GSA awards $99M contract for individual and family services, raising questions about competition and value

Contract Overview

Contract Amount: $99,095,157 ($99.1M)

Contractor: Carelon Health Federal Services, Inc

Awarding Agency: General Services Administration

Start Date: 2024-10-31

End Date: 2025-10-31

Contract Duration: 365 days

Daily Burn Rate: $271.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: MILITARY ONESOURCE BRIDGE

Place of Performance

Location: CHESAPEAKE, CHESAPEAKE CITY County, VIRGINIA, 23320

State: Virginia Government Spending

Plain-Language Summary

General Services Administration obligated $99.1 million to CARELON HEALTH FEDERAL SERVICES, INC for work described as: MILITARY ONESOURCE BRIDGE Key points: 1. The contract's value of $99 million over one year suggests a significant investment in individual and family services. 2. The sole-source nature of this award limits opportunities for competitive bidding and potentially impacts price discovery. 3. A high per-unit cost benchmark could indicate potential overspending or a lack of market-driven pricing. 4. The contract's duration of one year, with a potential for extensions, requires careful monitoring of performance and value. 5. The absence of small business set-asides warrants scrutiny regarding opportunities for smaller entities in this service area. 6. The reliance on a single contractor for these critical services presents a potential risk if performance falters.

Value Assessment

Rating: questionable

The contract's value of $99 million for a one-year period, with a base value of $27 million, appears high for 'Other Individual and Family Services' without further context on the scope of services. Benchmarking against similar contracts is difficult due to the lack of detailed service descriptions and the sole-source nature of the award. The fixed-price contract type offers some cost certainty, but the absence of competitive pressure makes it challenging to assess whether the pricing represents fair market value. Further analysis of the specific services provided and the contractor's historical performance is needed to definitively determine value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one vendor, Carelon Health Federal Services, Inc., was solicited. This approach bypasses the standard competitive bidding process, which typically involves soliciting proposals from multiple interested parties. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they generally lead to less price competition and may result in higher costs for the government compared to fully competed contracts. The lack of competition here means taxpayers do not benefit from the potential cost savings that a competitive environment could foster.

Taxpayer Impact: The sole-source award means taxpayers may not be receiving the best possible price for these services, as there was no opportunity for multiple vendors to compete and offer lower bids. This lack of competition limits the government's ability to leverage market forces to ensure cost-effectiveness.

Public Impact

The primary beneficiaries of this contract are likely individuals and families requiring support services, though the specific demographics and needs are not detailed. The contract is intended to deliver 'Other Individual and Family Services,' which could encompass a wide range of support, counseling, or case management. The geographic impact is centered in Virginia, where the contract is managed, but the services may extend to beneficiaries nationwide. Workforce implications could include the creation of jobs within Carelon Health Federal Services, Inc. and potentially its subcontractors, particularly in the human services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of transparency in the justification for a sole-source award.
Absence of small business participation raises concerns about equitable distribution of federal contracting opportunities.
The broad category of 'Other Individual and Family Services' lacks specificity, making it difficult to assess the true value and necessity of the contract.
Potential for vendor lock-in due to the sole-source nature of the award.

Positive Signals

The contract is awarded to a single, established entity, potentially ensuring continuity of services.
The firm fixed-price contract type provides budget certainty for the government.
The contract is managed by the General Services Administration (GSA), which has established procurement processes.
The contract duration allows for a defined period of service delivery.

Sector Analysis

The 'Other Individual and Family Services' category falls within the broader human services sector, which includes a wide array of support programs. This sector is characterized by a mix of government agencies, non-profit organizations, and private companies. Federal spending in this area often supports vulnerable populations, including veterans, low-income families, and individuals with specific needs. Comparable spending benchmarks are difficult to establish without a more precise definition of the services rendered, but federal investment in social and family services is substantial and ongoing.

Small Business Impact

This contract does not appear to include any specific small business set-asides, as indicated by the 'sb' field being false. The sole-source nature of the award further limits opportunities for small businesses to participate either as prime contractors or potentially even as subcontractors, unless specifically included in the prime contractor's plan. This raises concerns about the equitable distribution of federal contracting dollars and the potential impact on the small business ecosystem within this service area. Future solicitations in this domain should consider mechanisms to ensure greater small business involvement.

Oversight & Accountability

Oversight for this contract would primarily fall under the General Services Administration (GSA), specifically the Federal Acquisition Service, which awarded the contract. As a definitive contract, it is subject to standard federal procurement regulations and oversight. Transparency regarding the justification for the sole-source award and the specific performance metrics will be crucial for effective accountability. While no specific Inspector General jurisdiction is mentioned, the GSA's Office of Inspector General would likely have oversight authority over GSA contracting actions.

Related Government Programs

Department of Health and Human Services Programs
Department of Veterans Affairs Services
Social Services Block Grants
Child Care and Development Fund
Temporary Assistance for Needy Families (TANF)

Risk Flags

Sole-source award without clear justification.
Potential for lack of price competition.
Limited transparency on specific services and performance metrics.
Absence of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

General Services Administration awarded $99.1 million to CARELON HEALTH FEDERAL SERVICES, INC. MILITARY ONESOURCE BRIDGE

Who is the contractor on this award?

The obligated recipient is CARELON HEALTH FEDERAL SERVICES, INC.

Which agency awarded this contract?

Awarding agency: General Services Administration (Federal Acquisition Service).

What is the total obligated amount?

The obligated amount is $99.1 million.

What is the period of performance?

Start: 2024-10-31. End: 2025-10-31.

What specific services are included under 'Other Individual and Family Services' for this contract?

The provided data categorizes this contract under NAICS code 624190, 'Other Individual and Family Services.' This broad category can encompass a wide range of support services, such as crisis intervention, case management, counseling, life skills training, and support for individuals and families facing various challenges. Without more specific details from the contract's statement of work, it is difficult to ascertain the precise nature of the services being procured. This lack of specificity makes it challenging to evaluate the necessity, scope, and potential impact of the contract. Further inquiry into the contract's documentation would be required to understand the exact services delivered and the target population.

What is the justification for awarding this contract on a sole-source basis?

The data indicates this contract was awarded as 'NOT COMPETED,' which typically implies a sole-source or limited competition justification. Common reasons for sole-source awards include the unavailability of other sources, urgent and compelling needs, or when a specific contractor possesses unique capabilities essential for the requirement. However, the provided data does not include the specific justification document or rationale. A thorough review of the contract file, particularly the Justification and Approval (J&A) document, would be necessary to understand the government's reasoning for not pursuing a competitive procurement. Without this information, it is difficult to assess whether the sole-source award was appropriate and in the best interest of the government.

How does the base contract value of $27,149,400 compare to similar services procured by the government?

The base contract value of $27,149,400 for a one-year period, within the broad category of 'Other Individual and Family Services,' is substantial. However, without a detailed breakdown of the specific services to be rendered, direct comparison to similar contracts is challenging. Federal spending in social and family services varies widely based on the target population, intensity of services, and geographic scope. To benchmark this value effectively, one would need to identify contracts with comparable service descriptions, recipient populations, and contract types. The GSA's procurement data or agency-specific spending reports could offer insights, but the unique nature of sole-source awards often makes direct value comparisons less straightforward due to the absence of competitive pricing.

What are the potential risks associated with a sole-source contract of this magnitude?

A sole-source contract of this magnitude ($99 million total potential value) carries several inherent risks. Firstly, the lack of competition can lead to inflated pricing, as the contractor faces no pressure to offer the most cost-effective solution. Secondly, there's a risk of reduced service quality or innovation, as the contractor may have less incentive to improve performance when their position is secured. Thirdly, vendor lock-in can occur, making it difficult and costly to transition to a different provider in the future. Finally, the absence of competitive oversight can sometimes mask inefficiencies or performance issues. Robust contract management, performance monitoring, and clear deliverables are essential to mitigate these risks.

What is the track record of Carelon Health Federal Services, Inc. in delivering similar government contracts?

The provided data identifies Carelon Health Federal Services, Inc. as the contractor. To assess their track record, one would need to examine their past performance on federal contracts, particularly those involving individual and family services. This would involve searching federal procurement databases (like SAM.gov or FPDS) for previous awards to this entity, reviewing past performance evaluations (if publicly available), and looking for any history of contract disputes, terminations, or performance issues. A strong track record of successful contract completion and positive performance reviews would increase confidence in their ability to deliver on this current sole-source award. Conversely, any negative history would heighten concerns.

Industry Classification

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

Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 47QFCA24R0056

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1434 CROSSWAYS BLVD STE 150, CHESAPEAKE, VA, 23320

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

Financial Breakdown

Contract Ceiling: $220,152,926

Exercised Options: $107,965,470

Current Obligation: $99,095,157

Actual Outlays: $80,906,159

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline