HHS awarded $24.7M to HP Enterprise Services for administrative management consulting in Texas

Contract Overview

Contract Amount: $24,747,597 ($24.7M)

Contractor: HP Enterprise Services, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2005-09-30

End Date: 2010-12-01

Contract Duration: 1,888 days

Daily Burn Rate: $13.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 21

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: MEDICAL AND HEALTH STUDIES

Place of Performance

Location: PLANO, COLLIN County, TEXAS, 75024

State: Texas Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $24.7 million to HP ENTERPRISE SERVICES, LLC for work described as: MEDICAL AND HEALTH STUDIES Key points: 1. Contract value represents a significant investment in administrative management and general management consulting services. 2. The contract was awarded through full and open competition, suggesting a competitive bidding process. 3. The duration of the contract (1888 days) indicates a long-term need for these services. 4. The award was a delivery order, implying it was part of a larger contract vehicle. 5. The use of a Cost Plus Fixed Fee pricing structure warrants scrutiny for cost control. 6. The contract was awarded to a single vendor, HP Enterprise Services, LLC.

Value Assessment

Rating: fair

The total award of $24.7 million over approximately five years for administrative management consulting services appears moderate for a federal contract of this nature. Benchmarking against similar contracts for management consulting services within the Department of Health and Human Services (HHS) would be necessary for a precise value-for-money assessment. The Cost Plus Fixed Fee (CPFF) contract type can sometimes lead to higher costs if not managed diligently, as the contractor is reimbursed for allowable costs plus a fixed fee. Without specific performance metrics or detailed cost breakdowns, it's challenging to definitively assess if the pricing was competitive or if the value delivered was optimal.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 21 bids suggests a robust level of competition for this requirement. A high number of bidders generally benefits the government by fostering price discovery and encouraging contractors to offer their best terms and pricing to secure the award. This competitive environment is a positive indicator for achieving a fair market price.

Taxpayer Impact: The extensive competition for this contract likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award. It suggests that the government received proposals from multiple qualified vendors, driving down costs through market forces.

Public Impact

The Centers for Medicare and Medicaid Services (CMS) is the primary beneficiary, receiving administrative management and consulting support. The services delivered are expected to enhance the efficiency and effectiveness of CMS operations. The contract has a geographic impact primarily in Texas, where the vendor is located. The contract supports the IT and administrative functions within a major federal health agency.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) pricing structure can incentivize cost overruns if not closely monitored.
Long contract duration (1888 days) may lead to vendor lock-in or reduced flexibility over time.
Reliance on a single vendor for a significant portion of administrative support could pose a risk if performance falters.

Positive Signals

Awarded through full and open competition with 21 bids, indicating strong market interest and potential for competitive pricing.
Contract supports critical administrative functions within CMS, contributing to the agency's mission.
Vendor, HP Enterprise Services, LLC, is a large, established company with experience in government contracting.

Sector Analysis

This contract falls within the Administrative Management and General Management Consulting Services sector (NAICS code 541611). This sector is crucial for government operations, providing expertise to improve efficiency, strategy, and management practices. The federal market for these services is substantial, with agencies constantly seeking external expertise to navigate complex challenges and optimize resource allocation. This specific award to HP Enterprise Services, LLC, for $24.7 million represents a significant, albeit specific, investment within this broader consulting market, likely supporting core functions of the Centers for Medicare and Medicaid Services.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). As a large contract awarded to HP Enterprise Services, LLC, a major corporation, the primary focus is likely on the prime contractor's capabilities. There is no explicit information regarding subcontracting plans for small businesses. Without such details, it's difficult to assess the direct impact on the small business ecosystem, though large prime contractors often utilize small businesses for specialized support.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Centers for Medicare and Medicaid Services (CMS). As a delivery order under a larger contract vehicle, oversight mechanisms would be tied to the terms of that vehicle. Transparency is generally facilitated through contract databases like FPDS. Accountability measures would be defined in the contract's performance work statement and monitored through regular reporting and performance reviews. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Administrative Management and General Management Consulting Services
IT Professional Services
Healthcare Services Contracts
Centers for Medicare and Medicaid Services (CMS) Contracts

Risk Flags

Cost Plus Fixed Fee contract type requires diligent oversight to manage costs.
Long contract duration may present risks of vendor lock-in or reduced adaptability.
Performance metrics and outcomes for consulting services can be subjective and difficult to quantify.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $24.7 million to HP ENTERPRISE SERVICES, LLC. MEDICAL AND HEALTH STUDIES

Who is the contractor on this award?

The obligated recipient is HP ENTERPRISE 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 $24.7 million.

What is the period of performance?

Start: 2005-09-30. End: 2010-12-01.

What is the track record of HP Enterprise Services, LLC with federal contracts, particularly within HHS?

HP Enterprise Services, LLC (now often operating under different entities due to mergers and acquisitions, but historically a major player) has a substantial track record with federal agencies, including the Department of Health and Human Services (HHS). Their portfolio typically includes large-scale IT services, infrastructure management, and consulting. For contracts similar to this one, focusing on administrative management and consulting, their past performance would be evaluated based on successful delivery, adherence to schedules and budgets, and client satisfaction. Historical data from contract databases would reveal the volume and types of contracts awarded to them, providing a basis for assessing their experience and reliability in fulfilling government requirements. Specific performance metrics from prior HHS contracts would be the most direct indicator of their capabilities.

How does the $24.7 million award compare to other administrative management consulting contracts within HHS?

The $24.7 million award to HP Enterprise Services, LLC for administrative management and general management consulting services over approximately five years is a significant but not extraordinary sum within the context of large federal agencies like HHS. HHS, particularly through the Centers for Medicare and Medicaid Services (CMS), manages vast and complex operations requiring substantial support. Comparable contracts within HHS for similar consulting services can range from a few million to tens or even hundreds of millions of dollars, depending on the scope, duration, and criticality of the services. This particular award appears to be in the mid-to-upper range for a single delivery order focused on administrative consulting, suggesting a substantial scope of work. A detailed comparison would require analyzing contract databases for similar NAICS codes (541611) and agencies within HHS over a comparable timeframe.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude?

The primary risks associated with a Cost Plus Fixed Fee (CPFF) contract of this magnitude ($24.7 million) revolve around cost control and potential for contractor inefficiency. In a CPFF structure, the government reimburses the contractor for all allowable costs incurred, plus a predetermined fixed fee. The risk is that the contractor may have less incentive to control costs rigorously, as their profit (the fixed fee) is guaranteed regardless of the final cost. This can lead to cost overruns if the government's oversight is not robust. Additionally, defining 'allowable costs' can sometimes lead to disputes. For taxpayers, the risk is paying more than necessary for the services rendered if cost efficiencies are not actively pursued and managed by the government contracting team.

What is the expected impact of this contract on the efficiency of CMS operations?

This contract is intended to improve the efficiency of CMS operations by providing expert administrative management and general management consulting services. These services could encompass a wide range of activities, such as process optimization, strategic planning support, organizational analysis, and the implementation of best practices in management. By leveraging external expertise, CMS aims to streamline workflows, enhance decision-making processes, and potentially reduce operational costs or improve service delivery. The specific impact will depend on the precise nature of the consulting work performed, the effectiveness of the solutions proposed by HP Enterprise Services, LLC, and CMS's ability to implement the recommendations. The long duration of the contract suggests an expectation of sustained improvements.

How has federal spending on administrative management consulting services evolved over the past decade?

Federal spending on administrative management and general management consulting services has generally seen fluctuations but has remained a significant category of government expenditure over the past decade. Agencies consistently require external expertise to address complex challenges, implement new policies, improve operational efficiency, and manage large-scale projects. Factors influencing spending include budget appropriations, shifts in government priorities, and the increasing complexity of federal programs. While specific figures vary annually, the demand for these services persists as agencies strive to modernize, adapt to changing environments, and ensure effective resource utilization. The trend often involves a mix of large, long-term contracts and smaller, project-specific engagements across various departments and agencies.

Industry Classification

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

Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 21

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: HP, Inc.

Address: 5400 LEGACY DR, PLANO, TX, 75024

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $24,747,597

Exercised Options: $24,747,597

Current Obligation: $24,747,597

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: 500990012

IDV Type: IDC

Timeline