HHS awards $328.7M to CGS Administrators for Direct Health and Medical Insurance Carriers
Contract Overview
Contract Amount: $328,732,726 ($328.7M)
Contractor: CGS Administrators, LLC
Awarding Agency: Department of Health and Human Services
Start Date: 2010-07-08
End Date: 2016-02-29
Contract Duration: 2,062 days
Daily Burn Rate: $159.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 5
Pricing Type: COST PLUS AWARD FEE
Sector: Healthcare
Official Description: TAS::75 0511::TAS J15 A/B MAC
Place of Performance
Location: NASHVILLE, DAVIDSON County, TENNESSEE, 37228
Plain-Language Summary
Department of Health and Human Services obligated $328.7 million to CGS ADMINISTRATORS, LLC for work described as: TAS::75 0511::TAS J15 A/B MAC Key points: 1. The contract value of $328.7M over 2062 days indicates a significant investment in health insurance carrier services. 2. Competition was full and open, suggesting a competitive bidding process for this contract. 3. The contract type is Cost Plus Award Fee, which incentivizes performance but can lead to higher costs if not managed carefully. 4. The sector is Healthcare, specifically focusing on Direct Health and Medical Insurance Carriers.
Value Assessment
Rating: fair
The contract value of $328.7M over approximately 5.6 years suggests an average annual spend of around $58.7M. Benchmarking this against similar contracts for direct health and medical insurance carriers would be necessary for a precise valuation.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically leads to better price discovery and potentially lower costs for the government. The use of a Definitive Contract structure implies a well-defined scope of work.
Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and improve service quality.
Public Impact
Impacts millions of individuals relying on Medicare and other health insurance programs administered by CMS. Ensures the continuity of essential health insurance carrier services for beneficiaries. Potential for improved efficiency and effectiveness in health insurance administration through performance incentives.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee contracts can sometimes lead to cost overruns if performance metrics are not strictly defined and monitored.
- The long duration of the contract (2062 days) may present challenges in adapting to evolving healthcare regulations and technologies.
Positive Signals
- Awarded through full and open competition, indicating a robust selection process.
- The contract aims to ensure the effective operation of critical health insurance services.
Sector Analysis
This contract falls within the Healthcare sector, specifically supporting the administration of health insurance programs. Spending in this area is substantial due to the scale of government health initiatives like Medicare and Medicaid.
Small Business Impact
The data does not indicate any specific set-asides for small businesses. Further analysis would be needed to determine the extent of small business participation in the subcontracting process.
Oversight & Accountability
The Centers for Medicare and Medicaid Services (CMS) is responsible for overseeing this contract. Robust oversight is crucial for Cost Plus Award Fee contracts to ensure performance targets are met and costs are controlled.
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
- Contract type (Cost Plus Award Fee) may lead to higher costs.
- Long contract duration could pose risks related to adaptability.
- Lack of specific small business participation data.
- Potential for performance issues if award fee metrics are not robust.
Tags
direct-health-and-medical-insurance-carr, department-of-health-and-human-services, tn, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $328.7 million to CGS ADMINISTRATORS, LLC. TAS::75 0511::TAS J15 A/B MAC
Who is the contractor on this award?
The obligated recipient is CGS ADMINISTRATORS, 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 $328.7 million.
What is the period of performance?
Start: 2010-07-08. End: 2016-02-29.
What specific services are covered under this contract, and how do they align with CMS's mission?
This contract, awarded to CGS Administrators, LLC, focuses on Direct Health and Medical Insurance Carriers. These services are crucial for the day-to-day operations of CMS, likely involving claims processing, provider network management, and beneficiary support for programs like Medicare. The alignment with CMS's mission is direct, as it ensures the efficient and effective delivery of health insurance benefits to millions of Americans.
What are the key performance indicators (KPIs) for the 'Award Fee' component, and how are they measured?
The specific Key Performance Indicators (KPIs) for the 'Award Fee' component are not detailed in the provided data. Typically, for Cost Plus Award Fee contracts, KPIs would relate to service delivery timeliness, accuracy in claims processing, beneficiary satisfaction, and compliance with regulations. CMS would have established a detailed performance plan outlining these metrics and the methodology for assessing CGS Administrators' performance against them to determine the award fee.
How does the $328.7M contract value compare to historical spending on similar insurance carrier services?
The $328.7M contract value over approximately 5.6 years represents an average annual spend of roughly $58.7M. To assess its comparability, one would need to analyze historical spending data for similar contracts managed by CMS or other federal agencies providing direct health and medical insurance carrier services. Factors like inflation, program expansion, and changes in service scope would need to be considered for an accurate benchmark.
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: 5
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Blue Cross & Blue Shield of South Carolina
Address: 2 VANTAGE WAY, NASHVILLE, TN, 37228
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $377,405,099
Exercised Options: $377,405,099
Current Obligation: $328,732,726
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Timeline
Start Date: 2010-07-08
Current End Date: 2016-02-29
Potential End Date: 2023-04-23 00:00:00
Last Modified: 2023-04-24
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