DoD's $21M contract for accelerating care transformation awarded to TransformCare, Inc. without competition

Contract Overview

Contract Amount: $21,070,585 ($21.1M)

Contractor: Transformcare, Inc.

Awarding Agency: Department of Defense

Start Date: 2024-04-02

End Date: 2025-09-29

Contract Duration: 545 days

Daily Burn Rate: $38.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: ANNUAL ACCELERATING CARE TRANSFORMATION FOR DEFENSE HEALTH AGENCY.

Place of Performance

Location: SAN ANTONIO, BEXAR County, TEXAS, 78234

State: Texas Government Spending

Plain-Language Summary

Department of Defense obligated $21.1 million to TRANSFORMCARE, INC. for work described as: ANNUAL ACCELERATING CARE TRANSFORMATION FOR DEFENSE HEALTH AGENCY. Key points: 1. The contract's value of over $21 million for a 1.5-year period suggests a significant investment in healthcare IT transformation. 2. The lack of competition raises questions about potential overpayment and the availability of innovative solutions. 3. Performance risk is moderate given the firm-fixed-price structure, but execution challenges could still impact care transformation. 4. This contract aligns with broader defense health modernization efforts aimed at improving patient care and operational efficiency. 5. The focus on custom computer programming services indicates a need for tailored software solutions within the DHA. 6. The contract's duration of 545 days provides a defined timeframe for achieving specific transformation milestones.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the lack of competitive bids. The $21 million price tag for approximately 18 months of service, focused on custom computer programming, appears substantial. Without comparative pricing from other vendors, it's difficult to ascertain if this represents a fair market value or if taxpayers are receiving optimal value for money. Further analysis would require understanding the specific deliverables and comparing them to industry standards for similar transformation projects.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This approach is typically reserved for situations where only one vendor possesses the necessary capabilities or when urgency precludes a competitive process. The absence of a competitive bidding process limits the government's ability to explore a wider range of solutions and potentially secure more favorable pricing.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government does not benefit from the price reductions typically achieved through competitive bidding. It also limits opportunities for other qualified businesses to secure government contracts.

Public Impact

The primary beneficiaries are the Department of Defense and its healthcare providers, who will receive enhanced IT capabilities for care transformation. The contract aims to deliver improved healthcare services and operational efficiencies within the Defense Health Agency. The geographic impact is likely nationwide, covering all facilities and personnel served by the DHA. Workforce implications may include the need for specialized IT personnel to implement and manage the new systems, potentially impacting existing DHA IT staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Sole-source award limits exploration of alternative solutions and vendors.
Potential for vendor lock-in if the implemented systems are highly proprietary.
Dependence on a single vendor for critical healthcare IT transformation.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Focus on accelerating care transformation aligns with strategic defense health goals.
Contract duration is defined, allowing for focused project execution.

Sector Analysis

The healthcare IT sector is characterized by rapid innovation and significant investment. This contract falls within the custom computer programming services sub-sector, which is crucial for developing specialized solutions. The Defense Health Agency's spending on such services reflects a broader trend across government and private healthcare organizations to leverage technology for improved patient outcomes and operational efficiency. Comparable spending benchmarks are difficult to establish without more specific project details, but large-scale IT transformation projects often run into tens of millions of dollars.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by the 'sb' field being false. There is also no information provided regarding subcontracting plans for small businesses. This suggests that the primary contractor, TransformCare, Inc., will likely handle the majority of the work internally, potentially limiting opportunities for small businesses to participate in this significant federal contract.

Oversight & Accountability

Oversight for this contract will be managed by the Defense Health Agency, a component of the Department of Defense. As a firm-fixed-price contract, the primary accountability measure is the successful delivery of the specified services within the agreed-upon budget. Transparency regarding the sole-source justification and the contract's progress will be crucial. The Department of Defense's Inspector General may conduct audits or investigations if concerns arise regarding performance, cost, or compliance.

Related Government Programs

Defense Health Agency IT Modernization Programs
Military Health System Electronic Health Records
Federal Health IT Initiatives
Custom Software Development for Government Agencies

Risk Flags

Sole-source award lacks competitive pricing pressure.
Limited transparency on specific capabilities justifying sole-source award.
Potential for cost overruns without competitive benchmarking.
Risk of vendor lock-in with custom IT solutions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $21.1 million to TRANSFORMCARE, INC.. ANNUAL ACCELERATING CARE TRANSFORMATION FOR DEFENSE HEALTH AGENCY.

Who is the contractor on this award?

The obligated recipient is TRANSFORMCARE, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $21.1 million.

What is the period of performance?

Start: 2024-04-02. End: 2025-09-29.

What specific capabilities does TransformCare, Inc. possess that led to this sole-source award for accelerating care transformation?

The provided data does not detail the specific capabilities that led to TransformCare, Inc. being awarded this sole-source contract. Typically, sole-source justifications are based on factors such as unique technical expertise, proprietary technology, urgent need where no other vendor can meet the requirements, or if the contractor is the only source capable of performing the work. Without further documentation from the Department of Defense, it is impossible to ascertain the precise reasons for this determination. Further investigation would involve reviewing the contract's justification and approval (J&A) document, if publicly available, which would outline the rationale for bypassing full and open competition.

How does the $21 million contract value compare to similar healthcare IT transformation projects within the federal government?

Directly comparing the $21 million contract value for TransformCare, Inc. to similar federal healthcare IT transformation projects is challenging without more granular data on the scope, duration, and specific services rendered. However, large-scale IT modernization efforts within federal agencies, particularly in healthcare, often involve substantial investments. For instance, the Department of Veterans Affairs' Electronic Health Record Modernization (EHRM) program has seen billions of dollars in spending. While this DHA contract is significantly smaller, its focus on 'accelerating care transformation' suggests a complex undertaking. Benchmarking would ideally involve comparing it to other custom computer programming services contracts awarded by agencies like HHS or CMS for similar transformation goals, considering factors like the number of users impacted and the complexity of the systems being developed or integrated.

What are the primary risks associated with awarding a contract of this magnitude on a sole-source basis?

The primary risks associated with awarding a contract of this magnitude on a sole-source basis include potential overpayment due to the lack of competitive pricing, limited innovation from a single vendor, and the risk of vendor lock-in. Without competition, there is less incentive for the contractor to offer the most cost-effective solution. Furthermore, the government may miss out on potentially superior or more innovative solutions that other vendors could offer. Vendor lock-in occurs when the government becomes heavily reliant on a single provider's technology or services, making it difficult and costly to switch providers in the future. This can reduce leverage in future negotiations and potentially hinder long-term strategic flexibility.

What performance metrics or milestones will be used to evaluate the success of this 'accelerating care transformation' contract?

The provided data does not specify the performance metrics or milestones for this contract. However, for a contract focused on 'accelerating care transformation' within the Defense Health Agency, success would likely be measured against objectives related to improved patient outcomes, enhanced healthcare delivery efficiency, better data accessibility and interoperability, and increased user satisfaction among healthcare providers. Specific metrics could include reductions in patient wait times, improvements in diagnostic accuracy, successful integration of new IT systems with existing infrastructure, achievement of cybersecurity standards, and timely completion of project phases. The firm-fixed-price nature of the contract implies that deliverables and their acceptance criteria should be clearly defined to ensure accountability.

How does this contract align with the broader strategic goals of the Defense Health Agency and the Department of Defense?

This contract aligns with the broader strategic goals of the Defense Health Agency (DHA) and the Department of Defense (DoD) to modernize military healthcare and improve the readiness and well-being of service members and their families. The DHA's mission includes providing a medically ready force and a ready medical force, which necessitates efficient, effective, and technologically advanced healthcare systems. 'Accelerating care transformation' suggests an effort to rapidly implement changes that enhance the quality, accessibility, and efficiency of healthcare services. This could involve leveraging advanced IT solutions to streamline patient care pathways, improve data management for better clinical decision-making, and enhance telehealth capabilities, all of which are critical for supporting military operations and personnel health.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming 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: HT001124R0009

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 25714 RIDGE RD, DAMASCUS, MD, 20872

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

Financial Breakdown

Contract Ceiling: $21,070,585

Exercised Options: $21,070,585

Current Obligation: $21,070,585

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline