HHS's $455M contract for Other Government Insurance Programs awarded to Palmetto GBA, LLC
Contract Overview
Contract Amount: $454,989,834 ($455.0M)
Contractor: Palmetto GBA, LLC
Awarding Agency: Department of Health and Human Services
Start Date: 2007-10-25
End Date: 2013-07-24
Contract Duration: 2,099 days
Daily Burn Rate: $216.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: COST PLUS AWARD FEE
Sector: Other
Official Description: OTHER GOVERNMENT INSURANCE PROGRAMS
Place of Performance
Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29202
Plain-Language Summary
Department of Health and Human Services obligated $455.0 million to PALMETTO GBA, LLC for work described as: OTHER GOVERNMENT INSURANCE PROGRAMS Key points: 1. Contract value of $454.99M over its lifetime. 2. Awarded under full and open competition. 3. Risk is moderate due to the long duration and cost-plus award fee structure. 4. Sector is Other Government Insurance Programs, a niche but critical area.
Value Assessment
Rating: fair
The contract's Cost Plus Award Fee (CPAF) structure can lead to higher costs if not managed tightly. Benchmarking against similar insurance program contracts 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 competitive bidding process. However, the long duration and CPAF structure may have influenced the final pricing.
Taxpayer Impact: Taxpayer funds are utilized for insurance programs, with the ultimate impact depending on program efficiency and effectiveness in providing coverage.
Public Impact
Ensures continued operation of essential government insurance programs. Impacts beneficiaries of these insurance programs. Supports administrative functions for health and medical insurance.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration (over 5 years).
- Cost Plus Award Fee (CPAF) structure.
- Lack of specific performance metrics in provided data.
Positive Signals
- Awarded via full and open competition.
- Managed by a known entity (CMS).
Sector Analysis
This contract falls under Other Government Insurance Programs, a broad category. Spending benchmarks are difficult to establish without knowing the specific programs administered. The Centers for Medicare and Medicaid Services (CMS) typically manages large-scale health insurance operations.
Small Business Impact
The provided data does not indicate any specific set-asides or participation goals for small businesses in this contract. Analysis of small business impact is not possible with the current information.
Oversight & Accountability
The Centers for Medicare and Medicaid Services (CMS) is responsible for oversight. The long duration and CPAF structure necessitate robust monitoring to ensure cost control and performance.
Related Government Programs
- Direct Health and Medical Insurance Carriers
- Department of Health and Human Services Contracting
- Centers for Medicare and Medicaid Services Programs
Risk Flags
- Potential for cost overruns due to CPAF structure.
- Long contract duration may reduce flexibility.
- Lack of specific performance metrics hinders detailed analysis.
- Limited insight into specific insurance programs managed.
- No clear indication of small business participation.
Tags
direct-health-and-medical-insurance-carr, department-of-health-and-human-services, sc, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $455.0 million to PALMETTO GBA, LLC. OTHER GOVERNMENT INSURANCE PROGRAMS
Who is the contractor on this award?
The obligated recipient is PALMETTO GBA, 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 $455.0 million.
What is the period of performance?
Start: 2007-10-25. End: 2013-07-24.
What specific insurance programs are covered under this contract and what are their performance metrics?
The provided data identifies the contract as 'OTHER GOVERNMENT INSURANCE PROGRAMS' but lacks specifics on individual programs. Performance metrics are not detailed. Understanding the exact scope and associated performance indicators is crucial for assessing the contract's value and effectiveness in meeting program objectives and taxpayer expectations.
How does the Cost Plus Award Fee (CPAF) structure impact overall cost efficiency compared to fixed-price contracts for similar services?
CPAF contracts incentivize contractor performance by offering award fees based on meeting or exceeding certain criteria, potentially leading to better service quality. However, they also carry a risk of higher costs if the base fee is substantial or if award criteria are not rigorously defined and monitored, making direct cost comparisons challenging without detailed performance data.
What is the long-term effectiveness of Palmetto GBA, LLC in managing these insurance programs, and how is this measured?
Effectiveness is measured through the achievement of award fee criteria and overall program outcomes, which are not detailed here. Palmetto GBA, LLC has a history of managing Medicare and other health insurance contracts. Continuous monitoring by CMS is essential to ensure ongoing effectiveness and taxpayer value over the contract's extended period.
Industry Classification
NAICS: Finance and Insurance › Insurance Carriers › Direct Health and Medical Insurance Carriers
Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 3
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Blue Cross & Blue Shield of South Carolina (UEI: 055914089)
Address: 17 TECHNOLOGY CIR, COLUMBIA, SC, 29203
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $542,273,644
Exercised Options: $542,273,644
Current Obligation: $454,989,834
Actual Outlays: $8,016,238
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Timeline
Start Date: 2007-10-25
Current End Date: 2013-07-24
Potential End Date: 2013-07-24 00:00:00
Last Modified: 2020-02-11
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