HHS awards $50M contract for Medicaid/CHIP IT support to Fearless Solutions, LLC

Contract Overview

Contract Amount: $50,123,747 ($50.1M)

Contractor: Fearless Solutions, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2022-08-23

End Date: 2025-10-08

Contract Duration: 1,142 days

Daily Burn Rate: $43.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: MEDICAID AND CHIP PROGRAM (MACPRO)

Place of Performance

Location: BALTIMORE, BALTIMORE CITY County, MARYLAND, 21202

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $50.1 million to FEARLESS SOLUTIONS, LLC for work described as: MEDICAID AND CHIP PROGRAM (MACPRO) Key points: 1. Contract value appears reasonable given the scope of IT services for a major federal program. 2. Full and open competition suggests a healthy market for these services. 3. Potential risks include performance delays and cost overruns common in large IT projects. 4. This contract supports critical infrastructure for Medicaid and CHIP administration. 5. The IT services sector is highly competitive, with many firms capable of performing this work. 6. The contract duration extends into late 2025, indicating a need for sustained support.

Value Assessment

Rating: good

The contract value of approximately $50 million over its period of performance seems aligned with the scale of IT support required for the MACPRO system. Benchmarking against similar contracts for federal health IT systems suggests this pricing is within a competitive range. The Time and Materials pricing model, while offering flexibility, warrants close monitoring to ensure cost efficiency and prevent scope creep.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. With 8 bidders, the level of competition was robust, which typically drives more competitive pricing and better value for the government. This broad competition suggests that the market has sufficient capacity and interest in providing these specialized IT services.

Taxpayer Impact: A competitive bidding process for this contract likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award. The presence of multiple bidders helps ensure that government funds are used efficiently.

Public Impact

Beneficiaries include federal and state agencies managing Medicaid and CHIP programs. Services delivered are crucial for the operational integrity and modernization of the MACPRO system. Geographic impact is nationwide, supporting the administration of health coverage for millions of Americans. Workforce implications include the need for skilled IT professionals in software development, maintenance, and support.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep given the Time and Materials contract type.
Reliance on a single contractor for critical IT infrastructure could pose a risk if performance falters.
Ensuring adequate technical expertise transfer to government personnel or future contractors.

Positive Signals

Awarded through full and open competition, indicating a strong market response.
Contract duration suggests a stable, long-term need for these services.
The contractor, Fearless Solutions, LLC, is tasked with supporting a vital federal program.

Sector Analysis

The federal IT services market is substantial, with significant spending allocated to custom computer programming and IT support for large-scale government systems. Contracts like this, supporting critical health programs such as Medicaid and CHIP, are common. The Centers for Medicare and Medicaid Services (CMS) consistently invests in maintaining and enhancing its IT infrastructure to manage complex healthcare data and operations. Comparable spending benchmarks for similar federal health IT modernization projects often range in the tens to hundreds of millions of dollars.

Small Business Impact

This contract was not set aside for small businesses and the data indicates no specific subcontracting requirements for small businesses were mandated. The award to Fearless Solutions, LLC, a company that may or may not be a small business (further verification needed), means that opportunities for small business participation may be limited unless Fearless Solutions proactively engages them. The absence of a small business set-aside or specific subcontracting goals could mean less direct benefit to the small business IT ecosystem for this particular award.

Oversight & Accountability

Oversight for this contract will likely be managed by the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Accountability measures will be embedded in the contract's performance work statement, requiring adherence to service level agreements and delivery schedules. Transparency is facilitated through federal procurement databases where contract awards are reported. The Inspector General for the Department of Health and Human Services may conduct audits or investigations if performance or financial concerns arise.

Related Government Programs

Medicaid IT Modernization
CHIP Program Management
Federal Health IT Systems
Custom Computer Programming Services
Centers for Medicare and Medicaid Services IT Contracts

Risk Flags

Potential for cost overruns due to Time and Materials pricing.
Risk of performance issues impacting critical federal health programs.
Dependency on contractor for essential IT services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $50.1 million to FEARLESS SOLUTIONS, LLC. MEDICAID AND CHIP PROGRAM (MACPRO)

Who is the contractor on this award?

The obligated recipient is FEARLESS SOLUTIONS, LLC.

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 $50.1 million.

What is the period of performance?

Start: 2022-08-23. End: 2025-10-08.

What is the track record of Fearless Solutions, LLC in performing similar federal IT contracts?

Assessing the track record of Fearless Solutions, LLC requires a review of their past performance on federal contracts, particularly those involving custom computer programming and support for large-scale government systems. Information on their prior experience, client satisfaction ratings, and any history of contract disputes or awards would be crucial. Federal procurement data systems like SAM.gov or FPDS can provide insights into their past performance evaluations and the types of services they have delivered. A strong track record with similar agencies or programs would indicate a lower performance risk for this MACPRO contract.

How does the awarded amount compare to the estimated cost or budget for this requirement?

The awarded amount of $50,123,746.65 represents the ceiling value for this Time and Materials contract. To assess its value, it needs to be compared against the government's independent government cost estimate (IGCE) or the agency's allocated budget for the MACPRO IT support services. If the awarded amount is significantly lower than the IGCE, it suggests a favorable negotiation outcome. Conversely, if it's close to or exceeds the estimate, further scrutiny of the pricing and scope might be warranted. Without access to the IGCE, a definitive comparison is difficult, but the competitive nature of the award suggests the government likely secured a reasonable price.

What are the primary performance risks associated with this contract, and how are they being mitigated?

Key performance risks for this contract include potential delays in software development and implementation, cybersecurity vulnerabilities, and the contractor's ability to maintain system performance and availability for the critical MACPRO system. Mitigation strategies typically involve a robust performance work statement (PWS) with clearly defined deliverables and service level agreements (SLAs), regular progress reviews, and government oversight. The Time and Materials (T&M) pricing model itself introduces a risk of cost overruns if not managed tightly, requiring diligent monitoring of labor hours and material costs by the government's contracting officer's representative (COR).

How effective has the MACPRO system been in supporting Medicaid and CHIP administration prior to this contract?

The effectiveness of the MACPRO system is a critical factor influencing the necessity and scope of this IT support contract. MACPRO is designed to facilitate data exchange and reporting between state Medicaid agencies and the Centers for Medicare and Medicaid Services (CMS), supporting program integrity, operational efficiency, and compliance. Its effectiveness can be gauged by metrics such as data accuracy, timeliness of reporting, system uptime, user satisfaction among state and federal personnel, and its contribution to successful program administration and oversight. Any documented challenges or successes of MACPRO would inform the performance expectations for Fearless Solutions, LLC.

What has been the historical spending trend for MACPRO IT support over the past five years?

Analyzing historical spending on MACPRO IT support over the past five years would provide context for the current $50 million award. This trend analysis would reveal whether spending has been increasing, decreasing, or remaining stable, potentially indicating evolving needs, system upgrades, or efficiency gains. Significant year-over-year fluctuations might suggest project-based work or shifts in technology strategy. Understanding this historical spending pattern helps in evaluating the reasonableness of the current contract value and forecasting future IT investment requirements for the MACPRO system.

Are there any known issues with the current MACPRO system that this contract aims to address?

This contract likely aims to address ongoing operational needs, maintenance, and potentially modernization efforts for the MACPRO system. Specific issues could range from addressing technical debt, enhancing cybersecurity posture, improving user interface/user experience (UI/UX), integrating new functionalities to comply with evolving regulations, or improving system performance and scalability. Without specific details from the contract's statement of work or related documentation, it's presumed the contract supports the continued reliable operation and necessary evolution of this vital federal IT system.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 8

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 8 MARKET PL STE 200, BALTIMORE, MD, 21202

Business Categories: 8(a) Program Participant, Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, HUBZone Firm, Limited Liability Corporation, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $67,555,156

Exercised Options: $50,123,747

Current Obligation: $50,123,747

Actual Outlays: $48,143,592

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F115GA

IDV Type: FSS

Timeline