HHS awards $43.4M contract to WESTAT, INC. for IT services, with a 973-day duration
Contract Overview
Contract Amount: $42,207,995 ($42.2M)
Contractor: Westat, Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2009-08-24
End Date: 2012-04-23
Contract Duration: 973 days
Daily Burn Rate: $43.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: IT
Official Description: AWARD
Place of Performance
Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850
State: Maryland Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $42.2 million to WESTAT, INC. for work described as: AWARD Key points: 1. The contract's cost-plus award fee structure allows for flexibility but requires robust oversight to ensure value. 2. Full and open competition suggests a competitive bidding process, potentially leading to better pricing. 3. The contract's duration of 973 days indicates a significant, long-term need for the services provided. 4. The award date of August 24, 2009, places this contract in the context of IT spending trends of that era. 5. The North American Industry Classification System (NAICS) code 541519 suggests a broad range of IT services were procured. 6. The contract was awarded to a single vendor, WESTAT, INC., highlighting their specific capabilities or market position.
Value Assessment
Rating: fair
Benchmarking the value of this contract is challenging without more detailed service descriptions and performance metrics. The cost-plus award fee (CPAF) structure can lead to higher costs if not managed tightly, as the contractor is reimbursed for allowable costs plus a fee that is intended to be negotiated upfront but can be adjusted based on performance. Comparing this to similar contracts for IT services within HHS or other agencies would provide a clearer picture of whether the pricing was competitive and represented good value for the services rendered over its nearly three-year term.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This typically suggests a healthy level of competition, which can drive down prices and encourage innovation. The number of bidders is not specified, but the process itself implies that multiple entities had the opportunity to compete for this work, theoretically leading to a more favorable outcome for the government.
Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more cost-effective solutions and better pricing for government services.
Public Impact
The primary beneficiaries are likely the Substance Abuse and Mental Health Services Administration (SAMHSA) and its programs, which rely on IT support. The services delivered likely encompass a range of IT support, maintenance, or development activities crucial for SAMHSA's operations. The geographic impact is primarily within Maryland, where the contractor is located, but the services support a federal agency with national reach. Workforce implications could include employment opportunities for IT professionals at WESTAT, INC. and potentially within SAMHSA if the contract involved internal support roles.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus award fee contracts require diligent oversight to prevent cost overruns and ensure performance targets are met.
- The broad NAICS code (541519) could indicate a wide scope of work, increasing the risk of scope creep if not clearly defined.
- The contract's age means current market rates and technological capabilities may have significantly evolved since its award.
Positive Signals
- Awarded under full and open competition, suggesting a robust and fair bidding process.
- The contract was awarded to WESTAT, INC., a known entity in government contracting, potentially indicating a track record of successful performance.
- The duration suggests a stable, long-term need, allowing for focused service delivery and relationship building.
Sector Analysis
This contract falls within the broader Information Technology (IT) services sector, specifically under 'Other Computer Related Services'. This sector is characterized by a wide array of services, from software development and system integration to IT consulting and support. The market is highly competitive, with numerous large and small businesses vying for government contracts. Comparable spending benchmarks for IT services within federal agencies are substantial, often running into billions of dollars annually across various agencies and departments.
Small Business Impact
The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications mandated by a small business set-aside. The absence of a small business set-aside means larger, established firms were likely the primary competitors. This contract does not appear to directly contribute to the small business ecosystem through set-aside goals.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Health and Human Services (HHS) and its contracting officers, along with SAMHSA program managers. As a Cost Plus Award Fee (CPAF) contract, performance monitoring and cost control are critical oversight functions. Transparency would be facilitated through contract award databases and reporting requirements. The Inspector General for HHS would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.
Related Government Programs
- HHS IT Services Contracts
- SAMHSA IT Support
- Federal IT Consulting Services
- Cost Plus Award Fee Contracts
- Other Computer Related Services Contracts
Risk Flags
- Cost Overruns Risk (CPAF)
- Scope Creep Risk (Broad NAICS)
- Performance Measurement Difficulty (Award Fee)
- Contract Duration Management
Tags
it-services, health-and-human-services, substance-abuse-and-mental-health-services-administration, westat-inc, cost-plus-award-fee, full-and-open-competition, it-consulting, maryland, federal-contract, naics-541519, long-term-contract
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $42.2 million to WESTAT, INC.. AWARD
Who is the contractor on this award?
