HHS awards $53.2M for Zone Program Integrity Contractor services, spanning nearly 8 years

Contract Overview

Contract Amount: $53,254,746 ($53.3M)

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: $18.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: TAS::75 8393::TAS 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 $53.3 million to QLARANT INTEGRITY SOLUTIONS LLC for work described as: TAS::75 8393::TAS ZONE PROGRAM INTEGRITY CONTRACTOR ZONE 4 Key points: 1. Contract value of $53.2M over 2953 days suggests a daily burn rate of approximately $18,000. 2. The contract was awarded via full and open competition, indicating a robust bidding process. 3. The 'Cost Plus Award Fee' (CPAF) structure incentivizes performance but requires careful oversight to manage costs. 4. This contract falls under 'All Other Professional, Scientific, and Technical Services,' a broad category. 5. The duration of nearly 8 years suggests a long-term need for these integrity services. 6. The contractor, QLARANT INTEGRITY SOLUTIONS LLC, has been awarded this significant contract. 7. The contract was issued as a Delivery Order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) vehicle or a similar framework.

Value Assessment

Rating: fair

The total award of $53.2M over almost 8 years averages to roughly $6.65M annually. Benchmarking this against similar contracts for program integrity services within HHS or other agencies is difficult without more specific service details. The 'Cost Plus Award Fee' structure can lead to costs exceeding initial estimates if not managed tightly, but also offers potential for cost savings through performance incentives. The value proposition depends heavily on the effectiveness of the integrity measures implemented and the actual savings generated.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through 'Full and Open Competition,' suggesting that all responsible sources were permitted to submit a bid. This typically leads to a more competitive environment, potentially driving down prices and improving service quality. The presence of '4' bids (no) indicates a moderate level of competition for this contract, which is generally positive for price discovery and value for taxpayers.

Taxpayer Impact: Full and open competition with multiple bidders generally benefits taxpayers by fostering a competitive market that can lead to more cost-effective solutions and better service delivery.

Public Impact

The primary beneficiaries are likely the Centers for Medicare and Medicaid Services (CMS) and the Department of Health and Human Services (HHS), who receive support in maintaining program integrity. The services delivered are related to professional, scientific, and technical support, specifically focused on integrity within government programs. The geographic impact is primarily within Texas (ST: TX, SN: TEXAS), where the contractor is located, but the program integrity services likely have a national scope for CMS. Workforce implications include employment opportunities within QLARANT INTEGRITY SOLUTIONS LLC and potentially for subcontractors, contributing to the professional services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'Cost Plus Award Fee' (CPAF) contract type requires diligent oversight to ensure costs remain reasonable and that award fees are justified by performance.
The broad nature of 'All Other Professional, Scientific, and Technical Services' necessitates clear performance metrics to ensure the contractor is delivering targeted value.
Long contract durations can sometimes lead to complacency or a lack of innovation if not actively managed and re-evaluated.

Positive Signals

Awarding via 'Full and Open Competition' suggests a deliberate effort to secure the best value through market forces.
The existence of multiple bids (4) indicates market interest and a degree of competition, which is a positive signal.
The contract's focus on 'Program Integrity' directly addresses a critical need for government agencies to prevent fraud, waste, and abuse.

Sector Analysis

This contract falls within the Professional, Scientific, and Technical Services sector, specifically under NAICS code 541990 (All Other Professional, Scientific, and Technical Services). This sector is characterized by a wide range of specialized services. The market for program integrity services is significant, driven by government mandates to ensure accountability and efficiency in public spending. Comparable spending benchmarks would typically be found within specific government program integrity initiatives or contracts for similar analytical and investigative support services.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (SS: false, SB: false). Therefore, there are no direct subcontracting implications or specific benefits for the small business ecosystem stemming from a set-aside provision. The primary focus is on large business competition for this service requirement.

Oversight & Accountability

Oversight for this contract would primarily reside with the contracting officers and program managers within the Centers for Medicare and Medicaid Services (CMS). The 'Cost Plus Award Fee' structure necessitates robust performance monitoring and evaluation to justify award fees. Transparency would be enhanced through regular reporting requirements stipulated in the contract. While specific Inspector General (IG) jurisdiction isn't detailed, the HHS IG typically oversees programs within the department, including those related to Medicare and Medicaid integrity.

Related Government Programs

Medicare Program Integrity
Medicaid Program Integrity
Healthcare Fraud Prevention
Government Contract Oversight
Professional and Technical Services

Risk Flags

Cost Plus Award Fee (CPAF) structure requires diligent oversight.
Broad NAICS code necessitates clear performance metrics.
Long contract duration may require performance reassessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $53.3 million to QLARANT INTEGRITY SOLUTIONS LLC. TAS::75 8393::TAS 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 $53.3 million.

What is the period of performance?

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

What specific services does the Zone Program Integrity Contractor (ZPIC) perform for CMS?

The Zone Program Integrity Contractor (ZPIC) program was established by CMS to combat healthcare fraud, waste, and abuse. ZPICs are responsible for a range of activities including data analysis to identify potential fraud schemes, conducting investigations, auditing provider claims, and referring cases for potential prosecution or administrative sanctions. They act as a crucial front-line defense in protecting the integrity of the Medicare and Medicaid programs. The specific tasks under this contract would detail the scope of these investigative, analytical, and auditing functions performed by Qlarant Integrity Solutions LLC.

How does the 'Cost Plus Award Fee' (CPAF) structure compare to other contract types in terms of cost control?

A Cost Plus Award Fee (CPAF) contract is a type of cost-reimbursement contract where the contractor is reimbursed for all allowable costs plus an award fee. The award fee is based on the government's evaluation of the contractor's performance against pre-defined criteria. Compared to a firm-fixed-price contract, CPAF offers less cost certainty for the government as costs are not fixed upfront. However, it provides more flexibility than a fixed-price contract when the scope of work is uncertain or evolving. It aims to incentivize superior performance by linking a portion of the contractor's profit to meeting or exceeding performance objectives, potentially leading to better outcomes than a simple cost-plus-fixed-fee (CPFF) contract, but requires rigorous government oversight to manage costs effectively.

What is the historical spending trend for this specific contract or similar program integrity services?

The provided data shows a single award of $53,254,746 with an estimated duration of 2953 days (approximately 7.9 years). This represents the total obligated amount over the contract's life. To assess historical spending trends, one would need to examine the annual obligations against this contract or compare it to previous contracts for similar program integrity functions. Without historical obligation data or details on prior contracts, it's difficult to establish a trend. However, the significant total award suggests a consistent and substantial investment in program integrity services by CMS over this period.

What are the key performance indicators (KPIs) typically used to evaluate a Zone Program Integrity Contractor?

Key performance indicators for a ZPIC typically revolve around their effectiveness in identifying and preventing fraud, waste, and abuse. Common KPIs include the number of investigations initiated and completed, the value of detected fraud (dollars saved or recovered), the accuracy and timeliness of audits, the quality of referral packages sent to law enforcement or other investigative bodies, and adherence to contractual timelines and reporting requirements. The 'Award Fee' component of this CPAF contract would be directly tied to performance against these or similar metrics, ensuring the contractor is incentivized to achieve measurable results in program integrity.

What is the significance of the 'All Other Professional, Scientific, and Technical Services' NAICS code for understanding contract scope?

NAICS code 541990, 'All Other Professional, Scientific, and Technical Services,' is a broad category that encompasses a wide array of specialized services not classified under more specific codes. For this contract, it signifies that the services provided by Qlarant Integrity Solutions LLC are technical and professional in nature but do not fit neatly into categories like 'Management Consulting,' 'Research and Development,' or 'Environmental Consulting.' This broad classification means the specific deliverables and expertise required are detailed within the contract's Statement of Work (SOW), likely involving analytical, investigative, auditing, and reporting functions critical to maintaining program integrity for CMS.

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: 4

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: $59,095,162

Exercised Options: $53,254,746

Current Obligation: $53,254,746

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Parent Contract

Parent Award PIID: HHSM500200800027I

IDV Type: IDC

Timeline