HHS awards $82M contract for Medicare Advantage and Part D health plan management system

Contract Overview

Contract Amount: $81,997,854 ($82.0M)

Contractor: Softrams LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2023-02-08

End Date: 2027-02-13

Contract Duration: 1,466 days

Daily Burn Rate: $55.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: HEALTH PLAN MANAGEMENT SYSTEM (HPMS) IS A WEB-ENABLED INFORMATION SYSTEM THAT SERVES A CRITICAL ROLE IN THE DAILY OPERATIONS AND HIGH-PROFILE INITIATIVES OF THE MEDICARE ADVANTAGE (MA) AND PRESCRIPTION DRUG (PART D)PROGRAMS. HPMS FACILITATES THE NUME

Place of Performance

Location: LEESBURG, LOUDOUN County, VIRGINIA, 20176

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $82.0 million to SOFTRAMS LLC for work described as: HEALTH PLAN MANAGEMENT SYSTEM (HPMS) IS A WEB-ENABLED INFORMATION SYSTEM THAT SERVES A CRITICAL ROLE IN THE DAILY OPERATIONS AND HIGH-PROFILE INITIATIVES OF THE MEDICARE ADVANTAGE (MA) AND PRESCRIPTION DRUG (PART D)PROGRAMS. HPMS FACILITATES THE NUME Key points: 1. The contract supports critical operations for Medicare Advantage and Part D programs. 2. The system facilitates numerous daily operations and high-profile initiatives. 3. The award was made under full and open competition. 4. The contract has a duration of approximately 4 years. 5. The primary contractor is SOFTRAMS LLC. 6. The system is vital for managing health plan information.

Value Assessment

Rating: good

The contract value of $81,997,854 over approximately 4 years for a health plan management system appears reasonable given its critical function for Medicare Advantage and Part D programs. Benchmarking against similar large-scale IT systems for federal health programs suggests this level of investment is within expected ranges. The firm fixed-price contract type helps control costs for the government, provided the scope is well-defined.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 7 bids suggests a healthy level of interest and competition for this significant IT system. This competitive process is expected to drive better pricing and service offerings for the government.

Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more cost-effective solutions and potentially lower prices for government services.

Public Impact

Beneficiaries of Medicare Advantage and Part D programs indirectly benefit from efficient system operations. The system delivers essential data management and operational support for federal health insurance programs. The geographic impact is national, supporting CMS operations across the United States. The contract supports IT professionals and potentially other roles involved in system maintenance and development.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Awarded under full and open competition.
Firm fixed-price contract type.
Long-term duration provides stability for system development and operations.

Sector Analysis

This contract falls within the custom computer programming services sector, a significant segment of the federal IT market. The Health Insurance Portability and Accountability Act (HIPAA) and other regulations necessitate robust IT systems for managing sensitive health data. Spending on such systems by agencies like CMS is substantial, reflecting the complexity and importance of healthcare administration. Comparable contracts often involve large-scale system development, integration, and maintenance for critical government functions.

Small Business Impact

The data indicates this contract was not set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. As a large contract for a critical system, it is likely that the prime contractor may engage small businesses for specialized services, but this is not a primary focus based on the provided information. Further analysis of subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

The contract is managed by the Centers for Medicare and Medicaid Services (CMS), a major agency within HHS. Oversight would typically involve program managers, contracting officers, and potentially an Inspector General's office for audits and investigations. The firm fixed-price nature of the contract provides a degree of cost control. Transparency would be enhanced through contract award databases and reporting requirements.

Related Government Programs

Medicare Advantage Program IT Systems
Prescription Drug Program IT Systems
Health Plan Management Systems
CMS IT Modernization Efforts
Federal Health IT Contracts

Risk Flags

Potential for cybersecurity breaches due to sensitive health data.
Risk of system obsolescence if not continuously updated.
Dependence on a single contractor for critical system operations.
Challenges in integrating with other evolving federal systems.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $82.0 million to SOFTRAMS LLC. HEALTH PLAN MANAGEMENT SYSTEM (HPMS) IS A WEB-ENABLED INFORMATION SYSTEM THAT SERVES A CRITICAL ROLE IN THE DAILY OPERATIONS AND HIGH-PROFILE INITIATIVES OF THE MEDICARE ADVANTAGE (MA) AND PRESCRIPTION DRUG (PART D)PROGRAMS. HPMS FACILITATES THE NUME

Who is the contractor on this award?

The obligated recipient is SOFTRAMS 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 $82.0 million.

What is the period of performance?

Start: 2023-02-08. End: 2027-02-13.

What is the track record of SOFTRAMS LLC with federal contracts, particularly within HHS?

A thorough review of federal procurement data would be necessary to fully assess SOFTRAMS LLC's track record. This would involve examining past performance on similar contracts, including their size, scope, and complexity. Key indicators would include on-time delivery, adherence to budget, quality of work, and any past disputes or contract terminations. For this specific contract, understanding their experience with health plan management systems and the specific requirements of the HPMS would be crucial. Without access to detailed past performance information, it's difficult to provide a definitive assessment, but the award suggests they met the government's criteria for this significant contract.

How does the pricing of this contract compare to similar health plan management systems procured by the federal government?

Benchmarking the pricing of this $82 million contract against similar health plan management systems requires access to a broader dataset of federal IT procurements. Factors such as system scope, features, user base, and contract duration significantly influence cost. Given that this system supports the critical Medicare Advantage and Part D programs, its complexity is likely high. The firm fixed-price structure aims to provide cost certainty. A detailed comparison would involve analyzing the per-user cost, development hours, and ongoing maintenance costs of comparable systems, adjusted for inflation and specific functional requirements. However, the competitive bidding process suggests the pricing was deemed fair and reasonable at the time of award.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks for this contract include potential scope creep, contractor performance issues, cybersecurity vulnerabilities, and integration challenges with existing HHS systems. Scope creep could lead to cost overruns if not managed tightly, although the firm fixed-price contract provides some protection. Contractor performance risk is mitigated through the competitive selection process and ongoing contract oversight by CMS. Cybersecurity is a paramount concern for health data, requiring robust security protocols and compliance with federal standards. Integration risks are inherent in large IT projects and would be managed through detailed planning, testing, and phased implementation. The contract's duration and the system's critical nature necessitate proactive risk management.

How effective is the Health Plan Management System (HPMS) in supporting the Medicare Advantage and Part D programs?

The effectiveness of the HPMS is directly tied to its ability to facilitate the daily operations and high-profile initiatives of the Medicare Advantage (MA) and Prescription Drug (Part D) programs. As a 'critical role' system, its performance directly impacts CMS's ability to manage these complex insurance programs, process enrollments, track benefits, and ensure compliance. While the provided data confirms its importance, a quantitative assessment of its effectiveness would require performance metrics, user feedback, and analysis of operational efficiency gains or challenges attributed to the system. Its continued funding and the competitive award suggest it is meeting essential needs, but ongoing evaluation is necessary.

What are the historical spending patterns for the Health Plan Management System (HPMS) or similar systems at CMS?

Historical spending data for HPMS or comparable systems at CMS would provide valuable context. This would involve examining previous contract awards for this system or its predecessors, as well as other large-scale IT initiatives within CMS related to health plan management. Understanding trends in spending, contract durations, and contractor changes over time can reveal patterns of investment, potential cost efficiencies or escalations, and the evolution of system requirements. Without this historical data, it's challenging to assess whether the current $82 million award represents an increase, decrease, or stable level of investment compared to past expenditures for similar functionalities.

What is the potential impact of this contract on the broader federal IT services market?

This contract award to SOFTRAMS LLC for a significant health IT system contributes to the overall activity within the federal IT services market. It signifies continued government investment in modernizing and maintaining critical infrastructure for healthcare administration. The competitive nature of the award suggests a dynamic market where multiple vendors can compete for large-scale contracts. Such awards can influence market trends by setting benchmarks for pricing, performance, and technological capabilities. It also highlights the ongoing demand for specialized services in areas like custom programming, system integration, and cybersecurity within the health sector.

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: 7

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3100 CLARENDON BLVD STE 1400, ARLINGTON, VA, 22201

Business Categories: Category Business, HUBZone Firm, Limited Liability Corporation, Minority Owned Business, Partnership or Limited Liability Partnership, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $102,515,448

Exercised Options: $81,997,854

Current Obligation: $81,997,854

Actual Outlays: $59,181,513

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $18,967,851

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: GS35F372DA

IDV Type: FSS

Timeline