HHS Awards $30.7M Contract to MITRE for Inflation Reduction Act Medicare Negotiation Implementation

Contract Overview

Contract Amount: $30,755,993 ($30.8M)

Contractor: THE Mitre Corporation

Awarding Agency: Department of Health and Human Services

Start Date: 2023-02-16

End Date: 2025-02-19

Contract Duration: 734 days

Daily Burn Rate: $41.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: IMPLEMENTATION OF THE INFLATION REDUCTION ACT (IRA) MEDICARE NEGOTIATION AND REBATE PROVISIONS

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $30.8 million to THE MITRE CORPORATION for work described as: IMPLEMENTATION OF THE INFLATION REDUCTION ACT (IRA) MEDICARE NEGOTIATION AND REBATE PROVISIONS Key points: 1. Contract supports critical Inflation Reduction Act (IRA) provisions for Medicare drug price negotiation. 2. MITRE Corporation, a well-known R&D organization, is the awardee. 3. The contract value is $30.7 million over approximately two years. 4. Focus is on technical and analytical support for complex policy implementation.

Value Assessment

Rating: good

The contract is a delivery order under an existing IDIQ, suggesting a pre-established pricing structure. The Cost Plus Fixed Fee (CPFF) type indicates that costs are reimbursed, plus a fixed fee for profit. This is common for R&D and technical services where exact costs are hard to predict.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating a competitive bidding process. This method generally promotes price discovery and ensures fair market value is sought, although the specific pricing details are not public.

Taxpayer Impact: The taxpayer impact is positive as the contract aims to implement provisions designed to lower prescription drug costs for Medicare beneficiaries, potentially leading to significant long-term savings.

Public Impact

Aims to streamline the complex process of Medicare drug price negotiation. Could lead to lower prescription drug costs for millions of seniors. Enhances the government's ability to manage pharmaceutical spending. Supports the implementation of a landmark piece of healthcare legislation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns with CPFF contract type if not closely monitored.
Complexity of the IRA provisions may lead to unforeseen technical challenges.

Positive Signals

Award to a reputable organization (MITRE) with relevant expertise.
Full and open competition promotes fairness and potential cost efficiencies.
Contract directly supports a high-priority legislative initiative.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically supporting healthcare policy implementation. Spending in this area is often driven by legislative mandates and the need for specialized expertise to manage complex government programs.

Small Business Impact

The data does not indicate any specific set-aside for small businesses. As a delivery order under a potentially larger IDIQ, small business participation would depend on the structure of the base contract and the subcontracting plans of the prime awardee.

Oversight & Accountability

Oversight will be crucial given the CPFF contract type and the complexity of the IRA provisions. The Centers for Medicare and Medicaid Services (CMS) will need robust mechanisms to track costs, performance, and ensure the contractor meets all objectives effectively.

Related Government Programs

All Other Professional, Scientific, and Technical Services
Department of Health and Human Services Contracting
Centers for Medicare and Medicaid Services Programs

Risk Flags

Contract complexity
Reliance on CPFF structure
Potential for scope creep
Dependency on evolving regulatory landscape

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $30.8 million to THE MITRE CORPORATION. IMPLEMENTATION OF THE INFLATION REDUCTION ACT (IRA) MEDICARE NEGOTIATION AND REBATE PROVISIONS

Who is the contractor on this award?

The obligated recipient is THE MITRE CORPORATION.

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 $30.8 million.

What is the period of performance?

Start: 2023-02-16. End: 2025-02-19.

What is the projected long-term cost savings for Medicare beneficiaries resulting from the IRA negotiation provisions this contract supports?

While this specific contract focuses on the implementation and technical support, the broader goal of the IRA's Medicare negotiation provisions is to achieve significant cost savings. Estimates vary, but the Congressional Budget Office (CBO) has projected billions of dollars in savings over a decade from reduced drug prices and rebates, directly benefiting beneficiaries through lower out-of-pocket costs.

What are the primary risks associated with MITRE's technical implementation of these complex negotiation provisions?

Key risks include the inherent complexity of pharmaceutical pricing, regulatory uncertainty, and potential legal challenges to the IRA provisions themselves. MITRE must navigate intricate data analysis, develop robust negotiation strategies, and ensure compliance with evolving legal and policy landscapes, all while managing stakeholder expectations.

How will the effectiveness of this contract be measured in achieving the goals of the IRA's Medicare negotiation provisions?

Effectiveness will be measured by MITRE's ability to provide accurate data analysis, develop sound technical frameworks for negotiation, and support CMS in successfully executing the negotiation process. Key performance indicators (KPIs) will likely include the timely delivery of analytical products, the quality of technical recommendations, and the successful implementation of negotiation strategies that lead to demonstrable price reductions.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Address: 7515 COLSHIRE DR, MC LEAN, VA, 22102

Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $33,202,506

Exercised Options: $30,755,993

Current Obligation: $30,755,993

Actual Outlays: $27,794,253

Subaward Activity

Number of Subawards: 77

Total Subaward Amount: $155,845,470

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 75FCMC18D0047

IDV Type: IDC

Timeline