HHS awards $57.7M contract for accounting services to Castro & Company, LLC

Contract Overview

Contract Amount: $57,722 ($57.7K)

Contractor: Castro & Company, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2016-11-01

End Date: 2026-05-01

Contract Duration: 3,468 days

Daily Burn Rate: $17/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: IGF::OT::IGF ESTABLISH AND MAINTAIN CONTROLLED ACCOUNTING DATA AND VENDOR FILE INFORMATION.

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20857

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $57,721.97 to CASTRO & COMPANY, LLC for work described as: IGF::OT::IGF ESTABLISH AND MAINTAIN CONTROLLED ACCOUNTING DATA AND VENDOR FILE INFORMATION. Key points: 1. Contract provides essential accounting data and vendor file management. 2. The contract duration extends over a decade, indicating long-term need. 3. Services are critical for financial operations within the agency. 4. The award was made under full and open competition. 5. The contractor, Castro & Company, LLC, is a key provider for these services. 6. The contract type is Time and Materials, which can pose cost control challenges.

Value Assessment

Rating: good

The contract value of $57.7 million over approximately 10 years suggests a significant investment in accounting services. Benchmarking this against similar contracts for 'Other Accounting Services' (NAICS 541219) is challenging without more specific service details. However, the duration and scope indicate a substantial need. The Time and Materials pricing structure warrants careful monitoring to ensure cost-effectiveness and prevent scope creep, as it can be less predictable than fixed-price contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of a single award (no. 1) suggests that Castro & Company, LLC was selected as the most advantageous offer. The competitive process should have facilitated price discovery and ensured a reasonable market price for the services.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for accounting services, preventing potential overpricing that could occur with less competitive solicitations.

Public Impact

The Department of Health and Human Services (HHS) benefits from reliable accounting data and vendor management. Ensures accurate financial record-keeping and vendor compliance. Supports the operational efficiency of the Office of the Assistant Secretary for Administration. Impacts the financial integrity of federal health programs by ensuring proper accounting.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type may lead to cost overruns if not closely managed.
Long contract duration could present risks if vendor performance degrades over time.
Dependence on a single vendor for critical accounting functions.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
Contract addresses essential administrative and financial functions for a major agency.
The contractor has secured a long-term agreement, indicating a level of trust and performance.

Sector Analysis

This contract falls under the 'Other Accounting Services' sector (NAICS 541219), which encompasses a broad range of financial support functions. The federal government is a significant consumer of such services, with spending often concentrated in areas requiring complex financial management and compliance. Comparable spending benchmarks would typically be found within broader government-wide contract spending reports for professional services, but specific data for this niche is less readily available. This contract represents a substantial portion of spending for specialized accounting support within HHS.

Small Business Impact

The data indicates that 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 requirement. The primary contractor, Castro & Company, LLC, is likely a small business itself, given its name, but the contract was competed broadly. The absence of a small business set-aside means opportunities for small business participation would depend on the prime contractor's subcontracting plans, if any.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services' internal financial management and contracting offices. The Office of the Assistant Secretary for Administration is responsible for the program's execution. Transparency is generally maintained through federal contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract's performance or financial management.

Related Government Programs

HHS Financial Management Services
Federal Accounting Standards Advisory Board (FASAB)
Government Accountability Office (GAO) Audits
Office of Management and Budget (OMB) Financial Guidance

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Long contract duration may increase risk of vendor performance degradation.
Dependence on a single vendor for critical financial operations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $57,721.97 to CASTRO & COMPANY, LLC. IGF::OT::IGF ESTABLISH AND MAINTAIN CONTROLLED ACCOUNTING DATA AND VENDOR FILE INFORMATION.

Who is the contractor on this award?

The obligated recipient is CASTRO & COMPANY, LLC.

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 $57,721.97.

What is the period of performance?

Start: 2016-11-01. End: 2026-05-01.

What is the specific nature of the 'accounting data and vendor file information' being managed under this contract?

The contract description 'ESTABLISH AND MAINTAIN CONTROLLED ACCOUNTING DATA AND VENDOR FILE INFORMATION' suggests the services involve managing critical financial databases. This likely includes maintaining accurate records of financial transactions, vendor details (such as contact information, payment terms, and certifications), and ensuring data integrity for reporting and auditing purposes. The controlled nature implies strict access controls and data security protocols are in place. This function is fundamental to the agency's ability to process payments, track expenditures, and comply with federal financial regulations.

How does the Time and Materials (T&M) pricing structure compare to other accounting service contracts awarded by HHS or similar agencies?

Time and Materials contracts are common for services where the scope of work is not clearly defined at the outset or is expected to change. For accounting services, T&M can be used for tasks like ad-hoc financial analysis, system troubleshooting, or project-based support. However, compared to fixed-price contracts, T&M carries a higher risk of cost escalation for the government, as the final cost is directly tied to the hours worked and materials used. Agencies often mitigate this by including contract clauses that cap total labor hours or costs, or by requiring detailed justifications for hours billed. Benchmarking T&M rates against fixed-price equivalents or other T&M contracts for similar services is crucial for value assessment.

What is Castro & Company, LLC's track record with federal contracts, particularly within HHS?

Castro & Company, LLC has a history of performing federal contracts. While specific details on their performance metrics for past contracts are not provided in this data snippet, their selection for a significant, long-term contract with HHS suggests a satisfactory performance history and capability to meet the agency's requirements. Further investigation into their contract performance ratings (e.g., CPARS) and past awards would provide a more comprehensive understanding of their reliability and expertise in delivering accounting services to the federal government.

What are the potential risks associated with a sole-source-like award (even if competed) for such a critical function?

Although this contract was awarded under 'full and open competition,' the fact that there is only one award (no. 1) means that Castro & Company, LLC is the sole provider for these specific services for the duration of the contract. The risk associated with relying on a single vendor for critical accounting functions includes potential disruptions if the vendor experiences financial difficulties, operational issues, or fails to perform adequately. It also reduces the government's leverage in future negotiations if the market for these specialized services is limited. Robust performance monitoring and contingency planning are essential to mitigate these risks.

How does the $57.7 million total contract value translate to annual spending, and how does this compare to historical spending on similar services?

The contract has a duration of 3468 days, which is approximately 9.5 years (3468 / 365.25). Spreading the $57.7 million over this period yields an average annual spending of roughly $6.07 million ($57.7M / 9.5 years). Comparing this to historical spending requires access to detailed historical contract data for HHS's accounting services. Without that, it's difficult to ascertain if this represents an increase, decrease, or stable level of investment. However, the substantial total value indicates a significant and ongoing commitment to these services.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Other Accounting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 1711 KING ST STE C, ALEXANDRIA, VA, 22314

Business Categories: 8(a) Program Participant, Category Business, Hispanic American Owned Business, Minority Owned Business, Small Business, Small Disadvantaged Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $57,722

Exercised Options: $57,722

Current Obligation: $57,722

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: HHSP233201700002B

IDV Type: BPA

Timeline