HHS awards $25.1M contract for administrative management consulting, with 3 bidders competing

Contract Overview

Contract Amount: $25,104,200 ($25.1M)

Contractor: Mdrc

Awarding Agency: Department of Health and Human Services

Start Date: 2014-09-30

End Date: 2021-09-30

Contract Duration: 2,557 days

Daily Burn Rate: $9.8K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: IGF::OT::IGF BUILDING BRIDGES AND BONDS

Place of Performance

Location: NEW YORK, NEW YORK County, NEW YORK, 10016

State: New York Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $25.1 million to MDRC for work described as: IGF::OT::IGF BUILDING BRIDGES AND BONDS Key points: 1. Contract awarded to MDRC for administrative management and general management consulting services. 2. The contract duration spans over 7 years, indicating a long-term need for these services. 3. The award was made under full and open competition after exclusion of sources, suggesting a specific justification for limiting the initial pool. 4. The contract type is Cost Plus Fixed Fee (CPFF), which can incentivize cost overruns if not closely monitored. 5. The base contract value is $9.8M, with potential for significant growth through delivery orders. 6. The contract is managed by the Office of the Assistant Secretary for Administration within HHS.

Value Assessment

Rating: fair

The contract's base value of $9.8M for over 7 years of administrative management consulting appears reasonable for the scope of services. However, the total award amount of $25.1M, achieved through multiple delivery orders, warrants closer examination to ensure value for money. Benchmarking against similar contracts for administrative management consulting services is crucial to assess if the pricing structure and fixed fee are competitive and reflect fair market value. Without specific details on the services rendered under each delivery order, a precise value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This indicates that while competition was sought, certain sources were excluded, suggesting a specific rationale or pre-qualification process. With three bidders participating, there was some level of competition, which is generally positive for price discovery. However, the 'exclusion of sources' aspect raises questions about the breadth of competition and whether the most advantageous pricing was achieved.

Taxpayer Impact: The limited competition, despite having three bidders, may have resulted in a higher price than if the competition had been fully open to all potential sources. Taxpayers may have paid a premium due to the restricted bidding pool.

Public Impact

The primary beneficiaries are likely the various offices and programs within the Department of Health and Human Services (HHS) that require administrative management and general management consulting support. The services delivered are expected to improve the efficiency and effectiveness of HHS's administrative operations. The contract has a geographic impact primarily within New York, where the contractor is located. The contract supports specialized consulting roles, potentially impacting the workforce through the engagement of experienced professionals in administrative management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in the competition process could limit the range of innovative solutions and potentially lead to higher costs.
The Cost Plus Fixed Fee (CPFF) contract type, while common, can create incentives for cost escalation if not rigorously managed and monitored by the agency.
The significant increase from the base contract value to the total award amount suggests substantial use of delivery orders, requiring careful oversight to ensure each order represents good value.
The long contract duration (over 7 years) could lead to vendor lock-in and reduced flexibility for HHS to adapt to changing needs or explore alternative solutions.
Lack of detailed public information on the specific services provided under each delivery order makes it difficult to fully assess performance and value.

Positive Signals

The contract was awarded after a competitive process, even if limited, indicating that multiple firms were considered.
The engagement of a single contractor over a long period suggests a successful working relationship and consistent delivery of required services.
The contract is managed by a specific office within HHS (Office of the Assistant Secretary for Administration), implying dedicated oversight.
The contract's focus on administrative management and general management consulting addresses critical operational needs within a large federal agency.

Sector Analysis

The administrative management and general management consulting services sector is a significant part of the professional services market supporting government operations. Federal agencies frequently contract for these services to enhance efficiency, implement new policies, and manage complex programs. Spending in this sector is driven by the need for specialized expertise that may not be available in-house. Comparable spending benchmarks would typically involve analyzing the average cost of similar consulting engagements across various federal agencies, considering factors like contract duration, scope of work, and contractor experience.

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 or specific impacts on the small business ecosystem stemming from a small business set-aside. The primary contractor, MDRC, is likely a larger entity, and any subcontracting would be at their discretion, not mandated by a set-aside provision.

Oversight & Accountability

Oversight for this contract would primarily reside within the Department of Health and Human Services, specifically the Office of the Assistant Secretary for Administration, which awarded the contract. Accountability measures would be embedded in the contract's terms and conditions, including performance metrics and reporting requirements tied to the delivery orders. Transparency is facilitated through contract databases like FPDS, which provide basic award information. The Inspector General's office for HHS would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

HHS Administrative Support Contracts
Management and Consulting Services
Federal Administrative Services
Government Management Consulting

Risk Flags

Limited Competition
Cost Plus Fixed Fee Contract Type
Significant Increase from Base to Award Value
Long Contract Duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $25.1 million to MDRC. IGF::OT::IGF BUILDING BRIDGES AND BONDS

Who is the contractor on this award?

