HHS awarded $42M for professional services to Advancemed Corp over 8 years

Contract Overview

Contract Amount: $41,963,365 ($42.0M)

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: $13.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: OTHER PROFESSIONAL SERVICES

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $42.0 million to ADVANCEMED CORPORATION for work described as: OTHER PROFESSIONAL SERVICES Key points: 1. Contract awarded via full and open competition, suggesting a competitive pricing environment. 2. The contract type is Cost Plus Award Fee (CPAF), which incentivizes performance but requires careful oversight. 3. The duration of the contract (over 8 years) indicates a long-term need for these services. 4. The North American Industry Classification System (NAICS) code 541990 covers 'All Other Professional, Scientific, and Technical Services,' a broad category. 5. The contract was awarded to a single entity, Advancemed Corporation. 6. The contract was not set aside for small businesses. 7. The contract was awarded as a Delivery Order, suggesting it was part of a larger indefinite-delivery contract vehicle.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the services provided. The Cost Plus Award Fee (CPAF) structure means the final cost is variable and depends on performance. While the total award of $41.96 million over nearly nine years averages to approximately $5.25 million per year, this figure needs to be contextualized by the scope and complexity of the 'All Other Professional, Scientific, and Technical Services' rendered. Without comparable contract data for similar services within CMS or HHS, a definitive value-for-money assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit bids. The specific number of bidders is not provided, but this method generally fosters price discovery and encourages competitive pricing. The agency sought proposals from a wide range of potential contractors, which should have led to a more favorable price for the government compared to sole-source or limited competition awards.

Taxpayer Impact: A full and open competition process is generally beneficial for taxpayers as it is designed to yield the best value by encouraging multiple companies to compete on price and quality, potentially lowering overall costs.

Public Impact

The Centers for Medicare and Medicaid Services (CMS) is the primary beneficiary, receiving professional services to support its operations. The services delivered fall under the broad category of 'All Other Professional, Scientific, and Technical Services,' likely supporting administrative, analytical, or technical functions within CMS. The contract's geographic impact is primarily tied to the operations of CMS, which is a federal agency, suggesting national implications for healthcare policy and administration. The workforce implications are related to the employment of professionals by Advancemed Corporation to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The broad nature of 'All Other Professional, Scientific, and Technical Services' could lead to scope creep if not managed tightly.
The Cost Plus Award Fee (CPAF) contract type requires robust oversight to ensure award fees are justified and costs remain reasonable.
The long contract duration (over 8 years) necessitates ongoing evaluation to ensure continued relevance and value.
Lack of specific service details makes it difficult to assess performance metrics and potential risks associated with service delivery.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that should have driven value.
The contract has a defined period of performance, allowing for reassessment at its conclusion.
The use of an award fee structure incentivizes contractor performance.
The contract is managed by the Centers for Medicare and Medicaid Services (CMS), a major health agency with established procurement processes.

Sector Analysis

The contract falls within the 'Professional, Scientific, and Technical Services' sector, specifically under NAICS code 541990. This is a broad category encompassing a wide array of services. The federal government is a significant consumer of such services, utilizing them for research, development, consulting, and technical support across various agencies. Comparable spending benchmarks are difficult to establish due to the generic nature of the service description, but the overall federal spending on professional services is in the billions annually.

Small Business Impact

This contract was not set aside for small businesses, as indicated by 'sb': false. There is no explicit mention of subcontracting plans. Therefore, the direct impact on the small business ecosystem is likely minimal unless Advancemed Corporation voluntarily engages small businesses as subcontractors. The absence of a small business set-aside suggests that the scope or nature of the services was deemed suitable for larger, more established firms or that the competition was intended to be broad.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the Centers for Medicare and Medicaid Services (CMS). As a Cost Plus Award Fee (CPAF) contract, performance monitoring and evaluation are critical to determining award fees. Transparency is facilitated by the contract's public award data, but detailed performance reports and cost breakdowns are typically internal. The Inspector General for the Department of Health and Human Services (HHS) would have jurisdiction to investigate potential fraud, waste, or abuse related to this contract.

Related Government Programs

HHS Professional Services Contracts
CMS Support Services
Federal IT and Professional Services
Government-wide Acquisition Contracts (GWACs) for Services

Risk Flags

Broad NAICS code may obscure specific service details.
CPAF contract type requires diligent performance monitoring.
Long contract duration necessitates ongoing relevance checks.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $42.0 million to ADVANCEMED CORPORATION. OTHER PROFESSIONAL SERVICES

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 $42.0 million.

What is the period of performance?

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

What specific professional, scientific, or technical services were provided under this contract?

The provided data indicates the contract falls under NAICS code 541990, 'All Other Professional, Scientific, and Technical Services.' This is a very broad category and could encompass a wide range of activities, such as management consulting, scientific research support, technical assistance, data analysis, program evaluation, or administrative support. Without access to the specific contract statement of work (SOW) or task orders issued under this contract, it is impossible to determine the precise nature of the services rendered. Agencies often use this broad category when the services don't fit neatly into more specific NAICS codes, or when the scope of work evolves over time.

How does the $41.96 million award compare to similar contracts for professional services within CMS or HHS?

Directly comparing this $41.96 million award to similar contracts is challenging without more specific service details and access to a comprehensive database of federal contract awards. However, given the nearly 9-year duration (September 2009 to April 2018), the average annual value is approximately $5.25 million. This figure falls within a common range for large, multi-year professional services contracts awarded by major federal agencies like CMS. Many contracts for IT support, program management, policy analysis, and healthcare consulting awarded by HHS exceed tens of millions of dollars over their lifecycle. The 'full and open competition' suggests the agency sought competitive bids, which is a positive indicator for value, but the ultimate value depends heavily on the specific services performed and their impact on CMS operations.

What are the key risks associated with a Cost Plus Award Fee (CPAF) contract of this magnitude and duration?

The primary risks associated with a CPAF contract of this size and duration include potential for cost overruns if the base cost-plus component is not well-managed, and the subjectivity inherent in determining 'award fees.' While CPAF incentivizes performance, the government must have robust mechanisms to objectively measure and evaluate contractor performance against defined criteria to ensure award fees are earned and justified. For a contract spanning over eight years, there's also the risk of the services becoming outdated or less relevant if the SOW isn't regularly reviewed and updated to reflect changing agency needs. Furthermore, the long duration requires sustained oversight to prevent scope creep and ensure continued alignment with strategic objectives. The broad NAICS code adds another layer of risk if the specific deliverables are not clearly defined and monitored.

What was Advancemed Corporation's track record prior to or during this contract?

Information regarding Advancemed Corporation's specific track record prior to or during this contract is not detailed in the provided data. However, as a recipient of a nearly $42 million, multi-year contract from CMS, it can be inferred that the company likely had prior experience and demonstrated capabilities relevant to the services required. Federal procurement systems often include past performance evaluations as a key factor in award decisions. To assess their track record thoroughly, one would need to examine their contract history, including performance reviews, any reported issues or disputes, and their success on other government contracts, particularly those with CMS or HHS. The fact that they were awarded this contract suggests they met the agency's requirements at the time of selection.

How did the 'full and open competition' impact the final price and quality of services received?

A 'full and open competition' process is designed to maximize the number of potential bidders, thereby increasing the likelihood of receiving competitive proposals. This typically leads to better price discovery, as multiple companies vie for the contract by offering their best terms. For taxpayers, this generally translates to a lower overall cost for the required services compared to sole-source or limited competition scenarios. In terms of quality, competition encourages contractors to offer robust solutions and demonstrate strong past performance to win the award. However, the quality of services ultimately depends on the clarity of the Statement of Work (SOW), the effectiveness of the evaluation criteria used by the agency, and the ongoing contract management and oversight. While competition sets a favorable stage, diligent government oversight is still crucial to ensure the contracted services meet the required quality standards throughout the contract's life.

What is the significance of the contract being awarded as a 'Delivery Order' (aw: DELIVERY ORDER)?

The designation 'Delivery Order' (aw: DELIVERY ORDER) indicates that this contract was likely issued under a larger, pre-existing indefinite-delivery/indefinite-quantity (IDIQ) contract vehicle or a similar master agreement. IDIQ contracts allow agencies to procure supplies or services over a set period, with the total quantity specified not to exceed a certain ceiling. Delivery orders are then issued against this IDIQ contract to specify the exact quantities, delivery times, and prices for individual orders. This approach provides flexibility for the agency to order services as needed, while the initial competition for the IDIQ vehicle establishes overall terms and conditions. For taxpayers, this can be efficient if the IDIQ was competitively awarded, but it requires careful management of the ceiling amount and individual order values to ensure cost control.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

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

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: $41,963,365

Exercised Options: $41,963,365

Current Obligation: $41,963,365

Actual Outlays: $17,208

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSM500200900008I

IDV Type: IDC

Timeline