HHS awarded $41.4M contract for health services advisory, with 3 bidders competing

Contract Overview

Contract Amount: $41,369,263 ($41.4M)

Contractor: Health Services Advisory Group, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2014-07-18

End Date: 2019-07-17

Contract Duration: 1,825 days

Daily Burn Rate: $22.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: CA STATE TASK ORDER IGF::CT::IGF

Place of Performance

Location: GLENDALE, LOS ANGELES County, CALIFORNIA, 91203

State: California Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $41.4 million to HEALTH SERVICES ADVISORY GROUP, INC. for work described as: CA STATE TASK ORDER IGF::CT::IGF Key points: 1. Contract value represents a significant investment in advisory services. 2. Competition dynamics suggest a potentially competitive bidding environment. 3. Contract duration of 5 years indicates a long-term need for these services. 4. The 'Other Management Consulting Services' NAICS code covers a broad range of potential activities. 5. Fixed-fee pricing structure can offer cost predictability but may limit contractor incentive for efficiency. 6. The absence of small business set-aside suggests larger firms were likely primary targets or participants.

Value Assessment

Rating: fair

The contract's total value of $41.4 million over five years averages approximately $8.28 million annually. Benchmarking this against similar large-scale health advisory contracts is challenging without more specific service details. However, the fixed-fee structure, while providing cost certainty, can sometimes lead to higher overall costs if not carefully managed, as the contractor bears less direct risk for cost overruns. The number of bidders (3) suggests some level of competition, but the ultimate value-for-money depends heavily on the quality and impact of the advisory services provided.

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. With three bidders participating, the competition level appears moderate. A higher number of bidders generally correlates with more competitive pricing and a wider range of innovative solutions. However, three bidders can still yield a fair price, especially if the bidders were highly qualified and the solicitation was well-defined.

Taxpayer Impact: A full and open competition with multiple bidders is generally favorable for taxpayers, as it encourages competitive pricing and can lead to better value. The presence of three bidders suggests that the government likely received a reasonable price for the services rendered.

Public Impact

Beneficiaries include federal agencies within the Department of Health and Human Services, particularly CMS. Services delivered likely encompass strategic planning, operational improvements, and policy analysis within the healthcare sector. Geographic impact is national, supporting federal health initiatives across the United States. Workforce implications may involve specialized consultants and subject matter experts in health policy and management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in 'Other Management Consulting Services' if not tightly managed.
Reliance on a single awardee for a significant duration could pose continuity risks if performance falters.
Cost Plus Fixed Fee (CPFF) contracts can sometimes incentivize contractors to incur more costs than necessary if oversight is weak.

Positive Signals

Awarded under full and open competition, suggesting a robust vetting process.
Contract duration of 5 years indicates a stable, long-term need and potential for deep expertise development.
The award to 'HEALTH SERVICES ADVISORY GROUP, INC.' suggests they met stringent qualification requirements.

Sector Analysis

This contract falls within the Management Consulting Services sector, a critical component of government operations. The market for these services is substantial, with numerous firms offering expertise in areas like healthcare policy, operational efficiency, and strategic planning. The $41.4 million award is a significant sum, placing it in the upper tier for individual advisory contracts within HHS. Comparable spending benchmarks would typically be found within broader federal IT and professional services categories, but specific health advisory spending is often siloed.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the requirement was either too large or specialized for small business participation, or that the competition was open to all responsible sources, with larger, established firms likely dominating. Subcontracting opportunities for small businesses may exist, but are not explicitly detailed in this summary data. The overall impact on the small business ecosystem for this specific contract appears limited.

Oversight & Accountability

Oversight for this contract would primarily reside with the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Accountability measures are typically embedded within the contract's performance work statement (PWS), including deliverables, reporting requirements, and performance standards. Transparency is facilitated through contract databases like FPDS-NG, where basic award information is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

HHS Management and Consulting Services
Centers for Medicare and Medicaid Services Support Contracts
Federal Health Advisory Services
Professional Services Schedule (PSS) Contracts

Risk Flags

Contract Duration
Contract Type (CPFF)
Moderate Competition Level

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $41.4 million to HEALTH SERVICES ADVISORY GROUP, INC.. CA STATE TASK ORDER IGF::CT::IGF

Who is the contractor on this award?

The obligated recipient is HEALTH SERVICES ADVISORY GROUP, INC..

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 $41.4 million.

What is the period of performance?

Start: 2014-07-18. End: 2019-07-17.

What specific types of health services advisory were provided under this contract?

The NAICS code 541618, 'Other Management Consulting Services,' is broad and does not specify the exact nature of the advisory services. However, given the awarding agency is the Centers for Medicare and Medicaid Services (CMS), it is highly probable that the services related to healthcare policy analysis, program evaluation, operational efficiency improvements for Medicare and Medicaid programs, strategic planning for healthcare initiatives, or regulatory compliance guidance. Without access to the specific Statement of Work (SOW) or Performance Work Statement (PWS), the precise deliverables and focus areas remain general.

How does the $41.4 million contract value compare to similar advisory contracts awarded by CMS or HHS?

Comparing the $41.4 million total contract value requires context regarding the duration and scope. Over its 5-year term (2014-2019), this contract represented an average annual value of approximately $8.28 million. This figure is substantial for advisory services but falls within the range of large-scale federal contracts. CMS and HHS frequently award multi-million dollar contracts for various support services, including management consulting, IT, and program support. To provide a precise comparison, one would need to analyze contracts with similar NAICS codes, durations, and specific service requirements awarded within the same timeframe to gauge if this represented a premium, standard, or discounted rate.

What are the potential risks associated with a 5-year Cost Plus Fixed Fee (CPFF) contract for advisory services?

Cost Plus Fixed Fee (CPFF) contracts, while offering flexibility, carry inherent risks. For the government, the primary risk is that the contractor may have less incentive to control costs compared to fixed-price contracts, as their fee is fixed regardless of the actual costs incurred (within the ceiling). This can potentially lead to higher overall expenditures if not managed with rigorous oversight. For the contractor, the risk lies in accurately estimating costs to ensure the fixed fee is profitable. Risks for both parties include potential scope creep, where the project's objectives expand beyond the original agreement, leading to cost overruns and schedule delays. Effective contract management, clear performance metrics, and regular audits are crucial to mitigate these risks.

What was the track record of HEALTH SERVICES ADVISORY GROUP, INC. prior to or during this contract?

Information regarding the specific track record of HEALTH SERVICES ADVISORY GROUP, INC. (HSAG) prior to or during this particular $41.4 million contract is not detailed in the provided summary data. Generally, government contractors are vetted based on past performance, financial stability, and technical capabilities. HSAG is known to be a significant player in healthcare consulting, often working with government entities. A comprehensive assessment would involve reviewing their performance on previous contracts, any past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and their overall business history to understand their reliability and expertise in delivering complex advisory services.

How did the 'full and open competition' with 3 bidders impact the final price and service quality?

A 'full and open competition' signifies that the solicitation was broadly advertised, allowing any qualified vendor to bid. The presence of three bidders suggests a moderate level of competition. While more bidders typically drive prices down and foster innovation, three qualified bidders can still result in competitive pricing and adequate service quality. The government likely selected the offer that represented the best value, considering both price and technical factors. The impact on the final price is difficult to quantify without a baseline or comparison, but the competitive process itself is designed to achieve a fair market price. Service quality is influenced by the specific evaluation criteria in the solicitation and the rigor of the source selection process.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Management Consulting Services

Product/Service Code: MEDICAL SERVICES › DEPENDENT MEDICARE SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: HHSM5002014RFPQINQIO

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Health Services Holdings, Inc.

Address: 3133 E CAMELBACK RD, PHOENIX, AZ, 85016

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

Financial Breakdown

Contract Ceiling: $41,369,263

Exercised Options: $41,369,263

Current Obligation: $41,369,263

Actual Outlays: $100,000

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HHSM5002014QIN008I

IDV Type: IDC

Timeline