DoD's $5.6M HIPAA Accelerator contract awarded to HIPAA Accelerator Inc. raises value concerns

Contract Overview

Contract Amount: $5,622,320 ($5.6M)

Contractor: Hipaa Accelerator Inc

Awarding Agency: Department of Defense

Start Date: 2023-02-03

End Date: 2026-11-30

Contract Duration: 1,396 days

Daily Burn Rate: $4.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: HEALTH PRIVACY ACCELERATOR ENTERPRISE

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22041

State: Virginia Government Spending

Plain-Language Summary

Department of Defense obligated $5.6 million to HIPAA ACCELERATOR INC for work described as: HEALTH PRIVACY ACCELERATOR ENTERPRISE Key points: 1. The contract's value proposition is unclear given the lack of competition and limited performance data. 2. Sole-source award limits price discovery and potentially inflates costs for taxpayers. 3. The fixed-price contract type may not fully mitigate risks associated with custom programming. 4. Performance duration of nearly four years warrants close monitoring for efficiency. 5. The contract's focus on health privacy aligns with critical defense healthcare needs. 6. Limited information on the contractor's track record makes a comprehensive risk assessment challenging.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is difficult due to its sole-source nature and the specialized service provided. The fixed-price structure offers some cost certainty, but without competitive bids, it's hard to ascertain if the $5.6 million represents a fair market price for custom computer programming services. The duration of the contract (nearly four years) also means that the initial pricing needs to remain cost-effective throughout its lifecycle. Further analysis of the specific deliverables and their alignment with market rates for similar custom development projects 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 there was no open competition. This approach is typically used when only one vendor can provide the required services, often due to proprietary technology, unique expertise, or urgent needs. The lack of multiple bidders means that the government did not benefit from the price reductions and innovation that typically arise from a competitive bidding process. This limits the government's ability to explore alternative solutions or secure the most cost-effective option.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government may not achieve the best possible price without competitive pressure. It also reduces transparency in the procurement process.

Public Impact

The primary beneficiaries are the Department of Defense and its healthcare arm, the Defense Health Agency, which will receive enhanced health privacy solutions. The contract aims to deliver custom computer programming services to improve the handling and protection of sensitive health information. The geographic impact is primarily within the Defense Health Agency's operational sphere, potentially supporting military personnel and their families' health data. Workforce implications are likely internal to the contractor and the Defense Health Agency, focusing on specialized IT and privacy expertise.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing.
Sole-source award limits visibility into alternative solutions.
Custom programming can carry inherent development and integration risks.
Performance monitoring is crucial given the contract's duration and specialized nature.

Positive Signals

Fixed-price contract provides cost certainty for the defined scope.
Focus on health privacy is critical for sensitive defense data.
Awarded to a specialized entity, potentially indicating relevant expertise.

Sector Analysis

This contract falls within the IT services sector, specifically custom computer programming. The market for such services is vast and competitive, with numerous firms offering specialized solutions. However, for highly niche areas like defense health privacy acceleration, the pool of qualified contractors may be smaller. The $5.6 million value is moderate for a multi-year custom development project in the federal IT space. Comparable spending benchmarks would typically involve analyzing other sole-source or limited-competition IT development contracts within the Department of Defense or other federal health agencies.

Small Business Impact

There is no indication that this contract included a small business set-aside. The sole-source nature of the award further suggests that small businesses were not specifically targeted or considered as primary awardees. Subcontracting opportunities for small businesses are not explicitly detailed in the provided data, but given the specialized nature of the work, it is possible that the prime contractor may engage small businesses for specific components or services if deemed necessary and cost-effective.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officer and program managers within the Defense Health Agency. As a definitive contract, it is subject to standard federal procurement regulations and oversight mechanisms. The Inspector General of the Department of Defense may conduct audits or investigations if specific concerns regarding waste, fraud, or abuse arise. Transparency is limited due to the sole-source nature, but contract modifications and performance reports would be key areas for oversight.

Related Government Programs

Defense Health Information Technology
Health Information Privacy and Security
Custom Software Development Services
Federal Health IT Contracts

Risk Flags

Sole-source award limits price competition.
Lack of transparency in contractor selection.
Potential for cost overruns without competitive pressure.
Need for robust performance monitoring due to custom development.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.6 million to HIPAA ACCELERATOR INC. HEALTH PRIVACY ACCELERATOR ENTERPRISE

Who is the contractor on this award?

