HHS Spends $24.5M on BESST System Transactions with Northrop Grumman
Contract Overview
Contract Amount: $24,562,292 ($24.6M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Health and Human Services
Start Date: 2008-03-31
End Date: 2013-09-08
Contract Duration: 1,987 days
Daily Burn Rate: $12.4K/day
Competition Type: COMPETITIVE DELIVERY ORDER
Number of Offers Received: 5
Pricing Type: COST PLUS AWARD FEE
Sector: IT
Official Description: BENEIFICARY ELIGIBILITY SUITE OF SYSTEMS TRANSACTIONS (BESST)
Place of Performance
Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042
State: Virginia Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $24.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: BENEIFICARY ELIGIBILITY SUITE OF SYSTEMS TRANSACTIONS (BESST) Key points: 1. Contract awarded to Northrop Grumman for IT services. 2. The contract value is $24.5 million. 3. Services fall under Computer Systems Design. 4. Awarded as a competitive delivery order. 5. The contract duration is approximately 5 years.
Value Assessment
Rating: fair
The contract uses a Cost Plus Award Fee (CPAF) structure, which can lead to higher costs if not managed carefully. Benchmarking CPAF contracts for similar IT services is complex due to performance-based incentives.
Cost Per Unit: N/A
Competition Analysis
Competition Level: unknown
Awarded as a competitive delivery order, suggesting multiple vendors were considered. The competitive nature should have driven price discovery, but the CPAF structure requires close monitoring to ensure cost-effectiveness.
Taxpayer Impact: Taxpayer funds were used for IT system development and maintenance. The effectiveness of the spending depends on the successful delivery of the BESST system's capabilities.
Public Impact
Impacts beneficiaries by potentially improving eligibility determination processes. Supports the Centers for Medicare and Medicaid Services (CMS) operations. Enhances the efficiency of healthcare program administration. Could lead to more accurate healthcare coverage information.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- CPAF structure can incentivize cost overruns.
- No indication of small business participation.
- Contract duration is relatively long.
Positive Signals
- Awarded competitively.
- Supports critical healthcare functions.
- Clear contract end date.
Sector Analysis
This contract falls within the Information Technology sector, specifically computer systems design. Spending benchmarks for similar government IT contracts vary widely based on complexity and scope, but $24.5M over 5 years is a moderate investment.
Small Business Impact
The data indicates that small business participation was not a factor in this award (sb: false). Further analysis would be needed to determine if opportunities were missed for small businesses in this procurement.
Oversight & Accountability
The contract was awarded by the Centers for Medicare and Medicaid Services (CMS), a major agency within HHS. Oversight would involve monitoring Northrop Grumman's performance against the contract's objectives and cost controls.
Related Government Programs
- Computer Systems Design Services
- Department of Health and Human Services Contracting
- Centers for Medicare and Medicaid Services Programs
Risk Flags
- Potential for cost overruns due to CPAF structure.
- Lack of small business participation noted.
- Contract duration of 5 years requires ongoing monitoring.
- Complexity of IT system development and integration.
Tags
computer-systems-design-services, department-of-health-and-human-services, va, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $24.6 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. BENEIFICARY ELIGIBILITY SUITE OF SYSTEMS TRANSACTIONS (BESST)
Who is the contractor on this award?
The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORPORATION.
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 $24.6 million.
What is the period of performance?
Start: 2008-03-31. End: 2013-09-08.
What specific improvements did the BESST system bring to beneficiary eligibility determination?
The BESST system was intended to streamline and modernize the processes for determining beneficiary eligibility for healthcare programs administered by CMS. This included integrating various data sources, automating checks, and providing a more robust platform for managing eligibility information, aiming to reduce errors and improve efficiency in program administration.
What were the key performance metrics and award criteria under the Cost Plus Award Fee (CPAF) structure?
While specific metrics are not detailed, CPAF contracts typically tie award fees to the contractor's performance against predefined objectives related to cost, schedule, technical performance, and quality. For BESST, these likely included system uptime, accuracy of eligibility determinations, user satisfaction, and adherence to project timelines, with higher performance leading to greater fee payouts.
How did the competitive delivery order process ensure value for money compared to other contracting methods?
A competitive delivery order implies that multiple vendors were solicited, allowing for comparison of proposals and pricing. This process generally promotes better value for money than sole-source awards. However, the CPAF structure requires diligent oversight to ensure that the 'cost plus' aspect doesn't inflate prices beyond what is justified by performance.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: COMPETITIVE DELIVERY ORDER
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 5
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 8110 GATEHOUSE RD, FALLS CHURCH, VA, 22042
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $27,768,848
Exercised Options: $24,562,292
Current Obligation: $24,562,292
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: HHSM500200700014I
IDV Type: IDC
Timeline
Start Date: 2008-03-31
Current End Date: 2013-09-08
Potential End Date: 2014-08-31 00:00:00
Last Modified: 2025-08-29
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