HHS awards $31.9M contract for administrative management consulting services to Maximus Federal Services

Contract Overview

Contract Amount: $31,932,667 ($31.9M)

Contractor: Maximus Federal Services, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2021-09-30

End Date: 2025-12-31

Contract Duration: 1,553 days

Daily Burn Rate: $20.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PART A WEST QUALIFIED INDEPENDENT CONTRACTOR (QIC) AWARD

Place of Performance

Location: RESTON, FAIRFAX County, VIRGINIA, 20190

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $31.9 million to MAXIMUS FEDERAL SERVICES, INC. for work described as: PART A WEST QUALIFIED INDEPENDENT CONTRACTOR (QIC) AWARD Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 3. The fixed-price contract type aims to control costs and provide predictable spending. 4. The duration of the contract is over three years, indicating a significant, ongoing need. 5. The services fall under administrative management and general management consulting, a broad category. 6. The awardee, Maximus Federal Services, Inc., is a known entity in government contracting.

Value Assessment

Rating: good

The contract value of $31.9 million over approximately three years appears reasonable for administrative management consulting services. Benchmarking against similar contracts for management consulting within HHS or other large federal agencies would provide a more precise value-for-money assessment. The firm fixed-price structure is generally favorable for the government in controlling costs, assuming the scope of work is well-defined. Without specific details on the deliverables and performance metrics, a definitive assessment of value is challenging, but the competitive award process is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of two bids suggests a moderate level of competition for this specific delivery order. While two bidders is better than a sole-source award, a higher number of bids typically leads to more robust price discovery and potentially lower prices for the government. The specific details of the bidding process and evaluation criteria would further illuminate the effectiveness of the competition.

Taxpayer Impact: A competitive award process helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces. Full and open competition provides the best opportunity for the government to receive competitive pricing and high-quality services.

Public Impact

Beneficiaries include the Centers for Medicare and Medicaid Services (CMS) and potentially the broader healthcare system through improved administrative processes. Services delivered are expected to enhance the efficiency and effectiveness of administrative and management functions within CMS. The geographic impact is primarily within the agency, supporting federal operations, with potential downstream effects on healthcare program administration. Workforce implications may involve the utilization of Maximus Federal Services' personnel to support CMS's operational needs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in administrative consulting contracts if not tightly managed.
Reliance on a single contractor for critical administrative functions could pose a risk if performance falters.
Ensuring the contractor's proposed solutions align with evolving federal regulations and agency priorities.

Positive Signals

Awarded through full and open competition, indicating a fair and transparent process.
Firm fixed-price contract type provides cost certainty for the government.
Contract duration allows for sustained support and potential for long-term efficiency gains.

Sector Analysis

This contract falls within the Management and Consulting Services sector, a significant area of federal spending. Agencies frequently contract for these services to improve operational efficiency, implement new policies, and manage complex programs. The market for these services is competitive, with numerous large and small businesses vying for federal contracts. Spending in this category is often driven by the need for specialized expertise that may not be available in-house or to support specific project-based initiatives.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Maximus Federal Services, Inc. is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. Without this information, it is difficult to assess the direct impact on the small business ecosystem, though large prime contracts often include subcontracting goals.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the contract specialist at the Centers for Medicare and Medicaid Services (CMS). Performance monitoring would likely involve regular reviews of deliverables, progress reports, and adherence to the contract's terms and conditions. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Administrative Management and General Management Consulting Services
Centers for Medicare and Medicaid Services Contracts
Department of Health and Human Services Contracts
Federal Management Consulting Services

Risk Flags

Potential for performance issues if scope is not well-defined.
Risk of vendor lock-in for critical administrative functions.
Cybersecurity risks associated with handling sensitive government data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $31.9 million to MAXIMUS FEDERAL SERVICES, INC.. PART A WEST QUALIFIED INDEPENDENT CONTRACTOR (QIC) AWARD

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 $31.9 million.

What is the period of performance?

Start: 2021-09-30. End: 2025-12-31.

What is the track record of Maximus Federal Services, Inc. with federal contracts, particularly within HHS?

Maximus Federal Services, Inc. has a substantial history of performing federal contracts, including significant work with the Department of Health and Human Services (HHS) and its sub-agencies like the Centers for Medicare and Medicaid Services (CMS). They are known for providing a range of services, including health IT, program management, eligibility services, and administrative support. Their experience often involves large-scale, complex government programs. A review of their past performance on similar contracts would be necessary to fully assess their capabilities and reliability for this specific award. Past performance evaluations and any documented issues or successes on prior HHS contracts would provide critical context for this current award.

How does the awarded amount compare to typical spending on similar administrative management consulting contracts?

The awarded amount of $31.9 million over approximately 3.2 years (from September 30, 2021, to December 31, 2025) places this contract in the mid-to-large tier for administrative management consulting services within the federal government. Benchmarking requires comparing it to contracts with similar scopes of work, durations, and complexity, specifically within HHS or for comparable agencies. For instance, contracts focused on large-scale program support, policy implementation, or operational efficiency improvements can range from a few million to tens or even hundreds of millions of dollars. The firm fixed-price nature suggests a defined scope, and the competitive award process implies the pricing was deemed fair relative to the bids received. A detailed comparison would involve analyzing the specific tasks and deliverables outlined in the contract statement of work.

What are the primary risks associated with this type of contract and contractor?

Primary risks associated with this contract include potential scope creep if the administrative management and consulting tasks are not precisely defined and managed, leading to cost overruns or schedule delays, although the firm fixed-price structure mitigates this. There's also a risk related to contractor performance; if Maximus Federal Services, Inc. fails to deliver the expected quality or timeliness of services, it could impact CMS operations. Another risk involves the potential for vendor lock-in if the contractor becomes indispensable to certain critical functions. Finally, ensuring the contractor maintains robust cybersecurity practices to protect sensitive government data is crucial, especially given the nature of administrative and management support.

How effective is the firm fixed-price contract type in ensuring value for money for this administrative consulting service?

The firm fixed-price (FFP) contract type is generally considered effective for ensuring value for money when the scope of work is well-defined and unlikely to change significantly. For administrative management and general management consulting services, FFP incentivizes the contractor to control costs and improve efficiency to maximize profit. This structure shifts the risk of cost overruns to the contractor. However, its effectiveness hinges on the clarity and completeness of the contract's statement of work. If the scope is ambiguous or subject to frequent changes, the government might end up paying more than anticipated if change orders are necessary, or the contractor might cut corners to maintain profitability, potentially impacting quality. In this case, the competitive award process likely helped establish a fair baseline price.

What does the competition level (2 bidders) imply for the government's ability to secure competitive pricing?

Having two bidders for this delivery order suggests a moderate level of competition. While better than a sole-source award, it is less competitive than scenarios with numerous bidders. With only two offers, the government's negotiating leverage might be somewhat limited compared to a situation with, for example, five or more bids. The government would have relied on the evaluation process to ensure the selected offer represented the best value. The pricing submitted by the two bidders would have been compared, and the contract awarded to the one offering the best combination of technical merit and price. The limited number of bidders could indicate barriers to entry for other potential contractors or a niche market for these specific services.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11419 SUNSET HILLS ROAD, RESTON, VA, 20190

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $37,688,411

Exercised Options: $31,932,667

Current Obligation: $31,932,667

Actual Outlays: $28,121,099

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HHSM500200400007I

IDV Type: IDC

Timeline