HHS awarded $109M for Program Safeguard Contract to HP Enterprise Services, focusing on administrative management

Contract Overview

Contract Amount: $109,153,560 ($109.2M)

Contractor: HP Enterprise Services, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 1999-11-19

End Date: 2017-01-31

Contract Duration: 6,283 days

Daily Burn Rate: $17.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 21

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: PROGRAM SAFEGUARD CONTRACT

Place of Performance

Location: PLANO, COLLIN County, TEXAS, 75024

State: Texas Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $109.2 million to HP ENTERPRISE SERVICES, LLC for work described as: PROGRAM SAFEGUARD CONTRACT Key points: 1. Contract value of $109 million over its life suggests a significant investment in administrative management services. 2. The contract was awarded through full and open competition, indicating a broad market search. 3. A long duration of over 17 years (6283 days) implies a sustained need for these services. 4. The cost-plus award fee (CPAF) structure allows for contractor incentives based on performance. 5. The primary service category is Administrative Management and General Management Consulting Services, crucial for operational efficiency. 6. The contract was awarded as a delivery order, suggesting it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle or a similar framework.

Value Assessment

Rating: fair

Benchmarking the value of this $109 million contract is challenging without specific performance metrics or comparable contracts for administrative management consulting over such an extended period. The cost-plus award fee structure introduces variability, making direct price comparisons difficult. However, the sheer duration and total value suggest a substantial and ongoing need for these services within CMS.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically involves a broad solicitation to all eligible offerors. This approach aims to maximize competition and potentially achieve better pricing and service quality. The presence of 21 bids (no=21) indicates a robust competitive environment for this contract.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more cost-effective solutions and a wider array of innovative approaches.

Public Impact

The Centers for Medicare and Medicaid Services (CMS) benefits from enhanced administrative management and consulting services, potentially improving program efficiency and effectiveness. Services delivered likely include strategic planning, operational support, and management consulting to aid CMS in its mission. The contract's impact is primarily national, given CMS's role in administering federal healthcare programs. Workforce implications could involve direct employment by HP Enterprise Services and potential indirect impacts on government personnel managing the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 17 years) may indicate potential for vendor lock-in or reduced agility in adapting to evolving needs.
Cost-plus award fee contracts can sometimes lead to cost overruns if not managed diligently, despite performance incentives.
The broad nature of 'Administrative Management and General Management Consulting Services' could lead to scope creep if not clearly defined and monitored.

Positive Signals

Awarded through full and open competition with 21 bids suggests a competitive process that likely drove value.
The use of an award fee structure incentivizes contractor performance, aligning HP Enterprise Services' goals with CMS objectives.
The sustained award over many years indicates a consistent level of satisfaction and perceived value from the government's perspective.

Sector Analysis

This contract falls within the professional services sector, specifically administrative and management consulting. The federal market for these services is substantial, with agencies consistently seeking expertise to manage complex operations, improve efficiency, and implement policy. Comparable spending benchmarks would typically involve analyzing other large-scale consulting contracts awarded to major IT and professional services firms by federal agencies.

Small Business Impact

The data does not indicate any specific small business set-aside provisions for this contract (sb=false). Given the large contract value and the nature of the services, it is possible that subcontracting opportunities may exist for specialized areas, but this is not explicitly detailed. The primary awardee is a large corporation, suggesting the direct impact on the small business ecosystem might be limited unless significant subcontracting occurs.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officers and program managers within the Centers for Medicare and Medicaid Services (CMS). The cost-plus award fee structure necessitates close monitoring of performance against defined criteria. Transparency is generally maintained through contract databases and reporting requirements, though specific internal oversight mechanisms are not detailed here. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Medicare Administrative Contractors (MACs)
Medicaid Information Technology Architecture (MITA)
Healthcare Information Technology Standards Panel (HITSP)
Federal Health IT Strategy

Risk Flags

Long contract duration may lead to reduced flexibility and potential for vendor lock-in.
Cost-plus award fee structure requires diligent oversight to manage costs effectively.
Scope creep is a potential risk for broad administrative consulting services if not tightly managed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $109.2 million to HP ENTERPRISE SERVICES, LLC. PROGRAM SAFEGUARD CONTRACT

Who is the contractor on this award?

The obligated recipient is HP ENTERPRISE SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Medicare and Medicaid Services).

What is the total obligated amount?

The obligated amount is $109.2 million.

What is the period of performance?

Start: 1999-11-19. End: 2017-01-31.

What specific types of administrative management and general management consulting services were provided under this contract?

While the contract is broadly categorized under 'Administrative Management and General Management Consulting Services' (NAICS 541611), the specific deliverables are not detailed in the provided data. Typically, such contracts can encompass a wide range of services including strategic planning, organizational analysis, process improvement, program management support, policy development assistance, and operational efficiency consulting. For the Centers for Medicare and Medicaid Services (CMS), these services likely supported the complex administration and oversight of federal healthcare programs like Medicare and Medicaid, ensuring operational effectiveness and compliance.

How does the $109 million contract value compare to similar administrative consulting contracts awarded by HHS or other large federal agencies?

The $109 million total value over approximately 17 years represents a significant, long-term investment in administrative consulting services. Comparing this requires looking at other large-scale, multi-year professional services contracts within HHS and across federal agencies. For instance, large IT modernization efforts or major program management support contracts can reach similar or higher values. However, direct comparisons are difficult without knowing the specific scope, duration, and service level agreements of other contracts. The value suggests a sustained and critical need for external expertise in managing CMS's vast operations.

What are the key performance indicators (KPIs) used to determine the 'award fee' component of this Cost Plus Award Fee (CPAF) contract?

The specific Key Performance Indicators (KPIs) for the award fee component are not detailed in the provided summary data. However, in a CPAF contract, award fees are typically tied to the contractor's performance against pre-defined criteria and objectives outlined in the contract's Performance Work Statement (PWS). For administrative management consulting, these KPIs could include metrics related to project delivery timeliness, quality of deliverables, cost control, customer satisfaction (from government stakeholders), innovation, and adherence to regulatory requirements. The government would periodically evaluate the contractor's performance against these KPIs to determine the amount of award fee earned.

What is the historical spending pattern for this 'PROGRAM SAFEGUARD CONTRACT' or similar services by CMS over the years?

The provided data indicates a single award for the 'PROGRAM SAFEGUARD CONTRACT' to HP Enterprise Services, LLC, spanning from November 19, 1999, to January 31, 2017, with a total value of $109,153,559.72. This suggests a consistent, long-term engagement for these services. To understand historical spending patterns, one would need to examine CMS's budget allocations and contract awards for administrative management and consulting services over a broader period, potentially looking at predecessor contracts or subsequent awards for similar functions. The duration of this single contract implies a stable, ongoing requirement rather than fluctuating, project-based spending.

What risks are associated with a contract of this duration (over 17 years) and type (CPAF)?

Contracts spanning over 17 years carry inherent risks, including potential obsolescence of services or technology if not managed proactively, and the risk of 'vendor lock-in' where the government becomes overly reliant on a single provider, potentially stifling competition for future needs. For Cost Plus Award Fee (CPAF) contracts, risks include the potential for costs to escalate if performance metrics are not rigorously defined and monitored, and the subjective nature of award fee determinations which can lead to disputes. Additionally, long-term contracts may not always reflect the most current market pricing or innovative solutions available at the time of renewal or re-competition.

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: FULL AND OPEN COMPETITION

Offers Received: 21

Pricing Type: COST PLUS AWARD FEE (R)

Contractor Details

Parent Company: HP, Inc.

Address: 5400 LEGACY DR, PLANO, TX, 75024

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $109,153,560

Exercised Options: $109,153,560

Current Obligation: $109,153,560

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 500990012

IDV Type: IDC

Timeline