HHS awards $34.8M to MITRE for consumer support services, raising questions on competition and value

Contract Overview

Contract Amount: $34,831,045 ($34.8M)

Contractor: THE Mitre Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2024-09-23

End Date: 2026-09-29

Contract Duration: 736 days

Daily Burn Rate: $47.3K/day

Competition Type: NOT COMPETED

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: POLICY AND OPERATIONAL SERVICES IN SUPPORT OF THE CONSUMER SUPPORT GROUP (CSG) FOR THE CENTER FOR CONSUMER INFORMATION AND INSURANCE OVERSIGHT (CCIIO)

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $34.8 million to THE MITRE CORPORATION for work described as: POLICY AND OPERATIONAL SERVICES IN SUPPORT OF THE CONSUMER SUPPORT GROUP (CSG) FOR THE CENTER FOR CONSUMER INFORMATION AND INSURANCE OVERSIGHT (CCIIO) Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings from competition. 2. Pricing appears high relative to the estimated contract value, warranting further scrutiny. 3. The contract duration of over two years suggests a need for ongoing, critical support. 4. Performance is categorized as 'fair' based on preliminary value assessment. 5. The specific services provided are vital for consumer information and insurance oversight. 6. The contractor, MITRE Corporation, has a strong track record in research and development.

Value Assessment

Rating: fair

The contract's estimated value of $34.8 million over approximately two years suggests a significant investment in policy and operational support. Benchmarking against similar contracts for consumer support services is challenging due to the specialized nature of the work and the sole-source award. However, the reported 'fair' rating indicates that while the services are being delivered, there may be opportunities for improved cost-effectiveness or pricing negotiation. The cost-plus-fixed-fee structure necessitates careful oversight to ensure costs remain reasonable and aligned with the fixed fee.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one vendor, The MITRE Corporation, was solicited. This approach bypasses the competitive bidding process, which typically leads to price discovery and potentially lower costs for the government. While sole-source awards can be justified for unique capabilities or urgent needs, they inherently reduce the pressure on the contractor to offer the most competitive pricing. The absence of multiple bidders means there is no direct comparison to gauge if the awarded price is optimal.

Taxpayer Impact: The lack of competition means taxpayers may not be receiving the best possible price for these essential policy and operational services. Without a competitive environment, there is less incentive for the contractor to minimize costs, potentially leading to higher overall expenditure.

Public Impact

Consumers seeking information and assistance regarding insurance policies and healthcare oversight benefit directly from the services provided. The Center for Consumer Information and Insurance Oversight (CCIIO) receives critical operational and policy support, enabling its mission. The contract supports workforce needs within the federal agency responsible for consumer protection in the insurance sector. Services are likely to have a national impact, given CCIIO's role in overseeing consumer information and insurance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition, potentially increasing costs for taxpayers.
The 'fair' value assessment suggests room for improvement in cost-effectiveness.
Cost-plus-fixed-fee contracts require diligent oversight to manage expenditures effectively.

Positive Signals

The MITRE Corporation is a reputable organization with extensive experience in R&D and government support.
The contract addresses a critical need for consumer support and policy oversight within HHS.
The duration of the contract indicates a stable and ongoing requirement for these services.

Sector Analysis

This contract falls within the broader 'Research and Development in the Physical, Engineering, and Life Sciences' sector, specifically supporting policy and operational functions for consumer insurance oversight. The market for specialized policy support services within government agencies is often characterized by a mix of large, established contractors and niche providers. While the specific NAICS code points to R&D, the actual service delivery here is more aligned with management and consulting support for a regulatory body. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of CCIIO's mission and the sole-source award.

Small Business Impact

This contract does not appear to involve small business set-asides, as it was awarded to The MITRE Corporation, a large, federally funded research and development center (FFRDC). There is no indication of subcontracting requirements specifically aimed at small businesses within the provided data. The focus is on the prime contractor's capabilities, and the absence of set-asides means direct opportunities for small businesses through this specific award are unlikely.

Oversight & Accountability

Oversight for this contract is managed by the Centers for Medicare and Medicaid Services (CMS), a division within HHS. As a cost-plus-fixed-fee contract, rigorous financial oversight is crucial to monitor expenditures and ensure the fixed fee remains appropriate for the work performed. Transparency is facilitated through contract reporting mechanisms, though the sole-source nature limits public visibility into the bidding process itself. Inspector General jurisdiction would apply to any potential fraud, waste, or abuse related to the contract.

Related Government Programs

Consumer protection programs
Health insurance marketplace support
Healthcare policy analysis
Federal agency operational support
Research and Development services

Risk Flags

Sole-source award
Fair value assessment
Cost-plus contract type requires diligent oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $34.8 million to THE MITRE CORPORATION. POLICY AND OPERATIONAL SERVICES IN SUPPORT OF THE CONSUMER SUPPORT GROUP (CSG) FOR THE CENTER FOR CONSUMER INFORMATION AND INSURANCE OVERSIGHT (CCIIO)

Who is the contractor on this award?

The obligated recipient is THE MITRE CORPORATION.

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 $34.8 million.

What is the period of performance?

Start: 2024-09-23. End: 2026-09-29.

What is The MITRE Corporation's track record with the Department of Health and Human Services (HHS) and similar contracts?

The MITRE Corporation is a well-established organization that operates multiple Federally Funded Research and Development Centers (FFRDCs) for various government agencies, including HHS. They have a long history of providing technical, research, and advisory services across a wide range of domains. For HHS, MITRE often engages in complex projects related to healthcare policy, technology modernization, and operational improvements. Their expertise in areas like health IT, data analytics, and systems engineering makes them a frequent partner for agencies seeking specialized support. While specific contract details vary, MITRE's general track record with HHS is characterized by its role as a trusted advisor and implementer of critical government initiatives, often in areas requiring deep technical and policy understanding.

How does the $34.8 million contract value compare to similar policy and operational support services for consumer information agencies?

Directly comparing the $34.8 million contract value to similar policy and operational support services is challenging due to the unique mission of the Center for Consumer Information and Insurance Oversight (CCIIO) and the sole-source nature of this award. CCIIO's work involves complex regulatory, policy, and consumer-facing functions within the health insurance sector. Contracts for such specialized support can vary significantly based on scope, duration, and the specific expertise required. However, for large-scale, multi-year support contracts involving policy analysis, operational management, and technical assistance for federal agencies, a value in the tens of millions of dollars is not uncommon. The 'fair' value assessment suggests that while the price is within a plausible range for the services rendered, there may be opportunities for greater cost efficiency or better pricing if the contract had been competed.

What are the primary risks associated with a sole-source contract of this magnitude?

The primary risks associated with a sole-source contract of this magnitude include a lack of price competition, which can lead to higher costs for the government and taxpayers. Without multiple bidders vying for the contract, there is less incentive for the awarded contractor to offer the most competitive pricing. This can also reduce transparency in the procurement process. Furthermore, sole-source awards may limit the government's access to innovative solutions or alternative approaches that other potential vendors might offer. There's also a risk of vendor lock-in, where the agency becomes overly reliant on a single provider, potentially hindering future flexibility. Effective contract management and oversight are critical to mitigate these risks.

How effective is the 'Cost Plus Fixed Fee' (CPFF) contract type in ensuring value for money in this context?

The Cost Plus Fixed Fee (CPFF) contract type aims to balance cost control with flexibility, particularly for research and development or complex services where the scope may evolve. In this context, the 'cost' portion covers allowable expenses incurred by The MITRE Corporation, while the 'fixed fee' represents their profit. This structure incentivizes the contractor to control costs, as the fee remains constant regardless of the actual costs incurred. However, it requires robust government oversight to ensure that all claimed costs are reasonable, allocable, and necessary. The effectiveness in ensuring value for money depends heavily on the diligence of the contracting officer and the agency's ability to monitor expenditures and performance against the fixed fee. If oversight is weak, the government might end up paying higher costs without a commensurate increase in the contractor's effort or profit.

What are the historical spending patterns for policy and operational support services within HHS or similar agencies?

Historical spending patterns for policy and operational support services within HHS and similar large federal agencies typically show significant and sustained investment. These agencies often require extensive support for program management, policy development, regulatory implementation, and consumer outreach. Spending can fluctuate based on legislative mandates, new program initiatives, and evolving healthcare landscapes. Contracts in this category can range from millions to hundreds of millions of dollars annually, depending on the agency's size and scope of responsibilities. Agencies like CMS, which oversees Medicare and Medicaid, consistently award large contracts for operational and policy support due to the complexity and scale of their programs. The trend is generally towards seeking specialized expertise, often through established contractors or FFRDCs like MITRE, to manage intricate governmental functions.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Physical, Engineering, and Life Sciences (except Nanotechnology and Biotechnology)

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 7515 COLSHIRE DR, MC LEAN, VA, 22102

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

Financial Breakdown

Contract Ceiling: $79,877,648

Exercised Options: $34,831,045

Current Obligation: $34,831,045

Actual Outlays: $12,925,030

Subaward Activity

Number of Subawards: 7

Total Subaward Amount: $13,013,982

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 75FCMC23D0004

IDV Type: IDC

Timeline