HHS's $65.7M contract for health insurance marketplace analytics awarded to ElectrifAI, LLC

Contract Overview

Contract Amount: $65,686,406 ($65.7M)

Contractor: Electrifai, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2015-08-14

End Date: 2020-09-29

Contract Duration: 1,873 days

Daily Burn Rate: $35.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: TIME AND MATERIALS

Sector: Healthcare

Official Description: IGF::OT::IGF HEALTH INSURANCE MARKETPLACE AND FINANCIAL MANAGEMENT OPERATIONAL ANALYTICS

Place of Performance

Location: JERSEY CITY, HUDSON County, NEW JERSEY, 07302

State: New Jersey Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $65.7 million to ELECTRIFAI, LLC for work described as: IGF::OT::IGF HEALTH INSURANCE MARKETPLACE AND FINANCIAL MANAGEMENT OPERATIONAL ANALYTICS Key points: 1. The contract's value of $65.7 million over approximately five years represents a significant investment in operational analytics for health insurance marketplaces. 2. Awarded through full and open competition, the contract suggests a competitive bidding process that could lead to favorable pricing. 3. The use of a Time and Materials contract type introduces potential cost escalation risks if not closely managed. 4. The contract's duration of nearly five years indicates a long-term need for these analytical services. 5. The primary agency, HHS, and its sub-agency CMS, are key players in managing federal health insurance programs. 6. The North American Industry Classification System (NAICS) code 541611 points to a focus on management consulting services.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance metrics or comparable contracts for similar operational analytics within health insurance marketplaces. The Time and Materials pricing structure, while flexible, can lead to costs exceeding initial estimates if not meticulously monitored. The total award amount of $65.7 million over nearly five years suggests a substantial, but not necessarily excessive, investment for comprehensive analytical support in a complex sector.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This approach generally fosters a competitive environment, which can drive down prices and encourage innovation. The presence of five bids suggests a healthy level of interest and competition for this type of service.

Taxpayer Impact: Taxpayers benefit from full and open competition as it typically leads to more competitive pricing and a wider selection of qualified contractors, ensuring that federal funds are used more efficiently.

Public Impact

The Centers for Medicare and Medicaid Services (CMS) benefits directly through enhanced operational analytics for health insurance marketplaces. The services delivered are expected to improve the management and effectiveness of federal health insurance programs. The contract's impact is primarily national, supporting the administration of health insurance marketplaces across the United States. The contract supports a workforce skilled in data analytics, management consulting, and health policy.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The Time and Materials (T&M) contract type carries inherent risk of cost overruns if not managed with rigorous oversight and clear task definitions.
The duration of the contract (nearly 5 years) necessitates ongoing monitoring to ensure continued value and alignment with evolving program needs.
Lack of specific performance metrics in the provided data makes it difficult to assess the contractor's performance objectively.
The specific nature of 'operational analytics' can be broad, potentially leading to scope creep if not precisely defined.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process and potential for competitive pricing.
The contract supports critical functions within the Centers for Medicare and Medicaid Services (CMS), indicating strategic importance.
The contractor, ElectrifAI, LLC, was selected, implying they met the required qualifications and offered a competitive solution.
The contract duration suggests a stable, long-term partnership for essential analytical services.

Sector Analysis

This contract falls within the administrative management and general management consulting services sector, specifically applied to the complex domain of health insurance marketplaces. The market for such services is substantial, driven by government needs for data analysis, program management, and policy support. Comparable spending benchmarks would likely be found within other large federal contracts awarded to consulting firms for similar analytical and operational support functions within large government agencies.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract, nor does it detail subcontracting plans. As a large contract awarded through full and open competition, the primary focus was likely on securing the best overall value from a broad range of potential offerors, which may not always prioritize small business participation directly in the prime contract.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS). Accountability measures are typically embedded within the contract's terms, including performance standards, reporting requirements, and payment schedules tied to deliverables. Transparency is facilitated through contract award databases, though detailed operational performance data may be less publicly accessible.

Related Government Programs

Affordable Care Act (ACA) Marketplace Operations
Health Insurance Exchange IT Systems
Healthcare Data Analytics Programs
CMS Program Management Support
Federal Health IT Spending

Risk Flags

Time and Materials Contract Type
Potential for Cost Overruns
Scope Creep Risk
Long Contract Duration Requires Sustained Oversight

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $65.7 million to ELECTRIFAI, LLC. IGF::OT::IGF HEALTH INSURANCE MARKETPLACE AND FINANCIAL MANAGEMENT OPERATIONAL ANALYTICS

Who is the contractor on this award?

The obligated recipient is ELECTRIFAI, 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 $65.7 million.

What is the period of performance?

Start: 2015-08-14. End: 2020-09-29.

What is the track record of ElectrifAI, LLC in performing similar federal contracts, particularly within the healthcare sector?

Assessing ElectrifAI, LLC's track record requires a deeper dive into federal procurement databases like SAM.gov and FPDS. While the provided data confirms their award for this specific HHS contract, it doesn't detail their history with other agencies or similar projects. Federal contractors often have a portfolio of past performance, which includes contract values, agencies served, and types of services rendered. A review of their past performance would reveal their experience in areas such as health insurance, data analytics, and operational consulting. Positive past performance is a key indicator of a contractor's ability to successfully execute current and future contracts, influencing future award decisions and providing confidence to agencies regarding their capabilities and reliability.

How does the $65.7 million contract value compare to similar federal contracts for health insurance marketplace analytics?

Comparing the $65.7 million contract value requires identifying comparable contracts based on service type (operational analytics, management consulting), agency (HHS, CMS), and duration (approximately five years). Without access to a comprehensive database of all federal contracts and their specific scopes, a precise benchmark is difficult. However, for large federal IT and consulting services supporting major programs like health insurance marketplaces, this value appears substantial, reflecting the complexity and critical nature of the services. It suggests a significant investment by CMS in leveraging data for program improvement and operational efficiency, likely falling within the upper range for such specialized analytical support contracts.

What are the primary risks associated with the Time and Materials (T&M) contract type used for this award?

The primary risk associated with the Time and Materials (T&M) contract type is the potential for cost overruns. Unlike fixed-price contracts, T&M agreements reimburse the contractor for direct labor hours at specified hourly rates and for the actual cost of materials. This structure provides flexibility but lacks a definitive ceiling on the total project cost. If the scope of work is not precisely defined, or if project duration extends beyond initial estimates, costs can escalate significantly. Effective risk mitigation requires robust government oversight, detailed task orders, vigilant monitoring of labor hours and material expenses, and clear communication channels to manage any scope changes proactively.

How effective are the competition dynamics in ensuring value for money for this contract?

The contract was awarded under 'full and open competition' with five bids received, which generally fosters a competitive environment conducive to value for money. This level of competition suggests that multiple capable contractors vied for the award, potentially driving down prices and encouraging innovative solutions. However, the ultimate value for money also depends on the clarity of the solicitation's requirements, the evaluation criteria used, and the government's ability to effectively manage the contract post-award. While competition is a strong indicator, ongoing performance monitoring and contract management are crucial to ensure sustained value throughout the contract's lifecycle.

What is the historical spending trend for similar operational analytics services within HHS or CMS?

Analyzing historical spending trends for similar operational analytics services within HHS or CMS would involve examining procurement data over several fiscal years. This would require identifying contracts with similar NAICS codes (e.g., 541611) and service descriptions related to data analytics, program management, and operational support for health insurance programs. Trends might reveal an increasing investment in data analytics capabilities to manage complex healthcare initiatives, potentially driven by legislative changes, evolving program needs, or a strategic focus on data-driven decision-making. Understanding these trends provides context for the current contract's value and its place within the agency's broader spending priorities.

What are the potential implications of this contract on the broader health insurance marketplace technology and services sector?

This contract, valued at $65.7 million and awarded to ElectrifAI, LLC, signifies a substantial investment in operational analytics for federal health insurance marketplaces. Such awards can influence the market by highlighting the demand for specialized data analysis and consulting services within the healthcare sector. It may encourage other firms to develop or enhance their capabilities in this niche, potentially leading to increased competition and innovation in the future. Furthermore, the success of this contract could set precedents for future procurements, shaping the types of analytical tools and expertise sought by government agencies managing large-scale health programs.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 5

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Opera Solutions Intermediate, LLC

Address: 111 TOWN SQUARE PL STE 1203, JERSEY CITY, NJ, 07310

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

Financial Breakdown

Contract Ceiling: $65,686,406

Exercised Options: $65,686,406

Current Obligation: $65,686,406

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS23F0006X

IDV Type: FSS

Timeline