HHS awards $67.6M for Zone 2 ZPIC services to ADVANCEMED CORPORATION over 9 years

Contract Overview

Contract Amount: $67,626,339 ($67.6M)

Contractor: Advancemed Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2009-09-30

End Date: 2018-04-30

Contract Duration: 3,134 days

Daily Burn Rate: $21.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS AWARD FEE

Sector: Healthcare

Official Description: ZPIC - ZONE 2

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $67.6 million to ADVANCEMED CORPORATION for work described as: ZPIC - ZONE 2 Key points: 1. The contract value of $67.6M over 9 years suggests a significant but potentially high per-year cost for specialized investigative services. 2. Full and open competition was utilized, indicating a market with multiple capable vendors, which should theoretically drive competitive pricing. 3. The Cost Plus Award Fee (CPAF) contract type can incentivize performance but may lead to higher costs if award fees are consistently met. 4. The 'All Other Professional, Scientific, and Technical Services' NAICS code is broad, making direct sector benchmarks challenging without more specific service details.

Value Assessment

Rating: fair

The total award of $67.6M over 9 years averages to approximately $7.5M annually. Without specific performance metrics or detailed service breakdowns, it's difficult to definitively assess if this pricing is competitive. However, for specialized investigative services, this annual figure warrants scrutiny against similar contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. This method is generally expected to yield fair market prices. The use of a Cost Plus Award Fee structure, however, means the final cost is influenced by performance, potentially exceeding initial estimates.

Taxpayer Impact: The use of full and open competition is positive for taxpayer value. However, the CPAF structure requires careful monitoring to ensure that award fees are justified by exceptional performance and do not inflate costs unnecessarily.

Public Impact

Ensures continued oversight and fraud detection within Medicare and Medicaid programs in Zone 2. Supports the Department of Health and Human Services' mission to protect program integrity. The long duration of the contract (9 years) provides stability for the contractor and consistent service delivery.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract duration is exceptionally long (9 years).
Cost Plus Award Fee (CPAF) can lead to cost overruns if not managed tightly.
Broad NAICS code makes specific cost benchmarking difficult.

Positive Signals

Awarded under full and open competition.
Contract aims to ensure program integrity and combat fraud.
Long-term award provides service continuity.

Sector Analysis

This contract falls under professional, scientific, and technical services, specifically related to healthcare program integrity. Benchmarking requires comparison with other government contracts for investigative services, fraud detection, and program auditing within the healthcare sector.

Small Business Impact

The data indicates the contractor is ADVANCEMED CORPORATION, a large business. There is no explicit indication of small business participation or subcontracting requirements within the provided data.

Oversight & Accountability

The Centers for Medicare and Medicaid Services (CMS) is responsible for overseeing this contract. The CPAF structure implies performance metrics are tracked, but the effectiveness of oversight depends on the rigor of monitoring award fee criteria and overall contractor performance.

Related Government Programs

All Other Professional, Scientific, and Technical Services
Department of Health and Human Services Contracting
Centers for Medicare and Medicaid Services Programs

Risk Flags

Long contract duration (9 years).
Cost Plus Award Fee structure.
Broad NAICS code lacks specificity.
Potential for contractor complacency over long term.
Requires robust oversight to manage award fees.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $67.6 million to ADVANCEMED CORPORATION. ZPIC - ZONE 2

Who is the contractor on this award?

The obligated recipient is ADVANCEMED CORPORATION.

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 $67.6 million.

What is the period of performance?

Start: 2009-09-30. End: 2018-04-30.

What specific investigative services are covered under this contract, and how do they align with the annual cost?

The NAICS code '541990 - All Other Professional, Scientific, and Technical Services' is very broad. Understanding the precise nature of the investigative work (e.g., data analysis, site visits, provider audits) is crucial to determine if the average annual cost of $7.5M is justified. Without this detail, it's hard to assess value for money.

How effectively were award fees utilized and justified under this CPAF contract over its 9-year duration?

The Cost Plus Award Fee structure necessitates a review of how often and for what reasons award fees were granted. If high award fees were consistently paid without clear evidence of exceptional performance beyond basic requirements, it could indicate a risk of inflated costs and potentially weaker oversight of contractor performance.

What was the impact of the 9-year contract duration on competition and potential innovation in ZPIC services?

A 9-year contract, while providing stability, can limit opportunities for new entrants and potentially stifle innovation if the incumbent is not incentivized to adapt. Assessing whether alternative, shorter-term contracts or more frequent competitions could have yielded better results or encouraged technological advancements is important for long-term effectiveness.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: MEDICAL SERVICES › DEPENDENT MEDICARE SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 4

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: HIG Capital Management, Inc.

Address: 15245 SHADY GROVE RD, ROCKVILLE, MD, 20850

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

Financial Breakdown

Contract Ceiling: $67,626,339

Exercised Options: $67,626,339

Current Obligation: $67,626,339

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSM500200900008I

IDV Type: IDC

Timeline