HHS Awards $57.6M for Medical & Surgical Instruments to Blue Cross Blue Shield of Alabama
Contract Overview
Contract Amount: $57,642,810 ($57.6M)
Contractor: Blue Cross and Blue Shield of Alabama
Awarding Agency: Department of Health and Human Services
Start Date: 2001-08-15
End Date: 2010-12-31
Contract Duration: 3,425 days
Daily Burn Rate: $16.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 6
Pricing Type: COST PLUS FIXED FEE
Sector: Healthcare
Official Description: MED & SURGICAL INSTRUMENTS,EQ & SUP
Place of Performance
Location: BIRMINGHAM, SHELBY County, ALABAMA, 35244, UNITED STATES OF AMERICA
State: Alabama Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $57.6 million to BLUE CROSS AND BLUE SHIELD OF ALABAMA for work described as: MED & SURGICAL INSTRUMENTS,EQ & SUP Key points: 1. The contract value of $57.6 million over 9 years is substantial for medical and surgical instruments. 2. Competition was full and open, suggesting a potentially competitive pricing environment. 3. The risk appears moderate given the long duration and cost-plus fixed fee contract type. 4. This spending falls within the broader healthcare sector, specifically related to Medicare and Medicaid services.
Value Assessment
Rating: fair
The contract type is Cost Plus Fixed Fee, which can lead to higher costs than fixed-price contracts if not managed carefully. Benchmarking against similar contracts for medical and surgical instruments is difficult without more specific data on the items procured.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which generally promotes competitive pricing. However, the specific pricing mechanisms within the Cost Plus Fixed Fee structure need scrutiny to ensure value for money.
Taxpayer Impact: Taxpayer funds are being used for this contract. The effectiveness of the competition and the cost controls within the contract will determine the ultimate taxpayer impact.
Public Impact
Ensures availability of essential medical and surgical instruments for Medicare and Medicaid beneficiaries. Supports healthcare providers by supplying necessary equipment for patient care. The long contract duration may offer stability but also limits opportunities for newer, potentially more cost-effective solutions. Potential for cost overruns exists with Cost Plus Fixed Fee contracts if not rigorously overseen.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type
- Long contract duration (9 years)
- Limited specific product details
Positive Signals
- Full and open competition
- Awarded to a well-known entity (BCBS Alabama)
Sector Analysis
This contract falls under the healthcare sector, specifically focusing on the procurement of medical and surgical instruments. Spending benchmarks for this category can vary widely based on the specific items and quantities procured, but $57.6 million over 9 years suggests a significant, ongoing need.
Small Business Impact
The data indicates the contract was not specifically set aside for small businesses, nor does it mention small business participation. Further investigation would be needed to determine if small businesses were involved as subcontractors.
Oversight & Accountability
The Centers for Medicare and Medicaid Services (CMS) is responsible for oversight. The Cost Plus Fixed Fee structure necessitates robust oversight to manage costs and ensure performance. The long duration requires sustained accountability.
Related Government Programs
- Department of Health and Human Services Contracting
- Centers for Medicare and Medicaid Services Programs
Risk Flags
- Potential for cost overruns due to Cost Plus Fixed Fee structure.
- Lack of specific details on procured items and their unit costs.
- Long contract duration may limit adoption of newer technologies.
- Limited insight into small business participation.
Tags
department-of-health-and-human-services, al, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $57.6 million to BLUE CROSS AND BLUE SHIELD OF ALABAMA. MED & SURGICAL INSTRUMENTS,EQ & SUP
Who is the contractor on this award?
The obligated recipient is BLUE CROSS AND BLUE SHIELD OF ALABAMA.
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 $57.6 million.
What is the period of performance?
Start: 2001-08-15. End: 2010-12-31.
What specific medical and surgical instruments were procured under this contract, and how do their prices compare to market rates?
The provided data does not specify the exact instruments. To assess value, a detailed breakdown of procured items and their unit costs would be necessary. Comparing these to industry benchmarks and prices paid by other government agencies for similar items would reveal if the government received fair market value.
What mechanisms are in place to control costs and ensure efficiency within this Cost Plus Fixed Fee contract?
Cost Plus Fixed Fee contracts require strong government oversight to manage expenditures. Key mechanisms include regular audits of costs, clear definitions of allowable costs, and performance metrics tied to fee. Without detailed contract clauses, it's difficult to assess the robustness of these controls.
How effectively did the full and open competition process drive down prices for these medical and surgical instruments?
While full and open competition is a positive indicator, its effectiveness in driving down prices depends on the number and competitiveness of bidders, as well as the specific pricing structure. The Cost Plus Fixed Fee nature means the government bears cost risk, so the competition's impact on the final price needs careful analysis of the awarded rates and fees.
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 6
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 450 RIVERCHASE PARKWAY EAST, BIRMINGHAM, AL, 35244
Business Categories: Category Business, Nonprofit Organization, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $57,958,608
Exercised Options: $6,889,982
Current Obligation: $57,642,810
Parent Contract
Parent Award PIID: 500990017
IDV Type: IDC
Timeline
Start Date: 2001-08-15
Current End Date: 2010-12-31
Potential End Date: 2010-12-31 00:00:00
Last Modified: 2017-07-05
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