HHS awards $287M contract for eligibility appeals support, with 6 bidders and a 5-year term

Contract Overview

Contract Amount: $286,915,229 ($286.9M)

Contractor: Maximus Federal Services, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2013-09-25

End Date: 2018-09-24

Contract Duration: 1,825 days

Daily Burn Rate: $157.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: IGF::OT::IGF ELIGIBILITY APPEALS OPERATIONS SUPPORT

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $286.9 million to MAXIMUS FEDERAL SERVICES, INC. for work described as: IGF::OT::IGF ELIGIBILITY APPEALS OPERATIONS SUPPORT Key points: 1. Contract value appears reasonable given the 5-year duration and the nature of administrative support services. 2. Full and open competition suggests a healthy market for these services, potentially leading to competitive pricing. 3. The contract's duration and cost-plus-fixed-fee structure warrant scrutiny for potential cost overruns. 4. Performance context is critical to assess if the contractor is meeting the needs of CMS eligibility appeals. 5. This contract falls within the administrative management consulting sector, supporting critical healthcare operations.

Value Assessment

Rating: good

The contract's total value of approximately $287 million over five years averages to about $57 million annually. This figure seems within a reasonable range for large-scale administrative support services, particularly for a federal agency like CMS. Benchmarking against similar contracts for eligibility appeals or administrative management consulting would provide a more precise value-for-money assessment. The cost-plus-fixed-fee (CPFF) pricing structure means the government pays the contractor's allowable costs plus a fixed fee, which can offer some cost control but also requires diligent oversight to prevent scope creep or inefficient cost management.

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 offers. With six bidders participating, this suggests a competitive marketplace for these services. A higher number of bidders generally leads to better price discovery and potentially lower costs for the government. The presence of multiple qualified vendors implies that CMS had a good selection of potential contractors.

Taxpayer Impact: The full and open competition with six bidders is beneficial for taxpayers as it likely drove down the final price through competitive pressures, ensuring a better value for the funds expended on these essential administrative services.

Public Impact

Beneficiaries of Medicare and Medicaid services who appeal eligibility decisions will be directly impacted by the efficiency and effectiveness of these support operations. The contract delivers crucial administrative and management consulting services to the Centers for Medicare and Medicaid Services (CMS). The primary geographic impact is likely concentrated around the contractor's operational centers, but the services support a national program. Workforce implications include employment opportunities for administrative staff, analysts, and management personnel within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus-fixed-fee structure requires robust oversight to manage costs effectively.
Long contract duration (5 years) necessitates performance monitoring to ensure sustained quality.
Potential for scope creep in administrative support contracts needs careful management.

Positive Signals

Full and open competition indicates a competitive market, likely resulting in better pricing.
Multiple bidders (6) suggest a healthy level of interest and capability in the market.
Contract supports essential functions for CMS, indicating a critical need being met.

Sector Analysis

This contract falls within the administrative management and general management consulting services sector (NAICS 541611). This sector is vital for government operations, providing expertise in process improvement, operational efficiency, and program management. The market for these services is substantial, with numerous firms capable of supporting federal agencies. Comparable spending benchmarks would involve looking at other large administrative support contracts within HHS or similar large federal departments, considering the scale and complexity of managing eligibility appeals for national healthcare programs.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large contract awarded through full and open competition, it is unlikely to have significant direct subcontracting opportunities specifically targeted at small businesses unless the prime contractor voluntarily includes them. The absence of a small business set-aside means the primary focus was on obtaining the best value from the broader market, potentially overlooking opportunities to foster small business participation in this specific contract.

Oversight & Accountability

Oversight for this contract would primarily reside with the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. The cost-plus-fixed-fee structure necessitates close monitoring of incurred costs and the contractor's performance against the fixed fee. Transparency is generally maintained through contract reporting requirements. While specific Inspector General (IG) jurisdiction for this particular contract isn't detailed, the HHS Office of Inspector General (OIG) has broad authority to investigate fraud, waste, and abuse within the department's programs and contracts.

Related Government Programs

Medicare Appeals
Medicaid Appeals
Healthcare Eligibility Determination
Administrative Support Services
Management Consulting Services
HHS Contract Operations

Risk Flags

Cost-plus-fixed-fee structure requires diligent oversight.
Long contract duration necessitates sustained performance monitoring.
Potential for cost overruns inherent in CPFF contracts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $286.9 million to MAXIMUS FEDERAL SERVICES, INC.. IGF::OT::IGF ELIGIBILITY APPEALS OPERATIONS SUPPORT

Who is the contractor on this award?

The obligated recipient is MAXIMUS FEDERAL SERVICES, 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 $286.9 million.

What is the period of performance?

Start: 2013-09-25. End: 2018-09-24.

What is the historical spending trend for IGF ELIGIBILITY APPEALS OPERATIONS SUPPORT contracts awarded by CMS?

Analyzing historical spending on 'IGF ELIGIBILITY APPEALS OPERATIONS SUPPORT' requires examining contract awards over time. While this specific contract (ID: [Contract ID if available]) spans from 2013 to 2018 with a value of $286.9 million, understanding the trend involves looking at prior and subsequent contracts for similar services. If this is a recurring need, one would expect to see previous contracts of similar magnitude or potentially evolving contract values based on program changes or inflation. A detailed analysis would involve querying federal procurement databases (like FPDS or USASpending) for all contracts under relevant NAICS codes (e.g., 541611) and keywords related to 'eligibility appeals support' within CMS to identify patterns in award values, durations, and contractor performance over multiple fiscal years.

How does the per-contractor cost compare to industry benchmarks for similar administrative support services?

Determining a precise per-contractor cost benchmark is challenging without specific details on the services rendered and the contractor's fee structure. However, the total contract value of $286.9 million over five years, awarded to MAXIMUS FEDERAL SERVICES, INC., suggests an average annual value of approximately $57.4 million. For large-scale administrative support and management consulting, particularly within the complex healthcare regulatory environment of CMS, this figure is substantial but not necessarily outside the norm for a prime contractor managing such a critical function. Industry benchmarks often vary widely based on the scope of work, required expertise, geographic coverage, and specific service level agreements. A detailed comparison would necessitate access to proprietary benchmarking data or analysis of publicly awarded contracts with similar scopes and complexities.

What are the key performance indicators (KPIs) used to evaluate MAXIMUS FEDERAL SERVICES, INC.'s performance on this contract?

Key Performance Indicators (KPIs) for a contract like 'IGF ELIGIBILITY APPEALS OPERATIONS SUPPORT' typically focus on efficiency, accuracy, timeliness, and customer satisfaction. For CMS eligibility appeals, these might include metrics such as the average time to process an appeal, the accuracy rate of decisions or support provided, the volume of appeals processed per period, adherence to regulatory timelines, and potentially feedback from CMS program managers or end-users. The cost-plus-fixed-fee structure implies that performance against these KPIs would directly influence the contractor's ability to earn their fixed fee and potentially secure future contract awards. Specific KPIs are usually detailed within the contract's Performance Work Statement (PWS).

What is the track record of MAXIMUS FEDERAL SERVICES, INC. in managing large federal contracts, particularly within HHS?

MAXIMUS FEDERAL SERVICES, INC. has a significant track record in managing large federal contracts, particularly within the Department of Health and Human Services (HHS) and its sub-agencies like CMS. They are a well-established government contractor specializing in health and human services programs. Their portfolio often includes work related to eligibility determination, enrollment, call centers, and administrative support for various government health programs. While specific performance details for every contract are not always public, their continued success in winning and performing on large-scale, complex contracts suggests a generally positive track record. However, like any large contractor, they may have faced scrutiny or challenges on specific contracts, which would require a deeper dive into contract performance reports or IG investigations if available.

What are the potential risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this service?

The Cost Plus Fixed Fee (CPFF) contract type, used here, presents specific risks for the government. While it allows for flexibility and covers necessary costs, the primary risk is that the contractor may have less incentive to control costs compared to fixed-price contracts, as all allowable costs are reimbursed. The 'fixed fee' component is negotiated upfront, but the total cost can escalate if actual costs exceed initial estimates. This necessitates robust government oversight to ensure costs are reasonable, allocable, and allowable, and that the contractor is managing resources efficiently. There's also a risk of scope creep, where the contractor might incur additional costs for work not strictly defined in the original scope, potentially increasing the overall expenditure beyond what was initially anticipated.

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: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HHSM5002013RFP0020

Offers Received: 6

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Maximus Inc

Address: 1891 METRO CENTER DRIVE, RESTON, VA, 20190

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

Financial Breakdown

Contract Ceiling: $662,805,312

Exercised Options: $306,237,271

Current Obligation: $286,915,229

Actual Outlays: $5,318,646

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline