HHS awards $76.8M for Management Consulting, exceeding benchmark by 38%
Contract Overview
Contract Amount: $76,833,339 ($76.8M)
Contractor: Acumen LLC
Awarding Agency: Department of Health and Human Services
Start Date: 2011-09-30
End Date: 2017-03-31
Contract Duration: 2,009 days
Daily Burn Rate: $38.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: TIME AND MATERIALS
Sector: Other
Official Description: DATALINK 2
Place of Performance
Location: BURLINGAME, SAN MATEO County, CALIFORNIA, 94010
Plain-Language Summary
Department of Health and Human Services obligated $76.8 million to ACUMEN LLC for work described as: DATALINK 2 Key points: 1. Significant contract value of $76.8M awarded. 2. Competition was full and open, indicating market engagement. 3. Potential risk due to Time and Materials pricing. 4. Spending falls within Administrative Management consulting sector.
Value Assessment
Rating: questionable
The contract's Time and Materials pricing structure raises concerns about cost control and potential overruns, especially given the significant award value. Benchmarking against similar contracts is difficult without more granular data, but the high total value suggests a need for close monitoring.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which is positive for price discovery. However, the Time and Materials (T&M) pricing type can limit effective price competition and may lead to higher costs if not managed rigorously.
Taxpayer Impact: The T&M pricing structure could lead to increased taxpayer burden if not carefully managed and monitored for efficiency and necessity of hours billed.
Public Impact
Taxpayers may face higher costs due to the Time and Materials pricing model. The significant contract value suggests a substantial reliance on external consulting services. Ensuring the necessity and efficiency of all billed hours is crucial for accountability.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Time and Materials pricing
- High total contract value
- Potential for cost overruns
Positive Signals
- Full and open competition
- Awarded by CMS
Sector Analysis
This contract falls under Administrative Management and General Management Consulting Services (NAICS 541611). Spending in this sector can vary widely based on agency needs, but large, multi-year contracts like this warrant scrutiny for efficiency and necessity.
Small Business Impact
The data does not indicate whether small businesses participated in or benefited from this contract award. Further analysis would be needed to assess small business inclusion.
Oversight & Accountability
The use of Time and Materials pricing necessitates robust oversight from CMS to ensure that all hours billed are necessary, reasonable, and directly related to contract requirements. Regular audits and performance reviews are critical.
Related Government Programs
- Administrative Management and General Management Consulting Services
- Department of Health and Human Services Contracting
- Centers for Medicare and Medicaid Services Programs
Risk Flags
- Time and Materials pricing structure
- High total contract value ($76.8M)
- Potential for cost overruns
- Benchmark variance (38% above estimate)
Tags
administrative-management-and-general-ma, department-of-health-and-human-services, ca, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $76.8 million to ACUMEN LLC. DATALINK 2
Who is the contractor on this award?
The obligated recipient is ACUMEN 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 $76.8 million.
What is the period of performance?
Start: 2011-09-30. End: 2017-03-31.
What specific management and general consulting services were provided under this contract, and how did they contribute to CMS's mission?
The contract was for Administrative Management and General Management Consulting Services (NAICS 541611). While the specific services are not detailed, they likely encompassed areas such as operational efficiency improvements, strategic planning, program management support, or policy development for CMS. The value of these services lies in their potential to enhance the effectiveness and efficiency of Medicare and Medicaid programs, ultimately impacting healthcare delivery and administration.
How effectively was the Time and Materials pricing structure managed to control costs and ensure value for taxpayers?
The Time and Materials (T&M) pricing structure inherently carries a risk of cost escalation if not rigorously managed. Effective management would involve strict oversight of labor hours, verification of employee skill levels, and ensuring that all work performed was necessary and directly contributed to contract objectives. Without detailed performance and cost data, it's difficult to definitively assess the effectiveness of cost control, but the significant total award suggests a need for continuous monitoring and potential audits.
Given the full and open competition, were there alternative contract vehicles or pricing structures that could have offered better value or cost certainty for CMS?
While full and open competition is a positive indicator, the choice of a Time and Materials (T&M) pricing structure warrants consideration of alternatives. Depending on the scope and predictability of the work, fixed-price or cost-plus-incentive-fee contracts might have offered greater cost certainty and incentivized contractor efficiency more directly. Exploring whether these alternatives were considered and why T&M was selected would provide insight into the decision-making process and potential value optimization.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 1
Pricing Type: TIME AND MATERIALS (Y)
Evaluated Preference: NONE
Contractor Details
Address: 500 AIRPORT BLVD STE 365, BURLINGAME, CA, 94010
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $86,452,781
Exercised Options: $76,833,339
Current Obligation: $76,833,339
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Parent Contract
Parent Award PIID: GS10F0133S
IDV Type: FSS
Timeline
Start Date: 2011-09-30
Current End Date: 2017-03-31
Potential End Date: 2017-03-31 00:00:00
Last Modified: 2017-08-22
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