HHS awarded $119M to Health Research and Educational Trust for hospital engagement services

Contract Overview

Contract Amount: $118,970,382 ($119.0M)

Contractor: Health Research and Educational Trust

Awarding Agency: Department of Health and Human Services

Start Date: 2011-12-09

End Date: 2014-12-08

Contract Duration: 1,095 days

Daily Burn Rate: $108.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 44

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: HOSPITAL ENGAGEMENT CONTRACTOR

Place of Performance

Location: CHICAGO, COOK County, ILLINOIS, 60606, UNITED STATES OF AMERICA

State: Illinois Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $119.0 million to HEALTH RESEARCH AND EDUCATIONAL TRUST for work described as: HOSPITAL ENGAGEMENT CONTRACTOR Key points: 1. Contract value represents a significant investment in healthcare administration and consulting. 2. Full and open competition suggests a robust bidding process. 3. Contract duration of three years indicates a need for sustained support. 4. Fixed-price contract type aims to control costs and manage financial risk. 5. Geographic focus on Illinois may indicate a pilot or regional initiative. 6. The award was made by the Centers for Medicare and Medicaid Services, highlighting a focus on program integrity and patient care.

Value Assessment

Rating: good

The contract's value of approximately $119 million over three years for hospital engagement services appears reasonable given the scope. Benchmarking against similar large-scale healthcare consulting contracts managed by CMS would provide a clearer picture of value for money. The firm fixed-price structure suggests an effort to ensure cost predictability for the government. Without specific performance metrics or detailed cost breakdowns, a definitive value assessment is challenging, but the scale of the award implies a substantial service requirement.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 44 bids suggests a highly competitive environment, which typically drives down prices and encourages innovation. This level of competition is a positive sign for price discovery and ensures that the government is likely receiving competitive offers for the services required.

Taxpayer Impact: A competitive bidding process for this contract likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition award. The wide participation indicates that taxpayer funds are being utilized efficiently by selecting the most cost-effective and capable offeror.

Public Impact

The primary beneficiaries are likely healthcare providers, specifically hospitals, who will receive engagement and support services. Services delivered are expected to improve hospital operations, patient care quality, and potentially reduce healthcare costs. The geographic impact is specified as Illinois, suggesting a focused initiative within that state. Workforce implications could include the creation of jobs within the contractor organization and potential training or capacity building for hospital staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if engagement objectives are not clearly defined and managed.
Dependence on contractor performance for achieving desired hospital engagement outcomes.
Risk of insufficient data sharing or transparency from the contractor regarding engagement activities.

Positive Signals

Full and open competition indicates a strong market response and potential for high-quality service.
Firm fixed-price contract type provides cost certainty for the government.
The large number of bidders suggests a healthy competitive landscape for these services.

Sector Analysis

This contract falls within the administrative management and general management consulting services sector, specifically tailored for healthcare. The market for healthcare consulting is substantial, driven by complex regulatory environments, the need for operational efficiency, and the pursuit of improved patient outcomes. This award represents a significant portion of spending within this niche, likely aimed at enhancing the effectiveness of Medicare and Medicaid programs through direct hospital engagement.

Small Business Impact

The data indicates this contract was awarded under full and open competition and does not specify any small business set-aside provisions. Therefore, the direct impact on small businesses through set-asides is likely minimal. However, the prime contractor may engage small businesses as subcontractors, depending on the project's needs and their subcontracting plan, which could provide opportunities within the small business ecosystem.

Oversight & Accountability

Oversight would typically be managed by the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Accountability measures would be embedded in the contract's performance work statement, including deliverables, reporting requirements, and potential penalties for non-performance. Transparency is generally facilitated through contract award databases, though specific operational details of the engagement may be proprietary.

Related Government Programs

Medicare Quality Improvement Programs
Medicaid Health Home Services
Hospital Readmission Reduction Program
Value-Based Purchasing Programs

Risk Flags

Contract Duration
Large Contract Value
Specific Geographic Focus

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $119.0 million to HEALTH RESEARCH AND EDUCATIONAL TRUST. HOSPITAL ENGAGEMENT CONTRACTOR

Who is the contractor on this award?

The obligated recipient is HEALTH RESEARCH AND EDUCATIONAL TRUST.

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 $119.0 million.

What is the period of performance?

Start: 2011-12-09. End: 2014-12-08.

What specific services does the 'HOSPITAL ENGAGEMENT CONTRACTOR' provide to hospitals?

The contract description 'HOSPITAL ENGAGEMENT CONTRACTOR' suggests services aimed at improving communication, collaboration, and performance between healthcare providers (hospitals) and the Centers for Medicare and Medicaid Services (CMS). This could encompass a range of activities such as providing technical assistance, implementing best practices, facilitating quality improvement initiatives, supporting data collection and reporting, and promoting adherence to CMS program requirements. The goal is likely to enhance patient care quality, operational efficiency, and cost-effectiveness within the hospital setting, particularly concerning Medicare and Medicaid beneficiaries. The specific nature of engagement would be detailed in the Performance Work Statement (PWS) of the contract.

How does the $119 million award compare to typical spending on similar hospital engagement initiatives?

The $119 million award over three years is a substantial sum, indicating a significant scope and duration for the hospital engagement services. To benchmark this, one would need to compare it against other large-scale contracts awarded by CMS or other federal health agencies for similar purposes, such as quality improvement organizations (QIOs), program support contractors, or large-scale technical assistance providers. The average cost per year is approximately $39.7 million. Without access to a comprehensive database of comparable contracts, it's difficult to definitively state if this is high or low, but it suggests a major initiative. Factors like the number of hospitals involved, the complexity of the engagement, and the specific objectives would influence the appropriate spending level.

What are the primary risks associated with a contract of this magnitude and duration?

Key risks for a contract of this magnitude ($119M over 3 years) include performance risk, where the contractor may fail to achieve the desired outcomes in hospital engagement, potentially impacting quality of care or program efficiency. Financial risk is mitigated by the firm fixed-price structure, but cost overruns by the contractor could still impact their profitability and potentially their long-term commitment. There's also a risk of vendor lock-in if the contractor becomes indispensable, making future transitions difficult. Furthermore, if the engagement scope is not precisely defined, scope creep could lead to increased costs or delays. Finally, ensuring adequate data security and privacy for sensitive hospital and patient information is a critical risk area.

What does the number of bidders (44) tell us about the market for hospital engagement services?

The fact that 44 bids were received for this contract indicates a highly competitive and mature market for hospital engagement services. This suggests that numerous companies possess the capabilities and interest to undertake such work for the federal government. A large number of bidders generally leads to better price discovery, as competition drives down costs. It also provides the government with a wider pool of potential solutions and increases the likelihood of selecting a contractor that offers both high quality and good value. This competitive landscape is beneficial for taxpayers.

How has spending on 'Administrative Management and General Management Consulting Services' (NAICS 541611) by HHS evolved over time?

Analyzing the historical spending trends for NAICS code 541611 by the Department of Health and Human Services (HHS) would reveal the government's reliance on external consulting expertise. While this specific contract is from 2011-2014, broader trends show a consistent and often increasing demand for management consulting services across federal agencies, including HHS. This is driven by factors such as the need for specialized expertise, support for complex program implementation, efficiency improvements, and navigating evolving healthcare policies. Examining HHS's overall spending in this category over the past decade would provide context on whether this $119M award represents a typical investment or an outlier.

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) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: APP111513

Offers Received: 44

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: American Hospital Association (UEI: 051064566)

Address: 155 N WACKER DR STE 400, CHICAGO, IL, 60606

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

Financial Breakdown

Contract Ceiling: $118,970,382

Exercised Options: $118,970,382

Current Obligation: $118,970,382

Subaward Activity

Number of Subawards: 584

Total Subaward Amount: $561,703,642

Contract Characteristics

Cost or Pricing Data: NO

Timeline