HHS awards $27.5M contract for administrative consulting services to Q2 Administrators, LLC

Contract Overview

Contract Amount: $27,480,472 ($27.5M)

Contractor: Q2 Administrators, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2013-09-14

End Date: 2018-09-13

Contract Duration: 1,825 days

Daily Burn Rate: $15.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IGF::OT::IGF - ADMINISTRATIVE QUALIFIED INDEPENDENT CONTRACTOR

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $27.5 million to Q2 ADMINISTRATORS, LLC for work described as: IGF::OT::IGF - ADMINISTRATIVE QUALIFIED INDEPENDENT CONTRACTOR Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 5 years indicates a long-term need for these services. 3. The administrative management and general management consulting services category is broad and essential for agency operations. 4. The contract type (Cost Plus Fixed Fee) can lead to cost overruns if not managed carefully. 5. The award to a single contractor, Q2 Administrators, LLC, warrants scrutiny for performance and value. 6. The contract's value of $27.5M places it in the mid-tier range for federal consulting contracts.

Value Assessment

Rating: fair

The contract value of $27.5 million over five years for administrative management consulting services appears within a reasonable range for federal contracts of this nature. However, without specific benchmarks for the exact services provided by Q2 Administrators, LLC, a precise value-for-money assessment is challenging. The Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk, as costs can escalate beyond initial estimates if not rigorously controlled by the agency. Benchmarking against similar contracts for administrative consulting services would be necessary to definitively assess pricing and value.

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 a bid. The number of bidders is not specified, but the open competition suggests a healthy level of market interest. This process is designed to foster price discovery and ensure the government receives competitive offers. The extent to which this competition translated into the lowest possible price or best value is dependent on the specific evaluation criteria and the number of high-quality proposals received.

Taxpayer Impact: Full and open competition generally benefits taxpayers by promoting a more efficient allocation of resources and potentially lower prices due to market pressures. It reduces the risk of contractors overcharging and ensures that taxpayer funds are used to secure the most advantageous services.

Public Impact

The Centers for Medicare and Medicaid Services (CMS) benefits from enhanced administrative management and general management consulting services. These services are crucial for the efficient operation and oversight of CMS programs, which impact millions of Americans. The contract supports the agency's mission to improve healthcare quality, access, and affordability. Workforce implications are likely internal to CMS, with the contractor providing expertise to supplement government staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee (CPFF) contract type can incentivize cost overruns if not closely monitored.
Lack of specific performance metrics in the provided data makes it difficult to assess contractor effectiveness.
The broad nature of 'Administrative Management and General Management Consulting Services' could lead to scope creep if not clearly defined.

Positive Signals

Awarded through full and open competition, indicating a potentially competitive and fair process.
The contract has a defined duration, providing a clear timeframe for service delivery.
The contractor, Q2 Administrators, LLC, has secured a federal contract, suggesting some level of established capability.

Sector Analysis

The federal consulting services market is substantial, encompassing a wide range of expertise from IT to management and strategic planning. Administrative management and general management consulting services, classified under NAICS code 541611, are a critical component of this market. Agencies like CMS rely on these services to streamline operations, improve efficiency, and manage complex programs. The value of this contract, approximately $27.5 million over five years, is moderate within the broader federal consulting landscape, which sees contracts ranging from a few million to hundreds of millions of dollars.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The primary contractor, Q2 Administrators, LLC, is not explicitly identified as a small business in the provided data. The impact on the small business ecosystem is neutral in terms of direct set-aside opportunities, but large prime contracts can sometimes create indirect opportunities for small business subcontractors if the prime contractor chooses to engage them.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officer and the relevant program officials within the Centers for Medicare and Medicaid Services (CMS). The Cost Plus Fixed Fee (CPFF) nature of the contract necessitates robust oversight to ensure that costs are reasonable and allocable to the contract's objectives. Transparency would be facilitated through contract reporting mechanisms, such as the Federal Procurement Data System (FPDS). Specific Inspector General (IG) jurisdiction would depend on whether the Department of Health and Human Services Office of Inspector General (HHS-OIG) has identified this contract or its subject matter as a priority for audit or investigation.

Related Government Programs

Management and Financial Consulting, Acquisition and Commercialization Services
Professional, Scientific, and Technical Services
Administrative Support Services
Government Management Consulting Contracts
Healthcare Administration Support

Risk Flags

Cost Plus Fixed Fee contract type carries inherent cost overrun risk.
Broad service category requires clear definition and oversight to prevent scope creep.
Contractor performance history needs verification for reliability.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $27.5 million to Q2 ADMINISTRATORS, LLC. IGF::OT::IGF - ADMINISTRATIVE QUALIFIED INDEPENDENT CONTRACTOR

Who is the contractor on this award?

The obligated recipient is Q2 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 $27.5 million.

What is the period of performance?

Start: 2013-09-14. End: 2018-09-13.

What is the track record of Q2 Administrators, LLC in performing federal contracts, particularly those similar to this administrative consulting award?

Assessing the track record of Q2 Administrators, LLC requires a deeper dive into federal procurement databases like FPDS-NG or SAM.gov. While the provided data confirms they were awarded this specific contract, it doesn't detail their past performance history. Key indicators to examine would include the number of previous federal contracts awarded, their total value, the agencies they've served, and any reported performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS). A review of past contract types (e.g., CPFF, FFP) and their successful completion, along with any past performance issues or disputes, would provide crucial context for evaluating their reliability and capability in delivering administrative management and general management consulting services.

How does the awarded amount of $27.5 million compare to the average cost of similar administrative consulting contracts awarded by CMS or other federal agencies?

To benchmark the $27.5 million award, one would need to analyze historical data for contracts under NAICS code 541611 (Administrative Management and General Management Consulting Services) awarded by CMS and comparable agencies over the past several years. Factors such as contract duration, scope of work, and specific deliverables significantly influence cost. A comparison would involve looking at the average contract value, the range of values, and potentially the average annual cost. If this contract's value falls within the typical range for similar five-year engagements providing comparable services, it suggests fair pricing. Conversely, if it is significantly higher or lower, it warrants further investigation into the reasons, which could include unique service requirements, market conditions, or differences in competition levels.

What are the primary risks associated with the Cost Plus Fixed Fee (CPFF) contract type for this administrative consulting service, and how are they mitigated?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns. The government agrees to pay the contractor's actual costs plus a fixed fee, which incentivizes the contractor to incur costs, as their profit (the fixed fee) remains constant regardless of the total cost. This can lead to a lack of cost control if not managed diligently. Mitigation strategies include rigorous government oversight of all incurred costs, detailed review of invoices, clear definition of allowable costs, and strong contract administration to ensure the contractor is operating efficiently and within the scope of work. The fixed fee itself acts as a ceiling on profit, but not on total cost, making vigilant monitoring essential.

What specific administrative management and general management consulting services are being procured under this contract, and how do they align with CMS's strategic objectives?

The provided data classifies the contract under NAICS code 541611, 'Administrative Management and General Management Consulting Services.' This broad category can encompass a wide array of services, such as organizational efficiency improvements, strategic planning support, process re-engineering, policy development assistance, program management support, and general administrative operations consulting. To understand the specific services procured, one would need to review the contract's Statement of Work (SOW) or Performance Work Statement (PWS). Understanding these specifics is crucial to evaluating how effectively these services contribute to CMS's strategic objectives, such as improving healthcare access, reducing costs, or enhancing program integrity.

How has federal spending in administrative management and general management consulting services (NAICS 541611) trended over the past five years, and where does this contract fit within that trend?

Federal spending on administrative management and general management consulting services (NAICS 541611) has generally seen a steady demand, often fluctuating with agency budget cycles and specific program needs. Over the past five years, agencies like HHS, DOD, and others frequently procure these services to enhance operational efficiency, support strategic initiatives, and manage complex programs. This $27.5 million contract, awarded over five years, represents a significant but not exceptionally large award within this category. It aligns with the ongoing need for external expertise to support government functions. Analyzing broader spending trends would involve examining FPDS data for this NAICS code across all agencies to identify patterns in contract values, durations, and types of services most frequently sought.

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: 1

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 300 ARBOR LAKE DR, COLUMBIA, SC, 29223

Business Categories: Black American Owned Business, Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $28,069,853

Exercised Options: $27,480,472

Current Obligation: $27,480,472

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSM500200400010I

IDV Type: IDC

Timeline