DoD's $20.7M contract with Magellan Healthcare Inc. for telemarketing services awarded under full and open competition

Contract Overview

Contract Amount: $20,717,382 ($20.7M)

Contractor: Magellan Healthcare Inc

Awarding Agency: Department of Defense

Start Date: 2011-09-30

End Date: 2016-10-29

Contract Duration: 1,856 days

Daily Burn Rate: $11.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: BASE PERIOD

Place of Performance

Location: AVON, HARTFORD County, CONNECTICUT, 06001

State: Connecticut Government Spending

Plain-Language Summary

Department of Defense obligated $20.7 million to MAGELLAN HEALTHCARE INC for work described as: BASE PERIOD Key points: 1. The contract's value of $20.7 million over its period of performance suggests a significant need for the services provided. 2. Awarded under full and open competition, this contract indicates a market where multiple vendors could potentially offer these services. 3. The firm-fixed-price contract type suggests that the government aimed to establish a predictable cost for the services. 4. The duration of the contract (1856 days) points to a long-term requirement for telemarketing and contact center operations. 5. The absence of small business set-aside flags indicates that the competition was not specifically targeted towards smaller enterprises. 6. The North American Industry Classification System (NAICS) code 561422 identifies the specific industry focus on telemarketing and contact centers.

Value Assessment

Rating: fair

Benchmarking the value of this $20.7 million contract requires more granular data on the specific services rendered. However, for a five-year period, this amount suggests a substantial operational scale. Without comparable contract data for similar telemarketing and contact center services within the Department of Defense or other federal agencies, a precise value-for-money assessment is challenging. The firm-fixed-price structure implies that the contractor assumed the risk for cost overruns, which can be a positive indicator for the government if the services were delivered as specified.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition,' meaning all responsible sources were permitted to submit a bid. The presence of 7 bidders indicates a competitive landscape for these telemarketing and contact center services. A higher number of bidders generally suggests a healthier competition, which can lead to better pricing and service offerings for the government. The fact that multiple entities vied for this contract implies that the market is sufficiently robust to support such requirements.

Taxpayer Impact: The robust competition for this contract likely resulted in more favorable pricing for taxpayers compared to a sole-source or limited competition scenario. It ensures that the government received proposals from various providers, driving down costs through market forces.

Public Impact

The Department of the Army benefits from enhanced communication capabilities through these telemarketing and contact center services. The contract supports the delivery of essential outreach, customer service, or information dissemination functions. The geographic impact is primarily within Connecticut, where the contractor is located, but the services could support broader Army operations. The contract likely supports a workforce involved in telemarketing, customer service, and administrative support roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for service quality degradation if contractor resources are stretched thin across multiple large contracts.
Risk of increased costs if the firm-fixed-price contract did not adequately account for unforeseen service demands.
Dependency on a single contractor for critical communication functions could pose an operational risk if performance falters.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Firm-fixed-price contract type shifts cost overrun risk to the contractor.
Long contract duration (1856 days) indicates a stable, ongoing need and potential for established service delivery processes.

Sector Analysis

The telemarketing and contact center services sector is a vital component of business operations across many industries, including government. This contract falls under the broader business support services industry. The market for these services is characterized by a mix of large BPO (Business Process Outsourcing) providers and specialized call center firms. Government spending in this area often supports functions like constituent outreach, help desks, and program administration. Comparable spending benchmarks are difficult to establish without knowing the exact scope of services, but federal agencies frequently contract for such support to manage large volumes of communication.

Small Business Impact

The contract was not awarded as a small business set-aside, and the 'sb' field is false, indicating no specific preference for small businesses in the primary award. This suggests that the competition was open to all responsible sources, including large businesses. There is no explicit information provided regarding subcontracting plans for small businesses. Without this data, it's difficult to assess the direct impact on the small business ecosystem, though large prime contracts often have subcontracting goals that can benefit smaller firms.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the relevant program office within the Department of the Army. Accountability measures are inherent in the firm-fixed-price contract type, requiring the contractor to deliver specified services within the agreed price. Transparency is generally facilitated through contract award databases like FPDS, where basic information is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Defense-wide Telecommunications and Information Systems Support Services
Army Customer Relationship Management Systems
Federal Contact Center Services
Department of Defense Outreach Programs

Risk Flags

Contract Duration
Contract Value
Competition Level
Contract Type

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $20.7 million to MAGELLAN HEALTHCARE INC. BASE PERIOD

Who is the contractor on this award?

The obligated recipient is MAGELLAN HEALTHCARE INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Department of the Army).

What is the total obligated amount?

The obligated amount is $20.7 million.

What is the period of performance?

Start: 2011-09-30. End: 2016-10-29.

What specific telemarketing and contact center services were provided under this contract?

The provided data indicates the contract is for 'Telemarketing Bureaus and Other Contact Centers' (NAICS 561422) awarded to Magellan Healthcare Inc. by the Department of the Army. However, the specific nature of the services—such as whether they involved outbound sales, inbound customer support, appointment setting, lead generation, or public health outreach—is not detailed in the summary data. Understanding the precise services is crucial for evaluating performance, cost-effectiveness, and relevance to the Army's mission. Without this detail, the contract's impact and value remain generalized.

How does the $20.7 million contract value compare to similar telemarketing/contact center contracts within the DoD?

Direct comparison of the $20.7 million value for this 1856-day (approx. 5-year) contract requires access to a database of similar DoD contracts with detailed service scopes and pricing structures. However, for a large federal agency like the Department of the Army, a $4 million annual spend on specialized contact center services is within a plausible range, especially if it supports a significant program or a large number of users/stakeholders. The firm-fixed-price nature suggests a defined scope, and the full and open competition with 7 bidders implies market availability and potentially competitive pricing, though the actual value-for-money depends heavily on service quality and outcomes achieved.

What were the key performance indicators (KPIs) and service level agreements (SLAs) for this contract?

The provided summary data does not include details on Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) associated with this contract. These metrics are critical for objectively assessing the contractor's performance and ensuring the government received the expected value. Typical KPIs for contact center services might include call answer rates, average handling time, customer satisfaction scores, first-call resolution rates, and adherence to schedule. Without knowing these specific targets and Magellan Healthcare Inc.'s performance against them, a thorough evaluation of the contract's success and the quality of services delivered is not possible.

What is Magellan Healthcare Inc.'s track record with federal contracts, particularly within the DoD?

Magellan Healthcare Inc. has a history of receiving federal contracts, including those with the Department of Defense. While this specific contract highlights a $20.7 million award for telemarketing and contact center services, their broader federal portfolio may include health services, IT, or other support functions. A comprehensive review of their track record would involve examining past performance evaluations, any contract disputes or terminations, and the types and values of other contracts they have held. This information is typically available through federal procurement data systems and past performance databases, which can inform an assessment of their reliability and capability.

Were there any significant challenges or issues encountered during the performance of this contract?

The provided summary data does not contain information regarding specific challenges or issues encountered during the performance of this $20.7 million contract. Federal contract performance can sometimes involve unforeseen difficulties, such as changes in requirements, technical problems, or contractor performance issues. Information on such challenges, if they occurred and were formally documented (e.g., through contract modifications, cure notices, or performance reviews), would typically be found in more detailed contract files or agency performance reports. Without such records, it's assumed the contract proceeded without major, reportable impediments.

How has spending on telemarketing and contact center services by the Department of the Army evolved over time?

Analyzing the evolution of spending on telemarketing and contact center services by the Department of the Army requires a historical review of procurement data over multiple fiscal years. This $20.7 million contract, awarded in late 2011 and ending in late 2016, represents a snapshot of spending during that period. To understand trends, one would need to examine spending patterns before and after this contract, identify other similar contracts awarded, and assess whether the Army has increased or decreased its reliance on outsourced contact center functions. Factors like technological advancements, changing communication needs, and budget allocations would influence these spending patterns.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › Telemarketing Bureaus and Other Contact Centers

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: W81XWH11R0350

Offers Received: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6950 COLUMBIA GATEWAY DR, COLUMBIA, MD, 21046

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

Financial Breakdown

Contract Ceiling: $20,918,034

Exercised Options: $20,717,382

Current Obligation: $20,717,382

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline