HHS awards $116M contract for Eligibility Appeals Operational Support to Maximus Federal Services

Contract Overview

Contract Amount: $116,236,910 ($116.2M)

Contractor: Maximus Federal Services, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2023-07-24

End Date: 2026-09-24

Contract Duration: 1,158 days

Daily Burn Rate: $100.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: TIME AND MATERIALS

Sector: Healthcare

Official Description: ELIGIBILITY APPEALS OPERATIONAL SUPPORT (EAOS)

Place of Performance

Location: MCLEAN, FAIRFAX County, VIRGINIA, 22102

State: Virginia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $116.2 million to MAXIMUS FEDERAL SERVICES, INC. for work described as: ELIGIBILITY APPEALS OPERATIONAL SUPPORT (EAOS) Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of 1158 days indicates a long-term need for these services. 3. The award type is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 4. The North American Industry Classification System (NAICS) code 541611 points to administrative and management consulting services. 5. The contractor, Maximus Federal Services, Inc., has a significant presence in government contracting. 6. The contract is a Time and Materials (T&M) type, which can pose cost control challenges if not managed closely. 7. The base of the contractor is in Virginia, a common hub for federal contractors.

Value Assessment

Rating: fair

Benchmarking the value of this $116 million contract requires more specific data on the scope of 'Eligibility Appeals Operational Support' and the deliverables. However, for administrative management and general management consulting services, this award falls within a typical range for large-scale federal contracts. The Time and Materials pricing structure necessitates careful monitoring to ensure cost-effectiveness and prevent overruns compared to fixed-price contracts, which often offer better price certainty for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The presence of 4 bids suggests a moderate level of competition for this specific delivery order. While full and open competition is generally preferred for maximizing price discovery and ensuring fair market value, the actual competitiveness can vary based on the number of bidders and the specific requirements of the solicitation.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it aims to secure the best possible pricing and service quality by allowing a wide range of qualified contractors to compete. This process helps prevent inflated costs and encourages innovation.

Public Impact

Beneficiaries include individuals seeking eligibility appeals for health and human services programs administered by CMS. Services delivered involve operational support for the appeals process, likely encompassing case management, data processing, and administrative functions. The geographic impact is national, supporting CMS operations across the United States. Workforce implications may include the creation or maintenance of jobs for administrative staff, analysts, and support personnel within Maximus Federal Services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) contract type can lead to cost overruns if not closely managed and monitored for efficiency.
The large dollar value and long duration of the contract present a significant financial commitment for the government.
Reliance on a single contractor for critical operational support could pose a risk if performance issues arise.
The complexity of eligibility appeals processes can be challenging to manage effectively, potentially leading to delays or errors.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
The contractor, Maximus Federal Services, Inc., is an established entity with experience in government health and human services contracts.
The contract duration suggests a stable, long-term partnership to ensure continuity of essential services.
The specific NAICS code indicates a focus on specialized administrative and management consulting expertise.

Sector Analysis

The federal sector for administrative management and general management consulting services (NAICS 541611) is substantial, supporting a wide array of government functions. This contract fits within the broader healthcare administration and public sector consulting market. Comparable spending benchmarks for large-scale operational support contracts within HHS and CMS often run into tens or hundreds of millions of dollars, reflecting the complexity and scale of managing federal programs.

Small Business Impact

This contract was not set aside for small businesses, as indicated by 'sb': false. Maximus Federal Services, Inc. is a large business. There is no explicit information provided regarding subcontracting plans for small businesses. The absence of a small business set-aside suggests that the primary focus was on securing the most capable and cost-effective solution from the broader market, rather than specifically targeting small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Centers for Medicare and Medicaid Services (CMS), a division of HHS. As a delivery order under a larger IDIQ, oversight mechanisms would likely include performance reviews, milestone tracking, and financial audits. The contract's Time and Materials nature necessitates rigorous monitoring of labor hours and costs to ensure accountability and prevent waste. Transparency is typically managed through contract reporting requirements and potential Freedom of Information Act (FOIA) requests, though specific IG jurisdiction would depend on the nature of any alleged issues.

