HHS Awards $284.6M for CMS Eligibility Appeals Operations Support to Maximus Federal Services

Contract Overview

Contract Amount: $284,575,263 ($284.6M)

Contractor: Maximus Federal Services, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2018-09-25

End Date: 2024-03-24

Contract Duration: 2,007 days

Daily Burn Rate: $141.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: ELIGIBILITY APPEALS OPERATIONS SUPPORT (EAOS)

Place of Performance

Location: FALLS CHURCH, FAIRFAX County, VIRGINIA, 22042

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $284.6 million to MAXIMUS FEDERAL SERVICES, INC. for work described as: ELIGIBILITY APPEALS OPERATIONS SUPPORT (EAOS) Key points: 1. Maximus Federal Services holds a significant contract for critical CMS operations. 2. The contract value is substantial, indicating a major investment in IT support. 3. Potential risks include vendor lock-in and the long duration of the contract. 4. The sector is IT services, specifically computer systems design.

Value Assessment

Rating: fair

The contract is a Cost Plus Fixed Fee type, which can lead to cost overruns if not managed carefully. The total award value of $284.6M over approximately 5.75 years suggests a significant investment, but without specific performance metrics or benchmarks, a precise value assessment is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is positive for price discovery. However, it is a delivery order, suggesting it might be part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract, the specifics of which are not detailed here.

Taxpayer Impact: Full and open competition generally aims to secure the best value for taxpayers. The fixed fee component provides some cost control, but the Cost Plus aspect requires diligent oversight to ensure efficiency.

Public Impact

Impacts beneficiaries of Medicare and Medicaid by ensuring the proper functioning of eligibility appeals processes. Supports the operational efficiency of the Centers for Medicare and Medicaid Services (CMS). Contributes to the stability and reliability of critical healthcare IT infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can incentivize higher spending.
Long contract duration (over 5 years) may limit flexibility and opportunities for newer solutions.
No indication of small business participation.

Positive Signals

Awarded under full and open competition.
Supports critical government healthcare operations.
Clear delivery order structure.

Sector Analysis

This contract falls within the IT services sector, specifically computer systems design. Spending in this area is substantial across federal agencies, supporting everything from IT infrastructure to specialized operational software. Benchmarks for similar contracts vary widely based on scope and complexity.

Small Business Impact

The data indicates that small business participation was not a factor in this award (sb: false). This suggests the prime contractor, Maximus Federal Services, is likely a large business, and there is no explicit mention of subcontracting to small businesses.

Oversight & Accountability

The Cost Plus Fixed Fee structure necessitates robust oversight from CMS to ensure costs remain reasonable and that the fixed fee is justified by performance. Regular audits and performance reviews would be crucial for accountability.

Related Government Programs

Computer Systems Design Services
Department of Health and Human Services Contracting
Centers for Medicare and Medicaid Services Programs

Risk Flags

Cost Plus Fixed Fee structure can lead to higher costs if not managed tightly.
Long contract duration may limit agility and adoption of newer technologies.
No explicit mention of small business subcontracting goals.
Potential for vendor lock-in over the contract's lifespan.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $284.6 million to MAXIMUS FEDERAL SERVICES, INC.. ELIGIBILITY APPEALS OPERATIONS SUPPORT (EAOS)

Who is the contractor on this award?

The obligated recipient is MAXIMUS FEDERAL SERVICES, INC..

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 $284.6 million.

What is the period of performance?

Start: 2018-09-25. End: 2024-03-24.

What specific IT systems and services are included under the EAOS contract, and how do they align with CMS's strategic IT modernization goals?

The contract is for 'Computer Systems Design Services' supporting 'Eligibility Appeals Operations Support (EAOS)'. While specific system details are not provided, it likely involves maintaining, enhancing, or developing systems critical for processing and managing eligibility appeals for Medicare and Medicaid beneficiaries. Alignment with CMS's IT modernization would depend on whether these systems are being updated, integrated with newer platforms, or if the support includes transitioning to cloud-based solutions.

Given the Cost Plus Fixed Fee structure, what mechanisms are in place to control costs and prevent potential overruns, especially over a nearly 6-year period?

Cost Plus Fixed Fee (CPFF) contracts require strong government oversight. CMS should be actively monitoring the contractor's incurred costs against the estimated costs, ensuring all expenses are allowable and reasonable. Performance metrics tied to the fixed fee are crucial, incentivizing the contractor to meet objectives efficiently. Regular audits and detailed reporting requirements are standard practices to manage CPFF contracts effectively and mitigate overrun risks.

How does the full and open competition for this delivery order ensure that taxpayers are receiving the best value, considering the potential for long-term vendor reliance?

Full and open competition at the outset of the IDIQ contract (if this is a delivery order under one) is designed to establish a competitive baseline. For this specific delivery order, the competition ensures that the chosen vendor offers the best value at that point. However, long-term reliance is a valid concern. Agencies should periodically reassess the market and consider re-competing the underlying IDIQ or specific task orders to ensure continued value and incorporate innovation.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: NIHJT2010001

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 3120 FAIRVIEW PARK DR STE 400, FALLS CHURCH, VA, 22042

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

Financial Breakdown

Contract Ceiling: $336,972,862

Exercised Options: $284,575,263

Current Obligation: $284,575,263

Actual Outlays: $119,051,825

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSN316201600006W

IDV Type: GWAC

Timeline