USAID's $75.6M contract for technical services awarded to Management Sciences for Health, Inc. shows fair value
Contract Overview
Contract Amount: $75,639,623 ($75.6M)
Contractor: Management Sciences for Health, Inc.
Awarding Agency: Agency for International Development
Start Date: 2012-10-01
End Date: 2017-12-29
Contract Duration: 1,915 days
Daily Burn Rate: $39.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: COST PLUS FIXED FEE
Sector: Other
Official Description: IGF::OT::IGF - GH/OHA - NEW GFTS II (GMS)
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20523
Plain-Language Summary
Agency for International Development obligated $75.6 million to MANAGEMENT SCIENCES FOR HEALTH, INC. for work described as: IGF::OT::IGF - GH/OHA - NEW GFTS II (GMS) Key points: 1. The contract's total value of $75.6 million over its 5-year duration suggests a moderate annual spend. 2. Competition was full and open, indicating a robust bidding process that likely fostered competitive pricing. 3. The contract type, Cost Plus Fixed Fee (CPFF), can present cost control challenges if not closely monitored. 4. Performance context is limited without specific deliverables, but the duration suggests a significant, ongoing need. 5. The sector is professional, scientific, and technical services, a broad category with many potential providers. 6. The contractor, Management Sciences for Health, Inc., has a history of large federal contracts, suggesting experience.
Value Assessment
Rating: fair
The contract's total value of $75.6 million over nearly five years averages to approximately $15 million annually. Benchmarking this against similar large-scale technical services contracts for international development agencies is challenging without more specific service details. However, the CPFF contract type, while allowing for flexibility, requires diligent oversight to ensure costs remain reasonable and do not escalate beyond initial projections. The fixed fee component provides some cost certainty for the contractor's profit, but the cost reimbursement aspect necessitates careful scrutiny of all incurred expenses to confirm they are allowable, allocable, and reasonable.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of 5 bidders, as indicated, suggests a healthy level of interest and competition for this requirement. A competitive process like this is generally expected to drive down prices and encourage innovative solutions as contractors vie for the award. The agency likely benefited from a range of proposals and pricing structures, allowing for a thorough evaluation to select the best value.
Taxpayer Impact: Taxpayers likely benefited from a more competitive price due to the open bidding process. The agency's ability to select from multiple proposals suggests a greater likelihood of achieving cost efficiencies and obtaining services at a fair market price.
Public Impact
The primary beneficiaries are likely USAID's international development programs, which receive essential technical and scientific support. Services delivered under this contract are broad, encompassing 'All Other Professional, Scientific, and Technical Services,' supporting various global initiatives. The geographic impact is potentially worldwide, given USAID's mission to advance global development and humanitarian efforts. Workforce implications could include employment for a significant number of technical experts, scientists, and support staff, both domestically and internationally.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee (CPFF) contract type can lead to cost overruns if not managed tightly.
- The broad nature of 'All Other Professional, Scientific, and Technical Services' may obscure specific performance metrics and accountability.
- Long contract duration (1915 days) could lead to complacency or a drift from initial objectives without active management.
- Lack of specific details on deliverables makes it difficult to assess the true value and impact of the services rendered.
Positive Signals
- Awarded under full and open competition, ensuring a competitive bidding environment.
- Multiple bidders (5) indicate significant market interest and potential for diverse solutions.
- Contractor Management Sciences for Health, Inc. has extensive experience with federal contracts, suggesting a capable provider.
- The contract's duration implies a sustained need and potential for long-term impact in its supported programs.
Sector Analysis
This contract falls within the Professional, Scientific, and Technical Services sector, a vast industry encompassing a wide array of specialized expertise. The North American Industry Classification System (NAICS) code 541990, 'All Other Professional, Scientific, and Technical Services,' covers non-classified services. Spending in this sector is substantial across the federal government, supporting everything from research and development to management consulting and specialized technical support. This contract represents a portion of USAID's investment in acquiring such expertise for its global mission, fitting within the broader landscape of government outsourcing for specialized capabilities.
Small Business Impact
This contract was not set aside for small businesses, and there is no indication of specific subcontracting requirements for small businesses within the provided data. The award to Management Sciences for Health, Inc., a large entity, suggests that the primary focus was on securing the necessary expertise through open competition rather than specifically targeting small business participation. This means the direct impact on the small business ecosystem for this particular contract is likely minimal, though larger prime contractors may engage small businesses as subcontractors if it aligns with their project needs.
Oversight & Accountability
Oversight for this contract would primarily reside with the Agency for International Development (USAID). As a Cost Plus Fixed Fee contract, rigorous oversight is crucial to monitor expenditures, ensure costs are reasonable and allocable, and verify that the fixed fee is earned based on performance. Transparency would be facilitated through contract reporting mechanisms and potentially through USAID's Inspector General (IG) if any concerns regarding fraud, waste, or abuse arise. The agency's contracting officers and program managers are responsible for day-to-day oversight of contractor performance and adherence to contract terms.
Related Government Programs
- USAID Global Health Programs
- USAID Technical Assistance Contracts
- Federal Professional Services Contracts
- International Development Support Contracts
Risk Flags
- Cost Overrun Risk (CPFF)
- Performance Measurement Ambiguity (Broad NAICS)
- Contract Duration Management
- Value Assessment Difficulty (Lack of Specifics)
Tags
professional-scientific-technical-services, agency-for-international-development, definitive-contract, full-and-open-competition, cost-plus-fixed-fee, management-sciences-for-health-inc, usaid, district-of-columbia, large-contract, international-development
Frequently Asked Questions
What is this federal contract paying for?
Agency for International Development awarded $75.6 million to MANAGEMENT SCIENCES FOR HEALTH, INC.. IGF::OT::IGF - GH/OHA - NEW GFTS II (GMS)
Who is the contractor on this award?
The obligated recipient is MANAGEMENT SCIENCES FOR HEALTH, INC..
Which agency awarded this contract?
Awarding agency: Agency for International Development (Agency for International Development).
What is the total obligated amount?
The obligated amount is $75.6 million.
What is the period of performance?
Start: 2012-10-01. End: 2017-12-29.
What is the track record of Management Sciences for Health, Inc. with federal contracts, particularly with USAID?
Management Sciences for Health, Inc. (MSH) has a substantial history of working with U.S. federal agencies, including USAID. They are a well-established organization focused on improving health services globally. Their portfolio typically includes large, complex contracts related to public health, health systems strengthening, and infectious disease programs. MSH has a demonstrated capacity to manage significant budgets and implement programs in challenging environments. Their experience with USAID is extensive, often involving multi-year, multi-million dollar awards for technical assistance and program implementation in areas like maternal and child health, HIV/AIDS, and health governance. This specific contract, while substantial, aligns with their core competencies and past performance.
How does the annual spending on this contract compare to similar technical services contracts awarded by USAID?
The average annual spending of approximately $15 million for this contract ($75.6M over ~5 years) places it in the mid-to-large tier for technical services contracts. USAID awards a wide range of contracts, from smaller, specialized consultancies to massive, multi-billion dollar global health initiatives. Contracts for broad technical and professional services often fall into this spending range, especially when they support significant, long-term development objectives. To provide a precise comparison, one would need to analyze contracts with similar NAICS codes (541990) and similar scope of work (e.g., global technical assistance). However, this level of annual expenditure is not unusual for a prime contractor supporting a major federal agency's programmatic goals.
What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude?
The primary risks with a CPFF contract of this magnitude ($75.6M) revolve around cost control and contractor performance. For the government, the risk is that the contractor may not manage costs efficiently, potentially leading to expenditures exceeding what might have been achieved under a fixed-price contract, despite the fixed fee. There's also a risk that the contractor might prioritize activities that maximize cost reimbursement over those that are most critical to program success, especially if oversight is lax. For the contractor, the risk lies in accurately estimating costs to ensure the fixed fee provides adequate profit margin without incurring losses. Effective oversight by the agency is paramount to mitigate these risks, ensuring all costs are reasonable, allocable, and necessary, and that the contractor is delivering on performance expectations.
What does the 'All Other Professional, Scientific, and Technical Services' classification imply about the contract's scope and potential performance issues?
The NAICS code 541990, 'All Other Professional, Scientific, and Technical Services,' is a broad catch-all category. This implies the contract's scope is likely diverse and may not fit neatly into more specific service categories like engineering, IT, or management consulting. While this offers flexibility, it also presents challenges for defining clear performance metrics and ensuring accountability. Without specific deliverables or service areas clearly delineated, it can be difficult for both the government and the contractor to precisely measure success. This broadness necessitates robust performance work statements and diligent oversight to ensure the services provided align with USAID's objectives and deliver tangible value.
How has USAID's spending in the 'Professional, Scientific, and Technical Services' sector evolved over the past five years?
USAID's spending in the Professional, Scientific, and Technical Services (PSTS) sector has historically been significant, reflecting the agency's reliance on external expertise for its global development and humanitarian missions. Over the past five years, trends likely show a continued, and potentially increasing, reliance on these services to address complex global challenges such as public health crises, climate change adaptation, and economic development. While specific year-over-year data requires detailed analysis of federal procurement databases (like FPDS), it's reasonable to infer that spending in this sector remains a critical component of USAID's operational budget. Factors such as shifting geopolitical priorities, emerging global threats, and evolving development strategies influence the allocation of funds within this broad sector.
What is the significance of awarding a definitive contract versus other contract types for this service?
The award of a 'Definitive Contract' simply means it's a contract that specifies the exact quantity of supplies or services to be procured and establishes a firm price or method for determining price. This contrasts with 'Indefinite-Delivery' contracts (like IDIQ) where the exact quantity isn't known upfront. For a service contract like this, valued at $75.6M over nearly five years, a definitive contract suggests USAID had a relatively clear understanding of the total scope and duration required. This allows for more predictable budgeting and planning compared to indefinite-delivery vehicles, which are often used for requirements that are more variable or uncertain. The definitive nature, combined with the CPFF pricing structure, indicates a planned, substantial engagement.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: SOL-OAA-11-000060
Offers Received: 5
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Address: 784 MEMORIAL DR, CAMBRIDGE, MA, 02139
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: $99,889,580
Exercised Options: $99,889,580
Current Obligation: $75,639,623
Actual Outlays: $-209
Subaward Activity
Number of Subawards: 302
Total Subaward Amount: $21,568,118
Contract Characteristics
Multi-Year Contract: Yes
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2012-10-01
Current End Date: 2017-12-29
Potential End Date: 2017-12-29 00:00:00
Last Modified: 2021-05-12
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