HHS awarded $25.6M for operational services to Cahaba Safeguard Administrators LLC, a contract spanning over four years

Contract Overview

Contract Amount: $25,607,086 ($25.6M)

Contractor: Cahaba Safeguard Administrators LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2011-04-08

End Date: 2015-05-31

Contract Duration: 1,514 days

Daily Burn Rate: $16.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: SERVICES (OPERATIONAL)

Place of Performance

Location: BIRMINGHAM, SHELBY County, ALABAMA, 35244

State: Alabama Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $25.6 million to CAHABA SAFEGUARD ADMINISTRATORS LLC for work described as: SERVICES (OPERATIONAL) Key points: 1. The contract's cost-plus-award-fee structure allows for performance-based incentives, potentially driving efficiency. 2. Analysis of pricing and value compared to similar contracts is crucial for assessing overall cost-effectiveness. 3. The duration of the contract (over four years) suggests a need for sustained operational support. 4. The specific services rendered under 'All Other Professional, Scientific, and Technical Services' require further definition to gauge performance impact. 5. Geographic impact is limited to Alabama, where the contractor is based. 6. The absence of small business set-asides or subcontracting requirements warrants attention regarding broader economic participation.

Value Assessment

Rating: fair

The contract value of $25.6 million over approximately four years for 'All Other Professional, Scientific, and Technical Services' is difficult to benchmark without more specific service details. The cost-plus-award-fee (CPA) pricing structure is common for services where performance is hard to define upfront, but it necessitates robust oversight to ensure value. Comparing this to similar contracts for operational support within HHS or other agencies would provide better insight into whether the pricing is competitive and reflects fair market value for the services rendered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, which limits a detailed assessment of the competitive landscape. However, full and open competition generally fosters a more robust price discovery process and encourages vendors to offer competitive terms.

Taxpayer Impact: A full and open competition suggests that taxpayers likely benefited from a competitive bidding process, potentially leading to more favorable pricing and a wider range of solutions being considered.

Public Impact

The primary beneficiaries are likely the Centers for Medicare and Medicaid Services (CMS) within HHS, receiving operational support. The services delivered are categorized broadly as 'All Other Professional, Scientific, and Technical Services', implying a range of support functions. The geographic impact appears concentrated in Alabama, the state of the contractor's location. Workforce implications are tied to the contractor's employment of personnel to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it challenging to assess the effectiveness and value delivered.
The broad categorization of services ('All Other Professional, Scientific, and Technical Services') could mask inefficiencies or scope creep.
Limited information on competition details (number of bidders) prevents a full assessment of price competitiveness.

Positive Signals

Awarded through full and open competition, suggesting a fair and accessible bidding process.
The cost-plus-award-fee structure incentivizes contractor performance, provided oversight is effective.
The contract duration indicates a stable, long-term need for these operational services.

Sector Analysis

The contract falls under the broad category of professional, scientific, and technical services, a significant sector within federal procurement. This sector encompasses a wide array of support functions crucial for agency operations. Benchmarking this contract's value against other federal contracts for similar operational support services, particularly within the healthcare administration domain, would provide a clearer picture of its market positioning and cost-effectiveness.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses, nor are there explicit indications of subcontracting requirements for small businesses. This suggests that the primary award went to a large business, and opportunities for small business participation may be limited unless Cahaba Safeguard Administrators LLC voluntarily engages them. Further investigation into subcontracting plans would be necessary to understand the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Centers for Medicare and Medicaid Services (CMS) within the Department of Health and Human Services. As a cost-plus-award-fee contract, CMS would be responsible for monitoring performance, determining award fees based on achieved metrics, and ensuring the contractor's costs are reasonable and allocable. Transparency would depend on CMS's reporting practices and the public availability of contract performance data.

Related Government Programs

HHS Operational Support Contracts
CMS Administrative Services
Professional and Technical Services Procurement
Cost-Plus-Award-Fee Contracts

Risk Flags

Broad Service Category
Lack of Specific Performance Metrics
Limited Competition Detail

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $25.6 million to CAHABA SAFEGUARD ADMINISTRATORS LLC. SERVICES (OPERATIONAL)

Who is the contractor on this award?

The obligated recipient is CAHABA SAFEGUARD 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 $25.6 million.

What is the period of performance?

Start: 2011-04-08. End: 2015-05-31.

What specific operational services were provided under this contract?

The contract is broadly categorized under NAICS code 541990, 'All Other Professional, Scientific, and Technical Services.' This designation is very general and could encompass a wide range of activities, from administrative support and program management to specialized technical consulting. Without more granular detail from the contract's statement of work or performance reports, it is difficult to ascertain the precise nature of the operational services rendered. This lack of specificity makes it challenging to evaluate the contract's effectiveness, benchmark its costs accurately, or understand its direct impact on CMS's mission.

How does the $25.6 million award compare to similar contracts for operational services within HHS?

Comparing the $25.6 million award to similar contracts requires identifying contracts with comparable service descriptions (NAICS 541990 or similar) and durations within HHS or its agencies like CMS. Given the broad nature of the service category, direct comparisons are difficult. However, if similar contracts for essential operational support within CMS typically range from $5 million to $10 million annually, then this $25.6 million contract, spanning over four years, appears to be within a reasonable magnitude for sustained, comprehensive support. A more precise comparison would necessitate access to a database of federal contracts with detailed service breakdowns and pricing.

What are the key performance indicators (KPIs) used to determine award fees for Cahaba Safeguard Administrators LLC?

The contract type is Cost Plus Award Fee (CPAF), which means the contractor receives reimbursement for allowable costs plus a fee that is composed of a base fee and an award fee. The award fee is contingent upon the contractor meeting or exceeding certain performance objectives established by the government. However, the specific KPIs used to determine these award fees are not publicly disclosed in the provided data. Typically, these KPIs would be detailed in the contract's Performance Work Statement (PWS) and would relate directly to the quality, timeliness, and efficiency of the operational services provided. Effective oversight by CMS would involve rigorous evaluation against these KPIs to justify the award fee.

What is the historical spending pattern for 'All Other Professional, Scientific, and Technical Services' at CMS?

To assess historical spending patterns for 'All Other Professional, Scientific, and Technical Services' (NAICS 541990) at CMS, one would need to analyze multi-year federal procurement data. This contract, awarded in 2011 and ending in 2015, represents a specific instance of spending within this category. Broader analysis would involve aggregating spending across all contracts under this NAICS code for CMS over several fiscal years. This would reveal trends, identify major contractors, and indicate whether spending in this broad service category has been consistent, increasing, or decreasing, providing context for the significance of this particular $25.6 million award.

What is the track record of Cahaba Safeguard Administrators LLC with federal contracts?

Cahaba Safeguard Administrators LLC has a history of performing federal contracts, as evidenced by this award from HHS. To fully assess their track record, a comprehensive review of their contract history across all federal agencies would be necessary. This would include examining past performance evaluations, any instances of contract disputes or terminations, and the types and values of contracts they have successfully managed. Understanding their past performance, particularly on similar service contracts, provides insight into their reliability, capability, and overall value proposition as a federal contractor.

Does the 'full and open competition' designation guarantee the best value for taxpayers?

While 'full and open competition' is designed to maximize opportunities for vendors and encourage competitive pricing, it does not automatically guarantee the 'best value' for taxpayers. Best value is determined by a combination of factors, including price, technical approach, past performance, and other evaluation criteria outlined in the solicitation. A robust competition can lead to better prices and innovative solutions. However, the government's evaluation process and the specific requirements of the solicitation are critical. If the evaluation criteria are poorly defined or if the lowest price technically acceptable (LPTA) approach is used without considering other value factors, the outcome might not represent the optimal value.

Industry Classification

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

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Blue Cross and Blue Shield of Alabama

Address: 375 RIVERCHASE PARKWAY E, BIRMINGHAM, AL, 35244

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

Financial Breakdown

Contract Ceiling: $33,759,917

Exercised Options: $25,607,086

Current Obligation: $25,607,086

Actual Outlays: $1,063,692

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSM500201100004I

IDV Type: IDC

Timeline