Booz Allen Hamilton contract for government health insurance programs exceeds $78 million over five years

Contract Overview

Contract Amount: $78,466,113 ($78.5M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2011-09-30

End Date: 2016-05-31

Contract Duration: 1,705 days

Daily Burn Rate: $46.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: GOVT HEALTH INS PROGRAMS

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20852

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $78.5 million to BOOZ ALLEN HAMILTON INC for work described as: GOVT HEALTH INS PROGRAMS Key points: 1. Contract value suggests significant reliance on external expertise for complex government health insurance operations. 2. The administrative management and general management consulting services category indicates a broad scope of support. 3. A single delivery order under this contract points to a potentially consolidated or phased approach to service delivery. 4. The contract's duration of 1705 days (approx. 4.6 years) aligns with long-term program support needs. 5. The use of Time and Materials pricing may introduce cost variability depending on actual effort expended. 6. The contract was awarded under full and open competition, suggesting a robust bidding process.

Value Assessment

Rating: good

The total award amount of over $78 million for administrative management and general management consulting services is substantial, reflecting the complexity of government health insurance programs. Benchmarking this against similar large-scale consulting contracts within federal health agencies is necessary for a precise value-for-money assessment. However, the duration and scope suggest a significant investment in program support. The Time and Materials pricing structure, while flexible, warrants close monitoring to ensure costs remain aligned with expected deliverables and market rates for consulting services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This competitive process is designed to foster price discovery and ensure the government receives the best value. The fact that it resulted in a single delivery order suggests that either one offeror was significantly superior, or the requirement was structured in a way that favored a single, comprehensive solution. Further details on the number of bids received would provide a clearer picture of the competitive intensity.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices and encouraging innovation from a wider pool of contractors, leading to more cost-effective solutions for government programs.

Public Impact

Beneficiaries include federal agencies managing government health insurance programs, such as Medicare and Medicaid. Services delivered likely encompass strategic planning, operational efficiency improvements, policy analysis, and program management support. The geographic impact is national, supporting federal health insurance initiatives that affect citizens across the United States. Workforce implications may involve the integration of external consulting expertise with government personnel to enhance program delivery and oversight.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns due to Time and Materials pricing if not closely managed.
Reliance on a single delivery order might limit flexibility if program needs evolve significantly.
Scope creep could be a risk if not clearly defined and managed within the contract terms.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Long contract duration indicates a stable, long-term need for these critical services.
Contractor's established presence in government contracting suggests familiarity with federal requirements.

Sector Analysis

This contract falls within the professional services sector, specifically management consulting, which is crucial for the effective administration of large, complex government programs like health insurance. The federal government is a significant consumer of these services to navigate policy changes, improve operational efficiency, and manage vast datasets. Comparable spending benchmarks would involve analyzing other large consulting contracts awarded to major firms supporting federal health initiatives, often running into tens or hundreds of millions of dollars over several years.

Small Business Impact

The contract data indicates that this was not a small business set-aside, and there is no explicit mention of subcontracting goals for small businesses. This suggests that the primary award went to a large business. The impact on the small business ecosystem would depend on whether Booz Allen Hamilton is required to or chooses to subcontract portions of this work to small businesses, which could provide them with opportunities to contribute to significant federal health programs.

Oversight & Accountability

Oversight for this contract would typically reside with the contracting officer and program managers within the Department of Health and Human Services, specifically the Centers for Medicare and Medicaid Services. Accountability measures would be embedded in the contract's performance work statement, requiring adherence to specific deliverables and service levels. Transparency is facilitated through contract databases like FPDS, which record award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract is suspected.

Related Government Programs

Medicare Program Integrity
Medicaid Program Administration
Affordable Care Act Implementation Support
Federal Health IT Initiatives
Government Health Insurance Marketplace Operations

Risk Flags

Potential for cost overruns due to T&M pricing.
Scope definition and management critical for success.
Reliance on single delivery order may limit flexibility.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $78.5 million to BOOZ ALLEN HAMILTON INC. GOVT HEALTH INS PROGRAMS

Who is the contractor on this award?

The obligated recipient is BOOZ ALLEN HAMILTON 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 $78.5 million.

What is the period of performance?

Start: 2011-09-30. End: 2016-05-31.

What specific types of administrative and management consulting services were provided under this contract?

While the contract specifies 'Administrative Management and General Management Consulting Services' (NAICS code 541611), the exact nature of services is not detailed in the provided data. Typically, for government health insurance programs, such services could include strategic planning, policy analysis and development, operational process improvement, program evaluation, financial management consulting, IT strategy and implementation support, and regulatory compliance assistance. Given the scale and duration, it likely involved comprehensive support to enhance the efficiency, effectiveness, and integrity of federal health insurance programs managed by agencies like CMS.

How does the $78 million award compare to typical spending on similar consulting services for federal health programs?

An award of over $78 million for a contract spanning approximately 4.6 years is substantial, reflecting the complexity and scale of federal health insurance programs. Large federal health agencies like CMS frequently award multi-million dollar contracts for management and IT consulting services. This figure is within the expected range for major federal health initiatives requiring extensive expertise. However, a precise comparison would necessitate benchmarking against contracts with similar scopes (e.g., program management, policy support, operational enhancement) awarded to large consulting firms supporting programs like Medicare, Medicaid, or ACA initiatives over comparable periods.

What are the primary risks associated with a Time and Materials (T&M) contract of this magnitude?

The primary risk with a Time and Materials contract, especially one exceeding $78 million, is the potential for cost overruns if not rigorously managed. Unlike fixed-price contracts, T&M agreements pay the contractor for the actual time and materials used. This can lead to unpredictable costs if the scope is not well-defined, if inefficiencies arise, or if the contractor's effort exceeds initial estimates. For the government, this necessitates robust oversight, detailed tracking of labor hours and material costs, and strong negotiation skills to ensure fair pricing and prevent scope creep. Effective management is crucial to realizing value and controlling the overall expenditure.

What does the 'full and open competition' designation imply for the contractor selection and pricing?

The 'full and open competition' designation signifies that the contract was awarded after a process where all responsible sources were permitted to submit a bid or proposal. This is the preferred method of government procurement as it maximizes competition, theoretically leading to the best value for the government in terms of price, quality, and innovation. It implies that Booz Allen Hamilton was selected from a pool of potentially many qualified bidders based on the merits of their proposal against the government's requirements. This competitive environment generally exerts downward pressure on pricing compared to sole-source or limited competition awards.

What is the significance of the 'Administrative Management and General Management Consulting Services' classification?

The classification 'Administrative Management and General Management Consulting Services' (NAICS 541611) indicates that the contract's primary purpose is to provide expertise in improving the efficiency and effectiveness of organizational structures, management processes, and administrative procedures. For government health insurance programs, this could involve optimizing claims processing, enhancing member services, improving data management, advising on regulatory compliance, developing strategic plans, and streamlining internal operations. It suggests a broad mandate to support the overall management and administration of these complex public sector entities.

How might this contract impact the delivery and administration of government health insurance programs?

This contract likely plays a crucial role in ensuring the efficient and effective delivery of government health insurance programs. By engaging a large consulting firm like Booz Allen Hamilton, agencies such as CMS can access specialized expertise to tackle complex challenges, implement new policies (e.g., related to healthcare reform), improve operational workflows, enhance data analytics capabilities, and ensure compliance with evolving regulations. The support provided could lead to better program outcomes, improved beneficiary experiences, and more responsible stewardship of taxpayer funds within the vast federal health insurance landscape.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: DPWS20110001

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Booz Allen Hamilton Holding Corporation

Address: 8283 GREENSBORO DR, MCLEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $78,466,113

Exercised Options: $78,466,113

Current Obligation: $78,466,113

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $2,200,000

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: GS23F9755H

IDV Type: FSS

Timeline