The obligated recipient is MDRC.

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 $25.1 million.

What is the period of performance?

Start: 2014-09-30. End: 2021-09-30.

What specific administrative management and general management consulting services were rendered under this contract, and how did they contribute to HHS's mission?

The contract, awarded to MDRC, falls under the North American Industry Classification System (NAICS) code 541611 for Administrative Management and General Management Consulting Services. While the specific details of services provided under each delivery order are not publicly itemized in the provided data, such services typically encompass areas like organizational structure analysis, process improvement, strategic planning, program management support, and operational efficiency enhancements. These services are crucial for a large agency like HHS to effectively manage its vast array of health and human services programs, ensuring efficient resource allocation, policy implementation, and overall operational effectiveness. The contract's duration and value suggest a sustained need for these expert advisory services to support HHS's ongoing administrative functions and strategic objectives.

How does the total award amount of $25.1M compare to the base contract value of $9.8M, and what does this imply about the contract's utilization?

The total award amount of $25.1 million significantly exceeds the base contract value of $9.8 million, representing an increase of approximately 156%. This substantial difference indicates that numerous delivery orders were issued against the contract over its more than seven-year period. Such a pattern suggests that the initial contract served as a flexible vehicle to procure a wide range of administrative management and general management consulting services as needs arose. While this flexibility can be beneficial, it also necessitates rigorous oversight to ensure that each delivery order was justified, competitively priced (where applicable), and delivered value commensurate with the expenditure. The agency's ability to utilize the contract to this extent points to a consistent demand for the services provided by MDRC.

What are the potential risks associated with the Cost Plus Fixed Fee (CPFF) contract type used for this award?

The Cost Plus Fixed Fee (CPFF) contract type, utilized in this award, presents specific risks. While it allows for flexibility in scope and encourages contractor innovation, it can incentivize cost overruns. The 'cost-plus' component means the contractor is reimbursed for allowable costs incurred, plus a predetermined fixed fee. If not managed diligently, contractors may have less incentive to control costs compared to fixed-price contracts, as their profit (the fixed fee) is guaranteed regardless of the final cost. This necessitates robust government oversight to scrutinize allowable costs, ensure efficiency, and prevent unnecessary expenditures. The fixed fee itself should be negotiated to reflect a reasonable profit margin for the services rendered, considering the risk undertaken by the contractor.

Given the 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' designation, what does this imply about the procurement process and potential impact on pricing?

The designation 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' suggests a nuanced procurement approach. Initially, the agency likely intended full and open competition but subsequently excluded certain sources based on specific criteria, possibly related to capability, past performance, or unique qualifications. While three bidders participated, indicating some level of competition, the exclusion of other potential sources could limit the breadth of market engagement. This might mean that the pricing achieved, while competitive among the three, may not represent the absolute lowest possible price that could have been secured in a truly unrestricted full and open competition. The justification for excluding sources would be critical to understanding whether this approach was necessary and ultimately beneficial for the government.

What is the track record of MDRC as a contractor for the federal government, particularly in administrative management consulting?

MDRC (Manpower Demonstration Research Corporation) is a well-regarded research organization focused on improving social and economic policy. While primarily known for its rigorous research and evaluation work in areas like education, employment, and poverty, its expertise can extend to providing insights and recommendations that inform administrative management and policy implementation. Federal agencies, including HHS, often engage MDRC for its analytical capabilities and evidence-based approach. Their track record typically involves delivering high-quality research reports, policy analyses, and program evaluations. For administrative management consulting, MDRC's strength would lie in its ability to analyze program effectiveness, identify areas for operational improvement based on data, and provide strategic recommendations grounded in research methodologies. Their engagement with HHS suggests a recognized capability in supporting administrative functions through evidence-based insights.

How does the contract's duration of over 7 years (2557 days) influence its overall value and risk profile?

A contract duration exceeding seven years, as seen in this award, offers potential benefits such as continuity of services, reduced administrative burden associated with frequent re-procurement, and the opportunity for the contractor to develop deep institutional knowledge. This can lead to more efficient and effective service delivery over time. However, such long-term commitments also introduce risks. Market conditions, technological advancements, and agency needs can change significantly over seven years, potentially making the contracted services or pricing less optimal. There's also a risk of vendor lock-in, where the agency becomes overly reliant on a single provider, diminishing flexibility and bargaining power. To mitigate these risks, contracts of this duration typically include mechanisms for periodic review, performance-based adjustments, and options for early termination if performance is unsatisfactory or needs change.

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 AFTER EXCLUSION OF SOURCES

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 16 E 34TH ST FL 19, NEW YORK, NY, 10016

Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $25,104,200

Exercised Options: $25,104,200

Current Obligation: $25,104,200

Actual Outlays: $480,015

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $1,696,579

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSP23320095644WC

IDV Type: IDC

Timeline