HHS Spends $77.8M on Insurance Activities with Group Health Inc., Awarded Without Competition
Contract Overview
Contract Amount: $77,813,365 ($77.8M)
Contractor: Group Health Incorporated
Awarding Agency: Department of Health and Human Services
Start Date: 2012-09-06
End Date: 2014-02-18
Contract Duration: 530 days
Daily Burn Rate: $146.8K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Healthcare
Official Description: IGF::OT::IGF
Place of Performance
Location: NEW YORK, NEW YORK County, NEW YORK, 10004
State: New York Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $77.8 million to GROUP HEALTH INCORPORATED for work described as: IGF::OT::IGF Key points: 1. Significant contract value of $77.8 million awarded to a single vendor. 2. Lack of competition raises concerns about potential overpricing and value for money. 3. The contract type (Cost Plus Award Fee) can incentivize cost overruns. 4. Sector context: Insurance-related activities are critical for healthcare program administration.
Value Assessment
Rating: questionable
The contract's Cost Plus Award Fee structure, combined with a lack of competition, makes it difficult to assess value. Without benchmarks or competitive bids, it's hard to determine if the $77.8 million price was reasonable.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis ('NOT COMPETED'), indicating no formal competition was sought. This limits price discovery and may lead to higher costs for taxpayers.
Taxpayer Impact: The absence of competition suggests taxpayers may have paid more than necessary for these insurance-related activities.
Public Impact
Taxpayers funded a significant contract without exploring competitive options. The specific insurance activities performed are not detailed, limiting public understanding of the spending. The long contract duration (530 days) and cost-plus structure warrant scrutiny.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Cost Plus Award Fee contract type
- High contract value without competition
Positive Signals
- Contract supports essential insurance-related activities for CMS.
Sector Analysis
This contract falls within the 'All Other Insurance Related Activities' category for the Centers for Medicare and Medicaid Services (CMS). Spending in this area is crucial for program operations, but benchmarks are difficult to establish due to the specialized nature of the services.
Small Business Impact
There is no indication in the provided data whether small businesses were involved in this contract, either as prime contractors or subcontractors. The sole-source nature suggests limited opportunity for small business participation.
Oversight & Accountability
The sole-source award and cost-plus structure necessitate robust oversight to ensure costs are reasonable and performance meets expectations. Without competitive pressure, accountability relies heavily on the agency's monitoring capabilities.
Related Government Programs
- All Other Insurance Related Activities
- Department of Health and Human Services Contracting
- Centers for Medicare and Medicaid Services Programs
Risk Flags
- Lack of competition may lead to inflated costs.
- Cost Plus Award Fee structure can incentivize higher spending.
- Limited transparency on specific services rendered.
- Potential for suboptimal value for taxpayer dollars.
Tags
all-other-insurance-related-activities, department-of-health-and-human-services, ny, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $77.8 million to GROUP HEALTH INCORPORATED. IGF::OT::IGF
Who is the contractor on this award?
The obligated recipient is GROUP HEALTH INCORPORATED.
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 $77.8 million.
What is the period of performance?
Start: 2012-09-06. End: 2014-02-18.
What specific insurance-related activities were performed under this contract, and how did they align with CMS's mission?
The data indicates the contract covered 'All Other Insurance Related Activities' for CMS. While essential for program operations, the lack of specific service details makes it challenging to assess direct alignment with CMS's core mission of administering Medicare and Medicaid without further documentation. The significant value suggests a substantial scope of work.
What was the justification for awarding this contract on a sole-source basis, and were alternatives considered?
The provided data simply states 'NOT COMPETED' without detailing the justification. Typically, sole-source awards require a compelling reason, such as unique capabilities or urgent need. Without this justification, it's impossible to assess if alternatives were appropriately considered or if competition was unnecessarily bypassed.
How was the 'award fee' component determined, and what performance metrics were used to justify payments beyond direct costs?
The 'Cost Plus Award Fee' (CPAF) structure implies that the contractor received reimbursement for allowable costs plus a fee that included a base amount and an award amount based on performance. The specific metrics and evaluation process for determining the award fee are not detailed in the provided data, making it difficult to assess the effectiveness of performance incentives.
Industry Classification
NAICS: Finance and Insurance › Agencies, Brokerages, and Other Insurance Related Activities › All Other Insurance Related Activities
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Emblemhealth, Inc. (UEI: 075199265)
Address: 441 9TH AVE FRNT, NEW YORK, NY, 90
Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $77,813,365
Exercised Options: $77,813,365
Current Obligation: $77,813,365
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2012-09-06
Current End Date: 2014-02-18
Potential End Date: 2014-02-28 00:00:00
Last Modified: 2013-10-07
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