CMS awards $9.2M contract for mail and copy center operations to ServiceSource Inc

Contract Overview

Contract Amount: $9,227,180 ($9.2M)

Contractor: Servicesource Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2021-03-31

End Date: 2026-05-31

Contract Duration: 1,887 days

Daily Burn Rate: $4.9K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CMS MAIL AND COPY CENTER OPERATIONS

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $9.2 million to SERVICESOURCE INC for work described as: CMS MAIL AND COPY CENTER OPERATIONS Key points: 1. Contract value of $9.2M over approximately 5 years represents a significant investment in essential administrative support. 2. The 'All Other Business Support Services' category suggests a broad scope of potential services beyond basic mail and copying. 3. A firm-fixed-price contract type indicates that the government has a clear understanding of costs and risks are largely borne by the contractor. 4. The contract's duration of nearly 5 years suggests a need for stable, long-term support for these critical operations. 5. The award to a single entity implies a focused relationship for these specific services.

Value Assessment

Rating: fair

The contract value of $9.2 million over nearly five years for mail and copy center operations appears to be within a reasonable range for comprehensive administrative support services. Benchmarking against similar contracts for large federal agencies is challenging without more specific service details. However, given the scale of CMS, this investment is likely commensurate with the expected volume and complexity of operations. The firm-fixed-price structure suggests that pricing was determined upfront, aiming for cost certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when a specific contractor possesses unique capabilities, or when it's deemed impractical or uneconomical to compete. The lack of competition means that the government did not benefit from a bidding process that could have potentially driven down prices or spurred innovation from multiple vendors. The justification for this sole-source award would be critical to understanding the value proposition.

Taxpayer Impact: Sole-source awards limit the opportunity for taxpayers to benefit from competitive pricing and potentially more innovative solutions that could arise from a broader bidding process.

Public Impact

Beneficiaries include CMS staff and potentially other federal employees within the agency who rely on efficient mail and copy services. Services delivered likely encompass mail processing, distribution, printing, copying, and potentially related document management functions. The geographic impact is primarily focused on the Maryland (MD) location where the contractor is based, serving the CMS operations there. Workforce implications may include the direct employment of individuals by ServiceSource Inc. to perform these essential support functions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits price discovery and potential cost savings for taxpayers.
Sole-source awards can sometimes lead to complacency or reduced incentive for innovation by the incumbent contractor.
The broad 'All Other Business Support Services' NAICS code makes it difficult to assess the specific scope and potential for cost overruns if not tightly managed.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Long-term contract duration (nearly 5 years) suggests a stable and reliable provision of services.
Award to a single, established provider can streamline operations and communication for the agency.

Sector Analysis

The Business Support Services sector encompasses a wide range of activities that facilitate the smooth operation of organizations. This contract falls under the 'All Other Business Support Services' category (NAICS 561499), which is broad and can include services like mailroom operations, printing, copying, and administrative support. The federal government is a significant consumer of these services, often seeking reliable, large-scale providers to manage essential functions across various agencies. Benchmarking is difficult due to the broad NAICS code, but spending on administrative support services by federal agencies can run into billions annually.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'ss': false and 'sb': false. The award was made to ServiceSource Inc., which is typically considered a large business. There is no explicit information regarding subcontracting plans for small businesses within this award notice. Therefore, the direct impact on the small business ecosystem from this specific contract appears minimal, and there's no indication of specific efforts to leverage small business capabilities.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the Centers for Medicare and Medicaid Services (CMS). As a firm-fixed-price contract, performance monitoring and adherence to the statement of work are key oversight mechanisms. Transparency is limited by the sole-source nature of the award; however, contract details are typically available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Mail Management Services
Government Printing and Copying Services
Administrative Support Contracts
CMS Operational Support
Federal Business Services

Risk Flags

Sole-source award lacks competitive pricing.
Broad NAICS code may obscure specific service scope and risks.
Performance monitoring is critical due to fixed-price nature.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $9.2 million to SERVICESOURCE INC. CMS MAIL AND COPY CENTER OPERATIONS

Who is the contractor on this award?

The obligated recipient is SERVICESOURCE 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 $9.2 million.

What is the period of performance?

Start: 2021-03-31. End: 2026-05-31.

What is the specific justification for awarding this contract on a sole-source basis to ServiceSource Inc.?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source can provide the required supplies or services, often due to unique capabilities, proprietary technology, or urgent and compelling needs. For this contract, the justification would likely detail why other potential vendors could not meet CMS's requirements for mail and copy center operations. Without this justification, it's difficult to fully assess the necessity and potential value of bypassing a competitive bidding process. Further investigation into the contract file or agency procurement records would be needed to uncover the specific rationale.

How does the $9.2 million contract value compare to historical spending on similar mail and copy center operations at CMS or other large federal agencies?

Direct comparison of the $9.2 million contract value for mail and copy center operations is challenging without more granular data on the scope of services and the specific agency context. However, for a large agency like CMS, which handles vast amounts of data and communications, a contract of this magnitude over approximately five years for essential administrative support functions is plausible. Historical spending patterns for similar services across large federal entities can vary significantly based on the number of employees served, geographic distribution, volume of mail and print jobs, and the specific technologies employed. A comprehensive benchmark would require analyzing contracts with similar NAICS codes (561499) and service descriptions across agencies of comparable size and complexity.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract to ensure effective service delivery?

The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) for this contract. However, for mail and copy center operations, typical KPIs might include mail processing time, delivery accuracy, print job turnaround time, equipment uptime, and customer satisfaction ratings. SLAs would define the acceptable performance thresholds for these metrics. Effective oversight by CMS would involve regularly monitoring ServiceSource Inc.'s performance against these agreed-upon KPIs and SLAs, with potential remedies or incentives tied to meeting or exceeding these standards. The firm-fixed-price nature suggests that meeting defined service levels is crucial for the contractor's profitability.

What is the track record of ServiceSource Inc. in providing similar administrative support services to the federal government?

ServiceSource Inc. has a history of providing services to the federal government, often focusing on employment for individuals with disabilities and other mission-driven objectives. While their primary focus may not exclusively be mail and copy center operations, their experience in managing large-scale service contracts and supporting government agencies is relevant. Assessing their specific track record for this type of service would require reviewing past performance evaluations, contract awards, and any reported issues or successes in similar administrative support roles. Their broader experience in workforce development and service delivery suggests a capacity to manage complex operations, but the direct applicability to mail and copy center specifics needs further verification.

Are there any identified risks associated with this contract, such as potential cost overruns, performance deficiencies, or security vulnerabilities?

Given the sole-source nature of this contract, a primary risk is the potential lack of competitive pressure to ensure optimal pricing and service innovation. While the firm-fixed-price structure mitigates cost overrun risks for the government, it places the financial risk on the contractor, which could incentivize cost-cutting measures that might impact service quality if not closely monitored. Performance deficiencies are always a risk in service contracts; effective oversight and adherence to SLAs are crucial to mitigate this. Security vulnerabilities are also a concern, particularly if the mail and copy center operations handle sensitive or classified information, necessitating robust security protocols and background checks for personnel.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Business Support Services › All Other Business Support Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › ADMINISTRATIVE SUPPORT SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 10467 WHITE GRANITE DRIVE, OAKTON, VA, 22124

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

Financial Breakdown

Contract Ceiling: $9,677,986

Exercised Options: $9,227,180

Current Obligation: $9,227,180

Actual Outlays: $7,969,090

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline