Railroad Retirement Board Awards $28.5M SMAC Services Contract to Palmetto GBA, LLC, Lacking Competition
Contract Overview
Contract Amount: $28,478,386 ($28.5M)
Contractor: Palmetto GBA, LLC
Awarding Agency: Railroad Retirement Board
Start Date: 2023-04-01
End Date: 2024-09-30
Contract Duration: 548 days
Daily Burn Rate: $52.0K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: PROVISION OF SMAC SERVICES IN LIEU OF FORTHCOMING SMAC CONTRACT AWARD.
Place of Performance
Location: CHICAGO, COOK County, ILLINOIS, 60611
State: Illinois Government Spending
Plain-Language Summary
Railroad Retirement Board obligated $28.5 million to PALMETTO GBA, LLC for work described as: PROVISION OF SMAC SERVICES IN LIEU OF FORTHCOMING SMAC CONTRACT AWARD. Key points: 1. The contract is for SMAC (Systems, Medical, Administrative, and Claims) services, indicating a need for broad administrative and IT support. 2. Palmetto GBA, LLC, the sole awardee, suggests a lack of broader market engagement or a specific justification for limited competition. 3. The Cost Plus Award Fee (CPAF) structure allows for performance-based incentives but can lead to higher costs if not managed tightly. 4. The Railroad Retirement Board (RRB) is the contracting agency, focusing on specific federal employee benefits and services. 5. The contract duration of 548 days (approx. 1.5 years) with a significant value points to a critical, ongoing need.
Value Assessment
Rating: questionable
The Cost Plus Award Fee (CPAF) contract type, while allowing for performance incentives, can be less predictable in final cost compared to fixed-price contracts. Benchmarking against similar SMAC service contracts is difficult without more detailed scope and performance data.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was 'NOT COMPETED,' indicating a limited competition approach. This raises questions about whether alternative vendors were considered or if there was a specific justification for not pursuing a broader solicitation. Limited competition can impact price discovery and potentially lead to higher costs.
Taxpayer Impact: The lack of full and open competition may result in taxpayers paying more than necessary for these essential SMAC services.
Public Impact
Beneficiaries of the Railroad Retirement Board may experience continuity in services due to this contract. The specific nature of SMAC services suggests a direct impact on administrative and potentially claims processing for RRB programs. Federal employees within the RRB administration rely on these services for operational efficiency. The significant contract value highlights the importance of these services to the agency's mission.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of Competition
- Cost Plus Award Fee Structure
- Potential for Cost Overruns
Positive Signals
- Awarded to established vendor
- Addresses critical service need
- Performance-based incentives
Sector Analysis
The contract falls under general administrative and IT support services, often categorized within professional services. The value of $28.5 million is substantial for a single contract, suggesting a significant operational requirement for the Railroad Retirement Board. Benchmarking requires comparison to similar administrative support contracts for federal agencies.
Small Business Impact
The contract data indicates that small business participation was not a stated goal or requirement ('sb': false). This suggests that the procurement strategy did not prioritize opportunities for small businesses, potentially limiting their access to this contract vehicle.
Oversight & Accountability
The 'NOT COMPETED' status warrants further oversight to ensure the justification for limited competition was sound and that the agency explored all viable options to ensure fair pricing and maximize taxpayer value. The CPAF structure requires diligent monitoring of performance and costs.
Related Government Programs
- Administration of Public Health Programs
- Railroad Retirement Board Contracting
- Railroad Retirement Board Programs
Risk Flags
- Lack of competition may lead to higher costs.
- CPAF structure requires diligent oversight to control costs.
- Potential for vendor lock-in due to limited competition.
- Absence of small business set-aside opportunities.
- Significant contract value warrants scrutiny of justification for limited competition.
Tags
administration-of-public-health-programs, railroad-retirement-board, il, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Railroad Retirement Board awarded $28.5 million to PALMETTO GBA, LLC. PROVISION OF SMAC SERVICES IN LIEU OF FORTHCOMING SMAC CONTRACT AWARD.
Who is the contractor on this award?
The obligated recipient is PALMETTO GBA, LLC.
Which agency awarded this contract?
Awarding agency: Railroad Retirement Board (Railroad Retirement Board).
What is the total obligated amount?
The obligated amount is $28.5 million.
What is the period of performance?
Start: 2023-04-01. End: 2024-09-30.
What was the specific justification for not competing this significant SMAC services contract, and were any sole-source justifications thoroughly documented and approved?
The justification for not competing the contract is critical for assessing value. Agencies typically require a documented justification, such as a sole-source procurement based on unique capabilities or urgent needs. Without this documentation, it's difficult to ascertain if the limited competition was appropriate or if it potentially led to suboptimal pricing for the government.
How will the Railroad Retirement Board ensure cost control and effective performance management under the Cost Plus Award Fee (CPAF) structure for Palmetto GBA, LLC?
Effective management of a CPAF contract involves clearly defined performance metrics and award fee criteria aligned with agency objectives. The RRB must establish robust oversight mechanisms to monitor contractor performance against these criteria and ensure that award fees are only paid for exceptional performance, thereby controlling costs and driving desired outcomes.
What is the anticipated impact of this contract on the continuity and quality of services provided by the Railroad Retirement Board to its beneficiaries and stakeholders?
This contract is crucial for maintaining the operational continuity of the Railroad Retirement Board's administrative and claims processing functions. The SMAC services are designed to support these core activities, ensuring that beneficiaries continue to receive necessary support and that the agency can effectively manage its programs without disruption.
Industry Classification
NAICS: Public Administration › Administration of Human Resource Programs › Administration of Public Health Programs
Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: 60RRBH20R0003
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 17 TECHNOLOGY CIR, COLUMBIA, SC, 29203
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $31,699,379
Exercised Options: $31,699,379
Current Obligation: $28,478,386
Actual Outlays: $28,314,284
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2023-04-01
Current End Date: 2024-09-30
Potential End Date: 2024-09-30 00:00:00
Last Modified: 2025-01-14
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