HHS awards $78.6M contract for management consulting services to Health Services Advisory Group, Inc
Contract Overview
Contract Amount: $78,595,876 ($78.6M)
Contractor: Health Services Advisory Group, Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2025-05-28
End Date: 2030-05-27
Contract Duration: 1,825 days
Daily Burn Rate: $43.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: THE CONTRACTOR SHALL FURNISH THE NECESSARY PERSONNEL, MATERIALS, SERVICES, EQUIPMENT, AND FACILITIES (EXCEPT AS OTHERWISE SPECIFIED HEREIN), AND OTHERWISE DO ALL THE THINGS NECESSARY FOR OR INCIDENT TO THE PERFORMANCE OF THE WORK AS SET FORTH IN THE
Place of Performance
Location: PHOENIX, MARICOPA County, ARIZONA, 85016
State: Arizona Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $78.6 million to HEALTH SERVICES ADVISORY GROUP, INC. for work described as: THE CONTRACTOR SHALL FURNISH THE NECESSARY PERSONNEL, MATERIALS, SERVICES, EQUIPMENT, AND FACILITIES (EXCEPT AS OTHERWISE SPECIFIED HEREIN), AND OTHERWISE DO ALL THE THINGS NECESSARY FOR OR INCIDENT TO THE PERFORMANCE OF THE WORK AS SET FORTH IN THE Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The contract duration is 5 years, indicating a long-term need for these services. 4. The contractor, Health Services Advisory Group, Inc., is based in Arizona. 5. The contract falls under 'Other Management Consulting Services', a broad category. 6. The award amount of $78.6 million over five years warrants scrutiny for value for money.
Value Assessment
Rating: fair
The contract value of $78.6 million over five years averages to approximately $15.7 million annually. Benchmarking this against similar management consulting contracts for federal agencies is challenging without more specific service details. However, the Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk for cost control, as the government reimburses the contractor's allowable costs plus a fixed fee. This structure can sometimes lead to higher overall costs compared to fixed-price contracts if cost efficiencies are not rigorously pursued and monitored by the agency.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded using 'full and open competition', indicating that all responsible sources were permitted to submit a bid. The number of bidders is not specified in the provided data, but this method generally promotes a competitive environment. A competitive process is expected to drive down prices and encourage innovative solutions, leading to better value for the government.
Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best possible price and quality for the management consulting services required by the Centers for Medicare and Medicaid Services.
Public Impact
The primary beneficiaries are the Centers for Medicare and Medicaid Services (CMS), which will receive management consulting services to support its operations. The services delivered are expected to enhance the efficiency and effectiveness of CMS programs. The geographic impact is primarily within the agency's operational sphere, though the services may indirectly affect healthcare providers and beneficiaries nationwide. Workforce implications are likely to involve the contractor's personnel supporting CMS, rather than direct federal hiring.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contract type can incentivize higher spending if not closely managed.
- The broad nature of 'Other Management Consulting Services' may obscure specific performance metrics.
- Lack of detail on the number of bidders limits assessment of competitive intensity.
- Long-term contract duration (5 years) requires sustained oversight to ensure continued value.
Positive Signals
- Awarded through full and open competition, suggesting a robust bidding process.
- The contract has a defined end date, providing a clear timeframe for service delivery.
- The fixed fee component of the CPFF contract provides some cost predictability for the contractor's profit.
Sector Analysis
This contract falls under the broad 'Management Consulting Services' sector, specifically classified under NAICS code 541618. This sector is crucial for government operations, providing expertise in areas like strategy, efficiency improvements, and program management. Federal spending in management consulting is substantial, with agencies frequently seeking external expertise to navigate complex challenges. The market includes a wide range of firms, from large, diversified contractors to specialized boutique consultancies. This contract's value of $78.6 million over five years places it as a significant award within this category.
Small Business Impact
The provided data indicates that small business participation (ss: false, sb: false) was not a primary set-aside consideration for this specific contract award. There is no explicit mention of subcontracting goals for small businesses. This suggests that the primary focus was on securing the best overall proposal through full and open competition, rather than specifically targeting small business utilization. Further analysis would be needed to determine if any small businesses were part of the winning proposal as subcontractors.
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 would be embedded within the Cost Plus Fixed Fee contract terms, requiring detailed reporting on costs and performance. Transparency is generally facilitated through contract databases like FPDS, where award details are published. The specific Inspector General jurisdiction would typically be that of the Department of Health and Human Services (HHS), which oversees CMS.
Related Government Programs
- Management and Financial Consulting, Acquisition and Commercialization Services
- Professional, Scientific, and Technical Services
- Health Care Consulting Services
- Federal IT Consulting Contracts
- Government Program Management Support
Risk Flags
- Cost Plus Fixed Fee contract type requires diligent oversight to prevent cost overruns.
- Broad 'Other Management Consulting Services' category may lack specific, measurable performance indicators.
- Limited information on the number of bidders restricts assessment of competitive pressure.
- Contractor's federal performance history needs thorough review for risk assessment.
Tags
management-consulting, health-services, centers-for-medicare-and-medicaid-services, department-of-health-and-human-services, cost-plus-fixed-fee, full-and-open-competition, delivery-order, arizona, long-term-contract, naics-541618, federal-contract, consulting-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $78.6 million to HEALTH SERVICES ADVISORY GROUP, INC.. THE CONTRACTOR SHALL FURNISH THE NECESSARY PERSONNEL, MATERIALS, SERVICES, EQUIPMENT, AND FACILITIES (EXCEPT AS OTHERWISE SPECIFIED HEREIN), AND OTHERWISE DO ALL THE THINGS NECESSARY FOR OR INCIDENT TO THE PERFORMANCE OF THE WORK AS SET FORTH IN THE
Who is the contractor on this award?
The obligated recipient is HEALTH SERVICES ADVISORY GROUP, 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 $78.6 million.
What is the period of performance?
Start: 2025-05-28. End: 2030-05-27.
What is the track record of Health Services Advisory Group, Inc. with federal contracts, particularly within HHS?
A review of federal procurement data is necessary to fully assess the track record of Health Services Advisory Group, Inc. (HSAG). While this award is for $78.6 million, understanding their past performance, including previous contract values, types (e.g., CPFF, FFP), agencies served, and any past performance issues or awards, is crucial. Specifically, their history with the Department of Health and Human Services (HHS) and its sub-agencies like CMS would provide valuable context. A lack of significant federal contracting history might indicate a higher risk profile for performance, whereas a strong history suggests a greater likelihood of successful execution. Detailed analysis would involve searching databases like FPDS-NG for all their federal awards and terminations.
How does the $78.6 million contract value compare to similar management consulting services procured by CMS or other HHS agencies?
Benchmarking the $78.6 million contract value requires comparing it against similar 'Other Management Consulting Services' (NAICS 541618) contracts awarded by CMS and other HHS agencies over comparable periods. The average annual value of this contract is approximately $15.7 million. If CMS frequently procures similar services at lower annual values or with more favorable contract types (e.g., fixed-price), this award might be considered high. Conversely, if similar complex, long-term consulting needs have historically commanded similar or higher values, it could indicate fair pricing within the agency's context. Accessing historical contract data for comparable services is essential for a robust comparison.
What are the specific risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this engagement?
The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. While the 'fixed fee' component provides a predictable profit margin for the contractor, the 'cost plus' element means the government reimburses the contractor's allowable costs. If the contractor's costs escalate beyond initial estimates due to inefficiencies, scope creep, or poor management, the total contract cost to the government will increase. This necessitates rigorous oversight by the agency to ensure costs are reasonable, allocable, and allowable, and that the contractor is actively seeking efficiencies to control expenditures. Without strong oversight, CPFF contracts can be significantly more expensive than fixed-price alternatives.
What performance metrics or deliverables are expected under this 'Other Management Consulting Services' contract?
The provided data does not specify the exact performance metrics or deliverables for this contract, which falls under the broad category of 'Other Management Consulting Services'. Typically, such contracts would involve detailed statements of work (SOWs) outlining specific objectives, tasks, milestones, and expected outcomes. Performance metrics could include adherence to project timelines, quality of reports and recommendations, effectiveness of implemented strategies, and client satisfaction. The Centers for Medicare and Medicaid Services (CMS) would be responsible for defining and monitoring these metrics to ensure the contractor meets the contract's objectives and delivers value. The absence of specific details in the award summary highlights the need to consult the full contract documentation.
How has federal spending on management consulting services evolved, and where does this contract fit within that trend?
Federal spending on management consulting services has generally trended upwards over the past decade, driven by increasing complexity in government operations, the need for specialized expertise, and efforts to improve efficiency and modernization. Agencies like HHS, particularly CMS, often rely on consultants for strategic planning, policy analysis, IT modernization, and program evaluation. This $78.6 million, 5-year contract aligns with this trend, representing a significant investment in external expertise to support critical healthcare policy and administration functions. Its value suggests a substantial scope of work, likely involving complex, long-term challenges faced by CMS.
What is the potential impact of this contract on small businesses within the management consulting sector?
Given that this contract was awarded under full and open competition and the data indicates no specific small business set-aside (ss: false, sb: false), the direct impact on small businesses as prime contractors is likely minimal. However, the potential for small business subcontracting exists if Health Services Advisory Group, Inc. chooses to engage them. The overall impact depends on HSAG's subcontracting strategy and the specific requirements of the SOW. If HSAG actively seeks out small business partners for specialized services, it could provide opportunities. Conversely, if the work is largely performed in-house by HSAG, the direct benefit to the small business ecosystem would be limited.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Management Consulting Services
Product/Service Code: MEDICAL SERVICES › DEPENDENT MEDICARE SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: 75FCMC25RJ019
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 3133 EAST CAMELBACK RS STE 100, PHOENIX, AZ, 85016
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business
Financial Breakdown
Contract Ceiling: $78,595,876
Exercised Options: $78,595,876
Current Obligation: $78,595,876
Actual Outlays: $7,185,711
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: 75FCMC19D0026
IDV Type: IDC
Timeline
Start Date: 2025-05-28
Current End Date: 2030-05-27
Potential End Date: 2030-05-27 00:00:00
Last Modified: 2025-11-25
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