HHS awards $35.6M contract for management consulting services to Health Services Advisory Group, Inc

Contract Overview

Contract Amount: $35,618,420 ($35.6M)

Contractor: Health Services Advisory Group, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2011-08-01

End Date: 2014-07-31

Contract Duration: 1,095 days

Daily Burn Rate: $32.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: QIO 10TH SOW AWARD

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85016

State: Arizona Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $35.6 million to HEALTH SERVICES ADVISORY GROUP, INC. for work described as: QIO 10TH SOW AWARD Key points: 1. Contract awarded on a cost-plus-fixed-fee basis, indicating potential for cost overruns. 2. The contract was not competitively procured, raising questions about price discovery and value. 3. Duration of 1095 days suggests a long-term need for these consulting services. 4. The contractor, Health Services Advisory Group, Inc., has a track record with federal contracts. 5. Services fall under 'Other Management Consulting Services,' a broad category. 6. Awarded by the Centers for Medicare and Medicaid Services, highlighting a focus on healthcare administration. 7. The contract was awarded in Arizona, potentially impacting local workforce and economy.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific deliverables and performance metrics. The cost-plus-fixed-fee structure, while common for services where scope may evolve, can lead to higher costs than fixed-price contracts if not managed tightly. Comparing this to similar management consulting contracts within HHS or CMS would require detailed analysis of the specific services rendered and the outcomes achieved. The raw dollar amount of $35.6 million over three years suggests a significant investment in advisory services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competition from other qualified vendors. This approach is typically used when a specific contractor possesses unique capabilities or when circumstances prevent a full and open competition. The lack of competition means that the government did not benefit from the price reductions and innovation that can arise from a competitive bidding process.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without competing offers, it is harder to ensure the most cost-effective solution was secured.

Public Impact

Beneficiaries include the Centers for Medicare and Medicaid Services, which will receive management consulting expertise. Services delivered are expected to support the operational efficiency and strategic planning of CMS. Geographic impact is primarily within Arizona, where the contractor is based and services may be performed. Workforce implications could include employment opportunities within Health Services Advisory Group, Inc. and potentially within CMS if the consulting leads to new initiatives.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially reduces value for money.
Cost-plus-fixed-fee contract type can incentivize higher costs if not closely monitored.
Lack of detailed performance metrics in the provided data makes assessing effectiveness difficult.
The broad nature of 'Other Management Consulting Services' could lead to scope creep.

Positive Signals

Award to an established contractor suggests a level of trust and past performance.
The contract duration indicates a sustained need and potential for long-term strategic support.
Awarded by CMS, a critical agency, suggesting the services are deemed important for healthcare operations.

Sector Analysis

This contract falls within the Management and Business Professional Services sector, a significant area of federal spending. This sector encompasses a wide range of advisory and support services critical for government operations. Comparable spending in this sector often involves large, complex contracts supporting policy development, program management, and operational improvements. The market for these services is competitive, though specific niches can be dominated by specialized firms.

Small Business Impact

The provided data indicates that this contract was not awarded as a small business set-aside (ss=false, sb=false). Therefore, there are no direct subcontracting implications for small businesses stemming from this specific award mechanism. The primary contractor, Health Services Advisory Group, Inc., is not explicitly identified as a small business in the provided data, suggesting it may be a larger entity. The absence of small business considerations in the award itself means no specific boost to the small business ecosystem is directly evident from this contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Centers for Medicare and Medicaid Services. Accountability measures would be defined in the contract's statement of work and performance standards. Transparency is limited by the sole-source nature of the award; however, contract details are generally available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Management and Consulting Services
Healthcare Administration Support
Federal Advisory Contracts
Centers for Medicare and Medicaid Services Programs

Risk Flags

Sole-source award may limit competition and potentially increase costs.
Cost-plus-fixed-fee contract type can lead to cost overruns if not managed effectively.
Lack of specific performance metrics in summary data hinders effectiveness assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $35.6 million to HEALTH SERVICES ADVISORY GROUP, INC.. QIO 10TH SOW AWARD

Who is the contractor on this award?

