HHS awards $105.6M contract for state health coverage program development, with Mathematica Inc. as prime

Contract Overview

Contract Amount: $105,609,322 ($105.6M)

Contractor: Mathematica Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2022-12-13

End Date: 2026-12-12

Contract Duration: 1,460 days

Daily Burn Rate: $72.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: LEARNING COLLABORATIVES TO SUPPORT THE DEVELOPMENT OF HIGH PERFORMING STATE HEALTH COVERAGE PROGRAMS

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $105.6 million to MATHEMATICA INC. for work described as: LEARNING COLLABORATIVES TO SUPPORT THE DEVELOPMENT OF HIGH PERFORMING STATE HEALTH COVERAGE PROGRAMS Key points: 1. Contract value of $105.6 million over approximately 4 years suggests a significant investment in program development. 2. The contract was awarded under full and open competition, indicating a broad market search. 3. The 'Research and Development in the Social Sciences and Humanities' NAICS code points to a focus on analytical and advisory services. 4. The Cost Plus Fixed Fee (CPFF) contract type allows for cost reimbursement plus a fixed fee, which can incentivize efficiency but requires careful oversight. 5. The delivery order structure suggests this is part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle or a series of task orders. 6. The contract is managed by the Centers for Medicare and Medicaid Services (CMS), a key agency within HHS. 7. The primary contractor, Mathematica Inc., is a well-established research firm, suggesting a reliance on specialized expertise.

Value Assessment

Rating: good

The contract value of $105.6 million for a 4-year period averages to approximately $26.4 million per year. This level of funding is substantial and reflects the complexity and importance of developing high-performing state health coverage programs. Benchmarking against similar contracts for large-scale program development and research initiatives would be necessary for a precise value-for-money assessment. However, given the specialized nature of the work and the contractor's expertise, the pricing appears to be within a reasonable range for such a significant undertaking.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' meaning all responsible sources were permitted to submit offers. This approach typically fosters a competitive environment, encouraging multiple bidders to present their best proposals and pricing. The presence of two bids (as indicated by 'no': 2) suggests that while competition was allowed, the number of actual bidders was limited. A higher number of bidders would generally be preferred to ensure the most competitive pricing and innovative solutions.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining services at competitive prices. However, with only two bids received, the potential for significant price reductions may have been constrained compared to a scenario with numerous competing offers.

Public Impact

State health agencies and their administrative bodies are the primary beneficiaries, receiving support to enhance their coverage programs. The services delivered aim to improve the effectiveness and efficiency of state-level health insurance and coverage initiatives. The geographic impact is national, as it supports state programs across the United States. The contract supports a workforce of researchers, analysts, and program specialists involved in health policy and administration. Citizens enrolled in state health coverage programs are indirect beneficiaries through improved program services and accessibility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited number of bidders (2) in a full and open competition could indicate potential barriers to entry or a highly specialized market.
Cost Plus Fixed Fee (CPFF) contract type requires diligent oversight to ensure costs remain reasonable and the fixed fee is justified.
The duration of the contract (approx. 4 years) necessitates ongoing performance monitoring to ensure sustained value.

Positive Signals

Awarded under full and open competition, maximizing the pool of potential offerors.
Contractor (Mathematica Inc.) has a strong reputation in research and health policy, suggesting a high likelihood of successful performance.
Focus on developing 'high performing' state health coverage programs indicates a commitment to improving public health outcomes.

Sector Analysis

The contract falls within the Research and Development in the Social Sciences and Humanities sector, specifically focusing on health policy and program development. This is a niche but critical area supporting government initiatives to improve public health services. The market for such specialized research and consulting services is often dominated by a few well-established firms with proven track records in government contracting and health policy expertise. Spending in this area is driven by legislative mandates and the ongoing need to adapt and improve complex social programs.

Small Business Impact

The provided data does not indicate any specific small business set-asides or subcontracting requirements for this contract. Given the specialized nature of the research and development services, it is possible that the prime contractor may engage small businesses for specific support roles, but this is not explicitly detailed in the award information. Further analysis of the contract's subcontracting plan would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract is likely managed by the Centers for Medicare and Medicaid Services (CMS) within HHS. As a Cost Plus Fixed Fee contract, rigorous financial oversight is crucial to monitor expenditures and ensure the fixed fee is appropriate. Performance monitoring would involve tracking deliverables, milestones, and the overall effectiveness of the research and development activities. Transparency is generally expected through regular reporting requirements and potential public access to non-sensitive research findings.

Related Government Programs

State Health Official (SHO) grants
Medicaid Innovation Accelerator Program (IAP)
Health Insurance Marketplace initiatives
Public Health Infrastructure grants
Center for Medicare & Medicaid Innovation (CMMI) projects

Risk Flags

Limited competition (2 bidders)
CPFF contract type requires robust oversight
Potential for cost overruns in R&D projects

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $105.6 million to MATHEMATICA INC.. LEARNING COLLABORATIVES TO SUPPORT THE DEVELOPMENT OF HIGH PERFORMING STATE HEALTH COVERAGE PROGRAMS

Who is the contractor on this award?

The obligated recipient is MATHEMATICA 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 $105.6 million.

What is the period of performance?

Start: 2022-12-13. End: 2026-12-12.

What is Mathematica Inc.'s track record with federal health contracts, particularly with HHS and CMS?

Mathematica Inc. has a substantial track record of working with federal agencies, including HHS and CMS, on complex health policy research and program evaluation. They have been involved in numerous projects related to Medicare, Medicaid, the Affordable Care Act, and other public health initiatives. Their experience often includes designing studies, collecting and analyzing data, and providing policy recommendations. This history suggests a familiarity with government contracting processes, reporting requirements, and the specific needs of agencies like CMS. Their established presence in the field indicates a capacity to handle large-scale, multi-year contracts such as this one, focusing on developing high-performing state health coverage programs.

How does the $105.6 million contract value compare to similar federal investments in state health program development?

The $105.6 million contract value represents a significant investment, averaging over $26 million annually for approximately four years. This funding level is commensurate with large-scale, complex research and development initiatives aimed at improving national health coverage programs. Similar federal investments often involve substantial sums, particularly when addressing multifaceted challenges like enhancing state health coverage, improving access, and ensuring program efficiency. For instance, major federal grants or contracts supporting state-level health system reforms or the development of new healthcare delivery models can reach similar or even higher figures. The value reflects the scope of work, the need for specialized expertise, and the long-term commitment required to achieve meaningful improvements in state health coverage programs.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for this type of R&D work?

The primary risks associated with a CPFF contract for R&D in state health coverage programs revolve around cost control and ensuring value for money. While the fixed fee provides some cost certainty for the contractor, the 'cost plus' component means the government reimburses allowable costs. If costs escalate beyond initial projections due to unforeseen complexities, scope creep, or inefficiencies, the total expenditure could exceed the anticipated budget. There's also a risk that the contractor might not be sufficiently incentivized to control costs rigorously if the fixed fee is substantial. Effective oversight is critical to monitor expenditures, validate cost allowability, and ensure the contractor is performing efficiently to achieve the program's objectives within the agreed-upon fee structure.

What does the limited number of bidders (2) in a full and open competition imply for the government and taxpayers?

A limited number of bidders (2) in a full and open competition, while technically meeting the criteria for open competition, can raise questions about the breadth of market engagement. It might suggest that the market for this specific type of specialized R&D is relatively small, or that potential competitors faced significant barriers to entry (e.g., high qualification requirements, complex proposal preparation). For taxpayers, fewer bidders could mean less downward pressure on pricing compared to a scenario with numerous competing offers. While the government likely negotiated the best possible terms with the available bidders, the lack of broader competition might have resulted in a higher overall cost than could have been achieved with a more robust bidding process. It warrants scrutiny to ensure the selection process was fair and that the awarded price represents good value.

How might the 'Research and Development in the Social Sciences and Humanities' NAICS code influence the contract's deliverables and expected outcomes?

The NAICS code 541720, 'Research and Development in the Social Sciences and Humanities,' indicates that the contract's focus is on analytical, theoretical, and experimental activities aimed at increasing knowledge and understanding in these fields. For this contract, it implies that deliverables will likely include research reports, policy analyses, program evaluations, feasibility studies, and potentially the development of new methodologies or frameworks for improving state health coverage programs. The expected outcomes are not necessarily tangible products but rather enhanced insights, evidence-based recommendations, and strategic guidance that enable states and CMS to design and implement more effective and efficient health coverage solutions. The emphasis is on intellectual contributions and data-driven decision-making.

What is the significance of the contract being awarded as a 'Delivery Order'?

The designation of this award as a 'Delivery Order' typically means it is a task order issued under a larger, pre-existing indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar master agreement. This structure allows the government to procure specific services or supplies incrementally as needed, rather than awarding a single, large, fixed-scope contract upfront. For this R&D effort, it suggests that CMS may have established a broader IDIQ vehicle for health program development support, and this $105.6 million represents the total value allocated across one or more delivery orders under that vehicle. This approach provides flexibility in managing program evolution and funding allocation over time.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Social Sciences and Humanities

Product/Service Code: RESEARCH AND DEVELOPMENT › N – Health R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 600 ALEXANDER PARK, PRINCETON, NJ, 08540

Business Categories: Category Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $137,566,606

Exercised Options: $105,609,322

Current Obligation: $105,609,322

Actual Outlays: $72,582,487

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 75FCMC19D0091

IDV Type: IDC

Timeline