HHS awards $82.5M contract for physician services to Colella Consulting LLC, raising value-for-money questions

Contract Overview

Contract Amount: $82,550 ($82.5K)

Contractor: Colella Consulting LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2024-05-17

End Date: 2027-07-14

Contract Duration: 1,153 days

Daily Burn Rate: $72/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: B READER SERVICES

Place of Performance

Location: GIBSONIA, ALLEGHENY County, PENNSYLVANIA, 15044

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $82,550 to COLELLA CONSULTING LLC for work described as: B READER SERVICES Key points: 1. The contract's value of $82.5 million over approximately three years warrants scrutiny regarding its cost-effectiveness. 2. Awarded as a purchase order, the procurement method suggests limited competition and potential for price inflation. 3. The lack of competition raises concerns about whether the government secured the best possible value. 4. The firm fixed-price contract type shifts risk to the contractor, but the overall value proposition needs further analysis. 5. The contract supports physician services, a critical area within healthcare, but its specific impact is unclear without more detail. 6. The duration of the contract (over three years) necessitates a long-term assessment of performance and value.

Value Assessment

Rating: questionable

The contract value of $82.5 million for physician services over approximately three years appears substantial. Without comparable contract data or detailed service descriptions, it is difficult to benchmark the value for money. The 'NOT COMPETED UNDER SAP' designation suggests a procurement process that may not have maximized competitive pressure, potentially leading to a higher price than if the contract had been fully and openly competed. Further analysis of the specific services rendered and the contractor's proposed pricing structure is needed to definitively assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not competed under the Simplified Acquisition Procedures (SAP), indicating it was likely awarded through a non-competitive or limited competition process. The 'NOT COMPETED UNDER SAP' status suggests that full and open competition was not pursued. This limited competition raises concerns about whether the government explored all available sources and obtained the most favorable pricing. The absence of multiple bidders means there was no direct comparison of offers to drive down costs.

Taxpayer Impact: Limited competition can result in higher costs for taxpayers as the government may not benefit from the price reductions typically achieved through a robust bidding process. This could mean less efficient use of public funds.

Public Impact

The contract is intended to provide physician services, which directly impacts healthcare delivery within the Department of Health and Human Services (HHS). Beneficiaries of these services are likely patients seeking medical care facilitated by HHS programs. The geographic impact is centered around the Centers for Disease Control and Prevention (CDC) in Pennsylvania, where the contract is managed. The contract supports the operational capacity of the CDC by ensuring access to necessary medical expertise.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of full and open competition may lead to suboptimal pricing.
The substantial contract value requires rigorous performance monitoring to ensure value for money.
Limited transparency in the procurement process hinders public assessment of fairness and efficiency.

Positive Signals

Awarding a contract for physician services addresses a critical need within the agency.
The firm fixed-price contract structure transfers some financial risk to the contractor.
The contract duration allows for continuity of essential services.

Sector Analysis

This contract falls within the Healthcare sector, specifically concerning the provision of physician services. The North American Industry Classification System (NAICS) code 621111, 'Offices of Physicians (except Mental Health Specialists),' indicates a focus on direct medical care. The overall market for physician services is vast, with significant government spending in this area to support public health initiatives and agency operations. Benchmarking this contract's value would require comparison against similar service contracts within federal agencies or the broader healthcare market, considering the specialized nature of the services.

Small Business Impact

The data indicates this contract was not competed under SAP and does not specify any small business set-aside provisions (ss: false, sb: false). This suggests that small businesses were likely not specifically targeted or prioritized in this procurement. Consequently, there are no direct subcontracting implications for small businesses stemming from a set-aside. The impact on the small business ecosystem is neutral to potentially negative if opportunities were missed due to the procurement method.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Health and Human Services (HHS) and the Centers for Disease Control and Prevention (CDC). As a purchase order, oversight might be less formalized than for larger, more complex contracts. Accountability measures would rely on performance reviews and adherence to the firm fixed-price terms. Transparency is limited by the non-competitive nature of the award; detailed justifications for the sole-source or limited-source award would be crucial for assessing accountability. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

HHS Physician Services Contracts
CDC Medical Support Contracts
Federal Healthcare Procurement
Purchase Orders for Professional Services

Risk Flags

Limited Competition
Lack of Transparency in Procurement
High Contract Value

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $82,550 to COLELLA CONSULTING LLC. B READER SERVICES

Who is the contractor on this award?

The obligated recipient is COLELLA CONSULTING LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Disease Control and Prevention).

What is the total obligated amount?

The obligated amount is $82,550.

What is the period of performance?

Start: 2024-05-17. End: 2027-07-14.

What specific physician services are being procured under this contract, and how do they align with the CDC's mission?

The provided data indicates the NAICS code is 621111, 'Offices of Physicians (except Mental Health Specialists).' This suggests the contract is for general physician services, excluding mental health specialists. While the specific services are not detailed, they are likely related to supporting the operational needs of the Centers for Disease Control and Prevention (CDC). This could include providing medical evaluations for personnel, supporting public health research requiring clinical expertise, or offering direct medical services to specific populations relevant to CDC initiatives. The alignment with the CDC's mission would depend on whether these physician services directly contribute to disease prevention, health promotion, environmental health, or emergency preparedness efforts.

What is the justification for awarding this contract without full and open competition?

The data states the contract was 'NOT COMPETED UNDER SAP' (Simplified Acquisition Procedures). This designation implies that the procurement did not follow the standard full and open competitive process typically used for acquisitions above the SAP threshold. Agencies typically justify non-competitive awards due to reasons such as: only one responsible source being available, an urgent and compelling need, or a specific statutory authority. Without further documentation from the agency, the precise justification for this limited competition remains unclear. This lack of transparency raises concerns about potential missed opportunities for better pricing and broader contractor engagement.

How does the $82.5 million contract value compare to similar physician service contracts awarded by federal agencies?

Benchmarking the $82.5 million contract value requires access to detailed data on comparable contracts, including the specific services rendered, duration, and geographic location. However, as a general estimate, $82.5 million over approximately three years (1153 days) represents an average annual value of roughly $27.5 million. This is a significant sum for physician services. Federal agencies, particularly within HHS and the Department of Defense, frequently procure physician services. Without specific details on the scope of work, it's challenging to make a direct comparison. However, contracts of this magnitude often involve extensive support, specialized expertise, or services provided across multiple locations, suggesting a substantial requirement.

What are the potential risks associated with awarding a large contract like this through limited competition?

The primary risk associated with awarding a large contract like this through limited competition is the potential for paying a higher price than necessary. When competition is restricted, contractors face less pressure to offer their most competitive rates, as there are fewer alternatives for the government to consider. This can lead to suboptimal value for taxpayer money. Additionally, limited competition may reduce the pool of innovative solutions or specialized expertise available to the government. It can also create an uneven playing field, potentially disadvantaging capable small businesses or new entrants that were not afforded an opportunity to bid. Furthermore, a lack of transparency in the procurement process can raise concerns about fairness and potential impropriety.

What performance metrics or oversight mechanisms are likely in place for this contract?

Given that this is a firm fixed-price contract awarded as a purchase order, the primary performance metric will be the contractor's successful delivery of the agreed-upon physician services within the specified timeframe and quality standards. Oversight would typically involve a Contracting Officer's Representative (COR) or a similar designated official responsible for monitoring performance, ensuring compliance with contract terms, and approving invoices for payment. While the data doesn't specify the exact oversight mechanisms, standard government contracting practices would necessitate regular performance reviews, progress reports from the contractor, and potentially site visits or audits to ensure the services meet requirements. The effectiveness of oversight is crucial for mitigating risks associated with limited competition.

Industry Classification

NAICS: Health Care and Social Assistance › Offices of Physicians › Offices of Physicians (except Mental Health Specialists)

Product/Service Code: MEDICAL SERVICES › MEDICAL, DENTAL, AND SURGICAL SVCS

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 75D301-24-Q-77741

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 219 ROYAL DOULTON CT, GIBSONIA, PA, 15044

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $137,700

Exercised Options: $82,650

Current Obligation: $82,550

Actual Outlays: $41,250

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline