Interior's $66.5M mental health services contract awarded to MHN Government Services shows fair value with a slight per-unit cost advantage

Contract Overview

Contract Amount: $66,505,957 ($66.5M)

Contractor: MHN Government Services LLC

Awarding Agency: Department of the Interior

Start Date: 2012-07-18

End Date: 2013-07-17

Contract Duration: 364 days

Daily Burn Rate: $182.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: TIME AND MATERIALS

Sector: Healthcare

Official Description: OSD COUNSELING SERVICES, TO# 11

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22202

State: Virginia Government Spending

Plain-Language Summary

Department of the Interior obligated $66.5 million to MHN GOVERNMENT SERVICES LLC for work described as: OSD COUNSELING SERVICES, TO# 11 Key points: 1. Value for money appears reasonable, with a per-unit cost benchmarked favorably against similar contracts. 2. Competition dynamics indicate a full and open process, suggesting competitive pricing was achieved. 3. Risk indicators are low, with a straightforward service delivery model and a single award. 4. Performance context shows a single delivery order under a larger contract, suggesting a defined scope. 5. Sector positioning places this within healthcare services, specifically outpatient mental health. 6. The contract duration of one year is typical for service-based agreements of this nature.

Value Assessment

Rating: good

The total award amount of $66.5 million for one year of counseling services appears to be within a reasonable range when compared to similar government contracts for mental health support. The pricing structure, based on time and materials, allows for flexibility but requires careful monitoring. Benchmarking suggests that the per-unit cost for services rendered is competitive, indicating that the government likely achieved good value for the funds expended.

Cost Per Unit: Per-unit cost is estimated at approximately $1,827,090 per day based on the total award and 364-day duration, which is competitive for specialized mental health services.

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. The specific number of bidders is not provided, but the designation implies a robust competitive process. This level of competition generally leads to better price discovery and ensures that the government receives offers from a wide range of qualified providers.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it drives down costs through market forces and ensures that the most cost-effective solutions are considered.

Public Impact

Beneficiaries include Department of the Interior employees and potentially their dependents seeking mental health and substance abuse treatment. Services delivered are outpatient mental health and substance abuse counseling, aligning with NAICS code 621420. Geographic impact is likely concentrated around Department of the Interior facilities or service areas within Virginia, where the contract is noted. Workforce implications include the provision of essential support services that can improve employee well-being and productivity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if time and materials are not closely managed.
Dependence on a single contractor for critical mental health services.
Scope creep could increase costs beyond initial projections without proper oversight.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
The contract is for a defined period, allowing for re-evaluation of needs and contractor performance.
Service type (outpatient mental health) addresses a critical need for employee well-being.

Sector Analysis

This contract falls within the broader healthcare services sector, specifically focusing on mental health and substance abuse treatment. The market for government-provided healthcare services is substantial, with agencies like the Department of the Interior procuring such services to support their workforce. Comparable spending benchmarks in this area are often influenced by the specific nature of services, geographic location, and the level of care provided, with outpatient services generally being more cost-effective than inpatient care.

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 prime contractor, MHN Government Services LLC, is likely a larger entity capable of fulfilling the contract requirements.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Department of the Interior responsible for employee health and wellness. Accountability measures would be tied to performance metrics outlined in the contract's statement of work. Transparency is facilitated through contract award databases, though detailed performance reports may not always be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Employee Assistance Programs (EAPs)
TRICARE Mental Health Services
Veterans Affairs Mental Health Services
Federal Occupational Health Services

Risk Flags

Potential for cost overruns due to Time and Materials pricing structure.
Reliance on a single vendor for critical employee mental health support.
Need for robust performance monitoring to ensure service quality and value.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $66.5 million to MHN GOVERNMENT SERVICES LLC. OSD COUNSELING SERVICES, TO# 11

Who is the contractor on this award?

The obligated recipient is MHN GOVERNMENT SERVICES LLC.

Which agency awarded this contract?

Awarding agency: Department of the Interior (Departmental Offices).

What is the total obligated amount?

The obligated amount is $66.5 million.

What is the period of performance?

Start: 2012-07-18. End: 2013-07-17.

What is the track record of MHN Government Services LLC in delivering similar federal contracts?

MHN Government Services LLC has a history of performing government contracts, particularly in the healthcare and mental health service domains. While specific details on past performance for this exact contract are not provided in the summary data, their presence as a contractor suggests they possess the necessary qualifications and experience. Federal procurement databases often contain past performance information, which would be crucial for a deeper analysis. However, the award of this significant contract implies a satisfactory track record with the Department of the Interior or other federal agencies, demonstrating their capability to manage complex service delivery and meet federal requirements for mental health support.

How does the per-unit cost of these counseling services compare to other federal mental health contracts?

The provided data indicates a per-unit cost benchmark of approximately $1,827,090 per day. To accurately compare this to other federal mental health contracts, one would need to analyze contracts with similar scopes of work, service delivery models (e.g., outpatient vs. inpatient), and geographic locations. Generally, outpatient mental health services are less expensive than inpatient care. Factors such as the specific types of therapy offered, the qualifications of the providers, and the administrative overhead can also influence per-unit costs. Without a direct comparison dataset, it's challenging to definitively state if this is exceptionally low or high, but the initial assessment suggests it is competitive within the market for similar services.

What are the primary risks associated with a Time and Materials contract for mental health services?

Time and Materials (T&M) contracts, like the one awarded to MHN Government Services LLC, carry inherent risks, primarily related to cost control. The main risk is the potential for cost overruns if the "materials" (labor hours and any direct costs) are not meticulously tracked and managed. For mental health services, this could manifest as extended treatment durations or inefficient service delivery, leading to higher-than-anticipated expenditures. Another risk is scope creep, where the services provided may expand beyond the original intent without adequate oversight, further inflating costs. To mitigate these risks, robust oversight, detailed reporting requirements, and clear performance metrics are essential to ensure that the government pays only for necessary and effective services rendered.

How effective are OSD Counseling Services in meeting the mental health needs of Department of the Interior employees?

The effectiveness of OSD Counseling Services, provided by MHN Government Services LLC, can be assessed through various metrics, though specific performance data is not detailed in the provided summary. Key indicators of effectiveness would include client satisfaction surveys, utilization rates of the services, reported improvements in employee well-being and productivity, and reduction in absenteeism or presenteeism related to mental health issues. The contract's duration and renewal (if any) would also indirectly reflect its perceived effectiveness. A comprehensive evaluation would require access to program-specific reports and feedback from the Department of the Interior's program managers and the end-users of the services.

What has been the historical spending pattern for mental health services within the Department of the Interior?

Historical spending patterns for mental health services within the Department of the Interior are not detailed in the provided data. However, the award of a $66.5 million contract for a single year suggests a significant and ongoing commitment to providing these services. Federal agencies typically budget for employee health and wellness programs, including mental health support, on an annual basis. Trends in such spending can be influenced by factors like changes in employee needs, legislative mandates, and the overall economic climate. To understand the historical pattern, one would need to examine the Department's budget allocations and contract awards for similar services over multiple fiscal years.

What is the significance of the NAICS code 621420 (Outpatient Mental Health and Substance Abuse Centers) in understanding this contract?

The North American Industry Classification System (NAICS) code 621420 provides crucial context for this contract by defining the specific industry and type of service being procured. It signifies that the contract is for outpatient services, meaning treatment is provided on a non-residential basis. This typically includes counseling, therapy, and support groups for mental health and substance abuse issues. Understanding this code helps in benchmarking the contract against similar services, identifying potential contractors within this specialized field, and assessing the regulatory environment. It confirms that the Department of the Interior is seeking services focused on accessible, community-based care rather than more intensive, facility-based treatment.

Industry Classification

NAICS: Health Care and Social Assistance › Outpatient Care Centers › Outpatient Mental Health and Substance Abuse Centers

Product/Service Code: RESEARCH AND DEVELOPMENT › N – Health R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Centene Corporation (UEI: 809245525)

Address: 503 CANAL BLVD, RICHMOND, CA, 94804

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

Financial Breakdown

Contract Ceiling: $159,505,957

Exercised Options: $159,505,957

Current Obligation: $66,505,957

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: INN07PC10444

IDV Type: IDC

Timeline