DoD's $25.8M Magellan Federal contract for recovery care support services awarded without competition
Contract Overview
Contract Amount: $25,772,768 ($25.8M)
Contractor: Magellan Federal, Inc.
Awarding Agency: Department of Defense
Start Date: 2017-01-11
End Date: 2023-04-25
Contract Duration: 2,295 days
Daily Burn Rate: $11.2K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: IGF::OT::IGF RECOVERY CARE PROGRAM SUPPORT SERVICES
Place of Performance
Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202
State: Virginia Government Spending
Plain-Language Summary
Department of Defense obligated $25.8 million to MAGELLAN FEDERAL, INC. for work described as: IGF::OT::IGF RECOVERY CARE PROGRAM SUPPORT SERVICES Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential value. 2. Significant duration of over 6 years suggests a long-term need for these administrative management services. 3. The contract's firm-fixed-price structure aims to control costs, but the lack of competition limits benchmarking. 4. Performance context is within the Defense Health Agency, indicating a focus on supporting military healthcare. 5. Sector positioning is in administrative management consulting, a broad category with varying cost structures. 6. Risk indicators include the absence of competitive bidding and the extended contract term.
Value Assessment
Rating: questionable
Benchmarking the value of this $25.8 million contract is challenging due to its sole-source nature. Without competitive bids, it's difficult to assess if Magellan Federal's pricing is aligned with market rates or if alternative solutions could have been procured at a lower cost. The firm-fixed-price contract type provides some cost certainty, but the lack of competition prevents a robust value-for-money assessment against similar contracts in the public or private sector.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor possesses the unique capabilities or resources required for the service. The lack of competition means there was no opportunity for multiple bidders to propose solutions, which can limit price negotiation and potentially lead to higher costs for the government.
Taxpayer Impact: Taxpayers may not have received the best possible price due to the absence of a competitive bidding process. The government did not benefit from the cost-saving pressures that typically arise when multiple companies vie for a contract.
Public Impact
Beneficiaries include military personnel and their families receiving recovery care services. Services delivered encompass administrative management and general management consulting to support healthcare operations. Geographic impact is primarily within the United States, supporting the Defense Health Agency's mission. Workforce implications may involve the utilization of Magellan Federal's personnel to augment military healthcare staff.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition may lead to suboptimal pricing.
- Extended contract duration without re-competition raises concerns about sustained value.
- Sole-source award limits transparency in contractor selection.
Positive Signals
- Firm-fixed-price contract provides cost predictability.
- Contract supports critical healthcare services for military personnel.
- Awardee is a known entity within federal contracting.
Sector Analysis
The administrative management and general management consulting services sector is broad, encompassing a wide range of support functions for government agencies. This contract falls within the professional services segment, where expertise in operational efficiency and program support is highly valued. Comparable spending in this sector can vary significantly based on the scope and complexity of services, but the absence of competition here makes direct cost comparisons difficult.
Small Business Impact
This contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. The award to a single, likely larger, entity suggests that small business participation was not a primary consideration in the procurement strategy. This could limit opportunities for small businesses to contribute to this specific government requirement.
Oversight & Accountability
Oversight for this contract would typically fall under the Defense Health Agency's contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract, requiring delivery of specified services. Transparency is limited due to the sole-source nature of the award, but contract performance data and any associated Inspector General reports would provide further insight.
Related Government Programs
- Defense Health Agency Contracts
- Military Healthcare Support Services
- Administrative Management Consulting
- Federal Professional Services
Risk Flags
- Sole-source award
- Lack of competition
- Extended contract duration
Tags
defense, department-of-defense, defense-health-agency, administrative-management-consulting, professional-services, firm-fixed-price, definitive-contract, sole-source, healthcare-support, virginia
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $25.8 million to MAGELLAN FEDERAL, INC.. IGF::OT::IGF RECOVERY CARE PROGRAM SUPPORT SERVICES
Who is the contractor on this award?
The obligated recipient is MAGELLAN FEDERAL, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Health Agency).
What is the total obligated amount?
The obligated amount is $25.8 million.
What is the period of performance?
Start: 2017-01-11. End: 2023-04-25.
What is the track record of Magellan Federal, Inc. with the Department of Defense and specifically the Defense Health Agency?
Magellan Federal, Inc. has a history of contracting with the Department of Defense and the Defense Health Agency. While this specific contract for recovery care program support services was awarded sole-source, the company's broader federal contracting portfolio can be reviewed for performance trends. Analyzing past performance on similar administrative and management consulting contracts, including any reported issues or successes, would provide a more comprehensive understanding of their capabilities and reliability. Information on past performance, including any awards or penalties, is crucial for assessing the contractor's suitability and the potential risks associated with this sole-source award.
How does the $25.8 million contract value compare to similar administrative management consulting services procured by the DoD?
Direct comparison of the $25.8 million contract value for Magellan Federal's recovery care support services to similar administrative management consulting contracts procured by the DoD is challenging due to the sole-source nature of this award. Competitive procurements typically yield a range of pricing that allows for benchmarking. Without competitive bids, it's difficult to ascertain if this price represents optimal value for the services rendered. A thorough analysis would require identifying comparable sole-source contracts or, ideally, competitive contracts for similar services, adjusting for scope, duration, and specific requirements to establish a fair market price range.
What are the primary risks associated with a sole-source award of this magnitude and duration?
The primary risks associated with a sole-source award of $25.8 million over approximately six years include potential overpayment due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and a lack of transparency in the selection process. Taxpayers may not be receiving the best value for their money. Furthermore, the extended duration without re-competition could lead to vendor lock-in and make it difficult to transition to potentially more cost-effective solutions in the future. There's also a risk that the justification for the sole-source award might not fully capture all available alternatives or that market conditions could change, making competition feasible later.
What specific recovery care program support services are being provided under this contract?
The contract specifies 'Administrative Management and General Management Consulting Services' (NAICS code 541611) for recovery care program support. While the exact details of the services are not fully elaborated in the provided data, this typically involves functions such as program planning, operational support, logistical coordination, data management, and advisory services aimed at enhancing the efficiency and effectiveness of recovery care programs. These services are crucial for ensuring that military personnel undergoing recovery receive the necessary administrative and management support to facilitate their healing and reintegration processes.
What is the historical spending trend for recovery care program support services within the Defense Health Agency?
Historical spending trends for recovery care program support services within the Defense Health Agency are not directly available from the provided data for this specific contract. However, the fact that a sole-source contract of this magnitude ($25.8 million) was awarded and executed over several years (January 2017 to April 2023) suggests a consistent and significant need for such support. To understand broader trends, one would need to analyze historical contract awards for similar services, looking at the number of contracts, their values, and the agencies involved over time. This would help determine if spending in this area has increased, decreased, or remained stable.
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: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Magellan Health, Inc.
Address: 2800 S SHIRLINGTON RD STE 350, ARLINGTON, VA, 22206
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $25,772,768
Exercised Options: $25,772,768
Current Obligation: $25,772,768
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2017-01-11
Current End Date: 2023-04-25
Potential End Date: 2023-04-25 00:00:00
Last Modified: 2023-04-26
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