HHS spends $46.4M on health insurance outreach, with IPG DXTRA winning a sole-source contract

Contract Overview

Contract Amount: $46,393,758 ($46.4M)

Contractor: IPG Dxtra, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2022-01-21

End Date: 2022-12-31

Contract Duration: 344 days

Daily Burn Rate: $134.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: HEALTH INSURANCE EXCHANGE SPECIAL ENROLLMENT PERIOD (SEP) EDUCATION AND OUTREACH

Place of Performance

Location: NEW YORK, NEW YORK County, NEW YORK, 10022

State: New York Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $46.4 million to IPG DXTRA, INC. for work described as: HEALTH INSURANCE EXCHANGE SPECIAL ENROLLMENT PERIOD (SEP) EDUCATION AND OUTREACH Key points: 1. The contract value represents a significant investment in public health communication. 2. Competition dynamics for this contract were limited, raising questions about price discovery. 3. The use of a Time and Materials contract type can introduce cost uncertainty. 4. Performance context is crucial to assess the effectiveness of outreach efforts. 5. This contract falls within the advertising and marketing services sector for government health initiatives.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable outreach campaigns. The $46.4 million award is substantial for a single year of education and outreach. Given the sole-source nature, a direct comparison to similar competitively bid contracts is not feasible. The Time and Materials pricing structure warrants close monitoring to ensure costs remain aligned with the scope of work and do not escalate beyond reasonable expectations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed among multiple vendors. This approach limits the opportunity for competitive bidding and potentially reduces price discovery. While sole-source awards can be justified under specific circumstances, they often result in higher costs for the government compared to fully competed contracts. The lack of competition here means taxpayers may not have received the benefit of the lowest possible price.

Taxpayer Impact: The sole-source award means taxpayers did not benefit from competitive pricing that could have potentially lowered the overall cost of this outreach campaign.

Public Impact

The primary beneficiaries are individuals seeking health insurance coverage through the Health Insurance Exchange. The services delivered include education and outreach campaigns to inform the public about enrollment periods and options. The geographic impact is national, aiming to reach eligible individuals across the United States. Workforce implications are likely minimal, primarily involving the contractor's marketing and communication staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing benefits for taxpayers.
Time and Materials contract type introduces potential for cost overruns if not managed tightly.
Lack of transparency in the sole-source justification process.

Positive Signals

Focus on essential public health service: health insurance enrollment.
Contract awarded to a known entity (IPG DXTRA, INC.) potentially implying prior relevant experience.
Clear defined period of performance for the outreach efforts.

Sector Analysis

This contract falls within the advertising and public relations sector, specifically focusing on government-sponsored health initiatives. The market for government outreach and public awareness campaigns is substantial, often involving large media buys and complex communication strategies. Comparable spending benchmarks would typically be found in other large-scale public health campaigns or federal agency public affairs contracts. The $46.4 million figure is significant for a single year's effort in this specialized area.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit information regarding subcontracting plans for small businesses. The award to a single, likely larger, entity may limit opportunities for small businesses to participate in delivering these specific outreach services.

Oversight & Accountability

Oversight of this contract would primarily fall under the Centers for Medicare and Medicaid Services (CMS) within HHS. Accountability measures would be tied to the delivery of agreed-upon outreach activities and performance metrics. Transparency regarding the sole-source justification and the contractor's performance reporting would be key oversight elements. The Inspector General's office for HHS would have jurisdiction for audit and investigation if any concerns arise.

Related Government Programs

Affordable Care Act (ACA) Outreach and Enrollment
Health Insurance Marketplace Communications
Federal Public Health Campaigns
Government Advertising and Marketing Services

Risk Flags

Sole-source award may limit cost savings.
Time and Materials contract type requires close monitoring for cost control.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $46.4 million to IPG DXTRA, INC.. HEALTH INSURANCE EXCHANGE SPECIAL ENROLLMENT PERIOD (SEP) EDUCATION AND OUTREACH

Who is the contractor on this award?

The obligated recipient is IPG DXTRA, INC..

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 $46.4 million.

What is the period of performance?

Start: 2022-01-21. End: 2022-12-31.

What specific outreach activities were undertaken by IPG DXTRA, INC. under this contract?

The contract focused on 'HEALTH INSURANCE EXCHANGE SPECIAL ENROLLMENT PERIOD (SEP) EDUCATION AND OUTREACH.' Specific activities would typically include developing and executing multi-channel advertising campaigns (digital, print, broadcast), creating informational materials, managing public relations efforts, and potentially engaging in community outreach events. The goal was to inform the public about the Special Enrollment Period for health insurance exchanges, encouraging eligible individuals to enroll. Detailed reporting from the contractor would outline the precise execution of these strategies, including media placements, content produced, and reach metrics.

How does the $46.4 million contract value compare to previous HHS outreach efforts for SEPs?

Comparing this $46.4 million contract to previous HHS outreach efforts for Special Enrollment Periods (SEPs) requires historical spending data for similar campaigns. Without access to that specific historical data, a direct comparison is difficult. However, the figure represents a substantial investment, suggesting a significant scale and scope for the SEP education and outreach initiative during the contract period (2022). Factors influencing the cost would include the duration of the campaign, the breadth of media channels utilized, target audience size, and the specific objectives set by CMS. Large-scale public health campaigns often command significant budgets.

What are the risks associated with a sole-source award for public health outreach?

The primary risk associated with a sole-source award for public health outreach is the potential for inflated costs due to the absence of competitive bidding. Without competing offers, the government may not secure the most cost-effective solution. Additionally, a sole-source award can limit the infusion of innovative approaches that might come from a broader range of potential contractors. There's also a risk of complacency from the awarded contractor, as they face no direct competitive pressure to outperform or offer better value. Ensuring robust oversight and performance management becomes even more critical in sole-source situations to mitigate these risks.

What performance metrics were likely used to evaluate the success of this outreach contract?

Performance metrics for this contract would likely focus on the effectiveness of the education and outreach campaign in driving enrollment and awareness. Key metrics could include: website traffic to the Health Insurance Exchange, call center volume related to enrollment inquiries, the number of individuals who successfully enrolled during the Special Enrollment Period, media impressions generated by the campaign, public awareness survey results regarding the SEP, and potentially cost-per-acquisition or cost-per-enrollment figures. The contract would specify which metrics are most critical and the targets the contractor must achieve.

What is the significance of the 'Advertising Agencies' NAICS code (541810) in relation to this contract?

The North American Industry Classification System (NAICS) code 541810, 'Advertising Agencies,' accurately categorizes the primary function of this contract. It signifies that the Department of Health and Human Services (HHS) procured services from a firm specializing in the creation and placement of advertisements and other forms of communication to reach the public. This includes strategy development, media planning and buying, creative content production (copywriting, graphic design, video production), and campaign management, all aimed at educating and influencing the target audience regarding health insurance enrollment opportunities.

How does the Time and Materials (T&M) contract type impact cost control for this outreach campaign?

The Time and Materials (T&M) contract type can pose challenges for cost control in a large outreach campaign. Under T&M, the government pays the contractor for the actual labor hours expended at specified hourly rates, plus the cost of materials used. While flexible, it lacks a fixed ceiling on total costs, making it difficult to predict the final expenditure. This necessitates rigorous oversight from the agency to monitor labor hours, ensure efficiency, and prevent scope creep. Without strict management, T&M contracts can lead to cost overruns compared to fixed-price agreements, especially for services with potentially undefined or evolving requirements.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Advertising, Public Relations, and Related Services › Advertising Agencies

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: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 909 3RD AVE FL 7, NEW YORK, NY, 10022

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

Financial Breakdown

Contract Ceiling: $96,393,754

Exercised Options: $46,393,758

Current Obligation: $46,393,758

Actual Outlays: $46,393,758

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 75FCMC18D0046

IDV Type: IDC

Timeline