HHS awarded AdviseWell $15M for quality improvement services, with costs potentially rising

Contract Overview

Contract Amount: $15,028,014 ($15.0M)

Contractor: Advisewell, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2008-08-01

End Date: 2011-11-14

Contract Duration: 1,200 days

Daily Burn Rate: $12.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Healthcare

Official Description: QUALITY IMPROVEMENT ORGANIZATION

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 $15.0 million to ADVISEWELL, INC. for work described as: QUALITY IMPROVEMENT ORGANIZATION Key points: 1. Contract awarded on a cost-plus basis, indicating potential for cost overruns. 2. Limited competition raises concerns about price discovery and potential overpayment. 3. The contract's duration and cost-plus structure present financial risks. 4. Services provided are in management consulting, a broad category with varying value. 5. The contract was awarded to a single vendor, limiting market leverage. 6. Performance period spans over three years, requiring sustained oversight.

Value Assessment

Rating: questionable

The contract's cost-plus award fee structure makes direct value-for-money assessment difficult without detailed cost breakdowns. Benchmarking against similar quality improvement contracts is challenging due to the lack of specific service details and the 'cost-plus' nature. The final cost could exceed initial estimates, impacting overall value. The award was not competed, which typically leads to less favorable pricing for the government.

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. This limits the opportunity for multiple vendors to bid, which can drive down prices and encourage innovation. The lack of competition means the government did not benefit from a competitive bidding process to ensure the best possible price and service.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the most competitive pricing available in the market. It also reduces transparency in the procurement process.

Public Impact

Beneficiaries include Medicare and Medicaid recipients through improved quality of care. Services aim to enhance the quality of healthcare services delivered under federal programs. The contract has a geographic impact primarily in Louisiana, where the contractor is based. Workforce implications are likely within the consulting sector, with potential for specialized roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus award fee structure can lead to uncontrolled spending.
Sole-source award limits competitive pressure on pricing.
Long contract duration increases exposure to cost escalation.
Lack of detailed performance metrics makes oversight challenging.

Positive Signals

Focus on quality improvement aligns with agency goals.
Contractor is established, potentially bringing relevant expertise.
Award fee mechanism incentivizes performance, if well-defined.

Sector Analysis

This contract falls within the Management Consulting Services sector, specifically related to healthcare quality improvement. This sector is characterized by a mix of large, established firms and smaller specialized consultancies. Federal spending in this area often supports program administration, policy analysis, and operational efficiency improvements for various agencies. Benchmarking is difficult without specific service details, but consulting services can range widely in cost depending on expertise and scope.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. The sole-source nature of the award suggests it was not designed to promote small business participation. This contract does not appear to directly impact the small business ecosystem.

Oversight & Accountability

Oversight would typically be managed by the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Accountability measures would be tied to the award fee criteria. Transparency is limited due to the sole-source nature and the proprietary nature of cost-plus contracts. Inspector General jurisdiction would apply to potential fraud, waste, or abuse.

Related Government Programs

Medicare Quality Improvement Programs
Medicaid Quality Improvement Initiatives
Healthcare Consulting Services
Federal Management Consulting Contracts

Risk Flags

Cost-plus contract type can lead to higher than anticipated costs.
Sole-source award limits competitive pricing.
Long contract duration requires sustained oversight.
Lack of specific performance metrics may hinder accountability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $15.0 million to ADVISEWELL, INC.. QUALITY IMPROVEMENT ORGANIZATION

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 $15.0 million.

What is the period of performance?

Start: 2008-08-01. End: 2011-11-14.

What specific quality improvement activities were performed under this contract?

The provided data does not specify the exact quality improvement activities undertaken by AdviseWell, Inc. under this contract. The contract falls under NAICS code 541618 (Other Management Consulting Services), suggesting a broad range of potential activities. These could include developing quality metrics, implementing best practices, analyzing healthcare data for trends, providing training to healthcare providers, or assisting in the design of new quality initiatives for CMS programs. Without access to the contract's statement of work or performance reports, a detailed breakdown of services rendered is not possible.

How does the $15 million award compare to similar quality improvement contracts?

Comparing the $15 million award to similar quality improvement contracts is challenging without more specific details about the scope of work and duration. However, federal contracts for healthcare consulting and quality improvement can range significantly, from hundreds of thousands to tens of millions of dollars, depending on the complexity and scale of the initiative. The 'cost-plus award fee' structure also means the final expenditure could be higher than the initial estimate. To provide a precise comparison, one would need to identify contracts with similar objectives, service providers, and contract types within HHS or other agencies.

What are the primary risks associated with a 'cost-plus award fee' contract?

The primary risks associated with a 'cost-plus award fee' (CPAF) contract are related to cost control and potential overspending. In a CPAF contract, the contractor is reimbursed for all allowable costs incurred, plus a fee that is composed of a fixed base amount and an award amount based on performance. The risk for the government is that the contractor may have less incentive to control costs rigorously, as costs are reimbursed. The award fee component is intended to incentivize performance, but if not structured with clear, measurable, and achievable metrics, it may not fully mitigate the risk of inflated costs. This structure requires robust government oversight to ensure costs are reasonable and allocable, and that the award fee is justified by performance.

What is the significance of this contract being awarded on a sole-source basis?

A sole-source award signifies that the contract was not competed among multiple potential vendors. This typically occurs when only one vendor is deemed capable of meeting the government's requirements, or in specific circumstances like urgent needs or follow-on work where only one vendor holds the necessary intellectual property or expertise. For taxpayers, a sole-source award generally means a lack of competitive pricing pressure, potentially leading to higher costs than if the contract had been competed. It also reduces transparency in the procurement process and limits opportunities for other businesses to secure government contracts.

What is the track record of AdviseWell, Inc. in federal contracting?

The provided data indicates AdviseWell, Inc. was awarded this specific contract. Further information regarding AdviseWell, Inc.'s broader track record in federal contracting, including past performance on other contracts, past performance ratings, and any history of contract disputes or performance issues, is not available in the provided snippet. A comprehensive assessment of their track record would require accessing federal procurement databases like SAM.gov or FPDS for a more complete history of their awards, performance, and any associated evaluations.

How does the contract duration of 1200 days (approx. 3.3 years) impact oversight and value?

A contract duration of approximately 3.3 years necessitates sustained and diligent oversight from the contracting agency to ensure the contractor consistently meets performance expectations and adheres to cost controls. For a cost-plus award fee contract, this extended period increases the government's exposure to potential cost escalations if not managed effectively. From a value perspective, a longer duration can allow for the successful implementation of complex quality improvement initiatives, potentially yielding greater long-term benefits. However, it also requires ongoing resource allocation for contract management and monitoring, and the value realized is highly dependent on the contractor's performance throughout the entire period.

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

Financial Breakdown

Contract Ceiling: $15,028,014

Exercised Options: $15,028,014

Current Obligation: $15,028,014

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline