HHS's $107M Zone Program Integrity contract to Qlarant Integrity Solutions shows long duration and cost-plus structure

Contract Overview

Contract Amount: $106,863,182 ($106.9M)

Contractor: Qlarant Integrity Solutions LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2008-09-30

End Date: 2016-10-31

Contract Duration: 2,953 days

Daily Burn Rate: $36.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: ZONE PROGRAM INTEGRITY CONTRACTOR ZONE 4

Place of Performance

Location: SAN ANTONIO, BEXAR County, TEXAS, 78205

State: Texas Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $106.9 million to QLARANT INTEGRITY SOLUTIONS LLC for work described as: ZONE PROGRAM INTEGRITY CONTRACTOR ZONE 4 Key points: 1. The contract's 8-year duration suggests a need for sustained program integrity support. 2. A Cost Plus Award Fee (CPAF) structure incentivizes performance but requires careful oversight to manage costs. 3. The contract was awarded through full and open competition, indicating a potentially competitive bidding process. 4. The significant value of the contract points to the importance of program integrity within CMS operations. 5. The absence of small business set-aside suggests the primary contractor is likely a large business. 6. The contract's focus on 'All Other Professional, Scientific, and Technical Services' is broad, requiring specific performance metrics.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific performance data and comparable contracts. The Cost Plus Award Fee (CPAF) structure, while common for complex services, can lead to higher costs if not managed effectively. The total award value of over $106 million over nearly 8 years averages to approximately $13.4 million annually, which seems substantial for program integrity services. Further analysis would require understanding the specific deliverables and outcomes achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'Full and Open Competition,' suggesting that multiple bidders were likely considered. This method is generally preferred as it allows for the widest possible range of potential contractors to compete, theoretically leading to better pricing and service. The number of bids received and the specific evaluation criteria would provide further insight into the actual level of competition.

Taxpayer Impact: A full and open competition process is generally favorable for taxpayers as it promotes a competitive environment that can drive down costs and improve the quality of services received.

Public Impact

Beneficiaries include the Centers for Medicare and Medicaid Services (CMS) and ultimately, taxpayers, through efforts to ensure program integrity. Services delivered likely involve detecting and preventing fraud, waste, and abuse within Medicare and Medicaid programs. The geographic impact is national, given CMS's role in administering federal healthcare programs. Workforce implications could involve specialized analytical and investigative roles within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The CPAF structure requires diligent oversight to ensure award fees are tied to measurable performance and do not inflate costs.
The broad 'All Other Professional, Scientific, and Technical Services' NAICS code necessitates clear performance standards to avoid scope creep.
Long contract durations can sometimes lead to complacency or reduced competitive pressure over time.

Positive Signals

Awarding through full and open competition suggests a robust selection process.
The sustained need for this contract indicates its perceived importance and effectiveness in supporting CMS's mission.
The significant value awarded may reflect the complexity and criticality of program integrity functions.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically focusing on program integrity for government healthcare programs. This is a critical area for agencies like CMS, responsible for managing vast sums of taxpayer money. The market for such services is competitive, with numerous firms offering expertise in data analysis, fraud detection, and compliance. Comparable spending benchmarks would depend on the specific services rendered, but government contracts for program integrity and audit services can range from millions to hundreds of millions of dollars annually.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary contract was awarded to a large business, likely based on the scale and complexity of the services required. There is no explicit information on subcontracting plans, but large federal contracts often include provisions for small business participation. Without specific subcontracting data, it's difficult to assess the direct impact on the small business ecosystem, though it implies prime contract opportunities were not specifically targeted towards them.

Oversight & Accountability

Oversight for this contract would primarily reside with the Centers for Medicare and Medicaid Services (CMS). As a Cost Plus Award Fee (CPAF) contract, CMS would be responsible for monitoring contractor performance against defined metrics to determine award fee payouts. Transparency would be facilitated through contract award databases and potentially through Inspector General reports related to program integrity. The specific oversight mechanisms would be detailed in the contract's Statement of Work and terms.

Related Government Programs

Medicare Integrity Program
Medicaid Integrity Program
Program Fraud, Waste, and Abuse Prevention

Risk Flags

Contract duration exceeds typical service periods, requiring justification for sustained need.
Cost-plus award fee structure necessitates robust performance monitoring to ensure value.
Broad NAICS code requires detailed examination of the Statement of Work for specific service scope.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $106.9 million to QLARANT INTEGRITY SOLUTIONS LLC. ZONE PROGRAM INTEGRITY CONTRACTOR ZONE 4

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 $106.9 million.

What is the period of performance?

Start: 2008-09-30. End: 2016-10-31.

What specific services were provided under the ZONE PROGRAM INTEGRITY CONTRACTOR ZONE 4?

The contract, awarded to QLARANT INTEGRITY SOLUTIONS LLC, falls under the NAICS code 541990, 'All Other Professional, Scientific, and Technical Services.' While the specific details of the 'ZONE PROGRAM INTEGRITY CONTRACTOR ZONE 4' are not fully elaborated in the provided data, contracts of this nature typically involve a range of activities aimed at safeguarding federal healthcare programs. These can include data analysis to identify aberrant billing patterns, investigations into potential fraud, waste, and abuse, development and implementation of preventive strategies, provider education, and support for program integrity operations. The 'ZONE' designation might imply a regional focus or a specific operational zone within CMS's broader program integrity efforts. The Cost Plus Award Fee (CPAF) structure suggests that performance metrics were established, and the contractor's success in meeting these metrics influenced their final payment.

How does the Cost Plus Award Fee (CPAF) structure impact the value and risk for this contract?

The Cost Plus Award Fee (CPAF) structure means the contractor is reimbursed for allowable costs plus a fee that is composed of a fixed base fee and an award amount. The award amount is contingent upon meeting or exceeding performance objectives defined in the contract. This structure incentivizes the contractor to perform well and achieve specific outcomes, potentially leading to better value and innovation. However, it also introduces risk. For the government, the total cost is not fixed upfront, and there's a risk of costs escalating if performance objectives are not clearly defined or if oversight is insufficient. For the contractor, the award fee provides a significant incentive, but failure to meet objectives can result in a lower-than-expected fee. Effective management and clear performance metrics are crucial to ensure CPAF delivers value and controls costs.

What does the 8-year duration of this contract imply about the nature of the services and the contractor's performance?

The contract's duration of approximately 8 years (2953 days) suggests that the services provided are long-term and critical to the ongoing operations of the Centers for Medicare and Medicaid Services (CMS). Program integrity functions, such as fraud detection, prevention, and data analysis, require sustained effort and institutional knowledge. A long duration can indicate a stable, ongoing need for these specialized services. It may also imply that the contractor, QLARANT INTEGRITY SOLUTIONS LLC, has demonstrated consistent performance and reliability over an extended period, meeting the performance standards required to justify continued contract awards. Such longevity can also reduce transition costs and maintain continuity in vital program integrity efforts.

How does the 'All Other Professional, Scientific, and Technical Services' classification affect the analysis of this contract?

The classification under NAICS code 541990, 'All Other Professional, Scientific, and Technical Services,' is very broad. This means the contract could encompass a wide array of specialized services. For analysis, it highlights the need to look beyond the general classification to the specific Statement of Work (SOW) to understand the precise nature of the work performed. It suggests that the services are not easily categorized into more specific industry codes, possibly indicating a unique or multifaceted role. This broadness can make direct comparisons to other contracts more difficult unless the specific deliverables are known. It underscores the importance of performance metrics and reporting within the contract to gauge effectiveness and value for money.

What is the significance of the contract being awarded to QLARANT INTEGRITY SOLUTIONS LLC?

The award to QLARANT INTEGRITY SOLUTIONS LLC signifies that, based on the full and open competition process, this company was deemed the most capable and advantageous provider for the ZONE PROGRAM INTEGRITY services at the time of award. As a contractor specializing in program integrity, Qlarant likely possesses the expertise in data analytics, investigative services, and healthcare program knowledge required by CMS. The substantial value and long duration of the contract suggest a strong, established relationship and a track record of successful performance with the agency. Understanding Qlarant's broader portfolio and past performance on similar government contracts would provide further context on their capabilities and the significance of this particular award.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

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: $106,863,182

Exercised Options: $106,863,182

Current Obligation: $106,863,182

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSM500200800027I

IDV Type: IDC

Timeline