HHS awards $40.6M to KPMG for enterprise-wide portfolio management, with 4 bidders

Contract Overview

Contract Amount: $40,619,187 ($40.6M)

Contractor: Kpmg LLP

Awarding Agency: Department of Health and Human Services

Start Date: 2022-09-27

End Date: 2026-01-08

Contract Duration: 1,199 days

Daily Burn Rate: $33.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: OSPR ENTERPRISE-WIDE PORTFOLIO MANAGEMENT OFFICE

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $40.6 million to KPMG LLP for work described as: OSPR ENTERPRISE-WIDE PORTFOLIO MANAGEMENT OFFICE Key points: 1. Value for money appears fair given the scope of enterprise-wide portfolio management. 2. Competition dynamics show a full and open process with four bidders, suggesting a healthy market. 3. Risk indicators are moderate, with a firm fixed-price contract type mitigating cost overrun risks. 4. Performance context is tied to supporting the Centers for Medicare and Medicaid Services (CMS). 5. Sector positioning is within government administrative and financial consulting services.

Value Assessment

Rating: fair

The contract value of $40.6 million over approximately four years for enterprise-wide portfolio management services is within a reasonable range for a federal agency of CMS's size and complexity. Benchmarking against similar large-scale IT and administrative support contracts for federal health agencies suggests this pricing is competitive. The firm fixed-price structure provides cost certainty for the government, although it places more risk on the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit offers. With four bidders participating, the competition level suggests a reasonably robust market for these specialized services. This level of competition is generally expected to drive more competitive pricing and encourage contractors to offer their best value propositions.

Taxpayer Impact: A full and open competition with multiple bidders is beneficial for taxpayers as it increases the likelihood of securing services at a more competitive price and encourages innovation from the participating firms.

Public Impact

The primary beneficiary is the Department of Health and Human Services, specifically CMS, which will receive enhanced portfolio management capabilities. Services delivered include strategic planning, financial management, and operational efficiency improvements for federal health programs. The geographic impact is national, supporting federal health initiatives across the United States. Workforce implications include potential support roles and the need for specialized project management and financial expertise within the contractor's team.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if portfolio management definitions are not tightly controlled.
Reliance on a single large contractor for critical enterprise-wide functions could pose a long-term dependency risk.

Positive Signals

Firm fixed-price contract type helps control costs and provides budget predictability.
Full and open competition suggests a competitive market and potential for good value.
Contract duration of nearly four years allows for sustained focus and implementation of portfolio strategies.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically focusing on management and financial consulting for government operations. The market for such services is substantial, with numerous firms capable of supporting federal agencies. Comparable spending benchmarks for enterprise-wide IT and administrative support contracts often run into tens or hundreds of millions of dollars, depending on the agency's scale and the specific services required.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, KPMG LLP, is a large business. There is no explicit information on subcontracting plans for small businesses within this data, but large federal contracts often include requirements for small business subcontracting to promote their participation in the federal contracting ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within CMS. Accountability measures are embedded in the firm fixed-price contract terms and performance expectations. Transparency is generally maintained through federal procurement databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Federal IT Modernization Programs
Government Financial Management Systems
Healthcare IT Services
Administrative Support Services
Portfolio Management Consulting

Risk Flags

Potential for vendor lock-in
Scope definition and management challenges
Performance monitoring complexity

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $40.6 million to KPMG LLP. OSPR ENTERPRISE-WIDE PORTFOLIO MANAGEMENT OFFICE

Who is the contractor on this award?

The obligated recipient is KPMG LLP.

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 $40.6 million.

What is the period of performance?

Start: 2022-09-27. End: 2026-01-08.

What is KPMG's track record with similar large-scale federal portfolio management contracts?

KPMG LLP has a significant history of performing large-scale consulting and management services for various federal agencies, including those within the Department of Health and Human Services. Their experience often encompasses IT modernization, financial management, strategic planning, and operational efficiency improvements. While specific details on past portfolio management contracts of this exact scope and value are not provided in this data snippet, KPMG's general profile suggests they possess the requisite expertise and capacity. A deeper dive into their contract history with agencies like CMS or other large federal entities would reveal their performance metrics, past challenges, and successes in delivering similar enterprise-wide solutions.

How does the $40.6 million award compare to historical spending on portfolio management at CMS?

Without historical spending data specifically for CMS's enterprise-wide portfolio management office, a direct comparison is challenging. However, $40.6 million over approximately four years represents an average annual spend of roughly $10.15 million. This figure should be evaluated against the agency's overall IT and administrative budget. Given CMS's critical role in managing national healthcare programs, significant investment in portfolio management is expected to ensure efficient resource allocation and strategic alignment. This award appears to be a substantial, but potentially justified, investment for comprehensive oversight of its vast operations.

What are the primary risks associated with this contract for the government?

The primary risks for the government in this contract include potential vendor lock-in, where CMS becomes overly reliant on KPMG for critical portfolio management functions, making future transitions difficult or costly. There's also a risk of misalignment between the contractor's proposed solutions and the agency's evolving strategic needs if communication and oversight are not robust. While the firm fixed-price structure mitigates cost overrun risks, there's a possibility that the contractor might cut corners on quality or service delivery to maintain profitability, necessitating strong performance monitoring. Finally, the complexity of enterprise-wide systems means that integration challenges and unforeseen technical hurdles could arise.

How effective is a firm fixed-price contract for complex portfolio management services?

A firm fixed-price (FFP) contract is generally preferred by the government for its cost certainty. For complex services like enterprise-wide portfolio management, FFP can be effective if the scope of work is well-defined and understood from the outset. It incentivizes the contractor to manage costs efficiently. However, if the scope is inherently fluid or subject to significant change, an FFP contract can create tension. The contractor may resist necessary changes that increase their costs, or the government may need to issue numerous modifications, which can be administratively burdensome. In such cases, a cost-plus or time-and-materials contract might offer more flexibility, but with less cost predictability for the government.

What does the 'Offices of Certified Public Accountants' NAICS code imply about the services?

The North American Industry Classification System (NAICS) code 541211, 'Offices of Certified Public Accountants,' typically relates to accounting, auditing, bookkeeping, and tax preparation services. However, in the context of a large federal contract for 'Enterprise-Wide Portfolio Management,' this code might be used broadly to encompass financial management, strategic financial planning, and potentially auditing or compliance aspects related to program oversight. It suggests that a significant component of the services involves financial acumen, analysis, and reporting, which are crucial for effective portfolio management, even if the contract extends beyond traditional accounting functions.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Offices of Certified Public Accountants

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8350 BROAD ST STE 900, MC LEAN, VA, 22102

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

Financial Breakdown

Contract Ceiling: $45,598,673

Exercised Options: $40,619,187

Current Obligation: $40,619,187

Actual Outlays: $26,175,928

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $80,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 75FCMC20A0015

IDV Type: BPA

Timeline