HHS awards $9.15M for human capital management system, with Deloitte as prime contractor

Contract Overview

Contract Amount: $9,153,572 ($9.2M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Health and Human Services

Start Date: 2018-03-12

End Date: 2019-05-03

Contract Duration: 417 days

Daily Burn Rate: $22.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF HHS ENTERPRISE HUMAN CAPITAL MANAGEMENT SYSTEM CONFIGURATION, DEVELOPMENT, IMPLEMENTATION

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $9.2 million to DELOITTE CONSULTING LLP for work described as: IGF::OT::IGF HHS ENTERPRISE HUMAN CAPITAL MANAGEMENT SYSTEM CONFIGURATION, DEVELOPMENT, IMPLEMENTATION Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract value of $9.15 million falls within a moderate spending range for IT system development. 3. The fixed-price contract type aims to control costs and define scope upfront. 4. The delivery order structure indicates a phased approach to system implementation. 5. The prime contractor, Deloitte Consulting LLP, is a large, established firm with significant government contracting experience. 6. The contract duration of 417 days suggests a focused, project-based effort.

Value Assessment

Rating: good

The contract value of $9.15 million for a human capital management system configuration, development, and implementation appears reasonable given the scope. Benchmarking against similar IT system development contracts for federal agencies of this size and complexity suggests this award is within expected parameters. The firm fixed-price contract type provides cost certainty for the government, assuming the scope was well-defined at the time of award. Without specific per-unit metrics or detailed service breakdowns, a precise value-for-money assessment is challenging, but the overall award size does not immediately raise red flags.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The number of bidders is not specified, but this procurement method generally fosters a competitive environment, which can lead to better pricing and innovation. The agency sought proposals from a wide range of qualified contractors, suggesting a deliberate effort to ensure a fair and transparent selection process and to obtain the best value.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down costs through market forces and encourages a broader pool of contractors to offer their best solutions, potentially leading to more efficient use of public funds.

Public Impact

Federal employees within the Department of Health and Human Services will benefit from improved human capital management processes. The contract delivers configuration, development, and implementation services for an enterprise human capital management system. The geographic impact is primarily within the Department of Health and Human Services, supporting its internal operations. The workforce implications include the potential for streamlined HR functions, improved data management, and enhanced employee services for HHS personnel.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if requirements are not meticulously managed throughout the development lifecycle.
Dependence on a single large contractor for a critical system could pose long-term vendor lock-in risks.
Integration challenges with existing HHS IT infrastructure may arise, impacting implementation timelines and costs.

Positive Signals

Award to a reputable contractor like Deloitte suggests a high likelihood of successful project execution.
Firm fixed-price contract provides cost predictability and limits the government's exposure to cost overruns.
The use of a delivery order structure allows for phased implementation and potential for early wins.

Sector Analysis

This contract falls within the Information Technology (IT) sector, specifically focusing on software development and systems integration services. The market for enterprise resource planning (ERP) and human capital management (HCM) systems is robust, with numerous large and small businesses offering solutions. Federal spending in this area is substantial, driven by the need to modernize legacy systems and improve operational efficiency across agencies. Comparable spending benchmarks for similar HCM system implementations can vary widely based on agency size, complexity, and specific module requirements, but $9.15 million is a moderate investment for a comprehensive solution.

Small Business Impact

This contract was awarded under full and open competition and does not indicate any specific small business set-aside. While the prime contractor is a large business, there is no explicit information provided regarding subcontracting plans for small businesses. The absence of a small business set-aside or specific subcontracting goals means that the direct impact on the small business ecosystem for this particular award is likely limited, unless Deloitte voluntarily engages small businesses in its subcontracting efforts.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of Health and Human Services' Office of the Assistant Secretary for Administration. The firm fixed-price nature of the contract provides a degree of oversight through adherence to defined deliverables and milestones. Transparency is generally maintained through contract databases and reporting requirements. The Inspector General's office for HHS would have jurisdiction to investigate any potential fraud, waste, or abuse related to this award.

Related Government Programs

HHS Enterprise Resource Planning (ERP) Systems
Federal Human Capital Management Systems
IT Modernization Initiatives
Department of Health and Human Services IT Investments

Risk Flags

Potential for integration issues with legacy systems.
Risk of scope creep if requirements are not tightly managed.
Dependence on contractor expertise for critical system functionality.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $9.2 million to DELOITTE CONSULTING LLP. IGF::OT::IGF HHS ENTERPRISE HUMAN CAPITAL MANAGEMENT SYSTEM CONFIGURATION, DEVELOPMENT, IMPLEMENTATION

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 $9.2 million.

