Interior Department's $258M contract for health services saw a novation, with a firm fixed price and full and open competition

Contract Overview

Contract Amount: $258,217,100 ($258.2M)

Contractor: Carelon Health Federal Services, Inc

Awarding Agency: Department of the Interior

Start Date: 2015-05-01

End Date: 2019-04-30

Contract Duration: 1,460 days

Daily Burn Rate: $176.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: IGF::OT::IGF A. PURSUANT TO FAR 42.1203(H)(1), THE FOLLOWING IS A SUMMARY OF THE NOVATION AGREEMENT: ON 1 JANUARY 2015, VALUEOPTIONS, INC. MADE A CAPITAL CONTRIBUTION TO ITS WHOLLY-OWNED SUBSIDIARY, VALUEOPTIONS FEDERAL SERVICES, INC., THAT CONSISTED OF THE ASSETS OF VALUEOPTIONS, INC. S ACTIVE FEDERAL CONTRACT BUSINESS. ALL OF THE CORE PERSONNEL, FACILITIES, AND EQUIPMENT USED TO PERFORM VALUEOPTIONS, INC. S FEDERAL CONTRACTS WERE TRANSFERRED TO VALUEOPTIONS FEDERAL SERVICES, INC. INCLUDED IN THE TRANSFER WERE ACCOUNTS RECEIVABLE, PREPAID EXPENSES, OTHER RECEIVABLES, LEASEHOLD IMPROVEMENTS, AND VARIOUS EQUIPMENT AND SOFTWARE. BESIDES TRANSFERRING ALL OF THEIR FEDERAL CONTRACTS TO VALUEOPTIONS FEDERAL SERVICES, INC., ALL RELATED FEDERAL SUBCONTRACTS WERE TRANSFERRED AS WELL. A COPY OF THE LIST OF CONTRACTS AFFECTED IS ATTACHED TO THIS MODIFICATION. B. BLOCK 8 OF STANDARD FORM 30, NAME AND ADDRESS OF CONTRACTOR, AND BLOCK 15A OF STANDARD FORM 33, NAME AND ADDRESS OF OFFEROR, ARE MODIFIED AS FOLLOWS: FROM: VALUEOPTIONS, INC. 240 CORPORATE BOULEVARD NORFOLK, VA 23502 DUNS: 088192141 CAGE CODE: 3U2P7 TO: VALUEOPTIONS FEDERAL SERVICES, INC. 240 CORPORATE BOULEVARD NORFOLK, VA 23502 DUNS: 088192141 CAGE CODE: 3U2P7 C. EXCEPT AS PROVIDED HEREIN, ALL TERMS AND CONDITIONS OF THE CONTRACT REFERENCED IN ITEM 10A , REMAIN UNCHANGED AND IN FULL FORCE AND EFFECT.

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of the Interior obligated $258.2 million to CARELON HEALTH FEDERAL SERVICES, INC for work described as: IGF::OT::IGF A. PURSUANT TO FAR 42.1203(H)(1), THE FOLLOWING IS A SUMMARY OF THE NOVATION AGREEMENT: ON 1 JANUARY 2015, VALUEOPTIONS, INC. MADE A CAPITAL CONTRIBUTION TO ITS WHOLLY-OWNED SUBSIDIARY, VALUEOPTIONS FEDERAL SERVICES, INC., THAT CONSISTED OF THE ASSETS OF VALUEOPT… Key points: 1. The contract involved a novation agreement, transferring federal contract business from ValueOptions, Inc. to its subsidiary, ValueOptions Federal Services, Inc. 2. This transfer included core personnel, facilities, equipment, and all related federal contracts and subcontracts. 3. The contract was awarded under full and open competition, suggesting a competitive bidding process. 4. The contract type is a definitive contract with a firm fixed price, indicating predictable costs for the government. 5. The contract duration was 1460 days, spanning from May 1, 2015, to April 30, 2019. 6. The contract's primary purpose appears to be related to individual and family services, with a NAICS code of 624190.

Value Assessment

Rating: fair

The total award amount was over $258 million. Benchmarking this against similar contracts for health services requires detailed analysis of the specific services rendered and the scope of work. Without more granular data on the services provided and the number of individuals served, a precise value-for-money assessment is challenging. However, the firm fixed-price structure suggests an attempt to control costs. The novation itself does not inherently indicate a change in value but rather a change in corporate structure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. The data does not specify the number of bidders, but this method of procurement generally fosters price discovery and encourages competitive pricing. The transition to a subsidiary via a novation agreement after the initial award does not negate the original competitive nature of the procurement.

Taxpayer Impact: A full and open competition process is generally favorable for taxpayers as it aims to secure the best possible pricing through market forces.

Public Impact

Beneficiaries of this contract likely include individuals and families requiring the services outlined under NAICS code 624190 (Other Individual and Family Services). The services delivered are related to individual and family support, though the specific nature is not detailed in the provided data. The contract was awarded to a contractor operating in Virginia (VA), suggesting a potential geographic focus for service delivery or administrative operations. The transfer of core personnel during the novation implies that the workforce involved in performing federal contracts was maintained under the new corporate structure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The novation agreement, while a standard corporate procedure, could introduce complexities in tracking performance and accountability if not managed carefully.
Lack of specific details on the services provided makes it difficult to assess the effectiveness and true value of the contract.
The significant award amount necessitates robust oversight to ensure funds are used efficiently and effectively.

Positive Signals

The contract was awarded through full and open competition, indicating a competitive marketplace was leveraged.
The firm fixed-price contract type provides cost certainty for the government.
The transfer of assets and personnel during the novation suggests a continuity of operations and expertise.

Sector Analysis

The contract falls under the 'Other Individual and Family Services' sector (NAICS 624190). This sector encompasses a wide range of social assistance programs. The total award of over $258 million is substantial within this category, suggesting a significant scope of services. Comparable spending benchmarks would depend on the specific services offered, such as counseling, support, or case management, and the scale of the population served.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a specific set-aside criterion for this contract. Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from set-aside requirements for this particular award. The focus was on full and open competition.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the contracting officer and agency personnel responsible for monitoring performance and ensuring compliance with the contract terms. The novation agreement itself requires specific approvals and documentation, indicating a level of regulatory oversight. Transparency would be enhanced through regular reporting and performance reviews. Inspector General jurisdiction would apply to any potential fraud, waste, or abuse related to the contract.

Related Government Programs

Federal Health Services Contracts
Social Services Programs
Individual and Family Support Services
Government Contracting Novation Agreements

Risk Flags

Novation Agreement Complexity
Lack of Service Specificity
Potential for Cost Overruns (if scope poorly defined)
Performance Monitoring Challenges Post-Novation

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $258.2 million to CARELON HEALTH FEDERAL SERVICES, INC. IGF::OT::IGF A. PURSUANT TO FAR 42.1203(H)(1), THE FOLLOWING IS A SUMMARY OF THE NOVATION AGREEMENT: ON 1 JANUARY 2015, VALUEOPTIONS, INC. MADE A CAPITAL CONTRIBUTION TO ITS WHOLLY-OWNED SUBSIDIARY, VALUEOPTIONS FEDERAL SERVICES, INC., THAT CONSISTED OF THE ASSETS OF VALUEOPTIONS, INC. S ACTIVE FEDERAL CONTRACT BUSINESS. ALL OF THE CORE PERSONNEL, FACILITIES, AND EQUIPMENT USED TO PERFORM VALUEOPTIONS, INC. S FEDERAL CONTRACTS WERE TRANSFERRED TO VALUEOPTIONS FEDERAL SERVICES, INC. INCLUDE

Who is the contractor on this award?

The obligated recipient is CARELON HEALTH FEDERAL SERVICES, INC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $258.2 million.

What is the period of performance?

Start: 2015-05-01. End: 2019-04-30.

What specific services were provided under this contract, and how were they measured for effectiveness?

The provided data identifies the contract under NAICS code 624190, 'Other Individual and Family Services.' However, it does not detail the specific services rendered. These could range widely, encompassing areas like counseling, case management, support services for vulnerable populations, or family assistance programs. Effectiveness would typically be measured through performance metrics defined in the contract, such as client outcomes, service utilization rates, or satisfaction surveys. Without access to the contract's statement of work and performance reports, a precise assessment of service effectiveness is not possible from the given data.

How did the novation agreement impact the contractor's ability to perform and the government's oversight?

The novation agreement, where ValueOptions Federal Services, Inc. assumed the federal contracts of its parent company, ValueOptions, Inc., was designed to ensure continuity of operations. By transferring core personnel, facilities, and equipment, the intent was to maintain service delivery without disruption. From a government oversight perspective, novation agreements require formal approval processes, ensuring that the successor entity meets necessary qualifications. While the process aims for seamless transition, it can introduce administrative complexities in tracking performance history and ensuring accountability under the new entity. However, the core contractual obligations and performance standards remain.

What was the competitive landscape like for this contract, and how many bids were received?

The contract was awarded under 'full and open competition,' which signifies that the solicitation was made available to all responsible prospective contractors, and any responsible source could submit an offer. While the data confirms the competition type, it does not specify the number of bids received. A robust competitive process, ideally with multiple bidders, generally leads to better pricing and service options for the government. The absence of the number of bidders prevents a quantitative assessment of the competition's intensity but the 'full and open' designation suggests a broad market outreach.

How does the firm fixed-price contract type influence risk and cost control for the government?

A firm fixed-price (FFP) contract type is generally favored by the government for services where the scope of work is well-defined and risks are understood. Under an FFP contract, the contractor bears the primary responsibility for cost overruns, and the government pays a set price regardless of the contractor's actual costs. This provides significant cost certainty for the government and incentivizes the contractor to manage its expenses efficiently. For this $258 million contract, the FFP structure aims to lock in costs over the contract's duration, mitigating the risk of unexpected price increases for the government.

What is the historical spending pattern for this type of service within the Department of the Interior?

The provided data focuses on a single contract award of $258.2 million to ValueOptions Federal Services, Inc. (later Carelon Health Federal Services, Inc.) for services under NAICS code 624190. To understand historical spending patterns, one would need to analyze the Department of the Interior's expenditures on similar 'Other Individual and Family Services' over multiple fiscal years. This would involve examining prior contracts, their values, durations, and the specific services procured. Without this broader historical context, it's impossible to determine if this $258 million award represents an increase, decrease, or stable level of spending for such services within the agency.

Industry Classification

NAICS: Health Care and Social Assistance › Individual and Family Services › Other Individual and Family Services

Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: D12PS50899

Offers Received: 5

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1434 CROSSWAYS BLVD, CHESAPEAKE, VA, 23320

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

Financial Breakdown

Contract Ceiling: $419,760,100

Exercised Options: $258,217,100

Current Obligation: $258,217,100

Subaward Activity

Number of Subawards: 3

Total Subaward Amount: $43,901,275

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline