HHS awards $18M for IT services to General Dynamics, impacting Medicare/Medicaid systems

Contract Overview

Contract Amount: $18,071,416 ($18.1M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2010-01-28

End Date: 2015-07-31

Contract Duration: 2,010 days

Daily Burn Rate: $9.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: TAS::75 0511::TAS NATIONAL PLAN AND PROVIDER ENUMERATION SYSTEM

Place of Performance

Location: WARRENTON, FAUQUIER County, VIRGINIA, 20187

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $18.1 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: TAS::75 0511::TAS NATIONAL PLAN AND PROVIDER ENUMERATION SYSTEM Key points: 1. Spending on IT services for critical health infrastructure highlights reliance on established vendors. 2. The contract's cost-plus-fixed-fee structure warrants scrutiny for potential cost overruns. 3. Limited small business participation is noted, suggesting a focus on large prime contractors. 4. The duration and value indicate a significant, long-term investment in system modernization.

Value Assessment

Rating: fair

The $18M award for Computer Systems Design Services is a substantial investment. Benchmarking against similar large-scale IT contracts for government health systems is necessary to fully assess value, but the cost-plus-fixed-fee structure can lead to higher costs if not managed tightly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is positive for price discovery. However, the specific nature of the services required for the National Plan and Provider Enumeration System may favor vendors with specialized expertise, potentially limiting the breadth of competition.

Taxpayer Impact: Taxpayer funds are being used for essential IT infrastructure supporting Medicare and Medicaid. While competition was open, the long-term nature and specialized requirements mean ongoing vigilance is needed to ensure cost-effectiveness.

Public Impact

Impacts the operational efficiency and data integrity of Medicare and Medicaid systems. Ensures continued access to critical healthcare program information for beneficiaries and providers. Supports the government's ability to manage and administer healthcare services nationwide.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee contract type
Lack of small business subcontracting noted
Long contract duration

Positive Signals

Awarded under full and open competition
Supports critical healthcare infrastructure

Sector Analysis

This contract falls within the Information Technology sector, specifically focusing on computer systems design services for a federal health agency. Spending benchmarks for similar large-scale IT modernization projects in government healthcare often range in the tens to hundreds of millions of dollars over several years.

Small Business Impact

The contract was awarded to a large prime contractor, General Dynamics Information Technology, Inc. There is no specific indication of small business subcontracting goals or achievements within the provided data, suggesting limited direct participation for small businesses on this particular award.

Oversight & Accountability

Oversight by the Centers for Medicare and Medicaid Services (CMS) is crucial for this contract, given its impact on national healthcare programs. Regular performance reviews and financial audits will be essential to ensure the contractor meets objectives and manages costs effectively.

Related Government Programs

Computer Systems Design Services
Department of Health and Human Services Contracting
Centers for Medicare and Medicaid Services Programs

Risk Flags

Cost-plus-fixed-fee contract type may lead to higher costs.
Lack of explicit small business participation.
Long contract duration increases exposure to changing technological needs.
Potential for vendor lock-in due to specialized system knowledge.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $18.1 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. TAS::75 0511::TAS NATIONAL PLAN AND PROVIDER ENUMERATION SYSTEM

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 $18.1 million.

What is the period of performance?

Start: 2010-01-28. End: 2015-07-31.

What specific performance metrics were established to ensure the value delivered by General Dynamics aligns with the $18M investment?

The provided data does not detail specific performance metrics. However, for a contract of this nature and value, CMS would typically establish Key Performance Indicators (KPIs) related to system uptime, data accuracy, security compliance, and response times for critical functions. Regular performance reviews against these KPIs would be essential for value assessment.

What are the primary risks associated with a cost-plus-fixed-fee contract for complex IT systems, and how were they mitigated?

The primary risk of a cost-plus-fixed-fee contract is the potential for cost overruns, as the contractor is reimbursed for allowable costs plus a fixed fee. Mitigation strategies typically involve robust government oversight, detailed cost tracking, clearly defined scope, and strong negotiation of the fixed fee based on realistic cost estimates and risk assessment.

How does this contract contribute to the long-term effectiveness and modernization goals of the Centers for Medicare and Medicaid Services?

This contract is vital for maintaining and potentially modernizing the National Plan and Provider Enumeration System, a foundational component for administering Medicare and Medicaid. Its effectiveness directly impacts the ability to accurately identify and enroll providers and beneficiaries, process claims, and ensure program integrity, contributing to the overall operational effectiveness of CMS.

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: 1

Pricing Type: COST PLUS FIXED FEE (U)

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: $37,649,656

Exercised Options: $18,071,416

Current Obligation: $18,071,416

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSM500200700022I

IDV Type: IDC

Timeline