DoD awards $7.7M for medical software, but limited competition raises cost concerns

Contract Overview

Contract Amount: $7,728,914 ($7.7M)

Contractor: Medicomp Systems Inc

Awarding Agency: Department of Defense

Start Date: 2023-10-01

End Date: 2026-09-30

Contract Duration: 1,095 days

Daily Burn Rate: $7.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MEDCIN SOFTWARE SUBSCRIPTION.

Place of Performance

Location: SAN ANTONIO, BEXAR County, TEXAS, 78234

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $7.7 million to MEDICOMP SYSTEMS INC for work described as: MEDCIN SOFTWARE SUBSCRIPTION. Key points: 1. The contract's value is substantial, indicating a significant investment in medical software capabilities. 2. Limited competition for this award may have led to suboptimal pricing. 3. The firm-fixed-price contract type shifts risk to the contractor, which is generally positive. 4. The duration of the contract (3 years) suggests a need for sustained medical software support. 5. The contractor, Medicomp Systems Inc., is the sole provider for this specific software solution. 6. The contract falls under 'Other Computer Related Services,' a broad category.

Value Assessment

Rating: fair

The contract value of $7.7 million over three years for medical software subscription appears to be within a reasonable range for enterprise-level solutions. However, without specific details on the software's functionality and user base, a direct comparison to similar contracts is difficult. The absence of competition is a significant factor that could inflate the price. Benchmarking against market rates for comparable medical information systems would be necessary for a more definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one vendor, Medicomp Systems Inc., was considered. This approach is typically used when a product or service is unique and cannot be obtained from other sources, or in cases of urgent need. The lack of competition means that the government did not explore alternative solutions or leverage competitive bidding to potentially secure a lower price or better terms.

Taxpayer Impact: Sole-source awards limit the government's ability to negotiate favorable pricing, potentially resulting in higher costs for taxpayers compared to a competitively bid contract.

Public Impact

The primary beneficiaries are the Department of Defense and its medical personnel who will utilize the MEDCIN software. The contract delivers essential medical software subscription services, likely supporting patient care, record keeping, and clinical decision-making within military healthcare facilities. The geographic impact is likely concentrated within military treatment facilities where the software is deployed, with a primary focus on Texas (ST: TX, SN: TEXAS) as indicated. Workforce implications include the need for trained medical staff to operate and integrate the software into their daily workflows.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price negotiation and potentially increases costs for taxpayers.
Lack of competition may indicate a lack of market availability or a failure to explore alternatives.
The specific functionalities and benefits of the MEDCIN software are not detailed, making it hard to assess its true value.
The contract's duration could lock the government into a specific vendor without re-evaluation.

Positive Signals

Firm-fixed-price contract type shifts performance risk to the contractor.
The software addresses a critical need within the Defense Health Agency.
The contractor is established, potentially reducing implementation risks.

Sector Analysis

The market for medical software is diverse, encompassing electronic health records (EHRs), practice management systems, and specialized clinical support tools. This contract falls within the broader IT services sector, specifically 'Other Computer Related Services.' The federal government is a significant purchaser of such solutions to support its vast healthcare infrastructure. Comparable spending benchmarks are difficult to establish without knowing the specific niche of MEDCIN software, but enterprise-level EHR systems can range from millions to tens of millions annually.

Small Business Impact

This contract does not appear to have a small business set-aside component (SS: false, SB: false). As a sole-source award to a specific vendor, it is unlikely to involve subcontracting opportunities for small businesses unless Medicomp Systems Inc. voluntarily engages them. The absence of set-aside provisions means that small businesses were not specifically targeted for this procurement, potentially limiting their participation in this segment of federal healthcare IT spending.

Oversight & Accountability

Oversight for this contract would primarily fall under the Defense Health Agency (DHA) and the Department of Defense. Accountability measures would be tied to the terms and conditions of the firm-fixed-price contract, focusing on timely delivery and performance of the software subscription. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Defense Health Agency IT Modernization Programs
Electronic Health Record Systems (DoD)
Medical Information Systems Procurement
Federal Health IT Spending

Risk Flags

Sole-source award
Potential for inflated pricing due to lack of competition
Limited transparency on software functionality and value assessment

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $7.7 million to MEDICOMP SYSTEMS INC. MEDCIN SOFTWARE SUBSCRIPTION.

Who is the contractor on this award?

The obligated recipient is MEDICOMP SYSTEMS INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $7.7 million.

What is the period of performance?

Start: 2023-10-01. End: 2026-09-30.

What is the specific functionality and scope of the MEDCIN software being procured?

The provided data indicates the procurement is for 'MEDCIN SOFTWARE SUBSCRIPTION.' While the specific functionalities are not detailed, MEDCIN software is generally known as a clinical information system designed to assist physicians in documenting patient encounters, generating medical reports, and potentially aiding in clinical decision support. It often integrates with existing Electronic Health Record (EHR) systems. The subscription model implies ongoing access to the software, updates, and potentially support services. The contract's value of $7.7 million over three years suggests a comprehensive deployment or a significant user base within the Department of Defense's healthcare facilities.

How does the $7.7 million contract value compare to historical spending on similar medical software by the DoD or DHA?

Direct historical spending comparisons for this specific MEDCIN software subscription are not available in the provided data. However, the Department of Defense has invested billions in its EHR system, MHS GENESIS, and other health IT initiatives. The $7.7 million for a three-year subscription to a specific software solution like MEDCIN appears to be a moderate investment within the broader context of DoD healthcare IT. Without knowing the number of users, the specific modules licensed, and the level of integration required, it's challenging to benchmark this value precisely against other software procurements. However, given the sole-source nature, it's plausible that a competitively bid contract for similar functionality might have yielded a lower price point.

What are the key risks associated with a sole-source award for critical medical software?

The primary risk of a sole-source award for critical medical software is the lack of price competition, which can lead to inflated costs for the government and taxpayers. It also reduces the incentive for the sole provider to innovate or offer superior service, as there are no direct competitors vying for the contract. Furthermore, reliance on a single vendor can create vendor lock-in, making it difficult and costly to switch to alternative solutions in the future if needs change or performance issues arise. There's also a potential risk if the sole-source vendor experiences financial instability or discontinues the product, leaving the government without support for critical systems.

What performance metrics or service level agreements (SLAs) are likely included in this firm-fixed-price contract?

While specific performance metrics and SLAs are not detailed in the provided data, a firm-fixed-price contract for software subscription typically includes clauses related to software availability, uptime, response times for technical support, and the delivery of software updates and patches. The Defense Health Agency would likely expect the MEDCIN software to be accessible during specified operational hours with minimal downtime. Penalties for failing to meet critical SLAs might be stipulated, although the firm-fixed-price nature generally means the contractor is responsible for meeting the defined scope within the agreed price. The government's primary recourse would be to enforce the contract terms or potentially terminate for default if performance is severely lacking.

What is Medicomp Systems Inc.'s track record with the Department of Defense or other federal agencies?

Medicomp Systems Inc. has a history of providing its MEDCIN software to various healthcare organizations, including federal agencies. Information on their specific track record with the Department of Defense (DoD) or other federal entities beyond this award is not detailed here. However, their continued presence in the market and securing contracts suggests a level of established performance and capability. A deeper dive into contract databases and performance reviews would be necessary to fully assess their past performance, any past issues, and their overall reliability as a federal contractor.

Could this software subscription be consolidated or replaced by a broader enterprise solution in the future?

It is plausible that this software subscription could be consolidated or replaced by a broader enterprise solution in the future, especially as the DoD continues its health IT modernization efforts. Many federal agencies aim to standardize IT systems to reduce costs, improve interoperability, and streamline support. If MEDCIN software serves a specific niche function not adequately covered by a larger, more integrated system like MHS GENESIS, it might be retained. However, if its functionalities can be absorbed by a more comprehensive platform, consolidation could be pursued during future contract cycles to achieve economies of scale and reduce the number of disparate systems managed.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: HT001123R0097

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 14500 AVION PKWY, CHANTILLY, VA, 20151

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $19,254,344

Exercised Options: $7,728,914

Current Obligation: $7,728,914

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline