HHS Awards $32.4M for Medicare Coverage Tools 2.0 to Ad Hoc LLC

Contract Overview

Contract Amount: $32,434,451 ($32.4M)

Contractor: AD HOC LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2021-12-08

End Date: 2026-12-07

Contract Duration: 1,825 days

Daily Burn Rate: $17.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: EO14042 MEDICARE COVERAGE TOOLS (MCT) 2.0

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $32.4 million to AD HOC LLC for work described as: EO14042 MEDICARE COVERAGE TOOLS (MCT) 2.0 Key points: 1. Contract value of $32.4M over 5 years. 2. Ad Hoc LLC is the sole awardee. 3. Risk of limited competition due to sole-source nature. 4. IT sector contract for custom computer programming.

Value Assessment

Rating: fair

The contract value of $32.4M over five years suggests a significant investment. Benchmarking against similar custom computer programming services contracts is difficult without more detailed scope information, but the price appears substantial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded under full and open competition, but the data indicates it's a sole-source award. This limits price discovery and potentially increases costs for taxpayers.

Taxpayer Impact: The sole-source nature may lead to higher costs than a competitive process would yield, impacting taxpayer funds.

Public Impact

Enhances critical Medicare coverage tools, impacting millions of beneficiaries. Potential for improved efficiency and accuracy in healthcare administration. Sole-source award raises questions about cost-effectiveness and taxpayer value.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition.
Potential for cost overruns without competitive pressure.
Lack of small business participation noted.

Positive Signals

Addresses critical need for Medicare coverage tools.
Long-term contract provides stability for development.
Firm fixed price contract manages cost risk.

Sector Analysis

This contract falls within the IT sector, specifically custom computer programming services. Spending in this area is substantial across federal agencies, supporting critical digital infrastructure and services.

Small Business Impact

The data indicates that small business participation is not a factor in this contract award. This is a missed opportunity to support small businesses in the federal contracting space.

Oversight & Accountability

Oversight will be crucial to ensure Ad Hoc LLC delivers on the scope of work for Medicare Coverage Tools 2.0 and that the pricing remains justified throughout the contract term.

Related Government Programs

Custom Computer Programming Services
Department of Health and Human Services Contracting
Centers for Medicare and Medicaid Services Programs

Risk Flags

Sole-source award limits competition.
Potential for higher costs due to lack of competition.
No small business participation.
Contract duration is long (5 years).

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $32.4 million to AD HOC LLC. EO14042 MEDICARE COVERAGE TOOLS (MCT) 2.0

Who is the contractor on this award?

The obligated recipient is AD HOC LLC.

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 $32.4 million.

What is the period of performance?

Start: 2021-12-08. End: 2026-12-07.

What is the justification for the sole-source award, and how does it ensure best value for taxpayers?

The justification for a sole-source award typically involves unique capabilities or circumstances where only one vendor can meet the requirement. For this contract, understanding the specific rationale is key. Without competition, rigorous oversight and performance metrics are essential to ensure the government receives fair value and that the chosen vendor's pricing is justified against market rates for similar, albeit not identical, services.

How will the Centers for Medicare and Medicaid Services ensure cost control and prevent potential overruns on this sole-source contract?

CMS can implement robust cost control measures through detailed performance work statements, regular progress reviews, and strict adherence to the firm-fixed-price structure. Key performance indicators (KPIs) tied to deliverables and milestones will be crucial. Independent cost estimates and benchmarking against industry standards, even for sole-source contracts, can help identify potential deviations and prompt corrective actions.

What are the long-term implications of awarding this critical IT contract solely to Ad Hoc LLC for Medicare's operational effectiveness?

A sole-source award can lead to vendor lock-in and reduced innovation if not managed carefully. While it ensures continuity with a known entity, it limits the government's ability to leverage new technologies or competitive pricing from other firms in the future. CMS must ensure knowledge transfer and maintain flexibility to adapt to evolving technological landscapes and potential future competitive procurements.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - APLLICATIONS

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: 1676 INTERNATIONAL DR STE 530, MCLEAN, VA, 22102

Business Categories: Category Business, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $32,434,451

Exercised Options: $32,434,451

Current Obligation: $32,434,451

Actual Outlays: $25,898,935

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: GS35F392DA

IDV Type: FSS

Timeline