HHS Spends $27.5M on Deloitte Consulting for IT Support, Raising Value Questions

Contract Overview

Contract Amount: $27,495,218 ($27.5M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Health and Human Services

Start Date: 2014-01-01

End Date: 2019-01-31

Contract Duration: 1,856 days

Daily Burn Rate: $14.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::OT::IGF CORE SUPPORT SERVICES SUPPORTING DEPARTMENT OF HEALTH AND HUMAN SERVICES OFFICE OF APPLICATION AND ENTERPRISE DEVELOPMENT

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20201

State: District of Columbia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $27.5 million to DELOITTE CONSULTING LLP for work described as: IGF::OT::IGF CORE SUPPORT SERVICES SUPPORTING DEPARTMENT OF HEALTH AND HUMAN SERVICES OFFICE OF APPLICATION AND ENTERPRISE DEVELOPMENT Key points: 1. Significant spending on IT support services for HHS. 2. Deloitte Consulting LLP is the sole awardee. 3. Contract duration of over 5 years. 4. Potential for cost overruns with Time and Materials pricing. 5. IT services sector is highly competitive.

Value Assessment

Rating: questionable

The $27.5 million contract for computer systems design services appears high given the duration and the nature of the services. Benchmarking against similar contracts for IT support and systems design is crucial to determine if this represents fair value.

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 award mechanism (Delivery Order) and the Time and Materials pricing model warrant scrutiny for potential cost escalation.

Taxpayer Impact: Taxpayer funds are being utilized for IT support services. The effectiveness of the competition and the pricing structure will determine the ultimate impact on taxpayers.

Public Impact

HHS relies on external contractors for critical IT infrastructure and application development. The long-term engagement with a single vendor could limit flexibility and innovation. Transparency in how the $27.5 million was allocated is important for public trust.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials pricing can lead to uncontrolled costs.
Lack of specific performance metrics makes value assessment difficult.
Long contract duration may not reflect current market rates.
No small business participation noted.

Positive Signals

Awarded under full and open competition.
Services support a critical government function (HHS IT).

Sector Analysis

The IT services sector, particularly computer systems design, is dynamic and competitive. Spending benchmarks vary widely based on service complexity, duration, and vendor. This contract's value should be assessed against industry standards for similar IT support and development projects.

Small Business Impact

The data indicates no specific small business participation in this contract. Given the significant dollar value, opportunities for small businesses to participate, either as prime contractors or subcontractors, should be explored in future procurements.

Oversight & Accountability

Oversight is critical for Time and Materials contracts to ensure costs remain reasonable and services are delivered effectively. Regular reviews of contractor performance and expenditures by HHS are essential to maintain accountability.

Related Government Programs

Computer Systems Design Services
Department of Health and Human Services Contracting
Office of the Assistant Secretary for Administration Programs

Risk Flags

Time and Materials pricing model.
Long contract duration.
Lack of specific performance metrics in provided data.
No small business participation.
High dollar value for IT support services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $27.5 million to DELOITTE CONSULTING LLP. IGF::OT::IGF CORE SUPPORT SERVICES SUPPORTING DEPARTMENT OF HEALTH AND HUMAN SERVICES OFFICE OF APPLICATION AND ENTERPRISE DEVELOPMENT

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 (Office of the Assistant Secretary for Administration).

What is the total obligated amount?

The obligated amount is $27.5 million.

What is the period of performance?

Start: 2014-01-01. End: 2019-01-31.

What specific IT systems and applications are covered under this contract, and how critical are they to HHS operations?

The contract supports the Department of Health and Human Services' Office of Application and Enterprise Development. This likely includes a range of critical IT systems and applications essential for managing health programs, data, and internal operations. Understanding the scope clarifies the necessity of the spending and the potential impact of service disruptions.

How does the $27.5 million expenditure compare to industry benchmarks for similar IT support and systems design services over a five-year period?

Benchmarking this expenditure requires detailed analysis of the specific services rendered, vendor rates, and contract terms against comparable government and commercial contracts. Without this, it's difficult to definitively assess value. However, $5.5 million annually for comprehensive IT support and development suggests a need for careful review to ensure cost-effectiveness in a competitive market.

What mechanisms are in place to ensure cost control and performance accountability given the Time and Materials pricing structure?

Time and Materials contracts inherently carry a higher risk of cost overruns. Effective oversight requires robust monitoring of labor hours, rates, and material costs, along with clear performance metrics and deliverables. Regular audits and performance reviews by HHS are crucial to ensure the contractor is providing efficient and necessary services within the allocated budget.

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

Solicitation ID: NIHJT2010001

Offers Received: 5

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte LLP (UEI: 014127109)

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: $28,093,149

Exercised Options: $27,495,218

Current Obligation: $27,495,218

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $48,085

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200018W

IDV Type: GWAC

Timeline