HHS awards $26M+ R&D contract to Deloitte for critical functions, raising value-for-money questions

Contract Overview

Contract Amount: $26,090,297 ($26.1M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Health and Human Services

Start Date: 2015-08-21

End Date: 2020-08-23

Contract Duration: 1,829 days

Daily Burn Rate: $14.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: IGF::CT::IGF FOR CRITICAL FUNCTIONS

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $26.1 million to DELOITTE CONSULTING LLP for work described as: IGF::CT::IGF FOR CRITICAL FUNCTIONS Key points: 1. Contract awarded to a single, large incumbent vendor, potentially limiting competitive pricing. 2. Significant duration of over 5 years suggests a long-term need for these services. 3. The 'Research and Development in the Social Sciences and Humanities' NAICS code is broad and may obscure specific service delivery. 4. Cost-plus fixed fee contract type can incentivize spending, requiring close oversight. 5. The contract's value, while substantial, needs benchmarking against similar R&D efforts. 6. Lack of small business participation noted, potentially missing opportunities for smaller innovators.

Value Assessment

Rating: questionable

The contract's value of over $26 million for R&D in social sciences and humanities, awarded to Deloitte Consulting LLP, warrants scrutiny. Without specific performance metrics or comparable contract data, it's difficult to definitively assess value for money. The cost-plus fixed fee structure, while common for R&D, can lead to cost overruns if not managed tightly. Benchmarking this against other federal R&D contracts in similar domains would be crucial for a comprehensive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. However, the award went to a single entity, Deloitte Consulting LLP. The number of bidders and the specific evaluation criteria are not detailed here, which limits a deeper analysis of the competitive landscape. A robust competition typically drives down prices and encourages innovation.

Taxpayer Impact: While full and open competition was utilized, the specific outcomes regarding price discovery and taxpayer savings are not immediately apparent without further details on the bidding process and the number of proposals received.

Public Impact

The primary beneficiary is likely the Department of Health and Human Services (HHS), specifically the Centers for Medicare and Medicaid Services (CMS), which will receive research and development services. The services delivered are broadly categorized under 'Research and Development in the Social Sciences and Humanities,' suggesting potential improvements in policy, program design, or operational efficiency within HHS. The geographic impact is primarily federal, supporting national-level health policy and administration. Workforce implications may include specialized research and analytical roles within Deloitte and potentially subcontractors, contributing to the federal R&D workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus fixed fee contract type can lead to higher costs if not carefully managed.
The broad NAICS code may obscure the specific nature and value of the R&D performed.
Lack of explicit small business participation could limit opportunities for smaller, innovative firms.

Positive Signals

Awarded through full and open competition, suggesting a fair opportunity for multiple vendors.
Long contract duration indicates a sustained need and potential for deep expertise development.
Incumbent contractor (Deloitte) likely possesses significant institutional knowledge.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on social sciences and humanities. This is a niche area within the broader federal R&D spending landscape, which is often dominated by science, technology, engineering, and mathematics (STEM) fields. Comparable spending benchmarks would involve looking at other federal contracts for social science research, policy analysis, and program evaluation, particularly within health and human services agencies.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that large businesses were the primary focus or participants in the competition. There is no information provided on subcontracting plans, so the impact on the small business ecosystem is unclear. Without specific set-aside goals or reporting, it's difficult to assess the extent to which small businesses will benefit from or contribute to this contract.

Oversight & Accountability

Oversight for this contract would primarily fall under the Centers for Medicare and Medicaid Services (CMS) within HHS. The effectiveness of oversight depends on the agency's program management capabilities, including regular performance reviews, financial audits, and adherence to the terms of the Cost Plus Fixed Fee agreement. Transparency is facilitated through contract databases, but detailed performance reports are often internal. The Inspector General's office for HHS would have jurisdiction for investigating fraud, waste, or abuse.

Related Government Programs

Federal R&D Spending
Health Policy Research Contracts
Social Science Research Grants
CMS Program Evaluation Contracts
Deloitte Consulting Contracts

Risk Flags

Potential for cost overruns due to CPFF structure.
Lack of specific performance metrics in provided data.
Broad NAICS code may obscure specific R&D focus.
Limited insight into competitive landscape beyond 'full and open'.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $26.1 million to DELOITTE CONSULTING LLP. IGF::CT::IGF FOR CRITICAL FUNCTIONS

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

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 $26.1 million.

What is the period of performance?

Start: 2015-08-21. End: 2020-08-23.

What specific research and development activities were undertaken under this contract?

The provided data indicates the contract falls under NAICS code 541720 (Research and Development in the Social Sciences and Humanities) and was awarded to Deloitte Consulting LLP by CMS. However, the specific nature of the R&D activities is not detailed. Typically, R&D in this domain could encompass areas such as health economics, healthcare policy analysis, program effectiveness studies, patient behavior research, or the development of new methodologies for social science research relevant to healthcare. Further investigation into the contract's statement of work (SOW) would be necessary to ascertain the precise deliverables and research objectives.

How does the $26 million contract value compare to similar R&D contracts in social sciences and humanities at HHS?

Benchmarking the $26 million contract value requires access to a broader dataset of federal contracts for R&D in social sciences and humanities, specifically within HHS or similar agencies. Without this comparative data, it's challenging to determine if this award represents a fair market price or an outlier. Factors influencing cost include the contract duration (over 5 years), the complexity of the research, the required expertise, and the specific deliverables. A comprehensive analysis would involve identifying comparable contracts by NAICS code, agency, and scope of work to establish a relevant price range and assess value for money.

What are the potential risks associated with a Cost Plus Fixed Fee (CPFF) contract for R&D?

Cost Plus Fixed Fee (CPFF) contracts, while suitable for R&D where scope can be uncertain, carry inherent risks. The primary risk for the government is that the contractor is reimbursed for all allowable costs plus a fixed fee, which can incentivize higher spending to increase the fee base if not managed diligently. This structure requires robust government oversight to ensure costs are reasonable and allocable to the contract. Potential risks include cost overruns beyond initial estimates and a reduced incentive for the contractor to control costs aggressively, as their profit is fixed regardless of the total cost incurred. Effective management and clear performance metrics are crucial to mitigate these risks.

What is Deloitte Consulting LLP's track record with federal R&D contracts, particularly within HHS?

Deloitte Consulting LLP is a major federal contractor with a significant presence across various agencies, including HHS. Their track record with federal R&D contracts, particularly in social sciences and humanities, would likely be extensive. Analyzing their past performance on similar contracts would involve reviewing past performance evaluations, any documented issues or successes, and their history of delivering on complex research and analytical projects. Given their size and experience, they are generally considered capable of handling large, complex R&D efforts, but specific contract performance data would be needed for a definitive assessment.

What does the long contract duration (over 5 years) imply about the nature of the services and potential future spending?

A contract duration of over 5 years (1829 days) for R&D services suggests a long-term, strategic need for the research and development being performed. This could indicate a complex, evolving area requiring sustained investigation, such as ongoing policy development, continuous program evaluation, or long-term trend analysis in healthcare. It implies a significant commitment from CMS and potentially signals that similar R&D needs may continue beyond the current contract period. Such long durations also necessitate robust contract management to ensure continued relevance and value throughout the period of performance.

How does the 'Research and Development in the Social Sciences and Humanities' NAICS code align with CMS's mission?

The NAICS code 541720, 'Research and Development in the Social Sciences and Humanities,' aligns with the Centers for Medicare and Medicaid Services (CMS) mission by supporting evidence-based decision-making in healthcare policy and administration. CMS relies on research to understand health trends, evaluate the effectiveness of its programs (like Medicare and Medicaid), inform policy changes, and improve healthcare delivery and financing. Research in social sciences can provide critical insights into patient behavior, healthcare access disparities, economic impacts of health policies, and the social determinants of health, all of which are vital for CMS's strategic objectives.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Social Sciences and Humanities

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

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte & Touche LLP

Address: 1725 DUKE ST, ALEXANDRIA, VA, 22314

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $26,090,297

Exercised Options: $26,090,297

Current Obligation: $26,090,297

Subaward Activity

Number of Subawards: 15

Total Subaward Amount: $14,629,566

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSM500201400031I

IDV Type: IDC

Timeline