HHS awards $6.3M contract to KPMG LLP for external audit program supporting advance premium tax credits

Contract Overview

Contract Amount: $6,298,898 ($6.3M)

Contractor: Kpmg LLP

Awarding Agency: Department of Health and Human Services

Start Date: 2025-09-16

End Date: 2026-09-15

Contract Duration: 364 days

Daily Burn Rate: $17.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Healthcare

Official Description: THE PPFMG EXTERNAL AUDIT PROGRAM SAFEGUARDS THE OVER $100 BILLION IN ANNUAL EXCHANGE PAYMENTS OF THE ADVANCE PREMIUM TAX CREDIT (APTC) AND PREMIUM STABILIZATION PAYMENT AND CHARGES UNDER THE HIGH-COST RISK POOL (HCRP). THIS TASK ORDER SUPPORTS CRIT

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $6.3 million to KPMG LLP for work described as: THE PPFMG EXTERNAL AUDIT PROGRAM SAFEGUARDS THE OVER $100 BILLION IN ANNUAL EXCHANGE PAYMENTS OF THE ADVANCE PREMIUM TAX CREDIT (APTC) AND PREMIUM STABILIZATION PAYMENT AND CHARGES UNDER THE HIGH-COST RISK POOL (HCRP). THIS TASK ORDER SUPPORTS CRIT Key points: 1. The contract supports a critical program safeguarding over $100 billion in annual exchange payments. 2. KPMG LLP, a large public accounting firm, was awarded this delivery order. 3. The contract is for audit services, aligning with the 'Offices of Certified Public Accountants' industry code. 4. This award represents a small portion of the overall spending on the Advance Premium Tax Credit (APTC) and Premium Stabilization Payment programs. 5. The contract duration is one year, with a potential for extension. 6. The contract type is Time and Materials, which can introduce cost variability.

Value Assessment

Rating: good

The contract value of $6.3 million for a one-year audit engagement appears reasonable given the critical nature of the program it supports. The Advance Premium Tax Credit (APTC) and Premium Stabilization Payment programs involve substantial financial flows, necessitating robust auditing. Benchmarking this specific contract's value against similar large-scale audit services for federal programs would provide further context, but the scale of the underlying financial activity suggests this is a necessary investment for fiscal integrity.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified bidders had the opportunity to submit proposals. This competitive process is expected to drive fair pricing and ensure the government receives high-quality services. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competition.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more cost-effective solutions and prevent price gouging.

Public Impact

Taxpayers benefit from the assurance of fiscal integrity in the APTC and Premium Stabilization Payment programs. The contract delivers essential audit services to safeguard billions of dollars in federal exchange payments. The geographic impact is national, as these programs affect health insurance marketplaces across the United States. The contract supports the workforce within the accounting and auditing sector, specifically at KPMG LLP.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type introduces potential for cost overruns if not closely managed.
The critical nature of the program means any audit failures could have significant financial repercussions.

Positive Signals

Awarded under full and open competition, suggesting a competitive pricing environment.
Supports a vital program for the Affordable Care Act, indicating strategic importance.
KPMG LLP is a well-established auditing firm with extensive experience.

Sector Analysis

This contract falls within the professional services sector, specifically accounting and auditing. The market for federal audit services is substantial, with numerous large and small firms competing for government contracts. This particular award supports the Centers for Medicare and Medicaid Services (CMS) in its oversight of critical healthcare subsidies, a key area of federal spending within the broader healthcare sector.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting requirements for small businesses. As a delivery order under a larger contract, the original solicitation would dictate any small business considerations. Given the nature of the services and the prime contractor, it's possible that small businesses may be involved in subcontracting, but this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically be managed by the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. The Inspector General's office within the Department of Health and Human Services (HHS) would likely have jurisdiction for audits and investigations related to potential fraud, waste, or abuse within the programs being audited. Transparency is facilitated through contract award databases and public reporting requirements.