The obligated recipient is HIPAA ACCELERATOR INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $5.6 million.

What is the period of performance?

Start: 2023-02-03. End: 2026-11-30.

What is the specific expertise of HIPAA Accelerator Inc. in custom computer programming for health privacy?

Information regarding the specific expertise of HIPAA Accelerator Inc. in custom computer programming for health privacy is not detailed in the provided contract data. As this was a sole-source award, the Defense Health Agency presumably determined that HIPAA Accelerator Inc. possessed the unique qualifications, capabilities, or proprietary technology necessary to meet the government's requirements. Further research into the company's background, past performance, and any publicly available information on their specialized services would be needed to fully assess their expertise. Without this, it's difficult to definitively state the depth of their qualifications beyond what was accepted by the awarding agency.

How does the $5.6 million contract value compare to similar custom health privacy software development projects within the federal government?

Direct comparison of the $5.6 million contract value to similar federal projects is challenging without more specific details on the scope of work and deliverables. However, for multi-year custom software development projects, especially those involving sensitive data like health information within a large agency like the DoD, this value is within a plausible range. The lack of competition means there's no direct benchmark from other bids. To provide a more accurate comparison, one would need to analyze the contract's specific requirements, the complexity of the custom programming, the duration of the development effort, and benchmark against other sole-source or limited-competition IT development contracts awarded by agencies like HHS or other DoD components for comparable services.

What are the key performance indicators (KPIs) and deliverables expected under this contract?

The provided contract data does not specify the key performance indicators (KPIs) or detailed deliverables for the 'HEALTH PRIVACY ACCELERATOR ENTERPRISE' contract. Typically, for custom computer programming services, deliverables would include software modules, documentation, testing reports, and potentially training materials. KPIs would focus on aspects like system performance, security compliance, bug resolution rates, and adherence to project timelines. The Defense Health Agency would have established these specific metrics and deliverables in the contract's statement of work (SOW) to ensure the contractor meets the program's objectives for enhancing health privacy.

What is the track record of HIPAA Accelerator Inc. with the Department of Defense or other federal agencies?

The provided data does not include information on the track record of HIPAA Accelerator Inc. with the Department of Defense or other federal agencies. As this was a sole-source award, the Defense Health Agency must have had a basis for selecting this specific contractor. To assess their track record, one would typically look at past performance evaluations, contract history, and any reported issues or successes on previous government contracts. Without access to this information, it is difficult to gauge their reliability and past performance in delivering similar services to the federal government.

What are the potential risks associated with a sole-source award for custom computer programming services?

Sole-source awards for custom computer programming services carry several potential risks. Firstly, the absence of competition can lead to higher prices than might be achieved in a competitive environment, as the contractor faces less pressure to offer the most cost-effective solution. Secondly, it limits the government's ability to explore a wider range of technical approaches or innovative solutions that other vendors might offer. Thirdly, there's a risk that the government may not fully understand the market or the best available technology if only one vendor's solution is considered. Finally, sole-source awards can sometimes indicate a lack of planning or market research, potentially leading to suboptimal contract choices.

How does this contract contribute to the broader cybersecurity and data privacy initiatives within the Department of Defense?

This contract, focused on a 'HEALTH PRIVACY ACCELERATOR ENTERPRISE,' directly contributes to the Department of Defense's (DoD) broader cybersecurity and data privacy initiatives by aiming to enhance the protection of sensitive health information. In an era of increasing cyber threats and stringent data privacy regulations (like HIPAA), ensuring the security and privacy of health records is paramount for maintaining trust, operational readiness, and compliance. By investing in custom solutions to accelerate these privacy capabilities, the DoD signals a commitment to safeguarding patient data, which is critical for military personnel and their families, and for maintaining the integrity of healthcare services within the defense establishment.

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: HT001523Q0006

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 373 SAINT ANDREWS LN, GURNEE, IL, 60031

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

Financial Breakdown

Contract Ceiling: $7,305,511

Exercised Options: $5,622,320

Current Obligation: $5,622,320

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline