HHS Awards $93M for DME MAC Services to CGS Administrators, LLC
Contract Overview
Contract Amount: $93,209,888 ($93.2M)
Contractor: CGS Administrators, LLC
Awarding Agency: Department of Health and Human Services
Start Date: 2023-04-01
End Date: 2027-03-31
Contract Duration: 1,460 days
Daily Burn Rate: $63.8K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS AWARD FEE
Sector: Healthcare
Official Description: JB DME MAC SERVICES
Place of Performance
Location: NASHVILLE, DAVIDSON County, TENNESSEE, 37214
Plain-Language Summary
Department of Health and Human Services obligated $93.2 million to CGS ADMINISTRATORS, LLC for work described as: JB DME MAC SERVICES Key points: 1. Contract value of $93.2M over 5 years. 2. Competition method is Full and Open. 3. Risk is moderate due to contract type and duration. 4. Sector is Healthcare, specifically insurance carriers.
Value Assessment
Rating: good
The contract is a Cost Plus Award Fee type, which allows for performance-based incentives. The total award value is $93.2M. Benchmarking against similar contracts for Durable Medical Equipment (DME) MAC services is difficult without more granular cost data.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a robust price discovery process. The definitive contract award type indicates a single award to CGS Administrators, LLC.
Taxpayer Impact: Taxpayer funds are being used for essential Medicare administrative services, aiming for efficient program delivery.
Public Impact
Ensures continued access to durable medical equipment for Medicare beneficiaries. Supports the operational efficiency of the Medicare program. Impacts beneficiaries in Tennessee and other service areas.
Waste & Efficiency Indicators
Waste Risk Score: 60 / 10
Warning Flags
- Cost Plus Award Fee structure can lead to higher costs if not managed effectively.
- Long contract duration (5 years) may limit flexibility for future technological advancements or market changes.
Positive Signals
- Full and open competition promotes competitive pricing.
- Contract aims to ensure continuity of essential services.
Sector Analysis
This contract falls within the Healthcare sector, specifically for insurance carriers administering Medicare benefits. Spending benchmarks for such administrative services are highly variable based on geographic scope and specific services provided.
Small Business Impact
The data does not indicate any specific set-asides for small businesses. The primary contractor, CGS Administrators, LLC, is not identified as a small business in this context.
Oversight & Accountability
The Centers for Medicare and Medicaid Services (CMS) is responsible for overseeing this contract. Oversight will focus on performance metrics and cost control within the Cost Plus Award Fee structure.
Related Government Programs
- Direct Health and Medical Insurance Carriers
- Department of Health and Human Services Contracting
- Centers for Medicare and Medicaid Services Programs
Risk Flags
- Potential for cost overruns due to Cost Plus Award Fee structure.
- Long-term contract may not adapt quickly to evolving healthcare needs or technologies.
- Dependence on a single contractor for critical administrative functions.
- Lack of specific small business participation noted.
Tags
direct-health-and-medical-insurance-carr, department-of-health-and-human-services, tn, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $93.2 million to CGS ADMINISTRATORS, LLC. JB DME MAC SERVICES
Who is the contractor on this award?
The obligated recipient is CGS ADMINISTRATORS, 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 $93.2 million.
What is the period of performance?
Start: 2023-04-01. End: 2027-03-31.
What is the expected cost savings or efficiency gain from using a Cost Plus Award Fee structure compared to a fixed-price contract for these services?
A Cost Plus Award Fee structure is intended to incentivize contractor performance by rewarding them for exceeding certain targets, potentially leading to greater efficiency and better service quality than a fixed-price contract. However, it also carries the risk of higher costs if performance targets are not well-defined or if oversight is insufficient. The actual savings or gains depend heavily on the specific award fee criteria and the effectiveness of CMS's monitoring.
What are the key performance indicators (KPIs) that will be used to determine the award fee for CGS Administrators, LLC?
The specific Key Performance Indicators (KPIs) for determining the award fee are not detailed in the provided data. Typically, for DME MAC services, KPIs would include metrics related to claims processing timeliness, accuracy rates, beneficiary satisfaction, fraud detection, and adherence to program integrity requirements. CMS will monitor these KPIs to assess contractor performance and determine the award fee.
How does this contract ensure the continuity and quality of durable medical equipment services for Medicare beneficiaries across its service area?
This contract ensures continuity by awarding services to a single entity, CGS Administrators, LLC, for a defined period. The Cost Plus Award Fee structure incentivizes the contractor to maintain high service quality and operational efficiency. CMS oversight will be crucial in monitoring performance against established metrics to guarantee that beneficiaries receive timely and appropriate access to necessary durable medical equipment.
Industry Classification
NAICS: Finance and Insurance › Insurance Carriers › Direct Health and Medical Insurance Carriers
Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: 75FCMC22R0002
Offers Received: 2
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 26 CENTURY BLVD STE 610, NASHVILLE, TN, 37214
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $212,962,887
Exercised Options: $111,283,465
Current Obligation: $93,209,888
Actual Outlays: $53,125,903
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Timeline
Start Date: 2023-04-01
Current End Date: 2027-03-31
Potential End Date: 2030-09-30 00:00:00
Last Modified: 2026-03-18
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