HHS awards $16.9M for Medicare Advantage & Part D system O&M to CGI Federal

Contract Overview

Contract Amount: $16,899,793 ($16.9M)

Contractor: CGI Federal Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2026-04-01

End Date: 2027-03-31

Contract Duration: 364 days

Daily Burn Rate: $46.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: THE PURPOSE OF THIS PROCUREMENT IS TO ACQUIRE CONTINUED OPERATIONS AND MAINTENANCE (O&M) SERVICES TO SUPPORT THE MEDICARE ADVANTAGE & PART D (MARX) SYSTEM SOFTWARE EFFECTIVELY, ECONOMICALLY, AND IN A TIMELY MANNER. MARX IS THE PRIMARY SYSTEM RESPONSI

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $16.9 million to CGI FEDERAL INC. for work described as: THE PURPOSE OF THIS PROCUREMENT IS TO ACQUIRE CONTINUED OPERATIONS AND MAINTENANCE (O&M) SERVICES TO SUPPORT THE MEDICARE ADVANTAGE & PART D (MARX) SYSTEM SOFTWARE EFFECTIVELY, ECONOMICALLY, AND IN A TIMELY MANNER. MARX IS THE PRIMARY SYSTEM RESPONSI Key points: 1. The contract focuses on essential Operations and Maintenance (O&M) for the MARX system. 2. CGI Federal Inc. is the incumbent contractor, suggesting potential for continued reliance. 3. The procurement aims for effective, economic, and timely support of critical Medicare systems. 4. The sector is IT services, specifically Other Computer Related Services.

Value Assessment

Rating: fair

The contract value of $16.9M over one year appears reasonable for O&M of a complex system like MARX. Benchmarking against similar large-scale IT system maintenance contracts would provide a clearer picture of its cost-effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is positive for price discovery. However, the specific details of the bidding process and the number of bidders are not provided, making it difficult to fully assess the competitive landscape.

Taxpayer Impact: The competitive award process aims to ensure taxpayer funds are used efficiently for essential government IT services.

Public Impact

Ensures continued operation of critical Medicare Advantage and Part D systems. Supports the financial and healthcare access of millions of Medicare beneficiaries. Maintains the integrity and functionality of vital healthcare program infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics.
Potential for vendor lock-in with incumbent.
Reliance on a single delivery order for a full year's service.

Positive Signals

Awarded under full and open competition.
Focus on essential system operations and maintenance.
Clear contract end date.

Sector Analysis

This contract falls within the IT services sector, specifically 'Other Computer Related Services'. Spending in this area is substantial across government, supporting a wide range of critical functions. Benchmarks for O&M of large-scale government IT systems vary widely based on complexity and scope.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, small businesses were likely not primary participants in this specific procurement, though they may be subcontractors.

Oversight & Accountability

The award was a delivery order, suggesting it might be part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. Oversight would focus on ensuring the delivery order meets the terms of the base contract and achieves the stated O&M objectives effectively.

Related Government Programs

Other Computer Related Services
Department of Health and Human Services Contracting
Centers for Medicare and Medicaid Services Programs

Risk Flags

Potential for sole-source continuation if competition was weak.
Reliance on incumbent may limit innovation.
Lack of detailed cost breakdown.
System criticality implies high impact of failure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $16.9 million to CGI FEDERAL INC.. THE PURPOSE OF THIS PROCUREMENT IS TO ACQUIRE CONTINUED OPERATIONS AND MAINTENANCE (O&M) SERVICES TO SUPPORT THE MEDICARE ADVANTAGE & PART D (MARX) SYSTEM SOFTWARE EFFECTIVELY, ECONOMICALLY, AND IN A TIMELY MANNER. MARX IS THE PRIMARY SYSTEM RESPONSI

Who is the contractor on this award?

The obligated recipient is CGI FEDERAL 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 $16.9 million.

What is the period of performance?

Start: 2026-04-01. End: 2027-03-31.

What is the historical performance of CGI Federal Inc. on the MARX system O&M, and how does it compare to the objectives of this new contract?

Assessing CGI Federal's past performance on the MARX system is crucial for understanding the value proposition of this continued O&M contract. Historical data on system uptime, issue resolution times, and user satisfaction would provide context for the $16.9M award. Comparing this historical performance against the stated goals of 'effectively, economically, and in a timely manner' will help determine if the current contract represents a continuation of successful service or an opportunity for improvement.

Given the full and open competition, what was the competitive landscape, and how did the pricing compare to other bids received?

While the contract states 'full and open competition,' understanding the number of bids received and the price range is essential for evaluating value. If only a few bids were submitted, or if CGI Federal's bid was significantly higher than estimated costs, it could indicate potential inefficiencies or a lack of robust competition. Conversely, multiple competitive bids would suggest a fair market price was achieved for the O&M services.

What are the key performance indicators (KPIs) for this contract, and how will CMS measure the effectiveness of CGI Federal's O&M services?

The effectiveness of this $16.9M contract hinges on clearly defined and measurable KPIs for the MARX system's O&M. Without specific metrics related to system availability, performance, security, and responsiveness to issues, it's difficult to objectively assess whether CMS is receiving value for its investment. Robust oversight requires transparent KPIs that demonstrate the contractor's adherence to service level agreements and overall system health.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related 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

Solicitation ID: 75FCMC26Q0029

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: THE Timken Company

Address: 12601 FAIR LAKES CIR # 100, FAIRFAX, VA, 22033

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

Financial Breakdown

Contract Ceiling: $22,015,436

Exercised Options: $16,899,793

Current Obligation: $16,899,793

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: GS35F281DA

IDV Type: FSS

Timeline