Leidos Inc. awarded $23.7M for Computer Systems Design Services by HHS CMS
Contract Overview
Contract Amount: $23,678,059 ($23.7M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2014-05-14
End Date: 2016-09-15
Contract Duration: 855 days
Daily Burn Rate: $27.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS AWARD FEE
Sector: IT
Official Description: NATIONAL DATA WAREHOUSE IGF::OT::IGF
Place of Performance
Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244
State: Maryland Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $23.7 million to LEIDOS, INC. for work described as: NATIONAL DATA WAREHOUSE IGF::OT::IGF Key points: 1. Contract value represents a significant investment in IT infrastructure. 2. Full and open competition suggests a robust bidding process. 3. The contract duration of 855 days indicates a medium-term project. 4. Cost Plus Award Fee contract type allows for performance-based incentives. 5. The award was made to a single vendor, Leidos, Inc. 6. The North American Industry Classification System (NAICS) code 541512 points to a focus on IT services.
Value Assessment
Rating: good
The contract value of $23.7 million for computer systems design services appears reasonable given the scope and duration. Benchmarking against similar contracts for IT services by the Centers for Medicare and Medicaid Services (CMS) would provide a more precise value-for-money assessment. The Cost Plus Award Fee (CPAF) structure incentivizes performance, potentially leading to better outcomes than fixed-price contracts if managed effectively. However, CPAF can also lead to higher costs if award fees are consistently maximized without commensurate value.
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 a bid. The fact that it was competed suggests a deliberate effort to solicit the best possible offer. While the number of bidders is not explicitly stated, full and open competition generally fosters a competitive environment that can drive down prices and improve service quality.
Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and higher quality services due to the pressure of multiple bidders vying for the contract.
Public Impact
Beneficiaries include the Centers for Medicare and Medicaid Services (CMS) and potentially healthcare providers and beneficiaries who rely on the underlying IT systems. Services delivered include computer systems design, crucial for maintaining and improving the technological infrastructure of CMS. The geographic impact is primarily within the United States, supporting federal IT operations. Workforce implications include employment opportunities for IT professionals and support staff within Leidos, Inc. and potentially subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for cost overruns with Cost Plus Award Fee contracts if not closely monitored.
- Dependence on a single contractor (Leidos, Inc.) for critical IT systems.
- The specific performance metrics and award fee criteria are not detailed, making it difficult to assess the true value of awarded fees.
Positive Signals
- Awarded under full and open competition, suggesting a competitive bidding process.
- Cost Plus Award Fee structure incentivizes contractor performance.
- The contract is for essential IT services supporting a major federal agency.
Sector Analysis
The IT services sector is a vast and critical component of federal spending. Contracts for computer systems design services, like this one under NAICS code 541512, are common across many government agencies. The market is characterized by a mix of large prime contractors and specialized subcontractors. Spending in this area is driven by the need to modernize legacy systems, develop new digital capabilities, and ensure cybersecurity. Comparable spending benchmarks would involve looking at other large IT service contracts awarded by agencies like HHS, DOD, or GSA.
Small Business Impact
This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the 'ss': false flag suggests no specific small business subcontracting goals were mandated. This means that while Leidos, Inc. may choose to subcontract to small businesses, there is no explicit requirement driving them to do so for this particular award. The impact on the small business ecosystem is neutral to potentially negative if subcontracting opportunities are not pursued.
Oversight & Accountability
Oversight for this contract would typically be managed by the contracting officer and program managers within the Centers for Medicare and Medicaid Services (CMS). Accountability measures are embedded in the Cost Plus Award Fee structure, which links a portion of the payment to performance. Transparency is generally facilitated through contract award databases, though detailed performance reports and fee justifications may not always be publicly available. 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
- Large IT Services Contracts
Risk Flags
- Potential for cost overruns due to CPAF structure.
- Contract performance monitoring is critical for value realization.
- Dependence on a single contractor for potentially critical systems.
Tags
it-services, computer-systems-design, health-and-human-services, centers-for-medicare-and-medicaid-services, leidos-inc, cost-plus-award-fee, full-and-open-competition, delivery-order, maryland, federal-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $23.7 million to LEIDOS, INC.. NATIONAL DATA WAREHOUSE IGF::OT::IGF
Who is the contractor on this award?
The obligated recipient is LEIDOS, 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 $23.7 million.
What is the period of performance?
Start: 2014-05-14. End: 2016-09-15.
What is the track record of Leidos, Inc. in delivering similar computer systems design services to federal agencies, particularly CMS?
Leidos, Inc. has a substantial track record in providing IT services to the federal government, including extensive work with the Department of Health and Human Services (HHS) and its sub-agencies like CMS. They are a major federal contractor known for large-scale IT solutions, systems integration, and support services. Their experience often encompasses complex projects involving data management, software development, and infrastructure support, aligning with the scope of computer systems design. A detailed review of their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS) for similar contracts would offer specific insights into their reliability, quality of work, and adherence to schedules and budgets. Given their size and market presence, they are generally considered a capable provider for such services.
How does the awarded amount of $23.7 million compare to the estimated value or budget for similar IT system design contracts at CMS?
Without specific internal budget documents or detailed scope of work for this particular contract, a precise comparison is challenging. However, $23.7 million for a contract spanning approximately two years (855 days) for computer systems design services at an agency like CMS, which manages vast and complex healthcare IT systems, appears to be within a reasonable range for a significant project. To benchmark effectively, one would need to analyze the number of bidders, the level of competition, the specific technical requirements, and the duration. Contracts for similar IT modernization or system design efforts within federal health agencies can range from a few million to tens or even hundreds of millions of dollars, depending on scale and complexity. The full and open competition suggests market forces were engaged to determine a competitive price.
What are the primary risks associated with a Cost Plus Award Fee (CPAF) contract for computer systems design, and how are they mitigated?
The primary risk with a CPAF contract is the potential for cost overruns, as the contractor is reimbursed for allowable costs plus a fee that includes an award component based on performance. If the performance criteria are not clearly defined or are too easily met, the government might pay a higher fee than warranted by the actual value delivered. Another risk is 'scope creep,' where the project expands without adequate cost adjustments. Mitigation strategies include rigorous oversight by the contracting officer and technical team, clearly defined and measurable performance objectives tied to the award fee, regular performance reviews, and strict adherence to the contract's cost accounting standards. The government must actively manage the contract to ensure the award fee truly reflects exceptional performance and value.
What is the expected effectiveness of the computer systems design services funded by this contract in improving CMS's IT infrastructure or operations?
The effectiveness of these services hinges on the specific objectives outlined in the contract's statement of work, which are not detailed here. Generally, computer systems design services aim to enhance functionality, improve efficiency, increase reliability, ensure security, and facilitate integration of IT systems. For CMS, this could translate to better data processing for healthcare claims, improved user interfaces for beneficiaries and providers, enhanced data analytics capabilities for policy-making, or more robust cybersecurity measures to protect sensitive health information. The success will be measured against the defined performance metrics within the CPAF structure. If the design services lead to streamlined operations, reduced system downtime, or improved data accuracy, then the contract will be deemed effective.
How has federal spending on computer systems design services (NAICS 541512) by the Department of Health and Human Services evolved over the past five years?
Federal spending on computer systems design services (NAICS 541512) by the Department of Health and Human Services (HHS) has generally seen a consistent or increasing trend over the past five years, reflecting the ongoing digital transformation efforts across government. Agencies like HHS, particularly CMS, rely heavily on IT infrastructure to manage critical healthcare programs. Spending in this category is driven by needs for system modernization, cloud migration, data analytics, cybersecurity enhancements, and development of new digital health platforms. While specific year-over-year figures for HHS would require detailed analysis of federal procurement data (like FPDS-NG or USASpending.gov), the overall trajectory indicates a sustained investment in IT services to support agency missions. This particular contract, awarded in 2014, falls within a period where such investments were robust.
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
Offers Received: 2
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 700 N FREDERICK AVE, GAITHERSBURG, MD, 20879
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $23,678,059
Exercised Options: $23,678,059
Current Obligation: $23,678,059
Actual Outlays: $-31,162
Subaward Activity
Number of Subawards: 15
Total Subaward Amount: $1,999,688
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HHSM500200600024I
IDV Type: IDC
Timeline
Start Date: 2014-05-14
Current End Date: 2016-09-15
Potential End Date: 2016-09-15 00:00:00
Last Modified: 2023-08-22
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