CMS awarded $13.2M to Telligen Illinois for management consulting, with a 1,187-day duration

Contract Overview

Contract Amount: $13,212,772 ($13.2M)

Contractor: Telligen Illinois, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2008-08-01

End Date: 2011-11-01

Contract Duration: 1,187 days

Daily Burn Rate: $11.1K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: BASE CONTRACT FOR 9TH SOW

Place of Performance

Location: OAK BROOK, DUPAGE County, ILLINOIS, 60523

State: Illinois Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $13.2 million to TELLIGEN ILLINOIS, LLC for work described as: BASE CONTRACT FOR 9TH SOW Key points: 1. The contract's value appears reasonable given the extended performance period. 2. Limited competition may have impacted pricing, warranting further cost analysis. 3. The Cost Plus Award Fee structure introduces performance-based incentives. 4. This contract supports essential healthcare program operations for CMS. 5. The contractor has a history of supporting federal health initiatives. 6. Performance duration suggests a long-term need for these consulting services.

Value Assessment

Rating: fair

The base contract value of $13.2 million over 1,187 days (approximately 3.25 years) suggests an average annual cost of around $4 million. Benchmarking this against similar management consulting contracts for large federal agencies like CMS is challenging without more specific service details. However, the duration and the 'Cost Plus Award Fee' structure indicate a potentially complex engagement where costs could fluctuate based on performance. The raw dollar amount itself doesn't immediately signal overspending, but a detailed review of the award fee criteria and actual performance against those metrics would be necessary for a definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities or when urgency dictates a direct award. The lack of competition means that the government did not benefit from the price discovery that typically occurs in a competitive bidding process. This can sometimes lead to higher prices than might be achieved in an open market.

Taxpayer Impact: For taxpayers, sole-source awards mean there's a reduced likelihood of securing the lowest possible price for the services rendered. Oversight is crucial to ensure fair pricing and prevent potential cost overruns.

Public Impact

Beneficiaries of improved healthcare program administration through enhanced management consulting. The Centers for Medicare and Medicaid Services (CMS) directly benefits from specialized consulting services. Services likely impact national healthcare program operations, with a focus on Illinois where the contractor is based. Potential for specialized job creation or utilization of skilled consultants within the healthcare sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing benefits for taxpayers.
Cost Plus Award Fee structure requires careful monitoring of performance metrics to ensure value.
Lack of detailed service description makes independent value assessment difficult.

Positive Signals

Contract duration suggests a stable, long-term relationship supporting critical government functions.
Award fee mechanism incentivizes contractor performance and alignment with agency goals.
Contractor's base in Illinois may indicate regional support or focus.

Sector Analysis

This contract falls within the 'Other Management Consulting Services' category (NAICS 541618), a broad sector encompassing advisory and assistance services for management and operations. The federal market for management consulting is substantial, with agencies like CMS frequently procuring such services to improve program efficiency, strategic planning, and operational effectiveness. This specific contract likely supports CMS's mission-critical functions related to healthcare program administration, fitting within the broader trend of federal agencies leveraging external expertise for complex challenges.

Small Business Impact

The provided data indicates that this contract was not awarded to a small business (ss: false) and does not appear to have a small business set-aside component (sb: false). Therefore, the direct impact on small business set-asides is minimal. However, the prime contractor, Telligen Illinois, LLC, may engage small businesses as subcontractors, depending on the scope of work and subcontracting plans, which are not detailed here. The absence of a small business set-aside means opportunities for small businesses to compete directly for this prime contract were not prioritized.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Health and Human Services and the Centers for Medicare and Medicaid Services. As a sole-source award, scrutiny on the justification for this approach and the subsequent performance and cost management is heightened. The 'Cost Plus Award Fee' structure necessitates robust monitoring of performance metrics to ensure the award fee is justified and that the contractor is meeting or exceeding expectations. Transparency would be enhanced through regular reporting and potential reviews by agency oversight bodies or the Government Accountability Office (GAO) if issues arise.

Related Government Programs

Medicare Program Administration
Medicaid Program Operations
Healthcare Consulting Services
Federal Management Consulting Contracts
Department of Health and Human Services Contracts

Risk Flags

Sole-source award lacks competitive pricing.
Performance metrics for award fee require careful monitoring.
Limited transparency on specific services rendered.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $13.2 million to TELLIGEN ILLINOIS, LLC. BASE CONTRACT FOR 9TH SOW

Who is the contractor on this award?

The obligated recipient is TELLIGEN ILLINOIS, 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 $13.2 million.

What is the period of performance?

Start: 2008-08-01. End: 2011-11-01.

What specific management consulting services were provided under this contract?

The contract falls under NAICS code 541618, 'Other Management Consulting Services.' While the specific details are not provided in the summary data, such services typically encompass a wide range of advisory and assistance functions. For the Centers for Medicare and Medicaid Services (CMS), this could include areas like strategic planning, organizational analysis, process improvement, policy development support, program evaluation, and operational efficiency enhancements related to Medicare and Medicaid programs. The 'Cost Plus Award Fee' structure suggests that the services were performance-oriented, aiming to achieve specific, measurable outcomes that would trigger award fee payments.

How does the $13.2 million contract value compare to similar federal management consulting contracts?

Direct comparison of the $13.2 million value is difficult without knowing the precise scope, duration, and performance metrics. However, for a contract spanning over three years (1,187 days) with a sole-source award to a large agency like CMS, this figure appears within a plausible range for specialized management consulting. Larger federal agencies often award multi-million dollar contracts for complex program support. To provide a more accurate benchmark, one would need to analyze contracts with similar NAICS codes, agency types, and contract types (e.g., Cost Plus Award Fee) awarded within the last 1-2 years, adjusting for inflation and specific service complexities.

What are the primary risks associated with a sole-source award for management consulting services?

The primary risk of a sole-source award is the lack of price competition, which can lead to the government paying a higher price than if the contract had been competed. This reduces the government's leverage in price negotiations. Another risk is that the agency might not be aware of potentially more innovative or cost-effective solutions offered by other vendors. Furthermore, sole-source awards can sometimes raise concerns about fairness and equal opportunity for other capable contractors. Robust justification for the sole-source nature of the award and stringent oversight of performance and costs are critical to mitigate these risks.

What is the significance of the 'Cost Plus Award Fee' (CPAF) contract type in this context?

The Cost Plus Award Fee (CPAF) contract type is significant because it incentivizes the contractor to perform well by linking a portion of their profit (the 'award fee') to achieving specific performance objectives defined by the government. The contractor is reimbursed for allowable costs plus a fixed fee, and then potentially earns an additional award fee based on performance evaluations. This structure is often used for complex services where performance is difficult to define precisely upfront. For CMS, this means Telligen Illinois, LLC's compensation is tied to meeting or exceeding defined performance standards, encouraging high-quality service delivery.

What is the historical spending pattern for management consulting services at CMS?

Historical spending on management consulting services at CMS is substantial, reflecting the agency's complex mission and large operational footprint. CMS consistently procures a wide array of consulting services to support its programs, including areas like IT modernization, policy analysis, program integrity, and operational efficiency. While specific historical data for Telligen Illinois, LLC under this particular contract isn't detailed, CMS's overall spending in the management consulting sector (NAICS 541618 and related codes) typically runs into hundreds of millions of dollars annually. This contract represents a portion of that broader investment in external expertise.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Management Consulting Services

Product/Service Code: MEDICAL SERVICES › DEPENDENT MEDICARE SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Telligen, Inc

Address: 2625 S BUTTERFIELD RD STE 102E, OAK BROOK, IL, 60523

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

Financial Breakdown

Contract Ceiling: $13,212,772

Exercised Options: $13,212,772

Current Obligation: $13,212,772

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline