DoD's $28.7M Employee Assistance Program contract awarded to Magellan Federal, Inc. for administrative management services

Contract Overview

Contract Amount: $28,765,566 ($28.8M)

Contractor: Magellan Federal, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-10-01

End Date: 2026-09-30

Contract Duration: 1,825 days

Daily Burn Rate: $15.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: EMPLOYEE ASSISTANCE PROGRAM SERVICES

Place of Performance

Location: DAYTON, GREENE County, OHIO, 45433

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $28.8 million to MAGELLAN FEDERAL, INC. for work described as: EMPLOYEE ASSISTANCE PROGRAM SERVICES Key points: 1. The contract value of $28.7 million over five years suggests a significant investment in employee well-being. 2. Awarded under full and open competition, indicating a potentially competitive bidding process. 3. The firm-fixed-price contract type helps manage cost certainty for the government. 4. The duration of 1825 days (5 years) allows for sustained service delivery. 5. The contract's focus on administrative management and general consulting services aligns with supporting employee assistance programs.

Value Assessment

Rating: good

The contract value of $28.7 million over five years for employee assistance program services appears reasonable given the scope. Benchmarking against similar large-scale EAP contracts for federal agencies would provide a more precise value-for-money assessment. The firm-fixed-price structure offers cost predictability. Without specific per-unit cost data or detailed service metrics, a definitive value assessment is challenging, but the overall investment seems aligned with supporting a large workforce.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. With two bids received, the competition level was moderate. This level of competition generally allows for price discovery and can lead to more favorable pricing for the government compared to sole-source or limited competition scenarios. However, the specific details of the bidding process and the nature of the services could influence the ultimate competitiveness.

Taxpayer Impact: A competitive bidding process for employee assistance services helps ensure that taxpayer funds are used efficiently by driving down costs and encouraging service providers to offer high-quality solutions.

Public Impact

Federal employees, particularly within the Department of the Air Force, are the primary beneficiaries of these employee assistance services. The services aim to provide confidential counseling, referrals, and support for personal and work-related issues. The contract's geographic impact is likely nationwide, supporting Air Force personnel across various installations. The contract supports a workforce dedicated to national defense by promoting mental health and well-being.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for service gaps if Magellan Federal, Inc. under-resourced the contract.
Risk of vendor lock-in if future competition is limited.
Ensuring consistent quality of care across diverse geographic locations can be challenging.

Positive Signals

Award under full and open competition suggests a competitive market for these services.
Firm-fixed-price contract provides budget certainty for the government.
Long-term contract (5 years) allows for stable service provision and relationship building.

Sector Analysis

The Employee Assistance Program (EAP) services fall under the broader administrative management and general management consulting services sector. This sector is characterized by a wide range of service providers, from large consulting firms to specialized EAP providers. Federal spending in this area is crucial for maintaining workforce productivity and well-being, especially within large organizations like the Department of Defense. Comparable spending benchmarks would involve looking at other large federal EAP contracts or large-scale employee support service procurements.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Magellan Federal, Inc. is not explicitly identified as a small business. Therefore, the direct impact on small businesses through set-asides appears minimal. However, the prime contractor may engage small businesses as subcontractors, which would be a positive development for the small business ecosystem, though this information is not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Department of the Air Force. Accountability measures would be embedded in the contract's performance work statement and service level agreements. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Federal Employee Health Benefits Program
Department of Defense Civilian Personnel Management
Workplace Safety and Health Programs
Mental Health Services Administration

Risk Flags

Potential for service quality degradation if contractor faces cost pressures.
Risk of limited competition in future procurements due to contractor entrenchment.
Ensuring consistent service delivery across diverse geographic locations and user needs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $28.8 million to MAGELLAN FEDERAL, INC.. EMPLOYEE ASSISTANCE PROGRAM SERVICES

Who is the contractor on this award?

The obligated recipient is MAGELLAN FEDERAL, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Air Force).

What is the total obligated amount?

The obligated amount is $28.8 million.

What is the period of performance?

Start: 2021-10-01. End: 2026-09-30.

What is the track record of Magellan Federal, Inc. in providing employee assistance program services to the federal government?

Magellan Federal, Inc. has a history of providing EAP services. While specific details of their past federal contracts are not provided in this data snippet, their ability to win a significant contract like this from the Department of Defense suggests they have demonstrated capabilities and experience. Further investigation into their past performance reviews, contract history with other federal agencies, and client testimonials would offer a more comprehensive understanding of their track record. Assessing their performance on previous EAP contracts, including client satisfaction, adherence to service level agreements, and any past performance issues, is crucial for evaluating their reliability and effectiveness in delivering these sensitive services.

How does the per-employee cost of this EAP contract compare to industry benchmarks?

The provided data does not include the number of employees covered by this contract, which is essential for calculating a per-employee cost. Without this information, a direct comparison to industry benchmarks for EAP services is not possible. Typically, EAP costs are calculated on a per-employee, per-month basis. To perform this benchmark, one would need the total contract value, the contract duration, and the estimated number of covered federal employees. Once these figures are available, the calculated per-employee cost could be compared against industry averages, which can vary based on the scope of services offered, the size of the organization, and the specific provider.

What are the key performance indicators (KPIs) used to measure the success of this Employee Assistance Program contract?

The provided data does not explicitly list the Key Performance Indicators (KPIs) for this contract. However, typical KPIs for EAP services often include metrics such as utilization rates (percentage of employees using the service), client satisfaction scores (from employees who have used the service), referral rates to specialized care, case closure rates, and turnaround times for initial appointments. The contract's performance work statement (PWS) would detail these specific metrics, along with acceptable performance levels and any associated incentives or penalties. Regular reporting on these KPIs would be part of the contractor's obligation to demonstrate effective service delivery.

What is the historical spending trend for Employee Assistance Program services within the Department of Defense?

The provided data snippet focuses on a single contract and does not offer historical spending trends for EAP services within the Department of Defense (DoD). To analyze historical spending, one would need to access broader federal procurement databases and filter for EAP services procured by the DoD over several fiscal years. This would allow for the identification of trends in contract values, the number of contracts awarded, and the primary contractors. Understanding these trends can help assess whether spending on EAP services is increasing, decreasing, or remaining stable, and whether the current contract represents a significant deviation from past investment levels.

What are the potential risks associated with a five-year firm-fixed-price contract for EAP services?

A five-year firm-fixed-price contract for EAP services presents several potential risks. For the government, the primary risk is that the fixed price may become uncompetitive over time if market rates decrease or if the scope of services needs to expand significantly without a corresponding price adjustment mechanism. Conversely, the contractor bears the risk of cost overruns if their operational costs increase substantially over the five years, potentially impacting service quality if they seek to cut corners. Additionally, a long-term contract might reduce the incentive for the contractor to innovate or improve services beyond the initial agreement, and it could limit the government's flexibility to adapt to changing employee needs or technological advancements in service delivery.

Industry Classification

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

Product/Service Code: EDUCATION AND TRAINING › EDUCATION AND TRAINING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Magellan Federal Inc.

Address: 2800 S SHIRLINGTON RD STE 350, ARLINGTON, VA, 22206

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

Financial Breakdown

Contract Ceiling: $32,033,320

Exercised Options: $28,869,714

Current Obligation: $28,765,566

Actual Outlays: $6,869,743

Subaward Activity

Number of Subawards: 1

Total Subaward Amount: $39,787

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS02F027BA

IDV Type: FSS

Timeline