Related Government Programs

Centers for Medicare and Medicaid Services (CMS) Operations Support
Health and Human Services (HHS) Administrative Services
Federal Eligibility Determination and Appeals Systems
Government Management Consulting Contracts

Risk Flags

Time and Materials contract type carries inherent cost overrun risk.
Long contract duration requires sustained performance monitoring.
Complexity of appeals process may lead to performance challenges.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $116.2 million to MAXIMUS FEDERAL SERVICES, INC.. ELIGIBILITY APPEALS OPERATIONAL SUPPORT (EAOS)

Who is the contractor on this award?

The obligated recipient is MAXIMUS FEDERAL SERVICES, INC..

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 $116.2 million.

What is the period of performance?

Start: 2023-07-24. End: 2026-09-24.

What is the historical spending pattern for Eligibility Appeals Operational Support (EAOS) by CMS?

Analyzing historical spending for EAOS by CMS requires access to detailed federal procurement databases and reports. Generally, CMS manages complex programs with significant operational needs, and spending on support services for eligibility appeals can fluctuate based on legislative changes, program expansions, and the volume of appeals. Without specific historical data for this particular contract or a closely related category, it's difficult to provide precise figures. However, given the scale of Medicare and Medicaid, it is reasonable to assume that operational support for appeals has been a consistent and substantial expenditure area for CMS over the years, likely involving multiple contracts and contractors.

How does the per-unit cost of this contract compare to similar EAOS contracts?

Determining a precise per-unit cost comparison for this $116 million contract is challenging without knowing the specific units of service being procured. 'Operational Support' can encompass a wide range of activities, from processing individual appeals to managing IT systems. If 'units' refer to processed appeals, then a comparison would involve dividing the total contract value by the projected number of appeals. However, Time and Materials contracts often make direct per-unit cost comparisons difficult because pricing is based on labor hours and material costs rather than fixed per-unit rates. Benchmarking would require detailed analysis of labor categories, overhead rates, and profit margins against similar contracts awarded by CMS or other agencies for comparable support functions.

What are the key performance indicators (KPIs) for this contract, and how is Maximus Federal Services' performance being measured?

Key Performance Indicators (KPIs) for an Eligibility Appeals Operational Support contract typically focus on efficiency, accuracy, timeliness, and customer satisfaction. Examples of KPIs could include the average time to process an appeal, the accuracy rate of decisions, the backlog of pending appeals, and the rate of successful resolutions. Performance measurement for Maximus Federal Services would likely involve regular reporting against these KPIs, potentially with defined acceptable performance levels. Contract officers and technical monitors from CMS would be responsible for evaluating performance, which could influence future task orders or contract renewals. Specific KPIs are usually detailed within the contract's Performance Work Statement (PWS).

What is Maximus Federal Services' track record with similar government contracts, particularly within HHS?

Maximus Federal Services, Inc. has a substantial track record of working with federal agencies, particularly within the Department of Health and Human Services (HHS) and its sub-agencies like the Centers for Medicare and Medicaid Services (CMS). The company is well-known for its work in administering government health and human services programs, including eligibility determination, enrollment, and claims processing. Their experience often involves large-scale IT systems and operational support for complex healthcare and social services initiatives. A review of federal procurement data would likely show numerous past awards and contract performance history, which would be a key factor in their selection for this EAOS contract.

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 Eligibility Appeals Operational Support is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts do not have a ceiling on the total cost, meaning the government pays for the actual labor hours and materials used, plus a fixed fee or profit. If the contractor's efficiency is low, or if the scope of work expands without adequate controls, costs can escalate beyond initial projections. This necessitates robust government oversight to monitor labor hours, ensure efficient work practices, and validate the necessity of all expenditures. Without diligent management, T&M contracts can be less cost-effective for the government compared to other contract types.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

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: 4

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Address: 1600 TYSONS BLVD STE 300, MCLEAN, VA, 22102

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

Financial Breakdown

Contract Ceiling: $197,914,957

Exercised Options: $116,236,910

Current Obligation: $116,236,910

Actual Outlays: $83,029,590

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS10F0085Y

IDV Type: FSS

Timeline