HHS Awards $110M to Qlarant for Medicare IT Services Over 10 Years

Contract Overview

Contract Amount: $109,709,919 ($109.7M)

Contractor: Qlarant Integrity Solutions LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2005-09-29

End Date: 2015-04-30

Contract Duration: 3,500 days

Daily Burn Rate: $31.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 10

Pricing Type: COST PLUS FIXED FEE

Sector: IT

Official Description: MEDIC

Place of Performance

Location: EASTON, TALBOT County, MARYLAND, 21601, UNITED STATES OF AMERICA

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $109.7 million to QLARANT INTEGRITY SOLUTIONS LLC for work described as: MEDIC Key points: 1. Significant 10-year contract for essential Medicare IT infrastructure. 2. Qlarant Integrity Solutions LLC is the sole awardee. 3. Potential for cost overruns given the Cost Plus Fixed Fee structure. 4. The IT services sector is highly competitive, raising questions about sole-source justification if applicable.

Value Assessment

Rating: fair

The contract's Cost Plus Fixed Fee (CPFF) structure allows for cost reimbursement plus a fixed fee. While this can be suitable for R&D or uncertain scope, it carries inherent risk of cost escalation compared to fixed-price contracts. The total award value of $109.7M over 10 years averages to $10.97M annually.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting multiple bidders participated. This method generally promotes competitive pricing and value. However, the duration and specific nature of the services could still lead to price increases over time.

Taxpayer Impact: Taxpayer funds are being used for critical IT infrastructure supporting Medicare. The competitive award aims for efficiency, but the CPFF structure warrants close monitoring to ensure cost control.

Public Impact

Ensures continued operation of vital Medicare IT systems. Supports healthcare access and efficiency for millions of Americans. Potential for long-term IT infrastructure stability. Job creation within the IT services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee structure can lead to cost overruns.
Long contract duration (10 years) may not reflect evolving technology needs.
Sole awardee could reduce future competitive pressure.

Positive Signals

Awarded through full and open competition.
Supports a critical government function (Medicare).
Long-term commitment provides stability for services.

Sector Analysis

This contract falls within the Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services subsector. Spending in this area is substantial across government, driven by the need for robust IT operations. Benchmarks vary widely based on service scope and duration.

Small Business Impact

The data does not indicate whether small businesses were involved as subcontractors. Larger IT contracts often have subcontracting goals, but without specific data, the small business impact is unknown.

Oversight & Accountability

The Centers for Medicare and Medicaid Services (CMS) is responsible for oversight. Given the contract's duration and CPFF structure, regular performance reviews and cost audits are crucial for accountability.

Related Government Programs

Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services
Department of Health and Human Services Contracting
Centers for Medicare and Medicaid Services Programs

Risk Flags

Cost Plus Fixed Fee structure.
Long contract duration (10 years).
Potential for scope creep.
Reliance on a single awardee for critical services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $109.7 million to QLARANT INTEGRITY SOLUTIONS LLC. MEDIC

Who is the contractor on this award?

The obligated recipient is QLARANT INTEGRITY SOLUTIONS 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 $109.7 million.

What is the period of performance?

Start: 2005-09-29. End: 2015-04-30.

What specific IT services are included under this contract, and how do they align with current and future Medicare needs?

The contract covers 'Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services.' This broad description necessitates detailed understanding of the specific services rendered to ensure they remain relevant and effective for Medicare's evolving technological landscape over the 10-year period. Regular reviews should confirm alignment with strategic IT modernization goals.

How will CMS ensure cost control and prevent potential overruns with the Cost Plus Fixed Fee (CPFF) contract structure over its 10-year duration?

CMS must implement rigorous oversight mechanisms, including detailed cost tracking, regular audits, and performance-based milestone reviews. Establishing clear performance metrics and potentially incorporating incentive fee adjustments tied to cost efficiency and performance outcomes can help mitigate risks associated with the CPFF structure.

Given the full and open competition, what was the rationale for a 10-year contract term, and how does this impact the government's ability to leverage technological advancements?

A 10-year term suggests a need for long-term stability in critical IT infrastructure. However, it also presents a risk of technological obsolescence. CMS should ensure contract clauses allow for regular reviews, potential modifications, or competitive re-procurement to incorporate newer technologies and maintain cost-effectiveness.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

Product/Service Code: SPECIAL STUDIES/ANALYSIS, NOT R&D › SPECIAL STUDIES - NOT R and D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 10

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Qlarant Inc (UEI: 926745808)

Address: 9240 CENTERVILLE RD, EASTON, MD, 21601

Business Categories: Category Business, Corporate Entity Tax Exempt, Limited Liability Corporation, Nonprofit Organization, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $109,709,919

Exercised Options: $109,709,919

Current Obligation: $109,709,919

Parent Contract

Parent Award PIID: HHSM500200500010I

IDV Type: IDC

Timeline