HHS Awards $154M to General Dynamics for Medicare Secondary Payer Systems

Contract Overview

Contract Amount: $154,018,105 ($154.0M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2019-09-12

End Date: 2024-09-11

Contract Duration: 1,826 days

Daily Burn Rate: $84.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: SYSTEMS MAINTAINER FOR COORDINATION OF BENEFIT AND RECOVERY. MEDICARE SECONDARY PAYER SYSTEMS CONTRACTOR (MSPSC) INVOLVES THOSE FUNCTIONS PERFORMED TO IDENTIFY WHEN ANOTHER PAYER HAS PAYMENT RESPONSIBILITY BEFORE MEDICARE IN ORDER TO PAY CLAIMS IN TH

Place of Performance

Location: TOWSON, BALTIMORE County, MARYLAND, 21204

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $154.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: SYSTEMS MAINTAINER FOR COORDINATION OF BENEFIT AND RECOVERY. MEDICARE SECONDARY PAYER SYSTEMS CONTRACTOR (MSPSC) INVOLVES THOSE FUNCTIONS PERFORMED TO IDENTIFY WHEN ANOTHER PAYER HAS PAYMENT RESPONSIBILITY BEFORE MEDICARE IN ORDER TO PAY CLAIMS IN TH Key points: 1. Contract awarded to General Dynamics Information Technology, Inc. for essential Medicare Secondary Payer Systems. 2. The contract aims to identify primary payer responsibility before Medicare pays claims, improving efficiency. 3. This is a Cost Plus Fixed Fee contract, indicating potential for cost overruns. 4. The sector is IT services, specifically Computer Systems Design, a competitive field.

Value Assessment

Rating: fair

The Cost Plus Fixed Fee contract type can lead to higher costs than fixed-price contracts if not managed carefully. Benchmarking against similar IT system design contracts is difficult without more detailed cost breakdowns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the Cost Plus Fixed Fee structure may not incentivize the most aggressive pricing.

Taxpayer Impact: Taxpayer funds are used for this contract. While competition is present, the contract type warrants scrutiny to ensure cost-effectiveness and prevent unnecessary spending.

Public Impact

Ensures Medicare doesn't pay claims when another insurer is primary, saving taxpayer money. Supports the integrity and efficiency of the Medicare claims process. Impacts beneficiaries by ensuring correct payer is identified, potentially speeding up claim resolution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type
Potential for cost overruns
Lack of detailed cost transparency

Positive Signals

Full and open competition
Essential function for Medicare operations
Long-term contract duration

Sector Analysis

This contract falls within the IT sector, specifically Computer Systems Design Services. Spending in this area is substantial across government, with benchmarks varying widely based on complexity and scope.

Small Business Impact

The data indicates this contract was not set aside for small businesses and the awardee is a large corporation. There is no indication of small business subcontracting in the provided data.

Oversight & Accountability

Oversight is crucial for Cost Plus Fixed Fee contracts to ensure costs are reasonable and allocable. The Centers for Medicare and Medicaid Services (CMS) is responsible for monitoring performance and expenditures.

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 contract type may lead to higher costs.
Potential for cost overruns due to the nature of CPFF contracts.
Lack of detailed cost breakdown for benchmarking.
No explicit mention of small business participation goals.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $154.0 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. SYSTEMS MAINTAINER FOR COORDINATION OF BENEFIT AND RECOVERY. MEDICARE SECONDARY PAYER SYSTEMS CONTRACTOR (MSPSC) INVOLVES THOSE FUNCTIONS PERFORMED TO IDENTIFY WHEN ANOTHER PAYER HAS PAYMENT RESPONSIBILITY BEFORE MEDICARE IN ORDER TO PAY CLAIMS IN TH

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS INFORMATION TECHNOLOGY, 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 $154.0 million.

What is the period of performance?

Start: 2019-09-12. End: 2024-09-11.

What is the projected total cost for the entire contract duration, and how does it compare to similar system maintenance contracts?

The provided data shows an award amount of $154,018,105 for a contract with a duration of 1826 days (approximately 5 years). A precise comparison to similar contracts is challenging without knowing the specific functionalities and complexity of the systems involved. However, this figure represents a significant investment in IT infrastructure for a critical government program.

What are the specific performance metrics and key performance indicators (KPIs) used to evaluate the contractor's effectiveness in identifying primary payer responsibility?

The provided data does not detail the specific performance metrics or KPIs. Effective oversight would require clearly defined metrics related to accuracy in identifying primary payers, timeliness of system updates, and system uptime. These would be essential for ensuring the contractor meets the contract's objectives and provides value.

How does the Cost Plus Fixed Fee structure incentivize cost control and efficiency for the contractor compared to other contract types?

A Cost Plus Fixed Fee (CPFF) contract allows the contractor to recover all allowable costs plus a predetermined fixed fee. While it provides flexibility for complex projects, it offers less incentive for cost savings compared to fixed-price contracts. The government bears the risk of cost overruns, making robust oversight critical to manage expenditures effectively.

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: RFPCMS2016SPARC

Offers Received: 3

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Wico Limited

Address: 3211 JERMANTOWN RD, FAIRFAX, VA, 22030

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

Financial Breakdown

Contract Ceiling: $155,547,791

Exercised Options: $154,018,105

Current Obligation: $154,018,105

Actual Outlays: $96,446,124

Subaward Activity

Number of Subawards: 80

Total Subaward Amount: $27,766,988

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HHSM500201600005I

IDV Type: IDC

Timeline