HHS Awards Northrop Grumman $26.5M for Fraud Prevention System Support
Contract Overview
Contract Amount: $26,464,771 ($26.5M)
Contractor: Northrop Grumman Systems Corporation
Awarding Agency: Department of Health and Human Services
Start Date: 2015-12-30
End Date: 2017-02-28
Contract Duration: 426 days
Daily Burn Rate: $62.1K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: IGF::OT::IGF THE PURPOSE OF THIS CONTRACT IS TO PROVIDE CONTINUED SUPPORT REQUIRED TO MAINTAIN THE FRAUD PREVENTION SYSTEM (FPS).
Place of Performance
Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102
State: Virginia Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $26.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION for work described as: IGF::OT::IGF THE PURPOSE OF THIS CONTRACT IS TO PROVIDE CONTINUED SUPPORT REQUIRED TO MAINTAIN THE FRAUD PREVENTION SYSTEM (FPS). Key points: 1. Contract awarded to a single, large incumbent provider. 2. Focus on maintaining an existing critical system. 3. Potential for cost overruns due to Cost Plus Fixed Fee structure. 4. IT services sector, specifically computer systems design.
Value Assessment
Rating: fair
The contract's Cost Plus Fixed Fee structure allows for cost reimbursement plus a predetermined fee. While this provides flexibility, it can lead to higher costs if not managed tightly, especially for system maintenance.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award. This limits price discovery and competition, potentially leading to higher costs than if multiple vendors had bid.
Taxpayer Impact: Taxpayer funds are used to maintain a critical fraud prevention system. The lack of competition raises concerns about cost-effectiveness and value for money.
Public Impact
Ensures continued operation of a system vital for preventing healthcare fraud. Supports the integrity of Medicare and Medicaid programs. Potential for increased costs to taxpayers due to sole-source award.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Cost Plus Fixed Fee contract type
- Potential for cost creep
Positive Signals
- Maintains critical fraud prevention system
- Supports government's anti-fraud efforts
Sector Analysis
This contract falls within the IT services sector, specifically computer systems design. Spending in this area is substantial across government, with benchmarks varying widely based on system complexity and support needs.
Small Business Impact
The contract was not awarded to small businesses, and there is no indication of subcontracting opportunities for small businesses in the provided data.
Oversight & Accountability
Oversight is crucial for Cost Plus Fixed Fee contracts to ensure costs are reasonable and the fixed fee is justified. The Centers for Medicare and Medicaid Services (CMS) would be responsible for this oversight.
Related Government Programs
- Computer Systems Design Services
- Department of Health and Human Services Contracting
- Centers for Medicare and Medicaid Services Programs
Risk Flags
- Sole-source award limits competition.
- Cost Plus Fixed Fee structure can lead to higher costs.
- Potential for cost creep without strong oversight.
- Lack of transparency in pricing due to non-competed nature.
Tags
computer-systems-design-services, department-of-health-and-human-services, va, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $26.5 million to NORTHROP GRUMMAN SYSTEMS CORPORATION. IGF::OT::IGF THE PURPOSE OF THIS CONTRACT IS TO PROVIDE CONTINUED SUPPORT REQUIRED TO MAINTAIN THE FRAUD PREVENTION SYSTEM (FPS).
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 $26.5 million.
What is the period of performance?
Start: 2015-12-30. End: 2017-02-28.
What is the historical cost performance of this contract and similar fraud prevention systems?
Historical cost performance data for this specific contract is not provided. However, Cost Plus Fixed Fee contracts can sometimes lead to cost overruns if not meticulously managed. Benchmarking against similar fraud prevention system maintenance contracts would be necessary to assess if the current spending is reasonable, considering the system's complexity and the incumbent's expertise.
What are the risks associated with relying on a sole-source provider for critical system maintenance?
The primary risk of a sole-source award is the lack of competitive pressure, which can lead to inflated prices and reduced incentive for innovation or efficiency. It also creates vendor lock-in, making it difficult and potentially more expensive to switch providers in the future if performance issues arise or better solutions become available.
How effectively does this contract contribute to the overall mission of preventing healthcare fraud?
The contract's effectiveness is directly tied to the continued, reliable operation of the Fraud Prevention System (FPS). If the system functions as intended and successfully identifies fraudulent activities, the contract is effective. However, measuring this effectiveness requires performance metrics beyond the contract's financial data, focusing on fraud detection rates and financial recoveries.
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: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: 160574
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 7575 COLSHIRE DR, MCLEAN, VA, 22102
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $32,086,443
Exercised Options: $26,464,771
Current Obligation: $26,464,771
Subaward Activity
Number of Subawards: 51
Total Subaward Amount: $32,727,551
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2015-12-30
Current End Date: 2017-02-28
Potential End Date: 2017-02-28 00:00:00
Last Modified: 2023-06-07
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