HHS awarded $154M for other professional services to Magellan Health, Inc. over 10 years

Contract Overview

Contract Amount: $154,216,943 ($154.2M)

Contractor: Magellan Health, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2000-12-01

End Date: 2012-09-30

Contract Duration: 4,321 days

Daily Burn Rate: $35.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: OTHER PROFESSIONAL SERVICES

Place of Performance

Location: AVON, HARTFORD County, CONNECTICUT, 06001, UNITED STATES OF AMERICA

State: Connecticut Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $154.2 million to MAGELLAN HEALTH, INC. for work described as: OTHER PROFESSIONAL SERVICES Key points: 1. The contract's duration of 10 years suggests a long-term need for these services. 2. The firm fixed-price contract type indicates a defined scope and payment structure. 3. The award was made under full and open competition, implying a robust bidding process. 4. The significant dollar value over a decade warrants scrutiny of ongoing performance and value. 5. The services fall under 'Other Individual and Family Services,' highlighting a focus on social support. 6. The contract was awarded by the Office of the Assistant Secretary for Administration, suggesting administrative or support functions.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific service details and comparable contract data. However, a $154 million award over 10 years for 'Other Professional Services' indicates a substantial investment. The firm fixed-price structure suggests that the contractor bears the risk of cost overruns, which can be favorable for the government if managed effectively. Without more granular data on the specific services rendered and their outcomes, a definitive value-for-money assessment is difficult, but the scale suggests significant operational impact.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' suggesting that all responsible sources were permitted to submit bids. This typically leads to a more competitive environment, potentially driving down prices and improving the quality of services offered. The fact that there were 6 bidders indicates a reasonable level of interest in the opportunity. A competitive process is generally a positive sign for price discovery and ensuring the government receives fair market value.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it fosters a competitive environment, which can lead to lower prices and better service quality, maximizing the value of federal spending.

Public Impact

Individuals and families receiving support services are the primary beneficiaries. The contract likely supports a range of administrative and operational functions within HHS. The geographic impact is likely national, given the scope of HHS operations. The contract may have implications for the workforce involved in delivering these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (10 years) could lead to complacency or reduced innovation if not actively managed.
The broad category of 'Other Professional Services' makes it difficult to assess specific performance metrics and value.
Potential for scope creep over the 10-year period if not tightly managed.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
Firm fixed-price contract type shifts cost risk to the contractor.
The significant investment suggests a critical need for these services within HHS.

Sector Analysis

The 'Other Professional Services' category is broad and encompasses a wide range of support functions across the federal government. This contract, valued at $154 million over 10 years, represents a significant portion of spending within this category for the Department of Health and Human Services. Comparable spending benchmarks are difficult to establish without knowing the specific nature of the services, but large, long-term contracts in this space often support critical administrative, technical, or specialized support functions essential for agency operations.

Small Business Impact

Information regarding small business set-asides or subcontracting plans is not provided in the data. As this was a full and open competition, it's possible that small businesses could have bid directly or participated as subcontractors. However, without specific details, the direct impact on the small business ecosystem remains unclear. Larger contracts often present opportunities for small businesses through subcontracting, but this depends on the prime contractor's strategy and the nature of the services.

Oversight & Accountability

Oversight mechanisms for this contract would typically be managed by the contracting officer and the relevant program officials within the Office of the Assistant Secretary for Administration at HHS. Transparency is generally facilitated through contract award databases like FPDS. Accountability measures would be tied to the performance work statement and the firm fixed-price contract terms. The extent of Inspector General involvement would depend on any reported issues or audits related to performance or financial management.

Related Government Programs

HHS Administrative Support Contracts
Federal Professional Services Contracts
Long-Term Government Service Contracts
Individual and Family Services Programs

Risk Flags

Long contract duration may reduce flexibility.
Broad service category lacks specificity for detailed performance assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $154.2 million to MAGELLAN HEALTH, INC.. OTHER PROFESSIONAL SERVICES

Who is the contractor on this award?

The obligated recipient is MAGELLAN HEALTH, INC..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of the Assistant Secretary for Administration).

What is the total obligated amount?

The obligated amount is $154.2 million.

What is the period of performance?

Start: 2000-12-01. End: 2012-09-30.

What specific professional services were procured under this contract?

The provided data categorizes this contract under 'Other Professional Services' (NAICS code 624190 - Other Individual and Family Services) and indicates the awarding agency as the Department of Health and Human Services (HHS), specifically the Office of the Assistant Secretary for Administration. However, the exact nature of the 'professional services' is not detailed. These could range widely, potentially including management consulting, administrative support, program management, technical assistance, or specialized services related to individual and family support programs. Without a detailed statement of work or contract line item details, the precise services remain unspecified.

How does the $154 million total award value compare to similar contracts for 'Other Professional Services' within HHS or other agencies?

Comparing the $154 million total award value for 'Other Professional Services' over 10 years requires access to extensive contract databases and specific service definitions. Generally, federal spending on professional services is substantial, with many large, multi-year contracts awarded across various agencies. For HHS, which manages a vast array of programs, significant investments in administrative and support services are common. A $15.4 million annual average for this type of service is considerable but not necessarily an outlier for a large federal agency. Benchmarking would necessitate identifying contracts with similar NAICS codes, contract durations, and agency scopes to determine if this represents a premium, a fair market price, or a bargain.

What are the key performance indicators (KPIs) used to measure the success of this contract?

The provided data does not specify the key performance indicators (KPIs) for this contract. Typically, for a firm fixed-price contract, performance is measured against the requirements outlined in the Performance Work Statement (PWS) or Statement of Work (SOW). Success would be evaluated based on the contractor's ability to meet defined deliverables, service levels, quality standards, and timelines. For services related to 'Other Individual and Family Services,' KPIs might include client satisfaction, service accessibility, program efficiency, or adherence to regulatory requirements. The contracting officer's representative (COR) would be responsible for monitoring performance against these metrics.

What is Magellan Health, Inc.'s track record with federal contracts, particularly with HHS?

Magellan Health, Inc. has a history of engaging with federal agencies, including HHS, often in the healthcare and health services sector. Their track record typically involves managing complex health programs, behavioral health services, and pharmacy benefits. While this specific contract is categorized broadly under 'Other Professional Services,' Magellan's core business often aligns with health-related support functions. A review of their federal contract history would reveal their performance on past awards, including on-time delivery, quality of service, and compliance. Their experience in managing large-scale health initiatives suggests a capacity to handle significant federal contracts, though specific performance on this particular award would require further investigation.

What is the historical spending trend for 'Other Professional Services' by the Office of the Assistant Secretary for Administration at HHS?

The provided data only details one specific contract award. To understand the historical spending trend for 'Other Professional Services' by the Office of the Assistant Secretary for Administration (ASA) at HHS, one would need to analyze spending data over multiple fiscal years. This would involve querying federal procurement databases (like FPDS) for all contracts awarded by the ASA under relevant NAICS codes. Analyzing this trend would reveal whether spending in this category has been increasing, decreasing, or remaining stable, and whether this $154 million contract represents a significant shift or continuation of past investment levels. Such analysis is crucial for budget planning and identifying potential areas for efficiency.

Given the 10-year duration, what mechanisms are in place to ensure continued relevance and value for money?

Long-term contracts, such as this 10-year award, necessitate robust mechanisms to ensure continued relevance and value. These typically include contract clauses for periodic reviews, potential for contract modifications based on changing requirements or technology, and performance-based metrics that can be adjusted. The government's ability to exercise options or terminate for convenience (with appropriate notice and compensation) also provides leverage. Furthermore, ongoing oversight by the Contracting Officer's Representative (COR) and regular communication with the contractor are vital. Market research conducted periodically throughout the contract's life can also ensure that the services remain competitive and aligned with current best practices and pricing.

Industry Classification

NAICS: Health Care and Social Assistance › Individual and Family Services › Other Individual and Family Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 6

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 55 NOD RD, AVON, CT, 06001

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

Financial Breakdown

Contract Ceiling: $1,495,312,881

Exercised Options: $938,241,359

Current Obligation: $154,216,943

Timeline