Railroad Retirement Board Awards $31M Contract for Specialty Medicare Services to Palmetto GBA, LLC
Contract Overview
Contract Amount: $30,959,557 ($31.0M)
Contractor: Palmetto GBA, LLC
Awarding Agency: Railroad Retirement Board
Start Date: 2024-08-19
End Date: 2034-09-30
Contract Duration: 3,694 days
Daily Burn Rate: $8.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS AWARD FEE
Sector: Healthcare
Official Description: PROVISION OF SPECIALTY MEDICARE ADMINISTRATIVE CONTRACTOR (SMAC) SERVICES.
Place of Performance
Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29203
Plain-Language Summary
Railroad Retirement Board obligated $31.0 million to PALMETTO GBA, LLC for work described as: PROVISION OF SPECIALTY MEDICARE ADMINISTRATIVE CONTRACTOR (SMAC) SERVICES. Key points: 1. The contract aims to provide essential Medicare administrative services, crucial for beneficiary support. 2. Awarded via full and open competition, suggesting a competitive bidding process. 3. The cost-plus award fee structure incentivizes performance but requires careful monitoring. 4. This spending falls under Administration of Human Resource Programs, highlighting its social impact.
Value Assessment
Rating: good
The contract value of $30.96 million over approximately 10 years suggests a moderate annual spend. Benchmarking against similar Medicare administrative contracts would be necessary for a precise value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, indicating that multiple vendors had the opportunity to bid. This process is generally expected to yield competitive pricing.
Taxpayer Impact: Taxpayer funds are being used to ensure the efficient administration of Medicare services, which is a core government function.
Public Impact
Ensures continued access to vital Medicare administrative services for beneficiaries. Supports the operational efficiency of the Railroad Retirement Board's healthcare-related functions. Potential for improved service delivery through performance-based incentives.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost-plus award fee contracts can lead to cost overruns if not managed tightly.
- The long duration of the contract may present risks if market conditions or service needs change significantly.
Positive Signals
- Awarded through full and open competition, promoting fairness and potentially better pricing.
- Performance incentives are built into the contract structure.
Sector Analysis
This contract falls within the broader healthcare administration sector, specifically focusing on Medicare services. Spending benchmarks for similar administrative contracts are typically tied to the volume of beneficiaries and complexity of services managed.
Small Business Impact
The data indicates that small businesses were not directly awarded this contract, as it was awarded to Palmetto GBA, LLC. Further analysis would be needed to determine if small businesses are involved as subcontractors.
Oversight & Accountability
The Railroad Retirement Board is responsible for overseeing this contract. Robust oversight will be critical to ensure performance objectives are met and costs remain within reasonable bounds, especially given the cost-plus award fee structure.
Related Government Programs
- Administration of Human Resource Programs (except Education, Public Health, and Veterans' Affairs Programs)
- Railroad Retirement Board Contracting
- Railroad Retirement Board Programs
Risk Flags
- Potential for cost overruns in Cost Plus Award Fee contracts.
- Long contract duration may not adapt well to future changes.
- Dependence on a single contractor for critical administrative functions.
- Need for robust oversight to ensure performance and cost control.
Tags
administration-of-human-resource-program, railroad-retirement-board, sc, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Railroad Retirement Board awarded $31.0 million to PALMETTO GBA, LLC. PROVISION OF SPECIALTY MEDICARE ADMINISTRATIVE CONTRACTOR (SMAC) SERVICES.
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 $31.0 million.
What is the period of performance?
Start: 2024-08-19. End: 2034-09-30.
What is the projected cost per beneficiary or per service provided under this contract, and how does it compare to industry benchmarks?
Without specific service delivery metrics or cost breakdowns, calculating a precise per-beneficiary or per-service cost is not possible from the provided data. A thorough review of the contract's performance work statement and financial reports would be required to establish these benchmarks and compare them against similar Medicare administrative contracts to assess value for money.
What are the key performance indicators (KPIs) for Palmetto GBA, LLC, and what are the potential financial implications if these KPIs are not met?
The contract type (Cost Plus Award Fee) implies that specific performance metrics are defined. Failure to meet these KPIs would likely result in reduced award fees, impacting the contractor's overall profit. The exact financial penalties or fee reductions would be detailed within the contract's award fee plan.
How will the Railroad Retirement Board ensure that the cost-plus award fee structure effectively drives efficiency and prevents unnecessary cost escalation over the contract's duration?
Effective oversight by the Railroad Retirement Board is paramount. This includes rigorous monitoring of contractor performance against defined objectives, regular audits of costs, and transparent communication regarding the award fee determination process. Clear, measurable, and achievable performance standards are essential to guide the contractor towards efficiency.
Industry Classification
NAICS: Public Administration › Administration of Human Resource Programs › Administration of Human Resource Programs (except Education, Public Health, and Veterans' Affairs Programs)
Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: 60RRBH21R0011
Offers Received: 2
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: $152,036,060
Exercised Options: $34,678,430
Current Obligation: $30,959,557
Actual Outlays: $22,182,479
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2024-08-19
Current End Date: 2034-09-30
Potential End Date: 2034-09-30 00:00:00
Last Modified: 2026-02-11
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