HHS awards $30M contract for COVID-19 uninsured and provider relief fund close-out services to OptumServe

Contract Overview

Contract Amount: $30,148,399 ($30.1M)

Contractor: Optumserve Technology Services, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2024-10-11

End Date: 2026-04-11

Contract Duration: 547 days

Daily Burn Rate: $55.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PRB184 C 5299 COVID-19 UNINSURED AND PROVIDER RELIEF FUND CLOSE-OUT SERVICES

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20857

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $30.1 million to OPTUMSERVE TECHNOLOGY SERVICES, INC. for work described as: PRB184 C 5299 COVID-19 UNINSURED AND PROVIDER RELIEF FUND CLOSE-OUT SERVICES Key points: 1. Contract awarded on a sole-source basis, raising questions about potential cost savings through competition. 2. The contract duration of 547 days suggests a significant, ongoing need for administrative support. 3. Fixed-price contract type aims to control costs, but the absence of competition limits price discovery. 4. The services fall under administrative management and general management consulting, a broad category. 5. The award to OptumServe, a known entity in government contracting, provides some level of performance predictability. 6. The contract's focus on 'close-out services' indicates a winding down of a specific program phase.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to its sole-source nature and specific focus on program close-out. Without competitive bids, it's difficult to ascertain if the $30.15 million price represents optimal value for the services rendered. The fixed-price structure provides some cost certainty, but the lack of comparison makes it hard to assess if it aligns with market rates for similar administrative and consulting services. Further analysis would require understanding the specific deliverables and the complexity of the close-out process.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the necessary qualifications or when urgency dictates a rapid award. The absence of competition means there was no opportunity for price negotiation or discovery through a bidding process, potentially leading to higher costs for taxpayers compared to a fully competed contract.

Taxpayer Impact: The lack of competition means taxpayers may not have received the benefit of a lower price that could have been achieved through a competitive bidding process. This could result in a less efficient use of federal funds.

Public Impact

The primary beneficiaries are likely healthcare providers and uninsured individuals who will experience a more organized and efficient conclusion to the COVID-19 relief programs. The services delivered include administrative management and general management consulting, crucial for closing out complex federal relief funds. The geographic impact is national, as the COVID-19 relief programs administered by HRSA served individuals and providers across the United States. Workforce implications include the potential for OptumServe to utilize its existing administrative and consulting staff, possibly requiring specialized knowledge of federal grant and relief fund management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits transparency and potential for cost savings.
Contract duration and value suggest significant administrative burden, requiring careful oversight.
Scope of 'close-out services' needs clear definition to prevent scope creep and ensure efficient resource allocation.

Positive Signals

Fixed-price contract type provides cost predictability.
Award to an established contractor like OptumServe may indicate a degree of confidence in their ability to perform.
Focus on program close-out suggests a move towards program completion and fiscal responsibility.

Sector Analysis

This contract falls within the administrative management and consulting services sector, a critical support function for government agencies. The market for such services is substantial, with agencies frequently outsourcing administrative tasks to specialized firms. The size of this particular award, over $30 million, indicates a significant undertaking, likely related to the scale and complexity of the COVID-19 relief programs. Comparable spending benchmarks would typically involve other large-scale administrative support contracts for federal programs, particularly those involving financial management and program close-out.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false. There is no explicit information regarding subcontracting plans for small businesses. The award to a large prime contractor like OptumServe may limit direct opportunities for small businesses unless they are specifically engaged as subcontractors. Further investigation into subcontracting goals and achievements would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of Health and Human Services (HHS) and its Health Resources and Services Administration (HRSA). As a definitive contract, it is subject to standard federal procurement regulations and oversight mechanisms. Transparency regarding the specific deliverables and performance metrics will be key. The Inspector General's office for HHS would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

COVID-19 Economic Relief Programs
Provider Relief Fund
Uninsured Program
Federal Grant Management
Administrative Support Services
Management and Consulting Services

Risk Flags

Sole-source award
Potential for cost overruns due to lack of competition
Contract performance monitoring
Scope definition and management

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $30.1 million to OPTUMSERVE TECHNOLOGY SERVICES, INC.. PRB184 C 5299 COVID-19 UNINSURED AND PROVIDER RELIEF FUND CLOSE-OUT SERVICES

Who is the contractor on this award?

