HHS awards $69M contract to Cahaba Government Benefit Administrators for insurance carrier services

Contract Overview

Contract Amount: $69,049,221 ($69.0M)

Contractor: Cahaba Government Benefit Administrators, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2014-07-12

End Date: 2015-07-11

Contract Duration: 364 days

Daily Burn Rate: $189.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: IGF::CT::IGF

Place of Performance

Location: BIRMINGHAM, SHELBY County, ALABAMA, 35242

State: Alabama Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $69.0 million to CAHABA GOVERNMENT BENEFIT ADMINISTRATORS, LLC for work described as: IGF::CT::IGF Key points: 1. Contract value of $69M for direct health and medical insurance carriers. 2. No competition was utilized for this award. 3. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns. 4. The sector is Healthcare, specifically insurance administration.

Value Assessment

Rating: questionable

The Cost Plus Fixed Fee contract type offers less incentive for cost control compared to fixed-price contracts. Without competitive bidding, it's difficult to assess if the fixed fee is reasonable.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and may result in higher costs for taxpayers.

Taxpayer Impact: The lack of competition for a $69M contract raises concerns about potential overspending of taxpayer funds.

Public Impact

Impacts beneficiaries of Medicare and Medicaid programs. Ensures continued operation of essential health insurance services. Potential for increased healthcare costs due to non-competitive award.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type
No competition awarded
Potential for cost overruns

Positive Signals

Ensures continuity of essential services
Awarded to a specialized carrier

Sector Analysis

This contract falls within the Healthcare sector, specifically for direct health and medical insurance carriers. Benchmarks for similar contracts are difficult to ascertain without competitive data.

Small Business Impact

There is no indication that small businesses were involved in this contract award. Further analysis would be needed to determine potential subcontracting opportunities.

Oversight & Accountability

The lack of competition suggests potential oversight gaps. Further review of the justification for a sole-source award is recommended.

Related Government Programs

Direct Health and Medical Insurance Carriers
Department of Health and Human Services Contracting
Centers for Medicare and Medicaid Services Programs

Risk Flags

Lack of competition
Cost Plus Fixed Fee contract type
Potential for cost overruns
Limited transparency on pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $69.0 million to CAHABA GOVERNMENT BENEFIT ADMINISTRATORS, LLC. IGF::CT::IGF

Who is the contractor on this award?

The obligated recipient is CAHABA GOVERNMENT BENEFIT ADMINISTRATORS, LLC.

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 $69.0 million.

What is the period of performance?

Start: 2014-07-12. End: 2015-07-11.

What was the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award is critical for understanding why competition was bypassed. Typically, this involves demonstrating that only one source can meet the requirement due to unique capabilities, urgency, or specific circumstances. Without this information, it's impossible to fully assess the necessity of the non-competitive approach and its potential impact on value for money.

How does the fixed fee compare to industry standards for similar administrative services?

Assessing the reasonableness of the fixed fee requires benchmarking against similar contracts in the health insurance administration sector. Without competitive bids or publicly available cost data for comparable services, it is challenging to determine if the fee is fair and reflects market rates. This lack of transparency hinders a thorough value assessment.

What mechanisms are in place to ensure cost efficiency and prevent overruns in this Cost Plus Fixed Fee contract?

Cost Plus Fixed Fee contracts inherently carry a risk of cost overruns as the contractor is reimbursed for allowable costs plus a fixed fee. Effective oversight requires robust monitoring of incurred costs, strict adherence to contract terms, and clear performance metrics. The agency must actively manage the contract to ensure the fixed fee remains appropriate and costs are controlled.

Industry Classification

NAICS: Finance and Insurance › Insurance Carriers › Direct Health and Medical Insurance Carriers

Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 500 CORPORATE PKWY STE 100, BIRMINGHAM, AL, 35242

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

Financial Breakdown

Contract Ceiling: $69,049,221

Exercised Options: $69,049,221

Current Obligation: $69,049,221

Actual Outlays: $309,420

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline