HHS awarded $1.69B for vaccine tracking, with SAP Public Services Inc. as the primary contractor

Contract Overview

Contract Amount: $16,916,904 ($16.9M)

Contractor: SAP Public Services Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2010-02-22

End Date: 2011-06-13

Contract Duration: 476 days

Daily Burn Rate: $35.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: VACCINE TRACKING SYSTEM (VTRCKS)

Place of Performance

Location: ATLANTA, DEKALB County, GEORGIA, 30329

State: Georgia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $16.9 million to SAP PUBLIC SERVICES INC for work described as: VACCINE TRACKING SYSTEM (VTRCKS) Key points: 1. The contract value of $1.69 billion represents a significant investment in public health infrastructure. 2. Full and open competition suggests a potentially robust market for such services. 3. The fixed-price contract type aims to control costs, but requires careful scope management. 4. The duration of 476 days indicates a medium-term project with ongoing operational needs. 5. The award was a delivery order, implying it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a pre-competed vehicle. 6. The North American Industry Classification System (NAICS) code 443120 (Computer and Software Stores) seems incongruous with a large-scale IT system development and implementation, warranting further investigation.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without more specific details on the services rendered and the system's scope. The total award amount of $1.69 billion is substantial for a system with a 476-day duration. The NAICS code provided (443120) is typically associated with retail sales of computer hardware and software, not large-scale IT system development or implementation, raising questions about the accuracy of the classification or the nature of the services procured. Without comparable contracts for vaccine tracking systems of similar complexity and scale, a precise value-for-money assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This suggests a competitive environment where multiple vendors had the opportunity to propose solutions. The fact that it was a delivery order implies it was likely placed against an existing contract vehicle or IDIQ, which itself would have undergone a competitive process. The number of bidders is not specified, but full and open competition generally promotes price discovery and potentially better pricing for the government.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages a wider range of offers, potentially leading to more competitive pricing and innovative solutions, thereby maximizing the value of government spending.

Public Impact

The primary beneficiary is the Centers for Disease Control and Prevention (CDC) and the Department of Health and Human Services (HHS) in their mission to track and manage vaccine distribution and efficacy. The services delivered likely include the development, implementation, and maintenance of a robust IT system for vaccine data management. The geographic impact is national, supporting public health initiatives across the United States. Workforce implications may include IT professionals, public health analysts, and data scientists involved in the system's operation and utilization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The NAICS code 443120 (Computer and Software Stores) is highly unusual for a contract of this magnitude and nature, suggesting a potential misclassification or a misunderstanding of the services procured.
The total award amount of $1.69 billion for a system with a 476-day duration raises questions about the cost-effectiveness and potential for scope creep or overruns, especially without detailed performance metrics.
Lack of specific details on the system's functionalities and performance outcomes makes it difficult to assess the true value delivered.
The contract type is 'Delivery Order,' which implies it might be a task order under a larger IDIQ contract. The competition and oversight for the parent IDIQ contract are not detailed here.

Positive Signals

The contract was awarded under full and open competition, which generally leads to better pricing and a wider selection of qualified vendors.
The firm fixed-price contract type provides cost certainty for the government, assuming the scope of work is well-defined and managed.
The award to SAP Public Services Inc. suggests a contractor with established capabilities in public sector IT solutions.
The system aims to support critical public health functions related to vaccine tracking, a vital area for national health security.

Sector Analysis

The procurement falls within the broader Information Technology (IT) sector, specifically focusing on software development, system integration, and data management for public health applications. The market for health IT solutions is substantial and growing, driven by government initiatives and the increasing need for digital health records and analytics. Comparable spending benchmarks would typically involve large-scale government IT system implementations, such as electronic health record systems or large database management projects. The $1.69 billion figure positions this as a major IT investment.

Small Business Impact

Information regarding small business set-asides or subcontracting plans is not provided in the data. Given the large contract value and the nature of the services (likely complex IT system development), it is possible that subcontracting opportunities for small businesses may exist, particularly for specialized components or services. However, without explicit details on set-aside goals or subcontracting requirements, the direct impact on the small business ecosystem remains unclear.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer's representative (COR) at the CDC/HHS, regular performance reviews, and adherence to the terms of the firm fixed-price contract. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected. The effectiveness of oversight depends on the clarity of performance metrics and the diligence of the government's program management.

Related Government Programs

CDC Vaccine Tracking Systems
HHS Health IT Modernization
Public Health Data Management Systems
Federal Health Information Exchange

Risk Flags

NAICS Code Mismatch
Potential Scope Definition Issues
Cost-Effectiveness Uncertainty

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $16.9 million to SAP PUBLIC SERVICES INC. VACCINE TRACKING SYSTEM (VTRCKS)

Who is the contractor on this award?

The obligated recipient is SAP PUBLIC SERVICES INC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Disease Control and Prevention).

What is the total obligated amount?

The obligated amount is $16.9 million.

What is the period of performance?

Start: 2010-02-22. End: 2011-06-13.

What specific functionalities does the VTRCKS system provide, and how does it improve upon previous vaccine tracking methods?

The provided data does not detail the specific functionalities of the VACCINE TRACKING SYSTEM (VTRCKS). However, based on its purpose, it likely encompasses features such as real-time inventory management, adverse event reporting, vaccination record maintenance, distribution logistics tracking, and public health surveillance. Its improvement over previous methods would hinge on its ability to provide more comprehensive, accurate, and timely data, enabling better public health decision-making, outbreak response, and vaccine efficacy monitoring. Without system documentation or performance reports, a precise comparison is not possible.

How does the $1.69 billion award compare to typical spending on similar public health IT systems?

The $1.69 billion award for the VTRCKS is a substantial investment. To benchmark it effectively, one would need to compare it against other large-scale federal IT projects, particularly those within the health sector. For instance, the development and implementation of nationwide electronic health record (EHR) systems or large-scale data analytics platforms for agencies like the FDA or NIH can run into hundreds of millions or even billions of dollars over their lifecycle. However, the duration of 476 days (approximately 1.3 years) for this specific award seems relatively short for such a large sum, suggesting it might be a significant phase of a larger program or a very high-cost per-day system. A direct comparison requires understanding the scope, complexity, and lifecycle of comparable systems.

What are the primary risks associated with a firm fixed-price contract of this magnitude and duration?

The primary risks with a firm fixed-price (FFP) contract of this magnitude ($1.69 billion) and duration (476 days) revolve around scope definition and management. If the requirements are not meticulously defined upfront, the contractor may face significant challenges in delivering the full scope, potentially leading to disputes or the need for contract modifications. Conversely, if the government's requirements change, modifications can be costly. For the contractor, the risk lies in underestimating the effort required, leading to reduced profit margins or even losses. For the government, the risk is receiving a system that does not fully meet evolving needs or is delivered at a price that, in hindsight, was not optimal due to the lack of flexibility inherent in FFP contracts for complex, long-term projects.

Given the 'full and open competition' award, how many bids were received, and what does this imply about the market for vaccine tracking solutions?

The provided data indicates 'FULL AND OPEN COMPETITION' but does not specify the number of bids received. Full and open competition means that all responsible sources were permitted to submit offers. The implication of this type of competition for the market of vaccine tracking solutions is generally positive: it suggests that the government sought a broad range of potential providers, fostering a competitive environment. A healthy number of bids would indicate a mature market with multiple capable vendors vying for government contracts. If only a few bids were received despite full and open competition, it might suggest a niche market or high barriers to entry for potential competitors.

What is the significance of the NAICS code 443120 (Computer and Software Stores) for this contract, and could it indicate a misclassification?

The NAICS code 443120, 'Computer and Software Stores,' is typically associated with retail establishments selling computer hardware and software. This classification is highly incongruous with a $1.69 billion contract for a 'VACCINE TRACKING SYSTEM (VTRCKS)' awarded to SAP Public Services Inc., which implies a large-scale IT system development, integration, and potentially maintenance project. This discrepancy strongly suggests a potential misclassification in the contract data. Such a mismatch could arise from various administrative errors or from a misunderstanding of the primary nature of the services procured. It warrants further investigation to determine the correct NAICS code that accurately reflects the services rendered, such as software development (e.g., 541511), custom computer programming services, or IT systems integration (e.g., 541512).

What is the track record of SAP Public Services Inc. in handling large federal IT contracts, particularly in the public health sector?

SAP Public Services Inc. is a subsidiary of SAP, a global leader in enterprise software. SAP has a well-established track record of providing enterprise resource planning (ERP), database, and analytics solutions to governments worldwide, including numerous large federal IT contracts in the US. Their experience often involves complex system implementations, data management, and business process optimization. While specific details on their past performance on vaccine tracking systems are not provided here, their general expertise in large-scale IT projects and public sector solutions suggests they possess the foundational capabilities required for such a contract. However, a thorough assessment would require reviewing specific past performance evaluations and contract histories related to public health IT.

Industry Classification

NAICS: Retail Trade › Electronics and Appliance Stores › Computer and Software Stores

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 2010Q11898

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: SAP AG (UEI: 316268655)

Address: 1300 PENNSYLVANIA AVE STE 600, WASHINGTON, DC, 20004

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $17,001,316

Exercised Options: $17,001,316

Current Obligation: $16,916,904

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS35F0406V

IDV Type: FSS

Timeline