Serco Inc. awarded $25.4M contract for administrative management services by HHS, with a 2028 end date

Contract Overview

Contract Amount: $25,410,327 ($25.4M)

Contractor: Serco Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2025-11-17

End Date: 2028-11-21

Contract Duration: 1,100 days

Daily Burn Rate: $23.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 9

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: THE CERT PROGRAM CALCULATES IMPROPER PAYMENT RATES BASED ON THE RESULTS OF THE REVIEWS CONDUCTED. THESE RATES INCLUDE AN OVERALL NATIONAL MEDICARE FFS IMPROPER PAYMENT RATE AND IMPROPER PAYMENT RATES FOR EACH CLAIM TYPE [PART A INPATIENT HOSPITAL PRO

Place of Performance

Location: HERNDON, FAIRFAX County, VIRGINIA, 20170

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $25.4 million to SERCO INC for work described as: THE CERT PROGRAM CALCULATES IMPROPER PAYMENT RATES BASED ON THE RESULTS OF THE REVIEWS CONDUCTED. THESE RATES INCLUDE AN OVERALL NATIONAL MEDICARE FFS IMPROPER PAYMENT RATE AND IMPROPER PAYMENT RATES FOR EACH CLAIM TYPE [PART A INPATIENT HOSPITAL PRO Key points: 1. Contract value of $25.4 million over approximately 4 years suggests a significant investment in administrative management. 2. Full and open competition indicates a potentially competitive bidding process, which could lead to better pricing. 3. The contract is a delivery order under a larger contract, implying it's part of an existing framework. 4. Fixed-price contract type shifts risk to the contractor, potentially stabilizing costs for the government. 5. The North American Industry Classification System (NAICS) code 541611 points to specialized management consulting services. 6. The contract's duration of approximately 4 years allows for sustained service delivery and potential for performance evaluation.

Value Assessment

Rating: good

The contract value of $25.4 million over roughly four years averages to approximately $6.35 million annually. Without specific benchmarks for similar administrative management consulting contracts within HHS or other federal agencies, a precise value-for-money assessment is challenging. However, the firm-fixed-price structure suggests that the contractor bears the risk of cost overruns, which is generally favorable for the government. Further analysis would require comparing the scope of services and deliverables to other contracts of similar size and complexity.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. This approach typically fosters a competitive environment, encouraging multiple bidders to offer their best pricing and services to secure the contract. The presence of 9 bidders suggests a healthy level of interest and competition for this requirement.

Taxpayer Impact: Full and open competition generally benefits taxpayers by promoting a more efficient allocation of resources and potentially lower prices due to market forces.

Public Impact

The primary beneficiaries are likely the Centers for Medicare and Medicaid Services (CMS) within HHS, which will receive administrative management and general management consulting services. The services delivered are expected to support the operational efficiency and management functions of the agency. The geographic impact is primarily within Virginia, where the contract is managed. Workforce implications may include the utilization of Serco Inc.'s personnel for specialized consulting tasks, potentially augmenting the agency's internal capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if deliverables are not clearly defined.
Reliance on contractor expertise may reduce internal agency knowledge development over time.
Performance monitoring is crucial to ensure services meet expectations and justify the investment.

Positive Signals

Firm-fixed-price contract aligns incentives for cost control.
Full and open competition suggests a robust selection process.
Contract duration allows for stable service provision and performance evaluation.

Sector Analysis

This contract falls within the administrative management and general management consulting services sector, a critical area for government operations. The market for these services is substantial, with numerous firms competing to provide expertise in areas such as process improvement, strategic planning, and operational support. This contract with HHS, a major federal agency, represents a significant engagement within this sector, likely benchmarked against other large-scale government consulting awards.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the primary focus is on the prime contractor, Serco Inc. Subcontracting opportunities for small businesses would depend on Serco's internal procurement practices and whether they choose to engage small businesses for specific components of the administrative management services. Without explicit subcontracting plans, the direct impact on the small business ecosystem is uncertain.

Oversight & Accountability

Oversight for this contract would typically reside with the contracting officer and the program office within the Centers for Medicare and Medicaid Services (CMS). Performance will be monitored against the terms and conditions of the delivery order, including deliverables, timelines, and quality standards. Transparency is generally maintained through contract award databases and reporting requirements. The Inspector General for HHS may have jurisdiction for audits and investigations related to potential fraud, waste, or abuse.

Related Government Programs

HHS Administrative Support Contracts
CMS Management Consulting Services
Federal Management and Consulting Services
Government Administrative Services

Risk Flags

Contract performance risk
Cost overrun potential (contractor-borne)
Scope creep potential
Dependency on contractor expertise

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $25.4 million to SERCO INC. THE CERT PROGRAM CALCULATES IMPROPER PAYMENT RATES BASED ON THE RESULTS OF THE REVIEWS CONDUCTED. THESE RATES INCLUDE AN OVERALL NATIONAL MEDICARE FFS IMPROPER PAYMENT RATE AND IMPROPER PAYMENT RATES FOR EACH CLAIM TYPE [PART A INPATIENT HOSPITAL PRO

Who is the contractor on this award?

The obligated recipient is SERCO 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 $25.4 million.

What is the period of performance?

Start: 2025-11-17. End: 2028-11-21.

What is Serco Inc.'s track record with federal contracts, particularly within HHS?

Serco Inc. has a substantial history of performing federal contracts across various agencies, including the Department of Health and Human Services (HHS). Their portfolio often includes services related to citizen services, defense, and government administration. For HHS, Serco has previously been involved in contracts related to healthcare services, IT support, and administrative functions. A review of their past performance on similar contracts would be necessary to assess their reliability, quality of service, and ability to meet complex requirements. Past performance evaluations and any disputes or terminations on prior HHS contracts would be key indicators of their suitability for this current award.

How does the $25.4 million contract value compare to similar administrative management contracts awarded by HHS?

The $25.4 million contract value for administrative management and general management consulting services awarded to Serco Inc. by HHS needs to be contextualized against similar procurements. Without access to a comprehensive database of all HHS contracts, a direct comparison is difficult. However, contracts for specialized consulting services for large federal agencies can range from a few million to tens or even hundreds of millions of dollars, depending on the scope, duration, and complexity. This $25.4 million award over approximately four years suggests a mid-to-large scale engagement. Benchmarking against contracts with similar NAICS codes (541611) and service descriptions within HHS or other health-focused agencies would provide a clearer picture of whether this represents a competitive price point and appropriate scale for the services rendered.

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

Key risks for this contract include potential performance issues if Serco Inc. fails to deliver services meeting the required quality standards, cost overruns if the firm-fixed-price model is not managed effectively by the contractor, and potential delays in service delivery impacting agency operations. Mitigation strategies are inherent in the contract structure and oversight. The firm-fixed-price nature shifts financial risk to Serco. The full and open competition process aims to select a capable contractor. Ongoing oversight by the contracting officer and program managers, along with defined performance metrics and reporting requirements, are crucial for monitoring progress and addressing any emerging issues proactively. Clear statement of work and deliverables also help manage scope.

What is the expected effectiveness of the administrative management services provided under this contract?

The expected effectiveness of the administrative management services hinges on the clarity of the contract's objectives and Serco Inc.'s ability to meet them. These services are intended to enhance the efficiency, effectiveness, and potentially the cost-savings of the agency's administrative functions. This could involve process optimization, strategic planning support, operational analysis, or other management consulting activities. The effectiveness will be measured against specific performance standards and deliverables outlined in the contract. A successful outcome would mean that CMS operates more smoothly, achieves its programmatic goals with greater efficiency, and potentially realizes cost benefits through improved administrative processes. Regular performance reviews and feedback loops are essential to ensure the services remain effective throughout the contract's duration.

How does this contract fit into the broader spending patterns of the Centers for Medicare and Medicaid Services (CMS)?

This $25.4 million contract for administrative management and general management consulting services represents a component of CMS's overall operational and program support spending. CMS, as a massive agency responsible for administering Medicare and Medicaid, incurs significant costs not only for healthcare services but also for the administrative infrastructure required to manage these complex programs. Spending on consulting and management services is common across federal agencies to bring in specialized expertise, improve efficiency, or support strategic initiatives. This contract likely supports specific CMS divisions or initiatives that require external management consulting support, contributing to the agency's ability to fulfill its mission. Its size suggests it's a notable, but not necessarily dominant, part of CMS's annual expenditures.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

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

Offers Received: 9

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12930 WORLDGATE DR, HERNDON, VA, 20170

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

Financial Breakdown

Contract Ceiling: $109,869,471

Exercised Options: $25,410,327

Current Obligation: $25,410,327

Actual Outlays: $187,467

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS00F297CA

IDV Type: FSS

Timeline