Leidos Inc. awarded $22.5M for TRICARE Online sustainment, a critical MHS patient portal
Contract Overview
Contract Amount: $22,475,186 ($22.5M)
Contractor: Leidos, Inc.
Awarding Agency: Department of Defense
Start Date: 2015-07-30
End Date: 2023-08-11
Contract Duration: 2,934 days
Daily Burn Rate: $7.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: IT
Official Description: IGF::OT::IGF TRICARE ONLINE (TOL) TIER III SUSTAINMENT IS TO MAINTAIN TOL, AS THE MILITARY HEALTH SYSTEMS (MHS) PATIENT PORTAL.
Place of Performance
Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $22.5 million to LEIDOS, INC. for work described as: IGF::OT::IGF TRICARE ONLINE (TOL) TIER III SUSTAINMENT IS TO MAINTAIN TOL, AS THE MILITARY HEALTH SYSTEMS (MHS) PATIENT PORTAL. Key points: 1. Contract provides essential sustainment for the Military Health System's patient portal. 2. Full and open competition suggests a potentially competitive pricing environment. 3. Long contract duration (2934 days) may indicate a need for stable, long-term support. 4. Cost Plus Fixed Fee contract type introduces potential for cost overruns if not managed closely. 5. The contract is a delivery order under a larger contract vehicle. 6. Focus on IT systems design and integration services for a critical healthcare platform.
Value Assessment
Rating: fair
The total award of $22.5 million over approximately 8 years for sustainment of a critical patient portal appears reasonable given the scope. However, without specific benchmarks for similar IT sustainment contracts within the federal healthcare sector, a precise value-for-money assessment is challenging. The Cost Plus Fixed Fee (CPFF) structure necessitates careful oversight to ensure costs remain controlled and do not escalate beyond the fixed fee, which could impact overall value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The number of bidders is not specified, but this approach generally fosters price discovery and encourages competitive pricing. The agency sought a broad range of qualified offerors for these computer systems design services.
Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining services at competitive market rates, potentially leading to cost savings compared to sole-source or limited competition awards.
Public Impact
Beneficiaries of the Military Health System (MHS) will continue to have access to the TRICARE Online patient portal. Services delivered include sustainment and maintenance of a critical IT system. The geographic impact is nationwide, serving MHS beneficiaries across the United States and potentially overseas. Workforce implications may involve IT professionals specializing in system sustainment and support.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee (CPFF) contract type can incentivize contractor to increase costs to maximize profit if not properly managed.
- Long contract duration may lead to vendor lock-in and reduced flexibility for future technological advancements.
- Reliance on a single delivery order under a larger contract vehicle might limit visibility into the specific performance of this particular task order.
Positive Signals
- Awarded under full and open competition, suggesting a competitive process.
- Sustainment of a critical patient portal ensures continuity of essential healthcare services for MHS beneficiaries.
- Contract awarded to a known entity (Leidos, Inc.) with existing federal contracting experience.
Sector Analysis
This contract falls within the Information Technology (IT) sector, specifically focusing on computer systems design services. The market for IT sustainment and support for large government systems, particularly in healthcare, is substantial. Comparable spending benchmarks would involve analyzing other large-scale IT sustainment contracts for federal agencies, especially within the Department of Defense and other healthcare providers, to gauge cost-effectiveness.
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 small business set-aside. The primary contractor, Leidos, Inc., is a large business, and its subcontracting practices would need to be monitored separately if specific small business subcontracting goals were established for this contract.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Health Agency (DHA) through contract officers and technical representatives. Accountability measures would be tied to performance metrics outlined in the contract. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.
Related Government Programs
- TRICARE Health Benefits
- Military Health System IT Infrastructure
- Federal Health IT Contracts
- Patient Portal Systems
- Defense Health Agency IT Services
Risk Flags
- Potential for cost overruns due to CPFF structure
- Risk of vendor lock-in with long contract duration
- Need for robust oversight to manage evolving requirements
Tags
it, defense, healthcare, computer-systems-design-services, large-contract, full-and-open-competition, cost-plus-fixed-fee, sustainment, patient-portal, delivery-order, department-of-defense, defense-health-agency
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $22.5 million to LEIDOS, INC.. IGF::OT::IGF TRICARE ONLINE (TOL) TIER III SUSTAINMENT IS TO MAINTAIN TOL, AS THE MILITARY HEALTH SYSTEMS (MHS) PATIENT PORTAL.
Who is the contractor on this award?
The obligated recipient is LEIDOS, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Health Agency).
What is the total obligated amount?
The obligated amount is $22.5 million.
What is the period of performance?
Start: 2015-07-30. End: 2023-08-11.
What is the historical spending trend for TRICARE Online (TOL) sustainment services prior to this award?
