HHS awarded $38.3M for Medicare overflow call services to Palmetto GBA, LLC via a non-competitive delivery order
Contract Overview
Contract Amount: $38,275,533 ($38.3M)
Contractor: Palmetto GBA, LLC
Awarding Agency: Department of Health and Human Services
Start Date: 2004-05-21
End Date: 2005-05-20
Contract Duration: 364 days
Daily Burn Rate: $105.2K/day
Competition Type: NON-COMPETITIVE DELIVERY ORDER
Number of Offers Received: 1
Pricing Type: COST PLUS FIXED FEE
Sector: Healthcare
Official Description: LETTER TASK ORDER FOR 1-800 MEDICARE MMA OVERFLOW CALLS
Place of Performance
Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29202
Plain-Language Summary
Department of Health and Human Services obligated $38.3 million to PALMETTO GBA, LLC for work described as: LETTER TASK ORDER FOR 1-800 MEDICARE MMA OVERFLOW CALLS Key points: 1. The contract was awarded on a cost-plus-fixed-fee basis, indicating potential for cost overruns if not managed carefully. 2. The non-competitive nature of this award raises questions about price discovery and potential for higher costs compared to an open market. 3. The contract duration of one year (364 days) suggests a short-term need for overflow call capacity. 4. The award was made to Palmetto GBA, LLC, a known entity in Medicare administration, suggesting a reliance on established contractors. 5. The specific service is for handling overflow calls for Medicare, a critical but potentially high-volume function. 6. The contract's value of $38.3M for a single year of overflow call services warrants scrutiny for efficiency.
Value Assessment
Rating: questionable
Benchmarking the value of this contract is challenging without more detailed cost breakdowns or comparisons to similar overflow call center services. The cost-plus-fixed-fee structure means the government pays for allowable costs plus a fixed fee, which can sometimes lead to less incentive for the contractor to control costs compared to fixed-price contracts. Given the non-competitive award, it's difficult to assess if the pricing reflects market rates or if a more competitive process could have yielded better value for taxpayers.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded as a non-competitive delivery order. This means that the agency did not solicit offers from multiple potential contractors. While sole-source awards can be justified in certain circumstances (e.g., urgency, unique capabilities), they limit the opportunity for competition, which typically drives down prices and encourages innovation. The lack of competition here means taxpayers may not have received the best possible pricing or service.
Taxpayer Impact: The absence of competition means taxpayers did not benefit from the price reductions and service improvements that a competitive bidding process could have generated.
Public Impact
Medicare beneficiaries in South Carolina and potentially nationwide will benefit from uninterrupted access to call center services, especially during peak demand periods. The services delivered include handling overflow calls for Medicare, ensuring that beneficiaries can reach assistance when needed. The geographic impact is primarily linked to the contractor's location in South Carolina, but the service supports the national Medicare program. The contract supports a workforce involved in customer service and administrative support for Medicare operations.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Non-competitive award limits price discovery and potential savings.
- Cost-plus-fixed-fee structure may not incentivize maximum cost efficiency.
- Lack of transparency in the justification for a sole-source award.
- Potential for higher per-unit costs due to lack of competition.
Positive Signals
- Award to an established contractor (Palmetto GBA, LLC) may ensure continuity of service.
- Focus on critical Medicare services ensures beneficiary support.
- Fixed fee component provides some cost predictability for the agency.
Sector Analysis
This contract falls within the broader Health Services sector, specifically focusing on administrative support and call center operations for a government healthcare program. The market for such services is competitive, with numerous companies offering call center solutions. However, for specialized government healthcare programs like Medicare, incumbent contractors often hold significant advantages due to established infrastructure, expertise, and security clearances. The value of this contract, at $38.3M for one year, is substantial for a single delivery order focused on overflow call handling, suggesting a significant volume of calls or a high cost per call.
Small Business Impact
The data indicates that small business participation was not a primary consideration for this specific award, as it was a non-competitive delivery order. There is no explicit mention of small business set-asides or subcontracting plans. This suggests that the primary contractor, Palmetto GBA, LLC, likely handled the majority of the work, potentially limiting opportunities for small businesses to participate in this particular contract's execution.
Oversight & Accountability
Oversight for this contract would fall under the Centers for Medicare and Medicaid Services (CMS), a division of HHS. As a delivery order under a larger contract vehicle, oversight mechanisms would likely involve contract officers, program managers, and potentially the HHS Office of Inspector General (OIG) if specific concerns or performance issues arise. Transparency regarding the justification for the non-competitive award and detailed performance metrics would be key to assessing accountability.
Related Government Programs
- Medicare Administrative Contractors (MACs)
- Healthcare Call Center Services
- CMS Program Support Contracts
- Federal Health IT Services
Risk Flags
- Non-competitive award
- Cost-plus-fixed-fee contract type
- Lack of detailed justification for sole-source award
Tags
healthcare, hhs, cms, medicare, call-center, non-competitive, delivery-order, cost-plus-fixed-fee, south-carolina, administrative-support, overflow-calls
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $38.3 million to PALMETTO GBA, LLC. LETTER TASK ORDER FOR 1-800 MEDICARE MMA OVERFLOW CALLS
Who is the contractor on this award?
The obligated recipient is PALMETTO GBA, LLC.
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 $38.3 million.
What is the period of performance?
Start: 2004-05-21. End: 2005-05-20.
What is the specific justification provided by CMS for awarding this contract on a non-competitive basis?
The provided data does not include the specific justification for the non-competitive award. Typically, agencies must document reasons such as urgency, lack of available sources, or unique capabilities of a single source. Without this documentation, it is difficult to fully assess the necessity of bypassing the competitive bidding process. This lack of transparency raises concerns about whether the government explored all viable options to secure the best value for taxpayers. Further investigation into CMS's contract files would be required to uncover the official rationale.
How does the cost-plus-fixed-fee structure compare to other contract types for similar call center services?
Cost-plus-fixed-fee (CPFF) contracts reimburse the contractor for allowable costs incurred plus a predetermined fixed fee representing profit. This structure is often used when the scope of work is not precisely defined or when there's uncertainty about costs. For call center services, fixed-price contracts are generally preferred when requirements are well-defined, as they place more cost risk on the contractor and incentivize efficiency. CPFF can lead to higher overall costs if not rigorously managed, as the contractor has less incentive to minimize expenses beyond what is necessary to earn their fixed fee. Benchmarking against similar government contracts would reveal if CPFF is standard for this type of overflow service or an outlier.
What was the historical spending pattern for Medicare overflow call services prior to this award?
The provided data only pertains to this specific delivery order awarded on May 21, 2004. It does not offer historical spending context for Medicare overflow call services. To understand historical patterns, one would need to analyze previous contracts awarded by CMS for similar services, potentially looking at different contractors, contract types, and award values over several fiscal years. This would help determine if this $38.3M award represents an increase, decrease, or consistent level of spending for this function and identify any trends in contractor selection or pricing.
What performance metrics were established for Palmetto GBA, LLC under this contract?
The provided data does not specify the performance metrics or quality assurance surveillance plans (QASP) associated with this contract. For a service contract, especially one involving direct beneficiary interaction like call centers, key performance indicators (KPIs) would typically include call answer rates, average handling time, first-call resolution rates, customer satisfaction scores, and adherence to privacy regulations. The effectiveness of the oversight would depend on the rigor of these metrics and how consistently they were monitored and enforced by CMS.
Are there any known issues or past performance concerns related to Palmetto GBA, LLC's handling of Medicare contracts?
The provided data does not contain information on Palmetto GBA, LLC's past performance or any specific issues related to their handling of Medicare contracts. Palmetto GBA is a well-established Medicare Administrative Contractor (MAC) and has held numerous contracts with CMS over many years. While their long tenure suggests a generally acceptable performance history, a comprehensive assessment would require reviewing past performance evaluations, any documented disputes, or audit findings related to their previous work with CMS. Without such data, it's presumed they met the requirements for this award.
Competition & Pricing
Extent Competed: NON-COMPETITIVE DELIVERY ORDER
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 1
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Blue Cross & Blue Shield of South Carolina (UEI: 055914089)
Address: 2501 FARAWAY DR, COLUMBIA, SC, 29223
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $38,275,533
Exercised Options: $38,275,533
Current Obligation: $38,275,533
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Parent Contract
Parent Award PIID: 500010051
IDV Type: IDC
Timeline
Start Date: 2004-05-21
Current End Date: 2005-05-20
Potential End Date: 2005-05-20 00:00:00
Last Modified: 2019-07-25
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