HHS awards $42.9M contract for IT operational support to Deloitte Consulting LLP

Contract Overview

Contract Amount: $42,942,073 ($42.9M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Health and Human Services

Start Date: 2017-10-01

End Date: 2020-03-31

Contract Duration: 912 days

Daily Burn Rate: $47.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: IGF::OT::IGF ICAM SIS OPERATIONAL SUPPORT

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $42.9 million to DELOITTE CONSULTING LLP for work described as: IGF::OT::IGF ICAM SIS OPERATIONAL SUPPORT Key points: 1. Contract value represents a significant investment in IT infrastructure maintenance and support. 2. The award was made under full and open competition, suggesting a robust bidding process. 3. The contract duration of 912 days indicates a long-term need for these services. 4. The use of Time and Materials pricing may introduce cost variability. 5. The contract is categorized under Computer Systems Design Services, a critical area for agency operations. 6. The awardee, Deloitte Consulting LLP, is a large, established federal contractor.

Value Assessment

Rating: good

The contract value of $42.9 million over approximately 2.5 years for IT operational support appears reasonable given the scope of services. Benchmarking against similar IT support contracts within the federal government for agencies of similar size and complexity would provide a more precise value-for-money assessment. The use of Time and Materials pricing, while flexible, warrants close monitoring to ensure costs remain within expected parameters and do not escalate beyond initial projections. The awardee's experience in this domain is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The specific number of bidders is not provided, but this procurement method generally fosters price discovery and encourages competitive pricing. The agency likely sought to leverage the market to obtain the best value for these essential IT operational support services.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to more competitive pricing and a wider selection of qualified contractors, maximizing the efficient use of federal funds.

Public Impact

The primary beneficiaries are the Department of Health and Human Services (HHS) operating units that rely on stable and secure IT systems. The services delivered include operational support for IT systems, ensuring continuity of essential government functions. The geographic impact is primarily within Virginia, where the contractor is located, but the services support HHS operations nationwide. The contract supports a workforce of IT professionals, likely including system administrators, network engineers, and support specialists.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to Time and Materials pricing structure if not closely managed.
Dependence on a single contractor for critical IT operational support could pose a risk if performance issues arise.
The broad scope of 'operational support' could lead to scope creep if not clearly defined and monitored.

Positive Signals

Award to a reputable contractor with a proven track record in federal IT services.
The use of full and open competition suggests a thorough evaluation process and potential for competitive pricing.
The contract duration indicates a stable, long-term need, allowing for focused service delivery and relationship building.

Sector Analysis

The IT services sector within the federal government is vast, encompassing a wide range of needs from software development to cybersecurity and operational support. This contract falls under Computer Systems Design Services, a segment focused on the design, development, and integration of IT systems. Federal spending in this area is consistently high as agencies modernize and maintain their technological infrastructure. Comparable spending benchmarks would involve analyzing IT support contracts across various federal agencies for similar system complexities and service levels.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The award was made to a large business, Deloitte Consulting LLP. There is no explicit information regarding subcontracting plans for small businesses within this award. Therefore, the direct impact on the small business ecosystem from this specific contract is likely minimal, though large prime contractors often engage small businesses for specialized support.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer's representative (COR) within the HHS Office of the Assistant Secretary for Administration. Performance monitoring, adherence to contract terms, and invoice review are standard oversight mechanisms. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

HHS IT Modernization Initiatives
Federal Civilian IT Services
IT Operations and Maintenance Contracts
Computer Systems Design Services

Risk Flags

Potential for cost escalation due to T&M pricing.
Contract duration may lead to vendor lock-in if not managed.
Scope definition clarity is crucial for operational support contracts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $42.9 million to DELOITTE CONSULTING LLP. IGF::OT::IGF ICAM SIS OPERATIONAL SUPPORT

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 $42.9 million.

What is the period of performance?

Start: 2017-10-01. End: 2020-03-31.

What is Deloitte Consulting LLP's track record with the federal government, particularly with HHS?

Deloitte Consulting LLP is a major federal contractor with a long history of providing a wide array of services across numerous government agencies, including the Department of Health and Human Services (HHS). Their federal contract portfolio is extensive, covering areas such as IT modernization, cybersecurity, financial management, and program management. For HHS specifically, Deloitte has been involved in various projects, often related to health IT, data analytics, and administrative support. Their consistent presence and significant contract awards suggest a generally positive working relationship and a demonstrated capability to meet federal requirements. However, like any large contractor, past performance reviews and specific contract outcomes should be examined on a case-by-case basis to fully assess their suitability for any given task.

How does the $42.9 million contract value compare to similar IT operational support contracts?

The $42.9 million contract value for approximately 2.5 years of IT operational support is substantial but falls within the expected range for large federal agencies like HHS. To benchmark effectively, one would compare it to contracts for similar services (e.g., system administration, network support, help desk) awarded to other large IT service providers for agencies of comparable size and complexity. For instance, contracts supporting agencies like CMS, SSA, or other large cabinet-level departments often range from tens to hundreds of millions of dollars over similar periods. Factors influencing the value include the number of users supported, the criticality of the systems, the scope of services (e.g., 24/7 support, specific technologies), and the labor mix required. Without specific comparable contract data, it's difficult to definitively state if it's high or low, but it aligns with the scale of IT needs for a major federal entity.

What are the primary risks associated with a Time and Materials (T&M) contract for IT operational support?

The primary risk associated with a Time and Materials (T&M) contract for IT operational support is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts reimburse the contractor for the actual labor hours and materials used, plus a fixed fee or percentage. If not managed diligently, this structure can lead to escalating costs if the scope of work expands, inefficiencies occur, or the contractor's time is not closely monitored. For IT operational support, this could manifest as extended troubleshooting times, unplanned system maintenance, or the need for additional resources beyond initial estimates. Effective oversight, clear task definitions, and robust reporting mechanisms are crucial to mitigate these risks and ensure the government receives good value.

How effective are full and open competition procurements in ensuring value for money in IT services?

Full and open competition is generally considered the most effective method for ensuring value for money in IT services procurements. By allowing all responsible sources to submit bids, it maximizes the pool of potential offerors, thereby increasing the likelihood of receiving competitive pricing and innovative solutions. This competitive pressure incentivizes contractors to offer their best value propositions to win the contract. Furthermore, the transparency inherent in this process allows agencies to compare a wider range of technical approaches and cost structures, leading to a more informed selection. While it requires more upfront effort in terms of solicitation and evaluation, the long-term benefits in terms of cost savings and service quality typically outweigh the initial investment.

What is the historical spending trend for Computer Systems Design Services at HHS?

Historical spending trends for Computer Systems Design Services at HHS are generally characterized by consistent and significant investment, reflecting the agency's reliance on complex IT systems to manage healthcare programs, research, and administrative functions. Over the past decade, federal IT spending, including this category, has seen fluctuations driven by budget cycles, modernization initiatives, and evolving technological needs. HHS, being one of the largest federal agencies, consistently ranks among the top agencies for IT expenditures. Spending on Computer Systems Design Services specifically would likely show an upward trend or stability, driven by needs for system integration, upgrades, cloud migration, and ongoing operational support. Analyzing specific HHS budget documents and contract databases (like FPDS) would reveal precise figures and trends for this service category.

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: 1

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: $42,942,073

Exercised Options: $42,942,073

Current Obligation: $42,942,073

Subaward Activity

Number of Subawards: 19

Total Subaward Amount: $1,376,757

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200018W

IDV Type: GWAC

Timeline