HHS awarded $22.8M for ADP Systems Development Services to CGI Federal Inc

Contract Overview

Contract Amount: $22,756,252 ($22.8M)

Contractor: CGI Federal Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2009-08-01

End Date: 2013-07-31

Contract Duration: 1,460 days

Daily Burn Rate: $15.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: IT

Official Description: ADP SYSTEMS DEVELOPMENT SERVICES

Place of Performance

Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22033

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $22.8 million to CGI FEDERAL INC. for work described as: ADP SYSTEMS DEVELOPMENT SERVICES Key points: 1. Contract value of $22.8M over 4 years suggests a significant investment in IT infrastructure. 2. The contract was awarded via full and open competition, indicating a broad market search. 3. The Cost Plus Award Fee (CPA) pricing structure introduces performance incentives but can lead to cost overruns if not managed carefully. 4. The contract duration of 4 years allows for sustained development and support. 5. The specific NAICS code (541512) points to a focus on computer systems design. 6. The award was a Delivery Order under a larger contract, implying a pre-existing framework.

Value Assessment

Rating: fair

Benchmarking the $22.8M contract value against similar ADP systems development contracts requires more specific details on the scope of services. However, the Cost Plus Award Fee (CPA) structure, while incentivizing performance, can be less predictable in terms of final cost compared to fixed-price contracts. Without detailed performance metrics and award fee payouts, assessing true value-for-money is challenging. The contract's duration of 4 years allows for substantial development, but the total cost needs to be evaluated against the delivered capabilities and long-term system benefits.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION,' suggesting that all responsible sources were permitted to submit a bid. This typically leads to a more competitive environment, potentially driving down prices and improving the quality of services offered. The number of bidders is not specified, which limits a deeper analysis of the competition's intensity. However, the open competition approach is generally favorable for government procurement.

Taxpayer Impact: A full and open competition process is designed to ensure that taxpayers receive the best possible value by encouraging a wide range of vendors to compete, potentially leading to more cost-effective solutions.

Public Impact

Beneficiaries include the Centers for Medicare and Medicaid Services (CMS) and potentially healthcare providers and beneficiaries who rely on the developed ADP systems. Services delivered include computer systems design and development, crucial for modernizing healthcare IT infrastructure. The geographic impact is primarily within Virginia, where the contractor is located, but the systems developed likely serve a national user base. Workforce implications include the creation of jobs for IT professionals involved in systems development and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Cost Plus Award Fee (CPA) contract type can lead to higher-than-expected costs if performance targets are not clearly defined or if scope creep occurs.
Lack of specific details on the number of bidders in the full and open competition makes it difficult to assess the true level of market competition.
The contract is a Delivery Order, which might indicate it's part of a larger, potentially less scrutinized, contracting vehicle.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
The contract duration of 4 years allows for sustained development and potential for long-term system stability.
The Cost Plus Award Fee structure, if managed effectively, can incentivize high performance and quality outcomes.

Sector Analysis

The IT services sector, particularly computer systems design, is a significant area of federal spending. This contract falls within the broader category of IT modernization and support for critical government functions like healthcare. Comparable spending benchmarks would depend on the specific complexity and scale of the ADP systems being developed, but contracts in this range are common for major system overhauls or new development initiatives within large agencies like HHS.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a set-aside. However, the prime contractor, CGI Federal Inc., may engage small businesses as subcontractors, depending on their own subcontracting plans and the nature of the work required. Analysis of subcontracting reports would be necessary to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Centers for Medicare and Medicaid Services (CMS) within HHS. The Cost Plus Award Fee structure necessitates robust performance monitoring and evaluation to ensure that award fees are justified. Transparency would be enhanced through regular reporting requirements and potential audits. The Inspector General for HHS would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Health Information Technology Services
Federal Civilian IT Modernization Programs
Centers for Medicare and Medicaid Services IT Contracts
ADP Systems Development

Risk Flags

Cost Plus Award Fee contract type requires careful monitoring to ensure value for money.
Potential for scope creep in IT development projects.
Dependence on contractor performance for successful system development.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $22.8 million to CGI FEDERAL INC.. ADP SYSTEMS DEVELOPMENT SERVICES

Who is the contractor on this award?

