HHS awards $33.3M contract for Medicare Advantage oversight, with 5 bidders competing

Contract Overview

Contract Amount: $33,336,012 ($33.3M)

Contractor: Conrad LLP

Awarding Agency: Department of Health and Human Services

Start Date: 2022-01-01

End Date: 2026-01-31

Contract Duration: 1,491 days

Daily Burn Rate: $22.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: SERVICES RELATED TO OVERSIGHT ACTIVITIES OF MEDICARE ADVANTAGE, PRESCRIPTION DRUG PLAN, PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY, AND OTHER RELATED HEALTH CARE ORGANIZATIONS

Place of Performance

Location: LAKE FOREST, ORANGE County, CALIFORNIA, 92630

State: California Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $33.3 million to CONRAD LLP for work described as: SERVICES RELATED TO OVERSIGHT ACTIVITIES OF MEDICARE ADVANTAGE, PRESCRIPTION DRUG PLAN, PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY, AND OTHER RELATED HEALTH CARE ORGANIZATIONS Key points: 1. Contract focuses on critical oversight of Medicare Advantage and related health programs. 2. Full and open competition suggests a robust market for these specialized services. 3. Potential for cost efficiencies due to multiple bidders vying for the contract. 4. Contract duration of nearly 5 years indicates a long-term need for these services. 5. Services are essential for ensuring program integrity and beneficiary protection. 6. Geographic focus on California for this specific delivery order.

Value Assessment

Rating: good

The contract value of $33.3 million over approximately 5 years for oversight services appears reasonable given the scope. Benchmarking against similar contracts for program integrity and oversight within CMS would provide a clearer picture of value for money. The time and materials pricing structure, while flexible, requires diligent monitoring to ensure costs remain within expectations and do not escalate beyond the anticipated value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with five bidders participating. This level of competition is a positive indicator, suggesting that the market has multiple capable providers for these specialized oversight services. The presence of five bidders likely contributed to a more competitive pricing environment, allowing the government to secure services at a potentially more favorable rate than if competition had been limited.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are being used efficiently by leveraging market forces to drive down costs and improve service quality.

Public Impact

Beneficiaries of Medicare Advantage, Prescription Drug Plans, and PACE programs benefit from enhanced program integrity. Services delivered include oversight activities crucial for maintaining the quality and compliance of healthcare organizations. Geographic impact is focused on California for this delivery order, ensuring localized oversight. Workforce implications include the need for skilled analysts and auditors within the contracting firm.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and materials pricing can lead to cost overruns if not closely managed.
The specific nature of oversight requires continuous vigilance to prevent fraud and abuse.
Dependence on a single contractor for critical oversight functions carries inherent risk.

Positive Signals

Full and open competition indicates a healthy market and potential for competitive pricing.
The contract duration suggests a stable need and commitment to program oversight.
The focus on oversight directly supports the integrity of vital healthcare programs.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically focusing on accounting, tax preparation, bookkeeping, and payroll services (NAICS 541211). The market for government contract auditing and oversight services is substantial, driven by the need for regulatory compliance and program integrity across various federal agencies. CMS, in particular, requires extensive support to manage its complex healthcare programs, making this a significant area of federal spending.

Small Business Impact

The contract was awarded under full and open competition and does not indicate a small business set-aside. There is no explicit information provided regarding subcontracting plans for small businesses. Further analysis would be needed to determine if opportunities exist for small businesses to participate in subcontracting roles for these oversight services.

Oversight & Accountability

Oversight of this contract is managed by the Centers for Medicare and Medicaid Services (CMS). The contract's time and materials (T&M) pricing structure necessitates robust monitoring and auditing by CMS to ensure that costs are reasonable and allocable to the work performed. Transparency is maintained through regular reporting requirements and performance evaluations. The Inspector General's office within HHS may also conduct audits or investigations related to the services provided.

Related Government Programs

Medicare Advantage Program
Prescription Drug Plan Programs
Programs of All-Inclusive Care for the Elderly (PACE)
Healthcare Organization Oversight
Federal Program Integrity

Risk Flags

Potential for cost overruns due to T&M pricing structure.
Need for continuous monitoring of contractor performance and deliverables.
Ensuring adequate expertise within the contractor team for complex healthcare regulations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $33.3 million to CONRAD LLP. SERVICES RELATED TO OVERSIGHT ACTIVITIES OF MEDICARE ADVANTAGE, PRESCRIPTION DRUG PLAN, PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY, AND OTHER RELATED HEALTH CARE ORGANIZATIONS

Who is the contractor on this award?

The obligated recipient is CONRAD LLP.

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 $33.3 million.

What is the period of performance?

Start: 2022-01-01. End: 2026-01-31.

What is the historical spending trend for similar oversight contracts by CMS?

Historical spending on similar oversight contracts by CMS has generally trended upwards, reflecting the increasing complexity and scope of Medicare Advantage and other managed care programs. For instance, CMS consistently awards multi-million dollar contracts for program integrity, audits, and quality reviews. Analyzing spending patterns over the past 5-10 years would reveal an increasing reliance on external contractors to manage oversight functions due to the sheer volume of beneficiaries and providers. This trend is driven by legislative mandates, evolving healthcare regulations, and the need to combat fraud, waste, and abuse effectively. Specific contract vehicles and their values can fluctuate based on program changes and strategic priorities, but the overall trajectory indicates sustained investment in oversight capabilities.

How does the per-contractor cost for this service compare to other federal agencies?

Benchmarking the per-contractor cost for this specific $33.3 million contract against similar federal agencies requires detailed analysis of contract scope, duration, and specific services rendered. However, generally, oversight and auditing services for large federal programs like Medicare can command significant fees due to the specialized expertise required. Agencies like the Department of Defense or the Social Security Administration also procure similar services, and their contract values can vary widely. Factors influencing cost include the level of security clearance required, the complexity of the regulations being overseen, and the geographic location of the work. Without direct comparable data points for identical services across agencies, a precise comparison is difficult, but CMS contracts in this domain are typically substantial due to the high stakes involved in healthcare program integrity.

What are the key performance indicators (KPIs) used to evaluate the contractor's performance?

Key Performance Indicators (KPIs) for this contract likely focus on the effectiveness and efficiency of the oversight activities. These could include metrics such as the number of compliance reviews completed, the accuracy rate of audits, the timeliness of reporting findings, the identification of potential fraud or non-compliance, and the contractor's adherence to established protocols and timelines. For instance, CMS might track the percentage of Medicare Advantage plans audited within a given period, the value of identified improper payments, or the reduction in beneficiary complaints related to plan operations. The contractor's ability to provide actionable insights and recommendations for improving program operations and compliance would also be a critical KPI, measured through client satisfaction surveys and the successful implementation of their recommendations.

What is the track record of Conrad LLP in performing similar government contracts?

Conrad LLP has a track record of performing government contracts, particularly within the accounting and auditing services domain. While specific details on their past performance for CMS oversight contracts would require deeper investigation into federal procurement databases like FPDS or SAM.gov, their presence as a bidder and awardee suggests they possess the necessary qualifications and experience. Companies specializing in NAICS code 541211 (Offices of Certified Public Accountants) often engage in contracts related to financial audits, compliance reviews, and program integrity support for various federal agencies. Evaluating their past performance would involve reviewing contract histories for on-time delivery, quality of work, adherence to budget, and any past performance issues or commendations.

What are the potential risks associated with the time and materials (T&M) contract type for this service?

The primary risk associated with a Time and Materials (T&M) contract type for these oversight services is the potential for cost overruns. Unlike fixed-price contracts, T&M agreements reimburse the contractor for direct labor hours at specified hourly rates and for the actual cost of materials. If not managed diligently, this structure can lead to increased costs if the contractor's labor hours exceed initial estimates or if material costs escalate unexpectedly. For CMS, this necessitates robust oversight to ensure that the hours billed are reasonable and directly related to the contract's objectives, and that material costs are fair market value. Without strict monitoring and controls, the total contract cost could significantly exceed the initial projections, impacting the overall value for taxpayer money.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Accounting, Tax Preparation, Bookkeeping, and Payroll Services › Offices of Certified Public Accountants

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: 5

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 23161 LAKE CENTER DR STE 200, LAKE FOREST, CA, 92630

Business Categories: Category Business, Partnership or Limited Liability Partnership, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $33,336,012

Exercised Options: $33,336,012

Current Obligation: $33,336,012

Actual Outlays: $31,908,977

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS23F056AA

IDV Type: FSS

Timeline