The obligated recipient is OPTUMSERVE TECHNOLOGY SERVICES, INC..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Health Resources and Services Administration).

What is the total obligated amount?

The obligated amount is $30.1 million.

What is the period of performance?

Start: 2024-10-11. End: 2026-04-11.

What is OptumServe Technology Services, Inc.'s track record with federal contracts, particularly with HHS?

OptumServe Technology Services, Inc. has a significant history of contracting with the federal government, including multiple awards from the Department of Health and Human Services (HHS). Their experience often involves large-scale IT and administrative support services, including work related to public health initiatives and healthcare administration. For instance, they have been involved in major contracts related to healthcare eligibility and enrollment, as well as IT modernization efforts within federal agencies. This extensive background suggests a familiarity with federal procurement processes, reporting requirements, and the complexities of managing large government contracts, which could be a factor in their selection for this sole-source award.

How does the $30.15 million value of this contract compare to similar program close-out contracts?

Direct comparison of this $30.15 million contract to similar program close-out contracts is challenging without more specific data on the scope and complexity of other close-out efforts. However, the value suggests a substantial undertaking, likely involving extensive data management, financial reconciliation, and stakeholder communication for the COVID-19 uninsured and provider relief funds. Large-scale administrative and consulting contracts for federal programs can range widely, but a $30 million award for a specific program's close-out phase indicates a significant level of effort and resources required. Factors influencing such costs include the number of beneficiaries, the volume of transactions, the duration of the program, and the regulatory requirements for closure.

What are the primary risks associated with a sole-source award for these services?

The primary risks associated with a sole-source award for these services include a lack of price competition, which can lead to higher costs for the government and taxpayers. Without multiple bids, there is less incentive for the contractor to offer the lowest possible price. Additionally, sole-source awards can reduce transparency in the procurement process and may limit the government's ability to explore innovative solutions that might be offered by a broader range of potential contractors. There's also a risk that the government may not fully leverage the competitive market's potential for efficiency and cost savings. Ensuring robust oversight and clear performance metrics becomes even more critical in sole-source situations.

How effective are administrative management and general management consulting services in facilitating program close-outs?

Administrative management and general management consulting services are often crucial for facilitating complex program close-outs. These services can provide specialized expertise in areas such as financial reconciliation, data analysis, compliance review, stakeholder communication, and process optimization. For large federal programs like the COVID-19 relief funds, which involved significant financial outlays and numerous recipients, expert administrative support is vital to ensure all obligations are met, funds are properly accounted for, and program objectives are formally concluded. The effectiveness hinges on the clarity of the contract's scope, the contractor's ability to navigate federal regulations, and the agency's oversight in ensuring all close-out requirements are met efficiently and accurately.

What has been the historical spending by HHS on administrative and consulting services for relief programs?

Historical spending by HHS on administrative and consulting services for relief programs, particularly those of the scale of COVID-19, has been substantial. While specific figures for past relief program close-outs are not readily available in this dataset, HHS consistently utilizes contracts for program management, oversight, and administrative support. During major public health crises or large-scale initiatives, the need for such services often increases significantly to manage the influx of funds, applications, and reporting requirements. The COVID-19 pandemic, being an unprecedented event, likely saw a surge in spending on related administrative and consulting contracts across various federal agencies, including HHS, to manage the distribution and close-out of trillions of dollars in relief.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 75R60224R00018

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Unitedhealth Group Incorporated

Address: 328 FRONT ST S, LA CROSSE, WI, 54601

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

Financial Breakdown

Contract Ceiling: $71,497,206

Exercised Options: $30,148,399

Current Obligation: $30,148,399

Actual Outlays: $25,885,251

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline