HHS awards $81M for IT support, with General Dynamics Information Technology securing a significant portion

Contract Overview

Contract Amount: $81,122,539 ($81.1M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2016-02-18

End Date: 2021-01-31

Contract Duration: 1,809 days

Daily Burn Rate: $44.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: IGF::OT::IGF DME SHARED SYSTEM MAINTAINER

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $81.1 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: IGF::OT::IGF DME SHARED SYSTEM MAINTAINER Key points: 1. Value for money appears fair given the IT support nature and contract duration. 2. Competition dynamics indicate a full and open process, suggesting potential for competitive pricing. 3. Risk indicators are moderate, typical for large IT service contracts. 4. Performance context is within the scope of IT system maintenance and support. 5. Sector positioning is within the government IT services market, a large and competitive space.

Value Assessment

Rating: fair

The contract's total value of $81.1 million over approximately five years for IT support services suggests a moderate annual spend. Benchmarking against similar IT support contracts within federal agencies is necessary for a precise value assessment. However, the Cost Plus Award Fee (CPAF) structure allows for performance-based incentives, which can drive efficiency and potentially improve value if managed effectively. The absence of specific performance metrics makes a definitive value judgment challenging without further data.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The fact that it was competed openly suggests that the agency sought the best possible solution and price. The number of bidders is not specified, but open competition generally fosters a more robust price discovery process compared to limited or sole-source awards.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing and a wider range of innovative solutions that can emerge from an open bidding process.

Public Impact

Beneficiaries include federal employees and contractors relying on stable IT systems within HHS. Services delivered encompass computer systems design and maintenance, crucial for agency operations. Geographic impact is primarily within Maryland, where the contractor is located, but supports national HHS operations. Workforce implications include the employment of IT professionals by the contractor to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns inherent in Cost Plus Award Fee contracts if not closely monitored.
Dependence on a single large contractor for critical IT infrastructure could pose a risk.
Scope creep could increase costs beyond initial projections without strict management.

Positive Signals

Full and open competition suggests a competitive environment that can drive better pricing.
Award fee structure incentivizes contractor performance and efficiency.
Long-term contract provides stability for IT system maintenance and support.

Sector Analysis

The federal IT services market is a substantial segment of government spending, with agencies continually investing in maintaining and upgrading their technological infrastructure. This contract for computer systems design services falls within this broad category. Comparable spending benchmarks would involve analyzing other large-scale IT support contracts awarded by HHS or similar federal departments, which often run into tens or hundreds of millions of dollars.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, General Dynamics Information Technology, Inc., is likely a large business. There is no direct information on subcontracting plans for small businesses within this data snippet. The impact on the small business ecosystem would depend on whether the prime contractor actively seeks to engage small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. The Cost Plus Award Fee structure implies performance monitoring and evaluation to determine award fees. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

HHS IT Modernization Initiatives
CMS Health IT Services
Federal Civilian IT Procurement
IT Support Services Contracts

Risk Flags

Potential for cost overruns in CPAF contracts.
Contract duration may exceed evolving technology needs.
Dependence on a single large contractor for critical services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $81.1 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. IGF::OT::IGF DME SHARED SYSTEM MAINTAINER

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 $81.1 million.

What is the period of performance?

Start: 2016-02-18. End: 2021-01-31.

What is the historical spending trend for IT support services at CMS?

Historical spending on IT support services at CMS has generally been substantial, reflecting the agency's critical role in managing healthcare programs. Over the years, CMS has consistently allocated significant portions of its budget to IT infrastructure, data management, and system maintenance. This includes contracts for developing and maintaining systems like the Medicare and Medicaid Electronic Health Records (EHR) systems, beneficiary portals, and administrative platforms. Spending patterns are influenced by legislative mandates, technological advancements, and the need for system upgrades and cybersecurity enhancements. Analyzing specific historical contract data for IT support would reveal trends in contract values, types (e.g., FFP, CPAF), and key service areas, showing a consistent demand for robust IT solutions to support its vast operations.

How does the pricing structure (Cost Plus Award Fee) compare to other contract types for similar IT services?

The Cost Plus Award Fee (CPAF) contract type used here is common for complex services where performance outcomes are difficult to define precisely upfront or where flexibility is needed. Unlike Firm-Fixed-Price (FFP) contracts, which offer the most price certainty but can be risky for the contractor if scope is underestimated, CPAF allows the government to reimburse the contractor's actual costs plus a fee that is adjusted based on performance against defined criteria. This structure can incentivize higher performance and efficiency compared to Cost Plus Fixed Fee (CPFF) contracts, where the fee is fixed regardless of performance. However, CPAF requires robust government oversight to ensure costs are reasonable and award fees are justified, making it potentially more expensive than FFP if performance targets are consistently met or exceeded. For IT services, CPAF is often chosen when innovation and adaptability are key.

What are the key performance indicators (KPIs) typically associated with IT support contracts of this nature?

Key Performance Indicators (KPIs) for IT support contracts like this one often focus on system availability, response times, resolution times, and user satisfaction. For example, metrics might include 'uptime percentage' for critical systems, 'mean time to respond' to user tickets, 'mean time to resolve' issues, and 'first contact resolution rate.' Cybersecurity metrics, such as the number of security incidents or vulnerabilities addressed, are also crucial. Customer satisfaction surveys and adherence to service level agreements (SLAs) are commonly used to gauge performance. The specific KPIs for this contract would be detailed in the Performance Work Statement (PWS) and would directly influence the award fee determination under the CPAF structure.

What is General Dynamics Information Technology's track record with large federal IT contracts?

General Dynamics Information Technology (GDIT), a business unit of General Dynamics, has a long and extensive track record of performing large-scale IT services contracts for various U.S. federal agencies, including the Department of Defense, Health and Human Services (HHS), and others. They are known for handling complex IT infrastructure management, cybersecurity, cloud migration, and modernization projects. GDIT has historically secured significant prime contracts across civilian and defense sectors, often valued in the hundreds of millions or billions of dollars. Their performance history is generally characterized by the successful execution of large, mission-critical systems. However, like any large contractor, they have also faced scrutiny and challenges on specific contracts, which are publicly documented through contract performance reports and agency oversight findings.

How does the $81.1M total award compare to the agency's overall IT spending?

The $81.1 million awarded to General Dynamics Information Technology for IT support represents a significant, but not dominant, portion of the Department of Health and Human Services' (HHS) overall IT spending. HHS is one of the largest federal agencies with a substantial IT budget, often in the billions of dollars annually, to support its vast array of health and human services programs, including Medicare, Medicaid, and public health initiatives. This specific contract value is consistent with major IT support or system development contracts awarded within large federal departments. To contextualize its impact, one would need to compare it against HHS's total IT budget for the contract period (2016-2021) and potentially against other similar IT contracts awarded by HHS during that timeframe to understand its relative scale and importance.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HHSM5002016RFP0001

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp

Address: 3150 FAIRVIEW PARK DR STE 100, FALLS CHURCH, VA, 22042

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

Financial Breakdown

Contract Ceiling: $85,351,060

Exercised Options: $81,297,539

Current Obligation: $81,122,539

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $1,632,433

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200023W

IDV Type: GWAC

Timeline