HHS Awards $471M Contract to Noridian Healthcare Solutions for Direct Health and Medical Insurance Carriers
Contract Overview
Contract Amount: $471,193,973 ($471.2M)
Contractor: Noridian Healthcare Solutions, LLC
Awarding Agency: Department of Health and Human Services
Start Date: 2018-07-15
End Date: 2025-11-30
Contract Duration: 2,695 days
Daily Burn Rate: $174.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: COST PLUS AWARD FEE
Sector: Healthcare
Official Description: IGF::OT:IGF SOLICITATION OF JURISDICTION F
Place of Performance
Location: FARGO, CASS County, NORTH DAKOTA, 58103
Plain-Language Summary
Department of Health and Human Services obligated $471.2 million to NORIDIAN HEALTHCARE SOLUTIONS, LLC for work described as: IGF::OT:IGF SOLICITATION OF JURISDICTION F Key points: 1. Significant contract value of $471M awarded to a single vendor. 2. Competition method is 'FULL AND OPEN COMPETITION', suggesting a competitive bidding process. 3. Contract type is 'COST PLUS AWARD FEE', which can incentivize performance but requires careful oversight. 4. The sector is Healthcare, specifically Direct Health and Medical Insurance Carriers.
Value Assessment
Rating: fair
The contract value is substantial. Without specific benchmarks for similar 'Direct Health and Medical Insurance Carriers' contracts, assessing the pricing's fairness is difficult. The 'COST PLUS AWARD FEE' structure necessitates monitoring to ensure costs remain reasonable and aligned with performance.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'FULL AND OPEN COMPETITION', indicating multiple bidders were likely considered. This method generally promotes price discovery and competitive pricing, though the final award price depends on the specific bids received and the negotiation process.
Taxpayer Impact: Taxpayer funds are being used for this contract. The 'COST PLUS AWARD FEE' structure means that costs are reimbursed, plus a fee that can be adjusted based on performance, requiring diligent oversight to ensure value for money.
Public Impact
Impacts beneficiaries of Medicare and Medicaid services by ensuring continuity of insurance carrier operations. Supports the administrative functions of healthcare insurance processing and management. Potential for improved healthcare access and efficiency through contracted services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee structure requires robust oversight to manage costs and ensure performance.
- Long contract duration (2018-2025) may limit flexibility for future technological or programmatic changes.
- Lack of specific performance metrics or award fee criteria makes it hard to assess value realization.
Positive Signals
- Full and open competition suggests a potentially competitive award process.
- Contract aims to ensure essential healthcare insurance carrier services are maintained.
- Vendor has a long-term contract, implying established capabilities.
Sector Analysis
The healthcare insurance sector is critical for national health services. Spending in this area often involves large, complex contracts to manage insurance programs like Medicare and Medicaid, with significant taxpayer investment.
Small Business Impact
The data does not indicate any specific provisions or set-asides for small businesses in this contract. Large, comprehensive contracts like this often favor larger, established companies.
Oversight & Accountability
The 'COST PLUS AWARD FEE' structure necessitates strong oversight from the Centers for Medicare and Medicaid Services to monitor costs, ensure performance targets are met, and justify the award fee. Regular audits and performance reviews are crucial.
Related Government Programs
- Direct Health and Medical Insurance Carriers
- Department of Health and Human Services Contracting
- Centers for Medicare and Medicaid Services Programs
Risk Flags
- Significant contract value.
- Cost Plus Award Fee structure.
- Long contract duration.
- Lack of specific performance metrics in provided data.
- Potential for cost overruns without strict oversight.
Tags
direct-health-and-medical-insurance-carr, department-of-health-and-human-services, nd, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $471.2 million to NORIDIAN HEALTHCARE SOLUTIONS, LLC. IGF::OT:IGF SOLICITATION OF JURISDICTION F
Who is the contractor on this award?
The obligated recipient is NORIDIAN HEALTHCARE 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 $471.2 million.
What is the period of performance?
Start: 2018-07-15. End: 2025-11-30.
How does the awarded price compare to industry benchmarks for similar direct health and medical insurance carrier services?
Without access to proprietary pricing data or specific industry benchmarks for comparable 'Direct Health and Medical Insurance Carriers' contracts, a precise comparison is challenging. However, the $471M value over approximately seven years suggests a significant investment. Further analysis would require detailed cost breakdowns and comparisons with similar government or private sector contracts to determine if the pricing represents good value for the services rendered.
What are the key performance indicators (KPIs) and award fee criteria tied to this contract, and how is performance being measured?
The provided data does not specify the key performance indicators (KPIs) or award fee criteria for this 'COST PLUS AWARD FEE' contract. Effective oversight requires clearly defined, measurable KPIs that align with the contract's objectives. The Centers for Medicare and Medicaid Services must have a robust system in place to track performance against these criteria to ensure Noridian Healthcare Solutions is meeting its obligations and to justify any awarded fees.
What is the potential impact of this contract's long duration and cost-plus structure on innovation and cost-efficiency in healthcare insurance administration?
A long-term contract (2018-2025) with a cost-plus structure can sometimes disincentivize innovation if the vendor is not strongly motivated to find efficiencies beyond meeting basic requirements. While the award fee component aims to encourage performance, the inherent nature of cost-plus might lead to less aggressive cost-saving measures compared to fixed-price contracts. This necessitates proactive management and clear incentives for continuous improvement and adoption of new technologies.
Industry Classification
NAICS: Finance and Insurance › Insurance Carriers › Direct Health and Medical Insurance Carriers
Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: HHSM5002017RFP0005
Offers Received: 4
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 900 42TH ST S, FARGO, ND, 58108
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $598,113,043
Exercised Options: $574,091,819
Current Obligation: $471,193,973
Actual Outlays: $306,928,903
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2018-07-15
Current End Date: 2025-11-30
Potential End Date: 2026-01-31 00:00:00
Last Modified: 2025-10-31
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