The obligated recipient is HEALTH SERVICES ADVISORY GROUP, 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 $35.6 million.

What is the period of performance?

Start: 2011-08-01. End: 2014-07-31.

What is the track record of Health Services Advisory Group, Inc. with federal contracts, particularly with HHS and CMS?

Health Services Advisory Group, Inc. has a history of receiving federal contracts, including those with the Department of Health and Human Services (HHS) and its sub-agencies like the Centers for Medicare and Medicaid Services (CMS). Analyzing their past performance, including contract values, types, and any reported issues or successes, is crucial for understanding their reliability and capability. A review of their contract history would reveal if they have successfully managed similar-sized and scoped projects, adhered to timelines and budgets, and met performance expectations. This context is vital for assessing the risk associated with the current $35.6 million award.

How does the $35.6 million contract value compare to similar management consulting contracts awarded by CMS?

To benchmark the $35.6 million contract value, a comparative analysis of similar management consulting services procured by CMS is necessary. This would involve identifying contracts with comparable objectives, scope of work, and duration. Factors such as the specific consulting areas (e.g., policy analysis, operational efficiency, IT strategy), the number of bidders in competitive solicitations, and the final award amounts would be examined. If this contract represents a significantly higher cost per year or per deliverable compared to similar competitively awarded contracts, it could indicate a potential issue with value for money, especially given its sole-source nature.

What are the primary risks associated with a sole-source, cost-plus-fixed-fee contract for management consulting?

A sole-source award for management consulting presents inherent risks. The primary risk is the lack of competitive pressure, which can lead to inflated pricing and reduced incentive for the contractor to innovate or optimize costs. The cost-plus-fixed-fee (CPFF) structure, while allowing flexibility, carries the risk of cost overruns if the contractor's estimated costs are inaccurate or if the scope expands significantly. This structure can also incentivize the contractor to incur more costs to increase their fee, which is a percentage of the costs. Effective oversight and robust performance metrics are critical to mitigate these risks.

What specific management consulting services are being provided under this contract, and how do they align with CMS's strategic goals?

The provided data categorizes the services as 'Other Management Consulting Services' (NA: 541618), which is a broad classification. To assess program effectiveness, a detailed understanding of the specific tasks, deliverables, and objectives outlined in the contract's Statement of Work (SOW) is required. These services should directly support CMS's strategic goals, such as improving healthcare quality, reducing costs, expanding access to care, or modernizing its IT infrastructure. Without the SOW, it's difficult to determine the precise nature of the consulting and its alignment with agency priorities, making an assessment of its impact and effectiveness speculative.

What has been the historical spending trend for management consulting services at CMS over the past five years?

Analyzing historical spending trends for management consulting services at CMS over the past five years would provide valuable context for the $35.6 million award. This trend analysis would reveal whether spending in this category has been increasing, decreasing, or remaining stable. It would also highlight major contracts, dominant service providers, and shifts in the types of consulting services procured. Understanding this historical pattern can help identify potential areas of overspending, emerging needs, or changes in procurement strategies within CMS, offering insights into the justification and potential necessity of this particular contract.

What are the performance metrics and deliverables associated with this contract, and how is performance being measured?

The provided data does not include specific performance metrics or deliverables for this contract. In a cost-plus-fixed-fee contract, especially one awarded on a sole-source basis, clearly defined performance standards and measurable deliverables are crucial for ensuring accountability and value. Without this information, it is impossible to assess how the contractor's performance is being monitored, what constitutes successful completion of tasks, and whether the agency is receiving the expected benefits from the $35.6 million investment. Robust oversight mechanisms should be in place to track progress against these undefined metrics.

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: ONLY ONE SOURCE

Solicitation ID: CMS10THSOW

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Health Services Holdings, Inc.

Address: 3133 E CAMELBACK RD, PHOENIX, AZ, 85016

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $35,618,420

Exercised Options: $35,618,420

Current Obligation: $35,618,420

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline