HHS awarded $134.6M to HP Enterprise Services for administrative management consulting over 14 years

Contract Overview

Contract Amount: $134,646,739 ($134.6M)

Contractor: HP Enterprise Services, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2002-10-15

End Date: 2017-01-31

Contract Duration: 5,222 days

Daily Burn Rate: $25.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Place of Performance

Location: PLANO, COLLIN County, TEXAS, 75024

State: Texas Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $134.6 million to HP ENTERPRISE SERVICES, LLC for work described as: Key points: 1. Contract value represents significant long-term investment in administrative support services. 2. Full and open competition suggests a potentially competitive bidding process. 3. Contract duration of over 14 years indicates a need for sustained service delivery. 4. The contract's focus on administrative management aligns with core government functions. 5. Performance was likely evaluated against award fee criteria, incentivizing quality. 6. The significant dollar amount warrants scrutiny of ongoing value and necessity.

Value Assessment

Rating: fair

The total award of $134.6 million over nearly 15 years averages to approximately $9 million annually. This figure needs to be benchmarked against similar large-scale administrative management contracts within HHS and across other federal agencies to determine if it represents a fair price. Without specific details on the services rendered and the complexity involved, a precise value-for-money assessment is challenging. However, the extended duration suggests a stable, long-term relationship that could offer cost efficiencies through predictability, but also carries the risk of price escalation or service obsolescence if not actively managed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bidders suggests a degree of competition, though the exact number of proposals received and the evaluation process are not detailed. A competitive process is generally expected to drive down prices and improve service quality, but the long duration and significant value of this contract mean that the initial competition's effectiveness in securing long-term value is a key consideration.

Taxpayer Impact: Taxpayers benefit from the potential for competitive pricing achieved through a full and open solicitation. However, the long-term nature of the contract requires ongoing vigilance to ensure continued cost-effectiveness and prevent price creep.

Public Impact

Beneficiaries include the Centers for Medicare and Medicaid Services (CMS) and potentially other HHS components requiring administrative support. Services delivered likely encompass a broad range of administrative management and general management consulting. The geographic impact is primarily centered in Texas, where the contract was administered. Workforce implications could involve direct hires by HP Enterprise Services and potential impacts on federal employee roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Extended contract duration may lead to complacency or reduced incentive for innovation if not actively managed.
The significant dollar amount over a long period necessitates robust oversight to ensure continued alignment with evolving needs.
Lack of specific performance metrics makes it difficult to independently assess the contractor's effectiveness.
Potential for scope creep over the 14+ year period without clear re-competition or modification controls.

Positive Signals

Award fee structure incentivizes contractor performance and quality.
Full and open competition suggests a potentially strong initial price negotiation.
Long-term contract provides stability and predictability for service delivery.
The contractor, HP Enterprise Services, likely possesses significant experience in large-scale government contracts.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically administrative management and general management consulting. This is a broad category encompassing services that help organizations improve their efficiency and effectiveness. The federal government is a major consumer of these services, utilizing them for everything from strategic planning and organizational design to IT management and human resources. The market size for federal administrative consulting is substantial, with agencies consistently seeking expertise to navigate complex operations and policy implementation. This contract represents a significant portion of spending within this niche for HHS.

Small Business Impact

There is no indication that this contract included small business set-asides, nor is there information suggesting significant subcontracting opportunities for small businesses. The primary contractor is a large entity, and the nature of administrative management consulting often involves direct service provision by the prime. Further analysis would be needed to determine if any small business participation was mandated or occurred organically.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the Centers for Medicare and Medicaid Services (CMS). The award fee structure implies performance monitoring and evaluation. Transparency would depend on the public availability of contract performance reports and any Inspector General (IG) reviews. The HHS IG would have jurisdiction to investigate potential fraud, waste, or abuse related to this contract.

Related Government Programs

HHS Administrative Support Contracts
CMS Management Consulting Services
Federal IT and Management Consulting Spending
Large-Scale Government Service Contracts

Risk Flags

Long contract duration may reduce flexibility and increase risk of obsolescence.
Award fee structure requires robust performance monitoring to ensure value.
Lack of detailed service scope makes precise value assessment difficult.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $134.6 million to HP ENTERPRISE SERVICES, LLC. See the official description on USAspending.

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 $134.6 million.

What is the period of performance?

Start: 2002-10-15. End: 2017-01-31.

What specific administrative management and general management consulting services were delivered under this contract?

The contract, awarded to HP Enterprise Services, focused on 'Administrative Management and General Management Consulting Services' (NAICS code 541611). While the specific deliverables are not detailed in the provided data, this category typically includes services aimed at improving organizational efficiency, strategic planning, business process re-engineering, program management support, and general administrative operations. For an agency like CMS, this could involve support for financial management, human capital planning, operational process optimization, policy implementation assistance, and overall program oversight. The extended duration suggests a broad and evolving scope of support critical to CMS's mission.

How does the $134.6 million award compare to similar contracts for administrative management consulting at HHS or other agencies?

Benchmarking the $134.6 million award requires comparing it against contracts with similar scope, duration, and complexity. Given this contract spanned over 14 years, the annual average of approximately $9 million is a more relevant figure for comparison. Large federal agencies frequently award multi-year contracts for management and administrative support. However, without detailed service descriptions and performance outcomes, a direct comparison is difficult. Contracts for specialized consulting (e.g., deep IT modernization or complex policy analysis) might command higher annual rates, while broader administrative support might be lower. The 'fair' rating suggests it's within a plausible range but warrants further investigation into specific service value.

What were the key performance indicators (KPIs) and award fee criteria used to evaluate HP Enterprise Services' performance?

The contract type is 'COST PLUS AWARD FEE' (CPAF), which indicates that performance was evaluated against pre-defined criteria, and the contractor could earn an award fee based on exceeding expectations. Specific KPIs and award fee criteria are not detailed in the provided data. Typically, for administrative management consulting, KPIs might include metrics related to cost savings achieved, efficiency improvements implemented, timeliness of deliverables, client satisfaction, adherence to budget, and successful project completion. The contracting officer and relevant program officials would have been responsible for assessing performance against these criteria to determine the award fee amount.

What is the historical spending trend for administrative management consulting services at CMS over the contract period?

The provided data covers a single, large contract awarded in 2002 and ending in 2017. To understand historical spending trends, one would need to examine CMS's overall budget allocations and procurement data for administrative and management consulting services across all contracts during that period (2002-2017). This specific $134.6 million award represents a significant portion of spending within this category during its term. Analyzing trends would involve looking at whether spending in this area increased, decreased, or remained stable relative to CMS's total budget and mission priorities over those years.

Were there any identified risks or challenges associated with this contract during its performance period?

While the provided data does not explicitly list risks encountered, long-duration, high-value contracts like this inherently carry potential risks. These could include the risk of the contractor becoming entrenched and less responsive, the risk of service scope becoming misaligned with evolving agency needs, potential cost overruns if not managed tightly (despite the CPAF structure), and the risk of vendor lock-in. The 'fair' value assessment suggests that while the contract may have been executed adequately, it might not have represented exceptional value or could have faced challenges that prevented a higher rating. Further review of contract performance reports or IG findings would be necessary to identify specific issues.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 2

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: $134,646,739

Exercised Options: $134,646,739

Current Obligation: $134,646,739

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 500990012

IDV Type: IDC

Timeline