HHS awards $76.4M contract for MACBIS data analytics to Mathematica Inc

Contract Overview

Contract Amount: $76,413,680 ($76.4M)

Contractor: Mathematica Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2021-02-13

End Date: 2026-04-30

Contract Duration: 1,902 days

Daily Burn Rate: $40.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS FIXED FEE

Sector: R&D

Official Description: MACBIS DATA ANALYTICS

Place of Performance

Location: PRINCETON, MERCER County, NEW JERSEY, 08540

State: New Jersey Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $76.4 million to MATHEMATICA INC. for work described as: MACBIS DATA ANALYTICS Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The duration of the contract is over 1900 days, indicating a long-term need for these services. 4. The contract is for Research and Development in the Social Sciences and Humanities, a specialized area. 5. The award was made by the Centers for Medicare and Medicaid Services (CMS), a key agency within HHS. 6. The contract has a base award value of $4.0M, with significant potential for task orders.

Value Assessment

Rating: fair

The contract's Cost Plus Fixed Fee structure warrants careful monitoring to ensure cost efficiency. Benchmarking this specific R&D service is challenging due to its specialized nature. However, the base award of $4.0M against a potential ceiling of $76.4M suggests significant flexibility for future needs. The fixed fee component provides some cost control, but the overall cost-plus nature requires diligent oversight to prevent excessive spending.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This approach generally fosters price discovery and allows the government to select the most advantageous offer. The presence of two bidders suggests a moderate level of competition for this specialized R&D service.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining competitive pricing and best value.

Public Impact

The contract supports the development and enhancement of the Medicare and Medicaid data analytics capabilities. Beneficiaries of improved data analytics include policymakers, researchers, and healthcare providers who rely on accurate data for decision-making. The services delivered are expected to enhance the understanding and management of Medicare and Medicaid programs. The contract's impact is primarily national, affecting the administration and analysis of federal healthcare programs. The workforce implications are likely within the specialized field of data analytics and social science research.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contracts can incentivize contractors to increase costs to maximize their fee.
The long duration of the contract increases the risk of scope creep and potential cost escalation over time.
The specialized nature of R&D in social sciences may limit the pool of qualified contractors, potentially impacting future competition.
The significant difference between the base award and the ceiling suggests potential for substantial future spending that needs careful justification.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
The fixed fee component provides a defined profit margin, offering some cost predictability.
The contractor, Mathematica Inc., is a known entity in research and analytics, suggesting relevant expertise.
The contract aims to improve critical data analytics for Medicare and Medicaid, which are vital federal programs.

Sector Analysis

This contract falls within the Research and Development sector, specifically focusing on social sciences and humanities. The market for specialized data analytics in healthcare is substantial, driven by the increasing need for evidence-based policy and program evaluation. Comparable spending benchmarks are difficult to establish precisely due to the unique nature of MACBIS data analytics, but government spending on R&D and data services is a significant portion of the federal budget.

Small Business Impact

The contract does not indicate any specific small business set-asides. Given the specialized nature of the R&D services required, it is unlikely that significant subcontracting opportunities for small businesses would be mandated unless specified in the task orders. The primary focus appears to be on securing specialized expertise from larger, established research firms.

Oversight & Accountability

Oversight for this contract would primarily reside with the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. Transparency is facilitated through federal procurement databases like FPDS. Accountability measures are inherent in the Cost Plus Fixed Fee structure, requiring detailed reporting and justification of costs. The Inspector General for HHS would have jurisdiction to investigate any potential fraud, waste, or abuse.

Related Government Programs

Medicare Data Analytics
Medicaid Data Analytics
Healthcare Research and Development
Federal Data Services Contracts
Cost Plus Fixed Fee Contracts

Risk Flags

Cost Plus Fixed Fee contract type carries inherent cost overrun risks.
Long contract duration increases potential for scope creep and obsolescence.
Specialized R&D nature may limit future competition.
Significant difference between base award and ceiling requires careful expenditure justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $76.4 million to MATHEMATICA INC.. MACBIS DATA ANALYTICS

Who is the contractor on this award?

The obligated recipient is MATHEMATICA 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 $76.4 million.

What is the period of performance?

Start: 2021-02-13. End: 2026-04-30.

What is Mathematica Inc.'s track record with federal contracts, particularly within HHS and CMS?

Mathematica Inc. has a substantial history of performing work for federal agencies, including HHS and CMS. They are a well-established research firm specializing in health policy, human services, and data analytics. Their prior experience likely includes numerous contracts involving data collection, analysis, and program evaluation for government clients. A review of their contract history would reveal the types of projects undertaken, their performance ratings, and any significant issues encountered. This specific contract leverages their core competencies in social science research and data analytics, areas where they have demonstrated significant capability.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar R&D services?

The Cost Plus Fixed Fee (CPFF) contract type is often used for research and development efforts where the scope of work is not precisely defined at the outset, or where innovation is a key component. Unlike fixed-price contracts, CPFF allows the government to reimburse the contractor for all allowable costs incurred, plus a predetermined fixed fee representing profit. This contrasts with Cost Plus Incentive Fee (CPIF) contracts, which offer bonuses for exceeding performance targets, or Firm Fixed Price (FFP) contracts, which offer the most cost certainty but are less flexible for R&D. For R&D, CPFF can be advantageous when flexibility is needed, but it carries a higher risk of cost overruns if not managed diligently compared to FFP.

What are the primary risks associated with a long-duration contract like this (over 1900 days)?

Long-duration contracts, such as this one extending over 1900 days, present several risks. Firstly, the risk of scope creep is elevated, as requirements may evolve significantly over the contract's life, potentially leading to increased costs and delays if not managed through formal contract modifications. Secondly, technological advancements or changes in program priorities could render the original scope of work less relevant or obsolete. Thirdly, maintaining consistent contractor performance and engagement over an extended period can be challenging. Finally, the longer the contract, the greater the potential for cost escalation due to inflation or unforeseen market changes, especially with a Cost Plus structure.

What is the significance of the $4.0M base award versus the $76.4M ceiling?

The significant difference between the $4.0M base award and the $76.4M ceiling indicates that the contract is structured as an indefinite-delivery, indefinite-quantity (IDIQ) vehicle or has substantial flexibility for future task orders. The base award represents the minimum guaranteed amount the contractor will receive, covering initial work or a defined period. The ceiling represents the maximum amount the government is obligated to spend over the life of the contract. This structure allows CMS to procure necessary data analytics services as needs arise, without needing to re-compete each time, providing agility but requiring careful management to ensure spending stays within justified requirements.

How does the 'Research and Development in the Social Sciences and Humanities' classification impact the contract's nature?

This classification signifies that the contract's primary objective is not the development of tangible products or standard IT services, but rather the generation of knowledge, insights, and methodologies within social science domains. This often involves complex data analysis, survey design, qualitative research, and policy analysis related to human behavior, societal trends, and program effectiveness. Such work is inherently less predictable than engineering or manufacturing, making cost estimation more challenging and often necessitating flexible contract types like CPFF. The outcomes are typically reports, recommendations, and analytical frameworks rather than deployable systems.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Scientific Research and Development Services › Research and Development in the Social Sciences and Humanities

Product/Service Code: RESEARCH AND DEVELOPMENT › N – Health R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 600 ALEXANDER PARK, PRINCETON, NJ, 08540

Business Categories: Category Business, Not Designated a Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $77,502,456

Exercised Options: $76,413,680

Current Obligation: $76,413,680

Actual Outlays: $64,360,474

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 75FCMC19D0091

IDV Type: IDC

Timeline