Analyzing historical spending for TOL sustainment prior to this $22.5 million award is crucial for understanding cost trends and identifying potential anomalies. Without access to specific historical data for this contract vehicle or previous sustainment efforts, it's difficult to provide a precise trend. However, the duration of this delivery order (2934 days, approximately 8 years) suggests a significant, ongoing investment in maintaining the MHS patient portal. If previous sustainment efforts were shorter-term or less comprehensive, this award could indicate an increased focus on long-term stability or a shift in the MHS's IT strategy. Comparing this award's total value to the cumulative spending over similar prior periods would reveal whether spending has increased, decreased, or remained stable, providing context for the current investment.
How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar IT sustainment services?
The Cost Plus Fixed Fee (CPFF) contract type used for the TRICARE Online (TOL) sustainment is common for complex IT projects where the scope may evolve or is not fully defined at the outset. In a CPFF contract, the contractor is reimbursed for allowable costs plus a predetermined fixed fee representing profit. This contrasts with Fixed Price contracts, where the price is set regardless of costs incurred, incentivizing efficiency but potentially increasing risk for the contractor if costs escalate. Cost Plus Incentive Fee (CPIF) contracts offer shared savings or cost overruns, aligning incentives more closely. For IT sustainment, CPFF can be advantageous when continuous updates and unforeseen technical challenges are expected, allowing flexibility. However, it places a significant burden on the government to meticulously audit costs and ensure the 'fixed fee' remains appropriate throughout the contract's life to prevent excessive profit and ensure value for money.
What are the key performance indicators (KPIs) associated with this contract, and how is contractor performance measured?
Key Performance Indicators (KPIs) for IT sustainment contracts like the TRICARE Online (TOL) Tier III Sustainment typically focus on system availability, performance, security, and user support. Specific KPIs might include uptime percentages (e.g., 99.9% availability), response times for critical issue resolution, patch deployment timelines, and successful completion of security vulnerability assessments. Contractor performance is usually measured against these KPIs through regular reporting, user feedback mechanisms, and government quality assurance surveillance plans. Failure to meet these KPIs can result in contractually defined remedies, such as performance-based payments adjustments or, in severe cases, termination. The effectiveness of the sustainment directly impacts the MHS beneficiary's ability to access essential health information and services.
What is Leidos, Inc.'s track record with similar large-scale IT sustainment contracts within the Department of Defense or other federal agencies?
Leidos, Inc. has a substantial track record of performing large-scale IT sustainment and systems integration contracts for the Department of Defense (DoD) and other federal agencies. They are a major prime contractor on numerous programs involving complex IT infrastructure, including healthcare IT systems. Their experience often encompasses managing critical systems, ensuring cybersecurity, and providing ongoing operational support. For instance, Leidos has been involved in significant projects related to electronic health records (EHR), network modernization, and enterprise IT services across various military branches and civilian agencies. This extensive background suggests they possess the organizational capacity, technical expertise, and security clearances necessary to manage a critical system like TRICARE Online. However, a detailed review of past performance evaluations and any past performance issues on similar contracts would provide a more granular assessment.
What are the potential risks associated with the long duration (2934 days) of this contract?
The long duration of this contract (2934 days, approximately 8 years) presents several potential risks. Firstly, it can lead to vendor lock-in, making it difficult and costly for the government to switch providers or adopt new technologies if the incumbent contractor's solutions become outdated or less competitive. Secondly, the extended period increases the risk of scope creep or requirements evolving beyond what was initially envisioned, potentially leading to cost increases if not managed carefully under the CPFF structure. Thirdly, maintaining consistent performance and innovation over such a long period can be challenging for any contractor. Finally, the government's ability to leverage competitive market advancements diminishes as the contract progresses, potentially resulting in suboptimal value compared to what could be achieved through more frequent re-competition.
How does the sustainment of TRICARE Online contribute to the overall mission effectiveness of the Military Health System?
The sustainment of TRICARE Online (TOL) is fundamental to the mission effectiveness of the Military Health System (MHS). TOL serves as the primary patient portal, providing beneficiaries with essential access to their health records, appointment scheduling, prescription refills, and secure communication with healthcare providers. By ensuring the continuous availability, reliability, and security of TOL, this contract directly supports the MHS's ability to deliver coordinated and accessible healthcare to millions of service members, veterans, and their families worldwide. A well-maintained portal enhances patient engagement, improves administrative efficiency, and facilitates the seamless flow of critical health information, which is vital for both routine care and readiness operations.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: HT001115R0018
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Leidos Holdings, Inc.
Address: 1750 PRESIDENTS ST, RESTON, VA, 20190
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $23,775,340
Exercised Options: $22,475,186
Current Obligation: $22,475,186
Subaward Activity
Number of Subawards: 13
Total Subaward Amount: $3,085,477
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: HHSN316201200044W
IDV Type: GWAC
Timeline
Start Date: 2015-07-30
Current End Date: 2023-08-11
Potential End Date: 2023-08-11 00:00:00
Last Modified: 2024-06-28
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