HHS awarded $121.9M for FFS transition costs to Qlarant Integrity Solutions LLC over 9 years

Contract Overview

Contract Amount: $121,913,385 ($121.9M)

Contractor: Qlarant Integrity Solutions LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2008-09-30

End Date: 2018-03-31

Contract Duration: 3,469 days

Daily Burn Rate: $35.1K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS AWARD FEE

Sector: Healthcare

Official Description: ZONE 4 - FFS TRANSITION COSTS

Place of Performance

Location: EASTON, TALBOT County, MARYLAND, 21601

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $121.9 million to QLARANT INTEGRITY SOLUTIONS LLC for work described as: ZONE 4 - FFS TRANSITION COSTS Key points: 1. Contract value represents significant investment in healthcare transition processes. 2. Sole awardee suggests potential for specialized expertise or limited market availability. 3. Long contract duration indicates a sustained need for these transition services. 4. Cost-plus award fee structure incentivizes performance while managing costs. 5. Focus on FFS transition costs highlights a critical area of healthcare administration. 6. The contract's scope is within professional, scientific, and technical services.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific service details and comparable contracts. The total award of $121.9 million over nearly a decade suggests a substantial, ongoing need for the services provided. However, without more granular data on the specific deliverables and performance metrics, it's difficult to definitively assess value for money. The cost-plus award fee structure allows for flexibility but requires careful oversight to ensure cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to compete. The number of bidders is not specified, but full and open competition generally promotes a competitive environment, which can lead to better pricing and service innovation. This approach suggests that the government sought the best possible solution from the widest range of qualified vendors.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it aims to secure the best value through market forces, potentially leading to lower costs and higher quality services.

Public Impact

Beneficiaries include the Centers for Medicare and Medicaid Services (CMS) in their efforts to manage and transition healthcare payment systems. Services delivered likely involve analysis, consulting, and technical support related to Fee-For-Service (FFS) payment models. The geographic impact is primarily national, given CMS's role in administering federal healthcare programs. Workforce implications may involve specialized roles in healthcare administration, data analysis, and program management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to vendor lock-in if not managed proactively.
Cost-plus award fee contracts can sometimes lead to cost overruns if not tightly controlled.
Lack of specific performance metrics in the provided data makes it hard to gauge efficiency.
The broad NAICS code 'All Other Professional, Scientific, and Technical Services' lacks specificity on the exact nature of the work.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
The contract duration indicates a sustained and critical need for these services.
Qlarant Integrity Solutions LLC's tenure on this contract suggests a level of established performance.
The focus on transition costs points to efforts in modernizing healthcare payment systems.

Sector Analysis

This contract falls within the Professional, Scientific, and Technical Services sector, a broad category encompassing a wide range of expertise. Within healthcare, this sector is crucial for supporting administrative functions, policy analysis, and technological advancements. Comparable spending in this area often involves large, multi-year contracts for program management, IT support, and consulting services, reflecting the complexity and scale of federal healthcare operations.

Small Business Impact

The provided data indicates that this contract was not specifically set aside for small businesses (sb: false) and there is no indication of small business subcontracting goals (ss: false). Therefore, the primary focus was likely on large business capabilities. This means that opportunities for small businesses to participate in this specific contract may be limited, unless they are part of a larger subcontracting effort not detailed here.

Oversight & Accountability

Oversight for this contract would primarily reside with the Centers for Medicare and Medicaid Services (CMS), a division of HHS. As a cost-plus award fee contract, CMS would be responsible for monitoring expenditures, evaluating performance against award criteria, and ensuring that the contractor delivers value. Transparency would be facilitated through contract reporting requirements and potentially through HHS's Inspector General's office for audits and investigations.

Related Government Programs

Medicare Administrative Contracts (MACs)
Medicaid Information Technology Architecture (MITA)
Healthcare Fraud and Abuse Control Program
Centers for Medicare & Medicaid Services (CMS) IT Modernization

Risk Flags

Long contract duration may increase risk of vendor lock-in.
Cost-plus award fee structure requires diligent oversight to control costs.
Broad service category lacks specificity, potentially obscuring performance details.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $121.9 million to QLARANT INTEGRITY SOLUTIONS LLC. ZONE 4 - FFS TRANSITION COSTS

Who is the contractor on this award?

The obligated recipient is QLARANT INTEGRITY SOLUTIONS LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Medicare and Medicaid Services).

What is the total obligated amount?

The obligated amount is $121.9 million.

What is the period of performance?

Start: 2008-09-30. End: 2018-03-31.

What specific services did Qlarant Integrity Solutions LLC provide under this contract?

The contract data indicates the award was for 'ZONE 4 - FFS TRANSITION COSTS' under NAICS code 541990 (All Other Professional, Scientific, and Technical Services). While the specific services are not detailed, this suggests Qlarant likely provided support related to the transition of healthcare payment systems from Fee-For-Service (FFS) models. This could encompass a range of activities such as data analysis, process improvement, policy interpretation, system integration support, and program management to facilitate shifts in healthcare reimbursement methodologies. The 'award fee' component implies that their performance was evaluated against specific criteria, and they received additional compensation based on exceeding expectations in delivering these transition-related services.

How does the $121.9 million award compare to similar contracts for healthcare transition services?

Direct comparisons for 'FFS Transition Costs' are difficult due to the specialized nature and the broad NAICS code used. However, large federal contracts supporting major healthcare program transitions, like those managed by CMS, often run into hundreds of millions of dollars over several years. For instance, contracts for modernizing IT systems or implementing new payment models can be substantial. The $121.9 million awarded to Qlarant over approximately 9.5 years averages around $12.8 million annually. This figure appears reasonable for a significant, long-term support role within a federal agency managing complex healthcare programs, though without specific service scope, a precise benchmark is elusive.

What are the key risks associated with a cost-plus award fee contract of this magnitude and duration?

A primary risk with Cost-Plus Award Fee (CPAF) contracts is the potential for cost escalation if the government's oversight and management of allowable costs are not rigorous. The contractor has an incentive to incur costs to achieve the award fee, which could lead to spending exceeding initial projections if not carefully monitored. For a contract of this size ($121.9M) and duration (nearly 10 years), risks include scope creep, potential for inefficiencies to go unnoticed, and the challenge of maintaining consistent performance and oversight over an extended period. Ensuring clear performance metrics and robust auditing processes are critical to mitigating these risks.

What does the contract's duration of over 9 years imply about the nature of the services and CMS's needs?

The contract's duration of approximately 9.5 years (from September 2008 to March 2018) strongly suggests that the services provided were critical, long-term, and required sustained effort. Transitioning healthcare payment systems, especially within a large federal program like Medicare or Medicaid, is not a short-term project. It involves complex policy implementation, system adjustments, stakeholder engagement, and ongoing monitoring. A long contract duration indicates that CMS viewed these transition costs as a persistent operational need rather than a one-time fix, requiring a stable, dedicated vendor relationship to ensure continuity and successful program evolution.

How has spending on 'All Other Professional, Scientific, and Technical Services' by HHS evolved over the period of this contract?

HHS consistently spends billions annually on professional, scientific, and technical services, reflecting the vast scope of its mission. Over the period of this contract (FY2008-FY2018), spending in this category likely saw fluctuations driven by legislative changes, new healthcare initiatives (like the Affordable Care Act), and evolving technological needs. While this specific $121.9M contract represents a portion of that spending, overall HHS obligations for services under NAICS 541990 and related categories would have been significantly higher, reflecting a broad demand for external expertise across research, administration, and technical support.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Qlarant Inc

Address: 28464 MARLBORO AVE, EASTON, MD, 21601

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

Financial Breakdown

Contract Ceiling: $121,913,385

Exercised Options: $121,913,385

Current Obligation: $121,913,385

Actual Outlays: $342,146

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HHSM500200800027I

IDV Type: IDC

Timeline