HHS awards $25M+ contract to AVAR CONSULTING INC for management consulting services

Contract Overview

Contract Amount: $25,087,797 ($25.1M)

Contractor: Avar Consulting Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2019-05-08

End Date: 2024-05-07

Contract Duration: 1,826 days

Daily Burn Rate: $13.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: Other

Official Description: NATIONAL COORDINATING&OVERSIGHT REVIEW CENTER (NCORC) AWARD

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $25.1 million to AVAR CONSULTING INC for work described as: NATIONAL COORDINATING&OVERSIGHT REVIEW CENTER (NCORC) AWARD Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. AVAR CONSULTING INC selected for 'Other Management Consulting Services' under NAICS code 541618. 3. The contract has a duration of 1826 days, indicating a long-term engagement. 4. This award represents a significant investment by CMS in external consulting expertise. 5. The contract type is Cost Plus Fixed Fee, which allows for cost reimbursement plus a fixed fee. 6. The base award amount is over $13.7 million, with a total potential value exceeding $25 million.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific deliverables and performance metrics. The Cost Plus Fixed Fee structure can sometimes lead to higher costs if not managed tightly. However, the fixed fee component provides some cost certainty for the government. Comparing this to similar large-scale management consulting contracts within HHS would provide a clearer picture of its value proposition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. With two bidders, the competition level appears moderate. This suggests that while there was some competition, it may not have been as robust as in scenarios with a larger number of proposals, potentially impacting price discovery.

Taxpayer Impact: A competitive bidding process generally benefits taxpayers by encouraging lower prices and better service offerings. The presence of two bidders suggests a reasonable level of competition, but further analysis of the proposals could reveal if the pricing was optimized.

Public Impact

The Centers for Medicare and Medicaid Services (CMS) is the primary beneficiary, receiving management consulting support. Services delivered are expected to enhance operational efficiency and strategic planning within CMS. The contract's impact is primarily within the federal government, specifically CMS operations. Workforce implications are likely to involve specialized consulting roles, potentially augmenting existing federal staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to incur costs, as they are reimbursed, with the fixed fee potentially not scaling with efficiency.
Limited competition (two bidders) might mean less aggressive pricing than a more crowded field.
The long duration of the contract could lead to scope creep if not managed diligently.

Positive Signals

Awarded through full and open competition, ensuring a broad range of potential contractors could participate.
The fixed fee component provides a degree of cost control and predictability for the government.
The contract addresses a need for specialized management consulting services within a critical agency.

Sector Analysis

This contract falls within the Management Consulting Services sector, a broad category encompassing strategic planning, operational improvement, and organizational development. The federal government is a significant consumer of these services, particularly within large agencies like HHS. Comparable spending benchmarks would involve looking at other large federal contracts for similar consulting services, often categorized under NAICS code 541618.

Small Business Impact

The data indicates that small business participation (sb: false) was not a specific set-aside requirement for this contract. There is no explicit information on subcontracting plans for small businesses. This suggests that the primary contractor, AVAR CONSULTING INC, is likely a larger entity, and the direct impact on the small business ecosystem through this specific award may be limited unless subcontracting opportunities are pursued.

Oversight & Accountability

Oversight for this contract would typically be managed by the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Accountability measures would be defined in the contract's statement of work and performance standards. Transparency is facilitated through contract award databases, though detailed performance reports are often internal. The Inspector General for HHS may have jurisdiction for audits and investigations related to fraud, waste, or abuse.

Related Government Programs

HHS Management and Consulting Services
CMS Operational Support Contracts
Federal Management Consulting Awards
Cost Plus Fixed Fee Contracts

Risk Flags

Potential for cost overruns due to CPFF structure.
Risk of scope creep given the contract's long duration.
Moderate competition level may impact price optimization.
Effectiveness dependent on quality of consulting services delivered.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $25.1 million to AVAR CONSULTING INC. NATIONAL COORDINATING&OVERSIGHT REVIEW CENTER (NCORC) AWARD

Who is the contractor on this award?

The obligated recipient is AVAR CONSULTING 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 $25.1 million.

What is the period of performance?

Start: 2019-05-08. End: 2024-05-07.

What is the track record of AVAR CONSULTING INC with federal contracts, particularly with HHS?

A comprehensive review of AVAR CONSULTING INC's federal contract history would be necessary to assess their track record. This would involve examining past performance evaluations, any reported contract disputes or terminations, and the types and values of previous awards. Specifically, their history with the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) would be crucial. A strong history of successful contract completion, positive past performance reviews, and adherence to timelines and budgets would indicate a reliable contractor. Conversely, a history of issues could raise concerns about their capacity to deliver on this current $25 million+ award.

How does the pricing structure (Cost Plus Fixed Fee) compare to other similar management consulting contracts awarded by CMS?

The Cost Plus Fixed Fee (CPFF) contract type reimburses the contractor for allowable costs plus a fixed amount for profit. This structure is often used when the scope of work is not precisely defined or is expected to evolve. To benchmark its value, one would compare the fixed fee percentage and the overall cost rates to similar CPFF contracts for management consulting services awarded by CMS or other federal agencies. If AVAR CONSULTING INC's fixed fee is significantly higher than the average for comparable services, or if their cost rates exceed benchmarks, it could indicate less favorable pricing. Conversely, if the fee and rates are in line with or below market averages, it suggests reasonable value.

What are the specific risks associated with a Cost Plus Fixed Fee contract of this magnitude and duration?

The primary risk with a Cost Plus Fixed Fee (CPFF) contract is the potential for cost overruns, as the government reimburses the contractor's costs. While the fixed fee provides some predictability for profit, it doesn't cap the total cost. For a contract valued over $25 million and spanning five years, risks include scope creep, where the project expands beyond its original intent without adequate adjustments to the fee or timeline. Inefficient performance by the contractor could also lead to higher costs without a direct penalty on their profit, only on the total expenditure. Robust oversight, clear performance metrics, and diligent cost monitoring are essential to mitigate these risks.

What is the expected impact of this contract on CMS's ability to achieve its strategic objectives?

This contract is intended to provide critical management consulting services to support CMS's strategic objectives. The specific impact will depend on the nature of the consulting work, such as improving program efficiency, developing new policy initiatives, or enhancing operational processes. If AVAR CONSULTING INC delivers high-quality strategic advice and implementation support, it could significantly contribute to CMS's goals related to healthcare access, affordability, and quality. Conversely, if the consulting services are poorly executed or misaligned with CMS's needs, the impact could be negligible or even detrimental, representing a poor use of federal funds.

How has CMS spending on 'Other Management Consulting Services' (NAICS 541618) trended over the past five years?

Analyzing historical spending trends for NAICS code 541618 at CMS over the past five years would provide context for this $25 million award. If CMS has consistently spent significant amounts in this category, it suggests a sustained need for external management consulting expertise. A sharp increase or decrease in spending could indicate shifts in agency priorities, budget allocations, or reliance on internal versus external resources. Understanding this trend helps assess whether this award is an anomaly or part of a larger pattern of federal investment in management consulting services.

What are the performance metrics and deliverables outlined in the contract, and how will success be measured?

The success of this contract hinges on clearly defined performance metrics and deliverables within the statement of work. These should specify the expected outcomes, quality standards, and timelines for the consulting services. CMS will likely measure success based on the contractor's ability to meet these criteria, potentially through regular progress reports, client satisfaction surveys, and achievement of specific project milestones. Without access to the detailed contract documents, it's difficult to assess the robustness of these measures, but they are crucial for ensuring accountability and value for money.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Management Consulting Services

Product/Service Code: MEDICAL SERVICES › DEPENDENT MEDICARE SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 75FCMC18R0034

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Amdex Corporation

Address: 1395 PICCARD DR STE 200, ROCKVILLE, MD, 20850

Business Categories: Asian Pacific American Owned Business, Category Business, Corporate Entity Not Tax Exempt, DoT Certified Disadvantaged Business Enterprise, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $25,087,797

Exercised Options: $25,087,797

Current Obligation: $25,087,797

Actual Outlays: $13,793,407

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 75FCMC19D0068

IDV Type: IDC

Timeline