ADVISEWELL, INC. contract for management consulting services awarded by HHS CMS for over $16.8 million

Contract Overview

Contract Amount: $16,814,952 ($16.8M)

Contractor: Advisewell, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2002-11-01

End Date: 2010-01-10

Contract Duration: 2,627 days

Daily Burn Rate: $6.4K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: QIO

Place of Performance

Location: BATON ROUGE, EAST BATON ROUGE County, LOUISIANA, 70809

State: Louisiana Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $16.8 million to ADVISEWELL, INC. for work described as: QIO Key points: 1. The contract's duration of over 7 years suggests a long-term need for the services provided. 2. The 'Other Management Consulting Services' category indicates a broad scope of potential support. 3. The contract was awarded as a definitive contract, implying a commitment to a specific service. 4. The Cost Plus Award Fee (CPAF) pricing structure allows for performance-based incentives. 5. The absence of a specific Product Service Code (PSC) might indicate a unique or specialized service offering. 6. The contract's significant value suggests a substantial impact on the agency's operations.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific deliverables or comparable contracts. The Cost Plus Award Fee structure means the final cost could vary based on performance, making direct price comparisons difficult. However, the extensive duration and substantial award amount suggest a significant investment in consulting services by CMS.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities or when circumstances prevent a competitive process. The lack of competition means that price discovery through market forces was not utilized.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to drive down prices.

Public Impact

The Centers for Medicare and Medicaid Services (CMS) is the primary beneficiary, receiving management consulting support. The services likely aim to improve the efficiency and effectiveness of CMS operations. The geographic impact is national, as CMS oversees healthcare programs across the United States. The contract may have implications for the federal workforce by potentially augmenting agency capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced innovation.
The long contract duration could lead to vendor lock-in and reduced flexibility for the agency.
The broad 'Other Management Consulting Services' category might obscure specific performance metrics and accountability.

Positive Signals

The Cost Plus Award Fee structure incentivizes good performance.
The definitive contract award suggests a clear commitment and understanding of the required services.
The long duration indicates a sustained need and potentially successful relationship with the contractor.

Sector Analysis

This contract falls within the management consulting sector, a broad industry that provides advisory services to organizations. The federal government is a significant consumer of these services, particularly within large agencies like HHS. Comparable spending benchmarks for management consulting can vary widely based on the specific services rendered and the agency's needs.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. As a sole-source award to a large contractor, it is unlikely to have directly benefited the small business ecosystem.

Oversight & Accountability

Oversight mechanisms would typically involve contract officers, program managers, and potentially an Inspector General within HHS. Transparency is limited due to the sole-source nature and lack of publicly detailed performance metrics. Accountability would be tied to the award fee structure and contractual obligations.

Related Government Programs

HHS Management and Administrative Support Contracts
CMS Program Support Contracts
Federal Management Consulting Services

Risk Flags

Sole-source award lacks competitive pricing pressure.
Long contract duration may limit agency flexibility.
Broad service category could obscure specific performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $16.8 million to ADVISEWELL, INC.. QIO

Who is the contractor on this award?

The obligated recipient is ADVISEWELL, INC..

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 $16.8 million.

What is the period of performance?

Start: 2002-11-01. End: 2010-01-10.

What specific management consulting services were provided under this contract?

The contract is categorized under 'Other Management Consulting Services' (NAICS 541618), which is a broad classification. Without more detailed contract line item numbers (CLINs) or statements of work (SOWs), the precise nature of the services remains unspecified. These services could range from strategic planning, organizational analysis, process improvement, financial management consulting, to IT strategy, among others. The long duration and significant value suggest that the services were likely substantial and ongoing, potentially supporting critical functions within the Centers for Medicare and Medicaid Services (CMS).

How does the Cost Plus Award Fee (CPAF) structure impact the final cost and contractor incentive?

The CPAF structure involves a base fee plus an award fee, which is determined by the government's assessment of the contractor's performance against predefined criteria. This means the total cost can fluctuate based on how well ADVISEWELL, INC. met its objectives. It incentivizes the contractor to exceed minimum performance standards to earn a higher award fee. However, it also introduces uncertainty in the final cost compared to fixed-price contracts. The government must have robust performance metrics and evaluation processes in place to ensure fair and accurate assessment of award fees.

What are the risks associated with a sole-source award of this magnitude and duration?

Sole-source awards, especially for long durations and significant values, carry inherent risks. The primary risk is the lack of competition, which can lead to inflated prices as the contractor faces no market pressure to be cost-efficient. There's also a risk of complacency, where the contractor may not feel the same urgency to innovate or provide optimal service as they would in a competitive environment. Furthermore, the agency might become overly reliant on a single vendor, making it difficult to switch or adapt if needs change or performance declines. Effective oversight is crucial to mitigate these risks.

What is the historical spending pattern for 'Other Management Consulting Services' at CMS?

Historical spending on 'Other Management Consulting Services' (NAICS 541618) by the Centers for Medicare and Medicaid Services (CMS) can be substantial, reflecting the agency's complex operational needs. While specific historical data for this exact contract is limited to its award and duration, CMS frequently procures consulting services to support its mission of administering Medicare, Medicaid, and other health programs. Analyzing broader trends in CMS's consulting expenditures would reveal patterns of reliance on external expertise for strategic planning, policy analysis, IT modernization, and operational efficiency improvements.

How does the contract's duration (over 7 years) align with typical federal contracting practices for consulting services?

A contract duration of over seven years, including potential option periods, is relatively long for management consulting services, though not unprecedented, especially for definitive contracts. Federal Acquisition Regulation (FAR) guidelines often encourage shorter contract terms to allow for re-competition and adaptation to evolving needs. However, for highly specialized services or where significant investment in understanding complex agency environments is required, longer-term arrangements can be justified. The extensive duration here suggests a deep integration of the contractor's services into CMS's operations and a perceived stability in the required support.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Management Consulting Services

Product/Service Code: MEDICAL SERVICES › DEPENDENT MEDICARE SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 8591 UNITED PLAZA BLVD STE 270, BATON ROUGE, LA, 70809

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

Financial Breakdown

Contract Ceiling: $16,814,952

Exercised Options: $16,814,952

Current Obligation: $16,814,952

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline