HHS awarded $217.7M to General Dynamics for program management, with 16 orders under a cost-plus award fee contract

Contract Overview

Contract Amount: $217,662,913 ($217.7M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2005-07-01

End Date: 2006-06-30

Contract Duration: 364 days

Daily Burn Rate: $598.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 16

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: PROGRAM MANAGEMENT/SUPPORT SERVICES

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22203

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $217.7 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: PROGRAM MANAGEMENT/SUPPORT SERVICES Key points: 1. The contract's cost-plus award fee structure incentivizes performance but requires careful monitoring of costs and award fees. 2. General Dynamics Information Technology, Inc. secured this significant award, indicating a strong position in the federal IT services market. 3. The contract was awarded under full and open competition, suggesting a robust bidding process. 4. With a duration of 364 days and 16 delivery orders, the contract demonstrates a pattern of task-based execution. 5. The $217.7 million total award value places this contract within a substantial spending category for program management services. 6. The contract's focus on program management and support services is a critical function for agencies like CMS.

Value Assessment

Rating: good

The total award of $217.7 million for program management and support services over a one-year period appears reasonable given the scope. Benchmarking against similar large-scale IT support contracts awarded by HHS or other agencies would provide a more precise value-for-money assessment. The cost-plus award fee (CPAF) structure, while common for complex services, necessitates diligent oversight to ensure costs are controlled and award fees are justified by performance. Without specific details on the services delivered and performance metrics, a definitive value assessment is challenging, but the scale suggests a significant operational requirement.

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 typically leads to a more competitive environment, potentially driving down prices and improving service quality. The presence of 16 delivery orders suggests ongoing needs met through this competitive vehicle. The number of bidders is not specified, but the 'full and open' designation implies a broad solicitation.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and a wider array of innovative solutions being considered. This process aims to ensure the government receives the best value by leveraging the entire market.

Public Impact

Beneficiaries include the Centers for Medicare and Medicaid Services (CMS) and, indirectly, the healthcare providers and beneficiaries of Medicare and Medicaid programs. Services delivered encompass program management and support, crucial for the effective operation of complex healthcare programs. The geographic impact is primarily national, supporting federal healthcare initiatives managed by CMS. Workforce implications include the employment of personnel by General Dynamics Information Technology, Inc. to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus award fee contracts can lead to cost overruns if not managed tightly, as the contractor is reimbursed for costs plus a fee that can increase with performance.
The lack of specific performance metrics in the provided data makes it difficult to assess the 'award' component of the fee and whether it was fully earned.
The duration of the contract (364 days) and the number of delivery orders (16) suggest a dynamic requirement that could be subject to scope creep if not carefully managed.

Positive Signals

Awarded under full and open competition, suggesting a competitive process that likely yielded favorable pricing and quality.
The contractor, General Dynamics Information Technology, Inc., is a large and established federal IT services provider with a significant track record.
The contract focuses on program management and support, essential functions for the operational success of CMS programs.

Sector Analysis

This contract falls within the broader Information Technology (IT) and Professional Services sector, specifically focusing on program management and support. The federal IT services market is substantial, with agencies like HHS being major spenders. Contracts of this nature are crucial for managing the complex operations of healthcare programs, requiring expertise in project management, systems integration, and administrative support. Comparable spending benchmarks would involve looking at other large program management contracts awarded to IT service providers within the federal government, particularly those supporting healthcare or large-scale IT initiatives.

Small Business Impact

The data indicates this contract was awarded under 'full and open competition' and does not specify any small business set-aside provisions (ss: false, sb: false). This suggests that small businesses were eligible to compete but were not specifically targeted through a set-aside. The prime contractor, General Dynamics Information Technology, Inc., is a large business. Therefore, the primary impact on small businesses would likely be through subcontracting opportunities, if any were pursued by the prime contractor. Without information on subcontracting plans, it's difficult to assess the extent of small business participation.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Health and Human Services (HHS), specifically the Centers for Medicare and Medicaid Services (CMS). As a cost-plus award fee contract, performance monitoring and cost control are critical oversight functions. The contract likely includes specific reporting requirements and performance metrics that CMS would track. The Inspector General for HHS would also have jurisdiction to investigate potential fraud, waste, or abuse related to this contract. Transparency would be enhanced through contract award databases and potentially through public reporting on program performance, though specific details are not provided.