What is the period of performance?

Start: 2018-03-12. End: 2019-05-03.

What is Deloitte Consulting LLP's track record with similar federal IT system development contracts?

Deloitte Consulting LLP has a substantial track record of performing IT system development and implementation services for various federal agencies. They are a major government contractor with extensive experience in areas such as enterprise resource planning (ERP), financial management systems, and human capital management (HCM) solutions. Past performance reviews and contract awards indicate their capability to handle large-scale, complex IT projects. Specific to HCM, Deloitte has been involved in numerous projects aimed at modernizing HR functions, improving data analytics, and enhancing employee self-service portals across different departments. Their experience suggests a strong understanding of federal procurement processes and compliance requirements, which is crucial for successful project delivery.

How does the $9.15 million award compare to other federal HCM system implementations?

The $9.15 million award for the HHS human capital management system configuration, development, and implementation falls within a moderate range for federal IT projects of this nature. Larger, more complex agency-wide ERP or HCM system overhauls can cost tens or even hundreds of millions of dollars over their lifecycle. Conversely, smaller, more targeted system upgrades or specific module implementations might cost less. For a project focused on configuration, development, and implementation over approximately 14 months (417 days), this value suggests a scope that is significant but not at the highest end of federal IT spending. Benchmarking against similar contracts for agencies of HHS's size and complexity indicates that this award is competitive and reflects typical market rates for such services.

What are the primary risks associated with this contract, and how are they mitigated?

Primary risks include potential scope creep, integration challenges with existing systems, and contractor performance issues. Scope creep is mitigated by the firm fixed-price contract type, which incentivizes the contractor to adhere to the defined scope, and by robust project management and change control processes. Integration challenges are inherent in large IT projects and are typically addressed through detailed technical planning, testing, and phased implementation. Contractor performance risks are managed through contract oversight, performance metrics, and the potential for remedies outlined in the contract. Deloitte's established reputation and experience also serve as a mitigating factor against performance-related risks.

How effective is the firm fixed-price contract type in ensuring value for taxpayers on this project?

The firm fixed-price (FFP) contract type is generally effective in ensuring value for taxpayers on IT development projects like this one because it shifts the risk of cost overruns to the contractor. The government agrees to pay a set price for the defined scope of work, providing budget certainty. This incentivizes the contractor to manage costs efficiently and deliver the project within the agreed-upon budget. For taxpayers, this means greater predictability in spending and a reduced likelihood of unexpected cost increases. However, the effectiveness of FFP relies heavily on a well-defined scope of work at the time of award; poorly defined requirements can lead to disputes or change orders that may increase the overall cost.

What are the historical spending patterns for human capital management systems at HHS?

Analyzing historical spending patterns for human capital management systems at HHS would require access to detailed HHS budget and contract data over several fiscal years. Generally, large federal agencies like HHS invest significantly in HCM systems to manage their vast workforces. Spending can fluctuate based on major system modernization efforts, upgrades to existing platforms, or the implementation of new HR functionalities. Without specific historical data for HHS HCM systems, it's difficult to provide precise patterns. However, it is common for agencies to have ongoing investments in maintaining, upgrading, and enhancing their core HR IT infrastructure, often involving multiple contracts over time for different components or phases of system development.

What is the significance of this contract being a 'Delivery Order'?

The designation of this award as a 'Delivery Order' (aw) typically means it was issued under an existing indefinite-delivery, indefinite-quantity (IDIQ) contract or a similar contract vehicle. This implies that the underlying contract vehicle was previously competed and established, and this specific delivery order represents a task or a specific quantity of work to be performed under that broader agreement. For this particular contract, it suggests that the initial competition likely established terms and conditions for a range of potential services, and this order defines the specific scope, price, and delivery schedule for the HHS HCM system project. This approach can streamline the procurement process for subsequent tasks.

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: 18233SOL00123

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte Financial Advisory Services LLP

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: $9,153,572

Exercised Options: $9,153,572

Current Obligation: $9,153,572

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $2,803,500

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201200018W

IDV Type: GWAC

Timeline