The obligated recipient is CGI FEDERAL 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 $22.8 million.

What is the period of performance?

Start: 2009-08-01. End: 2013-07-31.

What is the track record of CGI Federal Inc. with similar ADP systems development contracts for federal agencies?

CGI Federal Inc. has a substantial history of performing IT services for various federal agencies, including the Department of Health and Human Services (HHS). Their experience spans a wide range of contract types and services, including systems development, integration, and modernization. Analyzing their past performance on similar ADP systems development contracts would involve reviewing contract databases for metrics such as on-time delivery, budget adherence, and customer satisfaction ratings. Specific to HHS, CGI has been involved in numerous projects, and their overall track record suggests a capacity to handle large-scale IT initiatives. However, a detailed assessment would require examining specific contract performance reports and any documented issues or commendations related to their work on comparable systems.

How does the $22.8M contract value compare to other ADP systems development contracts awarded by CMS or HHS?

The $22.8 million contract value for ADP Systems Development Services awarded to CGI Federal Inc. by CMS falls within a common range for significant IT development projects within large federal agencies. To provide a precise comparison, one would need to analyze a dataset of similar contracts awarded by CMS and HHS over a relevant period, filtering by the NAICS code (541512 - Computer Systems Design Services) and contract type (e.g., Cost Plus Award Fee). Contracts for major system overhauls, new application development, or significant modernization efforts can range from a few million to tens or even hundreds of millions of dollars. This $22.8M award suggests a substantial project, likely involving complex system design and implementation, but it is not exceptionally large in the context of overall federal IT spending for agencies like HHS.

What are the primary risks associated with the Cost Plus Award Fee (CPA) contract type for this ADP systems development project?

The primary risks associated with the Cost Plus Award Fee (CPA) contract type for this ADP systems development project revolve around cost control and potential for contractor inefficiency. In a CPA structure, the contractor is reimbursed for allowable costs plus a fee that is composed of a fixed base fee and an award fee. The award fee is contingent upon meeting or exceeding certain performance objectives. The risk for the government is that if performance objectives are not clearly defined, measurable, or rigorously monitored, the contractor may receive a higher award fee than warranted, leading to increased costs without commensurate value. Furthermore, the 'cost plus' nature can reduce the contractor's incentive to control costs aggressively, as a larger cost base can sometimes lead to a larger fee. Effective oversight and clearly defined performance metrics are crucial to mitigate these risks.

What is the expected impact of this contract on the modernization of CMS's IT infrastructure?

This contract for ADP Systems Development Services is expected to contribute to the modernization of CMS's IT infrastructure by providing the necessary expertise and resources for designing and developing new or enhanced systems. Modernizing IT infrastructure is critical for agencies like CMS to improve data management, enhance security, streamline operations, and ultimately deliver better services to beneficiaries and healthcare providers. The specific impact will depend on the systems being developed, but it likely aims to replace legacy systems, improve interoperability, or introduce new functionalities that support CMS's mission. Successful execution of this contract should lead to more efficient, reliable, and secure IT systems, supporting CMS's ongoing efforts to adapt to evolving technological landscapes and healthcare demands.

How has federal spending on Computer Systems Design Services (NAICS 541512) evolved over the past five years, and where does this contract fit?

Federal spending on Computer Systems Design Services (NAICS 541512) has generally seen a consistent upward trend over the past five years, reflecting the government's increasing reliance on technology and the ongoing need for IT modernization across agencies. This category encompasses a broad range of services, including IT consulting, system integration, and custom software development. The $22.8 million awarded to CGI Federal Inc. for ADP Systems Development Services fits within this trend as a significant, but not outlier, investment in specialized IT services. It represents a portion of the overall federal expenditure on maintaining and upgrading complex information systems, particularly within critical sectors like healthcare, where agencies like CMS manage vast amounts of sensitive data and require robust technological solutions.

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 AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: CGI Inc

Address: 12601 FAIR LAKES CIR, FAIRFAX, VA, 22033

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $22,756,252

Exercised Options: $22,756,252

Current Obligation: $22,756,252

Actual Outlays: $-42,302

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HHSM500200700015I

IDV Type: IDC

Timeline