Related Government Programs

HHS Program Management Support Services
CMS IT Support Contracts
Federal IT Services Acquisition
Large-Scale Government IT Contracts
Cost-Plus Award Fee Contracts

Risk Flags

Cost Overruns Risk (CPAF)
Performance Measurement Ambiguity
Scope Creep Potential
Contractor Dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $217.7 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. PROGRAM MANAGEMENT/SUPPORT SERVICES

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Medicare and Medicaid Services).

What is the total obligated amount?

The obligated amount is $217.7 million.

What is the period of performance?

Start: 2005-07-01. End: 2006-06-30.

What is the track record of General Dynamics Information Technology, Inc. with similar federal contracts, particularly within HHS?

General Dynamics Information Technology, Inc. (GDIT) has a substantial and long-standing track record of performing IT and program management services for the federal government, including extensive work with the Department of Health and Human Services (HHS) and its various agencies like the Centers for Medicare and Medicaid Services (CMS). They are a major federal contractor known for handling large, complex programs. Their portfolio often includes areas such as health IT, cloud services, cybersecurity, and mission support. Past performance reviews and contract databases would detail specific projects, their success rates, and any past performance issues. Given their size and market position, they are frequently awarded significant contracts, indicating a generally positive performance history, though like any large contractor, specific contract outcomes can vary.

How does the $217.7 million award value compare to similar program management contracts awarded by CMS or HHS in recent years?

The $217.7 million award for program management and support services over approximately one year is a significant sum, placing it among larger contract awards within the federal IT services space. To benchmark effectively, one would compare this to other contracts for similar services (e.g., IT program management, systems support, administrative services) awarded by CMS or HHS to large IT contractors. For instance, contracts supporting the operational aspects of Medicare, Medicaid, or healthcare.gov often run into hundreds of millions of dollars annually. The 'cost-plus award fee' structure also influences the total potential value. A direct comparison would involve identifying contracts with similar scope, duration, and contractor type (large IT service provider) within the same agency or sector.

What are the primary risks associated with a Cost-Plus Award Fee (CPAF) contract of this magnitude?

The primary risks associated with a CPAF contract of this magnitude revolve around cost control and performance measurement. For the government, the risk is that costs could escalate beyond initial projections, as the contractor is reimbursed for all allowable costs. The 'award fee' component, intended to incentivize superior performance, introduces subjectivity and potential for disputes if performance metrics are not clearly defined or if the evaluation process is perceived as unfair. Contractors risk not achieving the performance targets necessary to earn the full award fee. Effective oversight, robust performance metrics, and clear communication are crucial to mitigate these risks and ensure the government receives good value for its investment.

How effective are program management support services in ensuring the efficient operation of CMS programs?

Program management support services are generally critical for the efficient operation of complex agencies like CMS, which manage vast healthcare programs. These services provide the necessary expertise in planning, organizing, directing, and controlling resources to achieve specific program objectives. Effective program management ensures that projects stay on schedule and within budget, that risks are identified and mitigated, and that stakeholders are effectively communicated with. For CMS, this translates to smoother administration of Medicare and Medicaid, better implementation of new healthcare policies, and improved service delivery to beneficiaries. The success hinges on the quality of the program management team, the clarity of objectives, and the agency's ability to provide necessary oversight and direction.

What is the historical spending trend for program management and support services at CMS?

Historical spending trends for program management and support services at CMS are typically substantial and have generally increased over time, reflecting the growing complexity and scope of federal healthcare programs. CMS manages multi-trillion dollar programs like Medicare and Medicaid, necessitating significant investment in program management, IT infrastructure, and administrative support. Spending in this category often correlates with legislative changes in healthcare policy, the rollout of new initiatives, and the ongoing need to modernize IT systems. Analyzing historical data from sources like USAspending.gov or agency budget reports would reveal patterns of growth, fluctuations tied to specific projects or policy shifts, and the proportion of the overall CMS budget allocated to these essential support functions.

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 16

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 3211 JERMANTOWN RD, FAIRFAX, VA, 22030

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $625,000,000

Exercised Options: $217,662,913

Current Obligation: $217,662,913

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 500010050

IDV Type: IDC

Timeline