HHS Awards $203.7M Contract to CGS Administrators for MAC Services, Ending Dec 2026
Contract Overview
Contract Amount: $203,726,114 ($203.7M)
Contractor: CGS Administrators, LLC
Awarding Agency: Department of Health and Human Services
Start Date: 2024-01-01
End Date: 2026-12-31
Contract Duration: 1,095 days
Daily Burn Rate: $186.1K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS AWARD FEE
Sector: Healthcare
Official Description: JURISDICTION J15 A/B MAC
Place of Performance
Location: NASHVILLE, DAVIDSON County, TENNESSEE, 37214
Plain-Language Summary
Department of Health and Human Services obligated $203.7 million to CGS ADMINISTRATORS, LLC for work described as: JURISDICTION J15 A/B MAC Key points: 1. Contract value of $203.7M over 3 years. 2. CGS Administrators, LLC is the sole awardee. 3. Risk of limited competition due to sole awardee. 4. Spending falls within the Direct Health and Medical Insurance Carriers sector.
Value Assessment
Rating: good
The contract type is Cost Plus Award Fee, which allows for performance-based incentives. Pricing will be assessed against similar Medicare Administrative Contractor (MAC) contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, CGS Administrators, LLC is the sole awardee, which may limit future price discovery.
Taxpayer Impact: Taxpayer funds are being used for essential Medicare administrative services, with the potential for cost efficiencies through award fees.
Public Impact
Ensures continued administration of Medicare services for beneficiaries. Supports the operational efficiency of the Centers for Medicare and Medicaid Services. Impacts healthcare providers through claims processing and payment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole awardee may limit future competition.
- Cost Plus Award Fee structure requires careful monitoring of performance.
Positive Signals
- Awarded under full and open competition.
- Contract duration provides stability for services.
Sector Analysis
This contract falls under the Direct Health and Medical Insurance Carriers sector, which includes entities that administer health insurance plans. Spending benchmarks for similar MAC contracts are typically in the hundreds of millions over several years.
Small Business Impact
The data indicates that small businesses were not directly involved in this specific contract award. Further analysis would be needed to determine if small businesses are subcontracting opportunities.
Oversight & Accountability
The Centers for Medicare and Medicaid Services (CMS) is responsible for oversight. The Cost Plus Award Fee structure necessitates robust performance monitoring to ensure value for taxpayer money.
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
- Limited competition due to sole awardee.
- Potential for cost overruns in CPAF contracts.
- Dependence on a single contractor for critical services.
- Need for strong government oversight to manage performance and costs.
Tags
direct-health-and-medical-insurance-carr, department-of-health-and-human-services, tn, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $203.7 million to CGS ADMINISTRATORS, LLC. JURISDICTION J15 A/B MAC
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 $203.7 million.
What is the period of performance?
Start: 2024-01-01. End: 2026-12-31.
What is the historical performance of CGS Administrators, LLC in managing Medicare administrative contracts?
Historical performance data for CGS Administrators, LLC in managing Medicare Administrative Contracts (MACs) is crucial for assessing their capability and efficiency. Reviewing past performance reviews, audit findings, and contract modifications can provide insights into their reliability, adherence to timelines, and cost management. This information helps determine if the current award is justified based on proven track record.
How does the awarded amount compare to the estimated cost and previous contract values for similar MAC jurisdictions?
Comparing the $203.7 million award to the government's estimate and previous contract values for similar MAC jurisdictions is essential for value assessment. Significant deviations could indicate potential overpricing or exceptional value. Benchmarking against peer contracts helps determine if the pricing is competitive and reflects market rates for comparable administrative services.
What mechanisms are in place to ensure CGS Administrators, LLC meets performance targets and justifies the award fee?
The Cost Plus Award Fee (CPAF) structure requires clear performance metrics and objective evaluation criteria. Mechanisms must be in place for CMS to rigorously monitor CGS's performance against these targets. This includes regular reviews, data analysis, and a transparent process for determining the award fee, ensuring accountability and incentivizing high-quality service delivery.
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: 75FCMC23R0003
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: $540,530,346
Exercised Options: $226,230,598
Current Obligation: $203,726,114
Actual Outlays: $122,979,750
Subaward Activity
Number of Subawards: 3
Total Subaward Amount: $3,151,909
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2024-01-01
Current End Date: 2026-12-31
Potential End Date: 2030-12-31 00:00:00
Last Modified: 2026-04-08
More Contracts from CGS Administrators, LLC
- Federal Contract — $592.3M (Department of Health and Human Services)
- Federal Contract — $361.1M (Department of Health and Human Services)
- TAS::75 0511::TAS J15 A/B MAC — $328.7M (Department of Health and Human Services)
- Durable Medical Equipment (DME) Medicare Administrative Contractor (MAC) for Jurisdiction C (JC) — $228.3M (Department of Health and Human Services)
- Dependent Medicare Services TAS::75 0511::TAS — $203.4M (Department of Health and Human Services)
Other Department of Health and Human Services Contracts
- Contact Center Operations (CCO) — $5.5B (Maximus Federal Services, Inc.)
- TAS::75 0849::TAS Oper of Govt R&D Goco Facilities — $4.8B (Leidos Biomedical Research Inc)
- THE Purpose of This Contract IS to Provide the Full Complement of Services Necessary to Care for UC in ORR Custody Including Facilities Set-Up, Maintenance, and Support Internal and Perimeter (IF Applicable) Security, Direct Care and Supervision Inc — $3.5B (Rapid Deployment Inc)
- Contact Center Operations — $2.6B (Maximus Federal Services, Inc.)
- Federal Contract — $2.4B (Leidos Biomedical Research Inc)
View all Department of Health and Human Services contracts →