DoD's $25.1M Deloitte EHR Contract Lacks Competition, Raises Value Concerns

Contract Overview

Contract Amount: $25,108,444 ($25.1M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of Defense

Start Date: 2017-12-10

End Date: 2023-06-12

Contract Duration: 2,010 days

Daily Burn Rate: $12.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: IGF::OT::IGF EHR CORE PM OFFICE

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22041

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $25.1 million to DELOITTE CONSULTING LLP for work described as: IGF::OT::IGF EHR CORE PM OFFICE Key points: 1. Significant spending on EHR modernization highlights a critical area for government IT. 2. Deloitte's extensive contract raises questions about market competition and pricing. 3. The lack of competition and long duration present potential risks to taxpayer value. 4. Administrative Management Consulting services are essential but require rigorous oversight.

Value Assessment

Rating: questionable

The contract's total value of $25.1 million over six years is substantial. Without competitive bidding, it's difficult to assess if this price reflects fair market value for administrative management and general management consulting services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source or limited competition award. This significantly limits price discovery and potentially leads to higher costs for the government.

Taxpayer Impact: The absence of competition likely results in a higher cost to taxpayers than if the contract had been awarded through a competitive process.

Public Impact

Impacts the efficiency and effectiveness of the Defense Health Agency's Electronic Health Record system. Affects the modernization of critical healthcare IT infrastructure for military personnel and veterans. Raises concerns about the government's ability to secure competitive pricing for essential consulting services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Long contract duration
Potential for cost overruns
Limited transparency in pricing

Positive Signals

Supports critical EHR modernization
Established vendor relationship

Sector Analysis

Spending in the IT sector, particularly for healthcare systems like EHRs, is a major government expenditure. Benchmarks for similar administrative and management consulting services are difficult to establish without competitive data, but large, sole-source contracts warrant scrutiny.

Small Business Impact

This contract was awarded to Deloitte Consulting LLP, a large business. There is no indication that small businesses were involved as subcontractors, missing an opportunity to support small business participation.

Oversight & Accountability

The 'NOT COMPETED' status suggests a potential lack of robust oversight in the initial procurement phase. Ongoing oversight is crucial to ensure the contractor delivers value and stays within budget, especially given the sole-source nature.

Related Government Programs

Administrative Management and General Management Consulting Services
Department of Defense Contracting
Defense Health Agency Programs

Risk Flags

Lack of competition
Potential for inflated pricing
Limited transparency
Missed small business opportunities
Long contract duration without clear performance benchmarks

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $25.1 million to DELOITTE CONSULTING LLP. IGF::OT::IGF EHR CORE PM OFFICE

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Health Agency).

What is the total obligated amount?

The obligated amount is $25.1 million.

What is the period of performance?

Start: 2017-12-10. End: 2023-06-12.

What specific administrative and management consulting services were provided under this contract, and how did they contribute to the EHR modernization goals?

The contract falls under NAICS code 541611 (Administrative Management and General Management Consulting Services). While the data doesn't detail specific deliverables, these services typically encompass strategic planning, process improvement, organizational design, and IT management support. For EHR modernization, this could involve project management, system integration consulting, change management, and policy development to ensure the system meets clinical and administrative needs effectively.

Given the sole-source nature, what mechanisms were in place to ensure fair pricing and prevent potential cost overruns throughout the contract's duration?

Sole-source contracts inherently limit price discovery. Without competitive bids, the government relies heavily on negotiation, cost analysis, and potentially benchmarking against similar, albeit non-identical, contracts. Robust internal review processes, clear performance metrics, and strict change order controls are vital to mitigate risks of overpayment and ensure the contractor remains accountable for delivering value within the agreed-upon terms.

How does this contract's performance and cost compare to other EHR modernization efforts within the DoD or other federal agencies, particularly those that were competitively procured?

Direct comparison is challenging due to the sole-source nature and lack of detailed performance data. However, competitively procured EHR systems often demonstrate better cost-efficiency and faster implementation timelines. The $25.1 million expenditure over six years for administrative support on a single EHR system, without competition, suggests a potentially higher cost per unit of service or outcome compared to market-driven alternatives.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HT001118R0010

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte Touche Tohmatsu Limited

Address: 1919 N LYNN ST, ARLINGTON, VA, 22209

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,171,001

Exercised Options: $25,108,444

Current Obligation: $25,108,444

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline