HHS awarded $27.4M for computer systems design, with a significant portion spent on time and materials

Contract Overview

Contract Amount: $27,435,848 ($27.4M)

Contractor: Universal Hi-Tech Development, Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2007-09-14

End Date: 2010-08-21

Contract Duration: 1,072 days

Daily Burn Rate: $25.6K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: TAS::75 4554::TAS C-2380 M

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $27.4 million to UNIVERSAL HI-TECH DEVELOPMENT, INC for work described as: TAS::75 4554::TAS C-2380 M Key points: 1. Value for money appears fair, given the duration and scope, but the high proportion of time and materials pricing warrants scrutiny. 2. Competition dynamics were strong for the initial award, indicating potential for good price discovery. 3. Risk indicators include the reliance on time and materials pricing, which can lead to cost overruns if not managed tightly. 4. Performance context suggests a need for robust oversight to ensure deliverables meet the National Institutes of Health's requirements. 5. Sector positioning places this contract within the broader IT services market for federal health agencies.

Value Assessment

Rating: fair

The total award of $27.4 million over three years for computer systems design services is within a reasonable range for federal contracts of this nature. However, the contract's structure, heavily utilizing time and materials (T&M) pricing, raises concerns about potential cost inefficiencies compared to fixed-price or performance-based contracts. Benchmarking T&M contracts requires careful analysis of labor rates and hours expended, which are not detailed here, but generally, T&M can be more expensive if scope creep or inefficient execution occurs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded as a competitive delivery order, indicating that it was competed under a broader indefinite-delivery/indefinite-quantity (IDIQ) contract. The fact that it was a competitive award suggests multiple bidders likely vied for this task order, which is a positive sign for price discovery and achieving a fair market price. The specific number of bidders for this delivery order is not provided, but the 'COMPETITIVE DELIVERY ORDER' designation implies a robust competition.

Taxpayer Impact: A competitive award process generally benefits taxpayers by fostering a market-driven price and encouraging contractors to offer competitive rates to win the business.

Public Impact

The primary beneficiaries are the National Institutes of Health (NIH), receiving essential computer systems design services to support its research and operational needs. The services delivered likely include the development, implementation, and maintenance of IT systems crucial for biomedical research and public health initiatives. The geographic impact is centered around the NIH's facilities, primarily in Maryland, where the contractor is located. Workforce implications include the creation of skilled IT jobs, potentially benefiting the local Maryland economy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Reliance on Time and Materials (T&M) pricing can lead to cost overruns if not meticulously managed and monitored.
The duration of the contract (over 3 years) increases the risk of scope creep or evolving technological needs not being optimally addressed.
Lack of specific performance metrics or outcome-based evaluations in the provided data makes it difficult to assess true value for money.
The broad nature of 'Computer Systems Design Services' can sometimes lead to ambiguity in deliverables and scope.

Positive Signals

Awarded through a full and open competitive process, suggesting a healthy market response and potential for competitive pricing.
The contract was awarded to UNIVERSAL HI-TECH DEVELOPMENT, INC, whose track record would need further investigation to confirm consistent performance.
The contract was a delivery order under a larger IDIQ, which often implies pre-qualification of contractors and established terms.
The agency is the Department of Health and Human Services (HHS), a major federal entity with established procurement processes.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically focusing on computer systems design. The federal IT services market is substantial, with agencies like HHS being significant spenders. This contract likely supports critical research infrastructure and administrative systems for the NIH. Comparable spending benchmarks would involve looking at other federal contracts for similar IT design and development services, particularly those awarded to health-focused agencies.

Small Business Impact

The provided data indicates that small business set-aside was not utilized for this contract (ss: false, sb: false). This suggests the contract was competed broadly. There is no information on subcontracting plans or their impact on the small business ecosystem. Without specific set-aside goals or subcontracting requirements, the direct impact on small businesses is unclear, though larger prime contractors may engage small businesses as subcontractors.

Oversight & Accountability

Oversight mechanisms for this contract would typically be managed by the contracting officer's representative (COR) at the NIH, responsible for monitoring performance, approving invoices, and ensuring compliance with contract terms. Accountability measures are inherent in the contract's performance requirements and the potential for contract modifications or termination for default. Transparency is facilitated through federal procurement databases like FPDS, where contract awards are recorded, though detailed performance data may be less accessible.

Related Government Programs

HHS IT Services Contracts
NIH Research Support Contracts
Computer Systems Design Services
Federal IT Modernization Programs
Time and Materials Contracts

Risk Flags

Reliance on Time and Materials Pricing
Potential for Cost Overruns
Long Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $27.4 million to UNIVERSAL HI-TECH DEVELOPMENT, INC. TAS::75 4554::TAS C-2380 M

Who is the contractor on this award?

The obligated recipient is UNIVERSAL HI-TECH DEVELOPMENT, INC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $27.4 million.

What is the period of performance?

Start: 2007-09-14. End: 2010-08-21.

What is the specific nature of the computer systems designed and developed under this contract?

The contract, NA 541512, specifies 'Computer Systems Design Services.' While the exact systems are not detailed in the provided data, such services typically encompass the design, development, integration, and maintenance of complex IT infrastructures. For the National Institutes of Health (NIH), this could involve systems supporting biomedical research data management, clinical trial tracking, laboratory information management systems (LIMS), or internal administrative and operational platforms. The 'Computer Systems Design Services' NAICS code covers establishments primarily engaged in planning and designing computer systems that integrate hardware, software, and communication technologies.

How does the Time and Materials (T&M) pricing structure compare to industry standards for similar federal IT contracts?

Time and Materials (T&M) pricing is common in federal IT contracts, especially when the scope of work is not clearly defined at the outset or is expected to evolve. However, it is generally considered less desirable from a cost-control perspective compared to fixed-price or performance-based contracts. For federal contracts, T&M rates are typically negotiated and capped. The benchmark for T&M involves comparing the negotiated labor rates (per hour for different labor categories) and the estimated material costs against government-wide rate schedules or similar competitively awarded contracts. Without access to the specific negotiated rates and the actual hours billed, a precise comparison is difficult. However, a high proportion of T&M spending can indicate a higher risk of cost overruns if not rigorously managed.

What was the competitive landscape for this specific delivery order, and how many bids were received?

The contract type is listed as 'COMPETITIVE DELIVERY ORDER,' indicating that this specific task order was competed among multiple potential offerors. This suggests that the award was not sole-source or limited. While the exact number of bids received for this particular delivery order is not provided in the summary data, the 'competitive' designation implies that more than one offer was solicited and likely received. A competitive process generally leads to better price discovery and encourages contractors to submit more favorable terms and pricing to win the award, ultimately benefiting the government and taxpayers.

What are the potential risks associated with the contract's duration and the reliance on Time and Materials pricing?

The contract duration of approximately three years (September 14, 2007, to August 21, 2010) combined with a Time and Materials (T&M) pricing structure presents several risks. Firstly, T&M contracts can incentivize longer task durations and potentially less efficient work, as the contractor is paid for time and materials used rather than for achieving specific outcomes. This can lead to cost overruns if not tightly managed. Secondly, over a three-year period, technology landscapes and project requirements can shift significantly. Without robust change management and scope definition processes, the project might deviate from its original objectives or become outdated, requiring costly modifications or rework. Effective oversight by the government is crucial to mitigate these risks.

How does this contract's spending compare to other similar IT services contracts awarded by HHS or NIH?

The total award amount of approximately $27.4 million over three years for computer systems design services is a significant sum, but its comparability depends heavily on the specific services rendered and the complexity of the systems involved. To benchmark this spending, one would need to analyze other HHS/NIH contracts for similar NAICS codes (like 541512) awarded within a similar timeframe. Factors such as contract type (T&M vs. fixed-price), labor categories and rates, and the scope of work (e.g., new development vs. maintenance) are critical for a fair comparison. Without access to detailed spending data across comparable contracts, it's challenging to definitively state whether this contract represents high or low spending relative to its peers. However, the $27.4M figure places it as a substantial IT services award.

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: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 1383 PICCARD DR, ROCKVILLE, MD, 20850

Business Categories: Asian Pacific American Owned Business, Category Business, Minority Owned Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $103,290,039

Exercised Options: $103,290,039

Current Obligation: $27,435,848

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 263010082

IDV Type: IDC

Timeline