Deloitte Consulting LLP awarded $42.9M contract for PPACA implementation support, raising value-for-money questions

Contract Overview

Contract Amount: $42,877,500 ($42.9M)

Contractor: Deloitte Consulting LLP

Awarding Agency: Department of the Treasury

Start Date: 2012-08-28

End Date: 2017-06-19

Contract Duration: 1,756 days

Daily Burn Rate: $24.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 32

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::CT::IGF ACQUIRE CONTRACTOR TECHNICAL SERVICES TO SUPPORT THE IMPLEMENTATION&TESTING GROUP S MISSION TO DELIVER WORLD CLASS IMPLEMENTATION AND TESTING SUPPORT SERVICES TO THE PROJECTS WITHIN THE PATIENT PROTECTION AND AFFORDABLE CARE ACT (PPACA) PMO OFFICE

Place of Performance

Location: ALEXANDRIA, ALEXANDRIA CITY County, VIRGINIA, 22314

State: Virginia Government Spending

Plain-Language Summary

Department of the Treasury obligated $42.9 million to DELOITTE CONSULTING LLP for work described as: IGF::CT::IGF ACQUIRE CONTRACTOR TECHNICAL SERVICES TO SUPPORT THE IMPLEMENTATION&TESTING GROUP S MISSION TO DELIVER WORLD CLASS IMPLEMENTATION AND TESTING SUPPORT SERVICES TO THE PROJECTS WITHIN THE PATIENT PROTECTION AND AFFORDABLE CARE ACT (PPACA) PMO OFFICE Key points: 1. Contract value of $42.9M over nearly five years suggests a significant investment in PPACA support. 2. The contract was awarded under full and open competition, indicating a broad market search. 3. The fixed-price contract type aims to control costs, but performance monitoring is crucial. 4. The 'Other Computer Related Services' NAICS code covers a broad range of potential activities. 5. The contract duration of 1756 days (approx. 4.8 years) is substantial for IT support services. 6. The award was a delivery order, implying it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle.

Value Assessment

Rating: fair

The contract's total value of $42.9 million over approximately 4.8 years averages to roughly $8.9 million annually. Benchmarking this against similar IT support contracts for large-scale government programs is challenging without more specific service details. However, the fixed-price nature suggests an attempt to manage costs, but the overall value proposition depends heavily on the successful delivery of complex PPACA implementation and testing services. Without performance metrics or comparison data, assessing the true value-for-money is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. The data indicates 32 offers were received, suggesting a robust competitive environment. A high number of bidders generally promotes price discovery and can lead to more favorable pricing for the government. The presence of numerous bids indicates that the market for these services is likely active and that the government had a good selection of potential contractors.

Taxpayer Impact: The full and open competition with 32 offers is positive for taxpayers, as it likely drove down prices and ensured the government received competitive bids for the required services.

Public Impact

Beneficiaries include the Patient Protection and Affordable Care Act (PPACA) program, which aims to expand health insurance coverage. Services delivered are critical for the implementation and testing of PPACA-related IT systems. The geographic impact is primarily national, supporting a federal healthcare initiative. Workforce implications include the potential for IT professionals and consultants to be engaged in this project.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep given the complexity of PPACA implementation.
Risk of cost overruns if not managed tightly, despite fixed-price structure.
Dependence on contractor expertise for critical government IT functions.

Positive Signals

Awarded under full and open competition with multiple bidders, indicating market interest and potential for competitive pricing.
Fixed-price contract type helps to establish cost certainty.
Significant duration suggests a long-term need and potential for stable support.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computer systems design and related services (NAICS 541519). The market for government IT support services is substantial, with agencies constantly seeking to modernize systems and implement new programs like PPACA. Deloitte Consulting LLP is a major player in this space, competing with other large system integrators. The spending benchmark for similar large-scale government IT projects can range from tens to hundreds of millions of dollars, depending on complexity and duration.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded to a major prime contractor, it may present subcontracting opportunities for small businesses. However, without specific subcontracting plans or goals detailed in the award, the direct impact on the small business ecosystem is unclear. Large prime contractors often utilize small businesses for specialized services or to meet set-aside goals on broader contracts.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program officials within the Department of the Treasury's Internal Revenue Service. The fixed-price nature of the contract implies that the government's primary oversight concern would be ensuring the contractor meets the defined scope of work and performance standards. Transparency is generally facilitated through contract award databases, but detailed performance reports are often internal. Inspector General jurisdiction would apply if fraud, waste, or abuse were suspected.

Related Government Programs

Patient Protection and Affordable Care Act (PPACA) IT Modernization
IRS Tax System Modernization Efforts
Federal Health IT Initiatives
Government IT Consulting Services

Risk Flags

Potential for cost overruns
Scope creep risk
Performance measurement challenges
Contractor dependency

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $42.9 million to DELOITTE CONSULTING LLP. IGF::CT::IGF ACQUIRE CONTRACTOR TECHNICAL SERVICES TO SUPPORT THE IMPLEMENTATION&TESTING GROUP S MISSION TO DELIVER WORLD CLASS IMPLEMENTATION AND TESTING SUPPORT SERVICES TO THE PROJECTS WITHIN THE PATIENT PROTECTION AND AFFORDABLE CARE ACT (PPACA) PMO OFFICE

Who is the contractor on this award?

The obligated recipient is DELOITTE CONSULTING LLP.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Internal Revenue Service).

What is the total obligated amount?

The obligated amount is $42.9 million.

What is the period of performance?

Start: 2012-08-28. End: 2017-06-19.

What specific technical services were included under this contract for PPACA implementation and testing?

The contract description indicates 'technical services to support the implementation & testing group's mission to deliver world class implementation and testing support services to the projects within the Patient Protection and Affordable Care Act (PPACA) PMO Office.' While the NAICS code (541519 - Other Computer Related Services) is broad, the context points towards IT system development, integration, testing, and potentially project management support crucial for rolling out complex healthcare reforms. Specific services could range from software development and configuration to quality assurance, user acceptance testing, and deployment support for various PPACA-related IT systems.

How does the $42.9 million contract value compare to similar PPACA-related IT support contracts?

Direct comparison is difficult without knowing the exact scope and duration of other PPACA IT contracts. However, $42.9 million over nearly five years ($8.9M/year) for a major federal program's implementation and testing support is within the expected range for large-scale IT projects. Many federal IT initiatives, especially those involving complex policy implementation like PPACA, require substantial and sustained investment. Contracts for similar scope and duration in other large federal programs (e.g., defense, social security) often fall within similar multi-million dollar figures, reflecting the complexity and criticality of the services.

What are the primary risks associated with a fixed-price contract of this magnitude and duration?

For a fixed-price contract of $42.9 million over 1756 days, key risks include the contractor underestimating the effort required, leading to reduced profit margins or potential quality issues, or the government not clearly defining requirements, leading to disputes or scope creep. If the contractor fails to deliver adequately, the government might face delays in PPACA implementation. Conversely, if the scope is poorly defined, the contractor might exploit ambiguities. Ensuring robust project management, clear performance metrics, and effective change control processes are critical to mitigating these risks.

What is Deloitte Consulting LLP's track record with large federal IT contracts, particularly in healthcare or complex program implementation?

Deloitte Consulting LLP is a major federal contractor with extensive experience across various sectors, including healthcare and large-scale program implementation. They have historically secured and performed on numerous large-value IT contracts for agencies like HHS, Treasury, and others. Their track record often involves complex system integrations, modernization efforts, and policy implementation support. While specific performance details for every contract are not publicly available, their consistent presence and success in winning competitive bids for significant federal IT work suggest a generally strong capability in managing complex projects.

How has federal spending on IT services for healthcare initiatives like PPACA evolved over the contract period (2012-2017)?

During the contract period of 2012-2017, federal spending on IT services for healthcare initiatives, including PPACA, was substantial and generally increasing. This era marked the active implementation and expansion phases of the ACA. Agencies like CMS and HHS were heavily investing in IT infrastructure, data management, and system enhancements to support enrollment, eligibility determination, and program administration. Overall federal IT spending remained a significant portion of agency budgets, with a growing emphasis on cloud computing, data analytics, and cybersecurity, all relevant to large programs like PPACA.

What does the 'Other Computer Related Services' (541519) classification imply about the nature of the work performed?

The NAICS code 541519, 'Other Computer Related Services,' is a broad category encompassing services not elsewhere classified within computer systems design and related services. For this contract supporting PPACA implementation and testing, it likely includes a wide array of activities such as IT consulting, systems integration, project management, business analysis, quality assurance, and potentially specialized testing services that don't fit into more specific categories like custom software development (541511) or computer facilities management (541512). It signifies a flexible scope to address various IT needs.

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 › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: TIPSS4 TTN-4088

Offers Received: 32

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Deloitte Financial Advisory Services LLP

Address: 1725 DUKE ST, ALEXANDRIA, VA, 22314

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

Financial Breakdown

Contract Ceiling: $45,865,044

Exercised Options: $45,693,063

Current Obligation: $42,877,500

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: TIRNO11D00016

IDV Type: IDC

Timeline