Related Government Programs

Advance Premium Tax Credit (APTC) Program
Premium Stabilization Payment Program
High-Cost Risk Pool (HCRP)
Affordable Care Act (ACA) Programs
Federal Audit Services

Risk Flags

Potential for cost overruns with Time and Materials contract.
Reliance on a single contractor for critical audit services.
Complexity of the financial programs being audited.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $6.3 million to KPMG LLP. THE PPFMG EXTERNAL AUDIT PROGRAM SAFEGUARDS THE OVER $100 BILLION IN ANNUAL EXCHANGE PAYMENTS OF THE ADVANCE PREMIUM TAX CREDIT (APTC) AND PREMIUM STABILIZATION PAYMENT AND CHARGES UNDER THE HIGH-COST RISK POOL (HCRP). THIS TASK ORDER SUPPORTS CRIT

Who is the contractor on this award?

The obligated recipient is KPMG LLP.

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 $6.3 million.

What is the period of performance?

Start: 2025-09-16. End: 2026-09-15.

What is the track record of KPMG LLP in performing similar federal audit contracts?

KPMG LLP is a major global professional services firm with a significant presence in government contracting. They have a long history of performing audits for federal agencies, including complex financial statement audits, compliance audits, and program-specific audits. Their experience often includes work related to large-scale financial programs and regulatory compliance. While specific details on past performance for this exact program are not provided, their general track record suggests they possess the necessary expertise and capacity to handle such engagements. Federal procurement data and past performance reviews would offer more granular insights into their specific success rates and client satisfaction on comparable contracts.

How does the value of this contract compare to other federal audit contracts for similar programs?

The contract value of $6.3 million for a one-year engagement supporting the APTC and Premium Stabilization Payment programs is substantial, reflecting the complexity and financial scale of the underlying programs. To benchmark effectively, one would need to compare it to other large federal audit contracts, particularly those involving financial oversight of major entitlement or subsidy programs. Contracts for auditing the IRS, Social Security Administration, or other large HHS programs could serve as comparators. The 'full and open competition' aspect suggests the pricing was vetted against market rates. Without direct comparative data on similar audit scopes for programs of comparable financial magnitude, it's difficult to definitively state if it's high or low, but it aligns with the significant financial oversight required.

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

The primary risks include potential cost overruns due to the Time and Materials (T&M) pricing structure, which requires diligent monitoring by the government to ensure efficient use of resources. Another risk is the potential for audit findings to be incomplete or inaccurate, which could undermine the integrity of the programs being audited. Furthermore, the critical nature of the APTC and stabilization payments means any disruption or failure in the audit process could have significant financial and policy implications. Mitigation strategies likely involve robust contract management by CMS, clear performance standards, regular progress reviews, and potentially independent quality control measures within KPMG's audit process. The Inspector General's office also provides an external layer of oversight.

How effective is the PPFMG External Audit Program in safeguarding federal exchange payments?

The PPFMG External Audit Program is designed to safeguard over $100 billion in annual exchange payments, indicating its critical role in ensuring the financial integrity of the Advance Premium Tax Credit (APTC) and Premium Stabilization Payment programs. The effectiveness of the program hinges on the quality and thoroughness of the audits conducted. While this specific contract is for audit services, the overall effectiveness is measured by the program's ability to detect and prevent fraud, waste, and abuse, ensure compliance with regulations, and provide assurance to policymakers and the public that funds are being managed appropriately. Independent audits, like the one awarded to KPMG, are a key component of this effectiveness, providing an objective assessment of financial controls and program operations.

What is the historical spending trend for audit services related to the APTC and Premium Stabilization Payment programs?

Historical spending data for audit services related to the APTC and Premium Stabilization Payment programs would provide valuable context for this $6.3 million award. Analyzing past contract awards for similar audit functions, including the number of contracts, their values, and the contractors involved, can reveal trends in spending. If spending has been consistently high or increasing, it might indicate growing complexity or a sustained need for robust oversight. Conversely, a decrease could suggest program maturation or changes in audit scope. Understanding this history helps assess whether the current award is in line with previous investments or represents a significant shift in resource allocation for program auditing.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Offices of Certified Public Accountants

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

Solicitation ID: 75FCMC25QJ022

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 8350 BROAD ST STE 900, MC LEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $31,078,313

Exercised Options: $6,298,898

Current Obligation: $6,298,898

Actual Outlays: $1,776,408

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS00F275CA

IDV Type: FSS

Timeline