The obligated recipient is WESTAT, INC..
Which agency awarded this contract?
Awarding agency: Department of Health and Human Services (Substance Abuse and Mental Health Services Administration).
What is the total obligated amount?
The obligated amount is $42.2 million.
What is the period of performance?
Start: 2009-08-24. End: 2012-04-23.
What was the specific nature of the 'Other Computer Related Services' provided under this contract?
The NAICS code 541519, 'Other Computer Related Services,' is very broad and encompasses a wide range of IT activities not classified elsewhere. Without access to the contract's Statement of Work (SOW), it's difficult to pinpoint the exact services. However, typical services under this code can include IT consulting, custom software development, system integration, IT project management, data processing services, and IT support services. Given the awarding agency (SAMHSA), the services likely supported the administration's mission-critical IT infrastructure, data management, or specific program-related software and systems. The 'Cost Plus Award Fee' structure suggests that performance metrics were defined, and the contractor's fee was adjusted based on achieving those metrics, implying a focus on quality and successful delivery of defined IT tasks.
How did WESTAT, INC.'s past performance influence the award of this contract?
While the provided data does not detail WESTAT, INC.'s past performance specifically for this contract, federal agencies are required to consider past performance as a significant evaluation factor in source selection, especially for larger, complex contracts like this one. Agencies typically review a contractor's record of meeting cost, schedule, and technical requirements on previous contracts. A positive past performance record, demonstrating reliability, quality of service, and effective management, would have strengthened WESTAT, INC.'s proposal. Conversely, a history of poor performance could have disqualified them. For a Cost Plus Award Fee contract, demonstrating a history of successful project completion and client satisfaction would be particularly important to justify the award and the potential for a high performance fee.
What were the key performance indicators (KPIs) used to determine the 'Award Fee' component?
The specific Key Performance Indicators (KPIs) for the 'Award Fee' component are not detailed in the provided summary data. However, for a Cost Plus Award Fee (CPAF) contract, these KPIs are typically established in the contract's Performance Work Statement (PWS) or Statement of Work (SOW). They are designed to measure the contractor's success in meeting or exceeding contract objectives. For IT services, common KPIs might include system uptime/availability, response times for technical support, project completion rates (on time and within budget), user satisfaction ratings, security compliance adherence, and the successful implementation of new features or systems. The government's Contracting Officer (CO) or designated representative would evaluate the contractor's performance against these KPIs to determine the amount of award fee earned.
How does the $43.4 million award compare to average IT spending for similar services within HHS?
Comparing the $43.4 million award to average IT spending for similar services within HHS requires access to broader HHS IT spending data and contract databases. However, $43.4 million over a period of approximately 3 years (973 days) represents a significant investment. On average, federal agencies spend billions annually on IT services. For a specific administration like SAMHSA, this contract amount could represent a substantial portion of its IT budget, particularly if it covers core operational support or major system development. To provide a precise comparison, one would need to analyze historical HHS IT spending reports, identify contracts with similar NAICS codes and contract types, and calculate average award values and durations to contextualize this specific $43.4 million award.
What risks are associated with the 'Cost Plus Award Fee' contract type for this specific service?
The primary risk associated with a Cost Plus Award Fee (CPAF) contract is the potential for cost escalation if not managed diligently. Since the contractor is reimbursed for allowable costs plus a fee, there's an inherent incentive to incur costs. The 'Award Fee' component is intended to mitigate this by incentivizing performance, but the government must have robust oversight to ensure costs are reasonable and allocable, and that the performance evaluation for the fee is objective and fair. For IT services, risks include scope creep, where the project expands beyond its original objectives, leading to increased costs. Additionally, defining clear, measurable, and achievable performance metrics for the award fee can be challenging, potentially leading to disputes or dissatisfaction. Effective contract administration and strong technical expertise within the government team are crucial to managing these risks.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: 280011000
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 1650 RESEARCH BLVD, ROCKVILLE, MD, 08
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $42,207,995
Exercised Options: $42,207,995
Current Obligation: $42,207,995
Contract Characteristics
Multi-Year Contract: Yes
Parent Contract
Parent Award PIID: HHSS283200700006I
IDV Type: IDC
Timeline
Start Date: 2009-08-24
Current End Date: 2012-04-23
Potential End Date: 2012-04-23 00:00:00
Last Modified: 2012-06-08
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