HHS Spends $74M on Pharmacy Benefit Management Over 8 Years Under Firm Fixed Price Contract
Contract Overview
Contract Amount: $74,087,580 ($74.1M)
Contractor: Healthcare Services Corporation
Awarding Agency: Department of Health and Human Services
Start Date: 2010-01-04
End Date: 2017-11-08
Contract Duration: 2,865 days
Daily Burn Rate: $25.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: TAS::75 0390::TAS
Place of Performance
Location: ALBUQUERQUE, BERNALILLO County, NEW MEXICO, 87113
Plain-Language Summary
Department of Health and Human Services obligated $74.1 million to HEALTHCARE SERVICES CORPORATION for work described as: TAS::75 0390::TAS Key points: 1. Significant contract value of $74M over nearly 8 years. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract type is Firm Fixed Price, which transfers risk to the contractor. 4. The sector is Healthcare Services, a critical area for government spending.
Value Assessment
Rating: good
The contract value of $74M over 8 years averages approximately $9.25M annually. This appears reasonable for comprehensive pharmacy benefit management services, though direct comparison requires detailed service scope analysis.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating multiple bidders likely participated. This method generally promotes competitive pricing and ensures the government receives the best value.
Taxpayer Impact: The competitive nature of the award suggests taxpayers likely benefited from a fair market price for the pharmacy benefit management services.
Public Impact
Ensures access to prescription drugs for beneficiaries. Manages costs associated with pharmaceutical benefits. Impacts the overall efficiency and effectiveness of healthcare programs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Contract duration is long (nearly 8 years).
- No indication of small business participation.
- Specific performance metrics not detailed.
Positive Signals
- Firm Fixed Price contract type.
- Full and open competition.
- Significant contract value indicates substantial service provision.
Sector Analysis
This contract falls within the Healthcare Services sector, specifically focusing on pharmacy benefit management. Spending in this area is substantial due to the rising costs of pharmaceuticals and the need for efficient administration.
Small Business Impact
The data indicates that small business participation was not a factor in this contract award (ss: false, sb: false). This suggests the prime contractor is likely a large entity, and there's no explicit information on subcontracting to small businesses.
Oversight & Accountability
The contract was awarded by the Department of Health and Human Services, Office of the Assistant Secretary for Administration. Oversight would typically involve monitoring contract performance, financial expenditures, and adherence to terms and conditions.
Related Government Programs
- Pharmacy Benefit Management and Other Third Party Administration of Insurance and Pension Funds
- Department of Health and Human Services Contracting
- Office of the Assistant Secretary for Administration Programs
Risk Flags
- Long contract duration.
- Lack of small business participation.
- Absence of detailed performance metrics.
- Limited insight into specific services provided.
- No data on contract modifications or performance issues.
Tags
pharmacy-benefit-management-and-other-th, department-of-health-and-human-services, nm, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $74.1 million to HEALTHCARE SERVICES CORPORATION. TAS::75 0390::TAS
Who is the contractor on this award?
The obligated recipient is HEALTHCARE SERVICES CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Health and Human Services (Office of the Assistant Secretary for Administration).
What is the total obligated amount?
The obligated amount is $74.1 million.
What is the period of performance?
Start: 2010-01-04. End: 2017-11-08.
What was the specific scope of pharmacy benefit management services provided under this contract?
The provided data does not detail the specific services included in the Pharmacy Benefit Management. This could range from claims processing, formulary management, drug utilization review, to negotiating rebates with manufacturers. Understanding the scope is crucial for assessing value and comparing costs to industry benchmarks.
Were there any performance issues or contract modifications during the nearly 8-year period?
The data does not provide information on contract performance or modifications. A comprehensive review would require access to contract performance reports, modification history, and any associated documentation to understand if the contractor met expectations and if the contract terms were adjusted over time.
How did the final negotiated price compare to initial bids and industry standards for PBM services?
While the contract was awarded under full and open competition, the data doesn't include details on the bidding process or specific pricing comparisons. To assess the value, one would need to compare the per-unit costs or overall contract value against industry benchmarks for similar PBM services, considering the contract's duration and scope.
Industry Classification
NAICS: Finance and Insurance › Agencies, Brokerages, and Other Insurance Related Activities › Pharmacy Benefit Management and Other Third Party Administration of Insurance and Pension Funds
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 4
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Health Care Service Corporation, a Mutual Legal Reserve Company (UEI: 030890891)
Address: 5701 BALLOON FIESTA PKWY NE, ALBUQUERQUE, NM, 87113
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $84,011,472
Exercised Options: $84,011,472
Current Obligation: $74,087,580
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Timeline
Start Date: 2010-01-04
Current End Date: 2017-11-08
Potential End Date: 2017-12-08 00:00:00
Last Modified: 2017-12-01
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