HHS Awards $32.3M to Safeguard Services LLC for Zone Program Integrity Contractor Services

Contract Overview

Contract Amount: $32,255,746 ($32.3M)

Contractor: Safeguard Services LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2009-06-22

End Date: 2014-11-30

Contract Duration: 1,987 days

Daily Burn Rate: $16.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: ZONE PROGRAM INTEGRITY CONTRACTOR - ZONE 7

Place of Performance

Location: PEMBROKE PINES, BROWARD County, FLORIDA, 33025

State: Florida Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $32.3 million to SAFEGUARD SERVICES LLC for work described as: ZONE PROGRAM INTEGRITY CONTRACTOR - ZONE 7 Key points: 1. Contract awarded to Safeguard Services LLC for zone program integrity. 2. The contract value is $32.3 million over its period of performance. 3. The agency is the Centers for Medicare and Medicaid Services (CMS). 4. The North American Industry Classification System (NAICS) code is 561440 (Collection Agencies). 5. The contract was awarded using full and open competition.

Value Assessment

Rating: fair

The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. Benchmarking against similar contracts for collection agencies is difficult without more specific service details.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, suggesting a robust price discovery process. However, the Cost Plus Fixed Fee structure may limit the incentive for the contractor to minimize costs.

Taxpayer Impact: Taxpayer funds are being used for collection services, aiming to recover funds for Medicare and Medicaid. The effectiveness of these services in recouping costs will determine the ultimate taxpayer impact.

Public Impact

Ensures integrity of Medicare and Medicaid programs by identifying and collecting improper payments. Supports CMS's mission to protect program beneficiaries and reduce healthcare fraud, waste, and abuse. The contract duration of nearly 5 years suggests a significant operational scope.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can incentivize higher costs.
Limited insight into specific performance metrics and success rates of collection efforts.

Positive Signals

Awarded through full and open competition.
Supports critical program integrity functions for major healthcare programs.

Sector Analysis

The healthcare sector, particularly within government programs like Medicare and Medicaid, relies heavily on contractors for administrative and integrity functions. Spending benchmarks for collection agencies within this sector can vary widely based on the complexity and volume of cases.

Small Business Impact

This contract was awarded to Safeguard Services LLC and does not indicate any specific set-asides for small businesses. The primary contractor is likely a larger entity capable of handling the scope of work for national healthcare programs.

Oversight & Accountability

The Centers for Medicare and Medicaid Services (CMS) is responsible for overseeing this contract. Robust oversight is crucial for Cost Plus Fixed Fee contracts to ensure cost efficiency and effective performance in program integrity efforts.

Related Government Programs

Collection Agencies
Department of Health and Human Services Contracting
Centers for Medicare and Medicaid Services Programs

Risk Flags

Cost Plus Fixed Fee contract type.
Potential for cost overruns without strict oversight.
Limited public data on contractor performance and recovery rates.
Long contract duration requires sustained monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $32.3 million to SAFEGUARD SERVICES LLC. ZONE PROGRAM INTEGRITY CONTRACTOR - ZONE 7

Who is the contractor on this award?

The obligated recipient is SAFEGUARD SERVICES 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 $32.3 million.

What is the period of performance?

Start: 2009-06-22. End: 2014-11-30.

What is the historical success rate of Safeguard Services LLC in recovering funds for similar government contracts, and how does this compare to industry averages?

Assessing the historical success rate requires access to specific performance data and recovery metrics for Safeguard Services LLC. Without this proprietary information, a direct comparison to industry averages for collection agencies is challenging. However, CMS likely has internal benchmarks and performance expectations based on the contract's objectives and the Cost Plus Fixed Fee structure, which should be monitored.

What are the key performance indicators (KPIs) used to measure the effectiveness of the Zone Program Integrity Contractor, and how are these KPIs tied to the fixed fee component?

Key Performance Indicators for such contracts typically include metrics like the amount of improper payments identified and recovered, the cost-effectiveness of recovery efforts (e.g., dollars recovered per dollar spent), and adherence to timelines and regulatory requirements. The fixed fee component should ideally be structured to incentivize the achievement of these KPIs, ensuring that the contractor is rewarded for successful outcomes rather than just effort.

How does the Cost Plus Fixed Fee structure impact the government's ability to control costs and ensure value for money in this contract, especially given the long duration?

The Cost Plus Fixed Fee structure allows for reimbursement of allowable costs plus a predetermined fixed fee. While the fixed fee provides some cost certainty, the 'cost plus' element can incentivize higher spending if not rigorously monitored. For a long-duration contract, effective oversight and clear definition of allowable costs are critical to prevent cost escalation and ensure the government receives good value for its investment in program integrity.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › Collection Agencies

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Veritas Capital Fund Management, L.L.C.

Address: 5400 LEGACY DRIVE, PLANO, TX, 75024

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $32,255,756

Exercised Options: $32,255,746

Current Obligation: $32,255,746

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSM500200800030I

IDV Type: IDC

Timeline