HHS awarded $13.8M for administrative management consulting, with a significant portion spent on labor hours

Contract Overview

Contract Amount: $13,831,693 ($13.8M)

Contractor: Keystone Peer Review Organization, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2005-08-31

End Date: 2010-10-15

Contract Duration: 1,871 days

Daily Burn Rate: $7.4K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: Other

Official Description: OTHER PROFESSIONAL SERVICES

Place of Performance

Location: HARRISBURG, DAUPHIN County, PENNSYLVANIA, 17105

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $13.8 million to KEYSTONE PEER REVIEW ORGANIZATION, LLC for work described as: OTHER PROFESSIONAL SERVICES Key points: 1. Contract focused on administrative management and general management consulting services. 2. Significant portion of the contract value was allocated to labor hours, indicating a service-intensive engagement. 3. The contract was awarded through a competitive process, suggesting potential for price discovery. 4. The duration of the contract (over 5 years) allowed for sustained support and project continuity. 5. The contract was not set aside for small businesses, implying larger prime contractors were involved. 6. The geographic location of the contractor is Pennsylvania, which may have implications for local economic impact.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific deliverables or performance metrics. However, the extensive use of labor hours suggests a significant investment in personnel. Comparing this to similar administrative management consulting contracts would require detailed analysis of the scope of work and the specific services rendered. The total award amount of $13.8 million over approximately five years indicates a moderate annual spend for the services provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded via a 'COMPETITIVE DELIVERY ORDER', indicating it was competed under a broader contract vehicle. The number of bidders is not specified in the provided data, but the 'full-and-open' competition level suggests that multiple vendors had the opportunity to bid. This competitive environment is generally expected to drive better pricing and service quality.

Taxpayer Impact: A competitively awarded contract typically ensures that taxpayer funds are used more efficiently by leveraging market forces to obtain the best value.

Public Impact

The primary beneficiaries are likely federal agencies within the Department of Health and Human Services (HHS) that received administrative and management consulting support. Services delivered likely focused on improving operational efficiency, strategic planning, and management practices within the agency. The geographic impact is primarily centered around the contractor's location in Pennsylvania, though the services may have been delivered remotely or to national programs. Workforce implications could include employment opportunities for consultants in Pennsylvania and potentially for federal employees who collaborated on these projects.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to assess the true value and impact of the consulting services.
The reliance on labor hours without clear output-based pricing could lead to cost overruns if not managed tightly.
The broad nature of 'Administrative Management and General Management Consulting Services' can sometimes lead to scope creep if not well-defined.
Limited information on the specific expertise of the contractor, KEYSTONE PEER REVIEW ORGANIZATION, LLC, in this domain.

Positive Signals

The contract was competitively awarded, suggesting a degree of market validation for the chosen vendor.
The contract spanned over five years, allowing for the development of long-term relationships and deeper understanding of agency needs.
The award was made to a specific entity, KEYSTONE PEER REVIEW ORGANIZATION, LLC, indicating a formal vetting process.
The contract was issued as a delivery order, likely against a pre-existing Indefinite Delivery/Indefinite Quantity (IDIQ) contract, which streamlines procurement.

Sector Analysis

The administrative management and general management consulting services sector is a significant part of the federal procurement landscape. Agencies frequently contract for these services to improve efficiency, implement new strategies, and manage complex operations. The total federal spending on management consulting services can run into billions annually, encompassing a wide range of expertise from strategic planning to IT management. This contract, valued at $13.8 million, represents a moderate-sized engagement within this broad sector, likely supporting specific program or agency-level initiatives.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the competition was open to all eligible firms, including large businesses. While there's no direct information on subcontracting plans, larger contracts often involve small business participation through subcontracting opportunities. However, without specific set-aside goals or reported subcontracting achievements, the direct impact on the small business ecosystem from this particular contract is unclear.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Health Resources and Services Administration (HRSA) of HHS. Accountability measures would be defined in the contract's statement of work and performance standards. Transparency is generally facilitated through contract databases like FPDS-NG, where basic award information is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Management and Consulting Services
Administrative Support Services
Health Program Management
Federal Agency Operational Support

Risk Flags

Potential for cost overruns due to labor-hour pricing model.
Lack of specific performance metrics makes value assessment difficult.
Scope creep risk in broad consulting services.
Limited transparency on specific deliverables and outcomes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $13.8 million to KEYSTONE PEER REVIEW ORGANIZATION, LLC. OTHER PROFESSIONAL SERVICES

Who is the contractor on this award?

The obligated recipient is KEYSTONE PEER REVIEW ORGANIZATION, LLC.

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 $13.8 million.

What is the period of performance?

Start: 2005-08-31. End: 2010-10-15.

What specific types of administrative and management consulting services were provided under this contract?

The contract falls under NAICS code 541611 (Administrative Management and General Management Consulting Services). This broad category typically includes services such as strategic planning, organizational design, process improvement, performance management, and general management advice. Without access to the specific statement of work (SOW) for this delivery order, the precise nature of the services rendered remains unspecified. However, given the awarding agency (HRSA), the consulting likely supported health-related program administration, operational efficiency improvements, or strategic initiatives within the agency.

How does the $13.8 million award compare to typical spending on similar consulting services by HHS?

The $13.8 million award over approximately five years translates to an average annual spend of roughly $2.76 million. This is a moderate amount for a federal agency like HHS, which procures billions of dollars in services annually. HHS frequently engages management and consulting firms for a wide array of needs, from IT modernization to policy analysis and program evaluation. Whether this amount is high or low depends heavily on the scope and complexity of the services required. Benchmarking would necessitate comparing it against contracts with similar objectives, durations, and agency components.

What are the potential risks associated with a contract primarily paid based on labor hours?

Contracts paid based on labor hours (often referred to as Time and Materials or Labor Hour contracts) carry inherent risks, primarily related to cost control. The main risk is that the total cost can escalate beyond initial estimates if the effort required is greater than anticipated or if the contractor's efficiency is low. This can lead to cost overruns and potentially exceed the contract ceiling. Effective oversight, detailed tracking of hours, and clear performance expectations are crucial to mitigate these risks. Without strong management, there's also a risk of scope creep, where tasks expand without corresponding adjustments to the budget or timeline.

What does the 'COMPETITIVE DELIVERY ORDER' designation imply about the procurement process?

A 'Competitive Delivery Order' signifies that this specific task order was competed among multiple vendors. This typically occurs when the delivery order is issued against a pre-existing Indefinite Delivery/Indefinite Quantity (IDIQ) contract or a similar multiple-award contract vehicle. The agency soliciting the delivery order would have established a process to request proposals from eligible contractors on the base contract and then evaluated those proposals based on defined criteria (e.g., technical approach, past performance, price). This competitive approach is intended to ensure fair pricing and optimal selection of the best-value solution for the specific requirement.

What is the significance of the contract's duration (1871 days, approx. 5 years)?

A contract duration of approximately five years suggests a need for sustained, long-term support for the services being procured. This extended period allows for the development of deeper institutional knowledge by the contractor, fostering a more integrated working relationship with the agency. It can also enable the execution of complex, multi-phase projects that require continuity over time. For the agency, a longer duration can reduce the administrative burden of frequent re-procurement and ensure stability in service delivery. However, it also necessitates robust performance management throughout the contract lifecycle to ensure ongoing value and alignment with evolving agency needs.

Can we assess the contractor's track record based solely on this award data?

The provided data identifies the contractor as KEYSTONE PEER REVIEW ORGANIZATION, LLC and indicates a single delivery order valued at $13.8 million. This information alone is insufficient to comprehensively assess the contractor's track record. While it shows they were awarded a significant contract by HHS, it doesn't reveal their performance quality, past successes or failures on other contracts, or their overall experience in administrative management consulting. A thorough assessment would require reviewing their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), other contract awards, and potentially their organizational capabilities and financial stability.

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: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 5N2325262DLC

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Parent Company: Pennsylvania Medical Society (UEI: 071217657)

Address: 777 E PARK DR, HARRISBURG, PA, 10

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $13,831,693

Exercised Options: $13,831,693

Current Obligation: $13,831,693

Parent Contract

Parent Award PIID: GS10F0325L

IDV Type: FSS

Timeline