HHS awarded $13.8M for management consulting, with limited competition and a cost-plus award fee structure

Contract Overview

Contract Amount: $13,781,245 ($13.8M)

Contractor: Massachusetts Peer Review Organization, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2008-08-01

End Date: 2011-07-31

Contract Duration: 1,094 days

Daily Burn Rate: $12.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: COST PLUS AWARD FEE

Sector: Other

Official Description: TAS::75 0511::TAS QIO

Place of Performance

Location: WALTHAM, MIDDLESEX County, MASSACHUSETTS, 02451

State: Massachusetts Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $13.8 million to MASSACHUSETTS PEER REVIEW ORGANIZATION, INC. for work described as: TAS::75 0511::TAS QIO Key points: 1. The contract utilized a cost-plus award fee structure, which can incentivize performance but may also lead to higher costs if not managed closely. 2. Limited competition for this contract raises questions about whether the government secured the best possible pricing and value. 3. The contract duration of 1094 days suggests a significant, ongoing need for the services provided. 4. The contractor, MASSACHUSETTS PEER REVIEW ORGANIZATION, INC., has a history with federal contracts, indicating some level of established capability. 5. The services fall under 'Other Management Consulting Services,' a broad category that requires careful scope management to ensure value. 6. The absence of small business set-aside or subcontracting indicates this contract did not directly aim to boost small business participation.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the consulting services rendered and their outcomes. The cost-plus award fee structure, while common for complex services, can sometimes lead to costs exceeding fixed-price contracts if performance incentives are not tightly aligned with cost control. Comparing it to similar contracts for 'Other Management Consulting Services' within HHS or CMS would be necessary for a more precise value assessment. The awarded amount of $13.8 million over approximately three years suggests a substantial investment, and its effectiveness hinges on the quality and impact of the consulting provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was not competed through a full and open process, indicating that the solicitation was likely restricted to a limited number of potential offerors. The specific reasons for this limitation (e.g., sole-source justification, existing contract vehicle) are not detailed here. A limited competition environment generally leads to less price pressure compared to full and open competition, potentially resulting in higher costs for the government.

Taxpayer Impact: Limited competition means taxpayers may not have benefited from the most competitive pricing that could have been achieved through a broader solicitation process.

Public Impact

The primary beneficiaries of this contract are likely the Centers for Medicare and Medicaid Services (CMS), which received management consulting services to support its operations. The services delivered aimed to improve the efficiency and effectiveness of CMS programs, though specific outcomes are not detailed. The geographic impact is primarily within the federal government's administrative structure, with potential downstream effects on healthcare policy and administration. Workforce implications are likely internal to CMS, with consultants potentially advising on organizational structure, process improvement, or strategic planning.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus award fee contracts require diligent oversight to ensure costs remain reasonable and aligned with performance objectives.
Limited competition may have resulted in a higher price than could have been achieved through a more robust bidding process.
The broad nature of 'Other Management Consulting Services' necessitates clear performance metrics and deliverables to ensure accountability.

Positive Signals

The contract was awarded to an established entity, MASSACHUSETTS PEER REVIEW ORGANIZATION, INC., suggesting a degree of proven capability.
The contract duration indicates a sustained need and potentially a successful, ongoing relationship for specific services.
The use of an award fee structure, if well-defined, can incentivize high performance and quality outcomes from the contractor.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically 'Other Management Consulting Services.' This sector is characterized by a wide range of advisory and support services provided to government agencies. The market size for federal management consulting is substantial, with agencies frequently seeking external expertise to navigate complex policy challenges, improve operational efficiency, and implement new programs. Comparable spending benchmarks would typically involve analyzing the average cost and duration of similar consulting engagements within HHS and CMS, considering the specific nature of the services provided.

Small Business Impact

This contract does not appear to have included a small business set-aside, nor is there information indicating significant subcontracting opportunities for small businesses. This suggests that the primary focus was on acquiring the specific expertise required, rather than on promoting small business participation through this particular award. Consequently, the direct impact on the small business ecosystem from this contract is likely minimal.

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). As a cost-plus award fee contract, performance monitoring and evaluation would be critical to determining the award fee component. Transparency regarding the specific deliverables, performance metrics, and awarded fees would be essential for public accountability. While specific Inspector General (IG) jurisdiction is not detailed, the HHS OIG generally oversees programs within the department, including those managed by CMS.

Related Government Programs

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

Risk Flags

Limited competition may lead to suboptimal pricing.
Cost-plus award fee structure requires robust performance monitoring.
Broad service category necessitates clear deliverable definition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $13.8 million to MASSACHUSETTS PEER REVIEW ORGANIZATION, INC.. TAS::75 0511::TAS QIO

Who is the contractor on this award?

The obligated recipient is MASSACHUSETTS PEER REVIEW ORGANIZATION, 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 $13.8 million.

What is the period of performance?

Start: 2008-08-01. End: 2011-07-31.

What specific management consulting services were provided under this contract?

The data indicates the contract was for 'Other Management Consulting Services' (NAICS 541618) awarded to MASSACHUSETTS PEER REVIEW ORGANIZATION, INC. by the Department of Health and Human Services (HHS) via the Centers for Medicare and Medicaid Services (CMS). However, the specific nature of these consulting services is not detailed in the provided data. Typically, 'Other Management Consulting Services' can encompass a wide array of support, including strategic planning, organizational analysis, process improvement, program management support, and policy development. Without further documentation, it is impossible to ascertain the precise tasks performed, the methodologies employed, or the specific objectives these consulting services were intended to achieve for CMS.

How does the $13.8 million contract value compare to similar management consulting contracts within HHS?

Comparing the $13.8 million contract value requires context regarding the duration and scope of services. This contract spanned 1094 days (approximately 3 years). To benchmark effectively, one would need to analyze average spending on management consulting services of similar duration and complexity within HHS and specifically CMS. Factors such as the specific functional areas supported (e.g., IT strategy, financial management, operational efficiency), the level of expertise required, and the number of personnel involved would influence cost. A preliminary assessment suggests that $13.8 million over three years, averaging around $4.6 million annually, is a significant but not necessarily outlier amount for specialized consulting support to a large agency like CMS, provided the services delivered were critical and impactful.

What are the primary risks associated with a 'cost-plus award fee' contract structure for management consulting?

The primary risks associated with a Cost-Plus Award Fee (CPAF) contract structure, like the one used here, revolve around cost control and potential for overspending. In a CPAF arrangement, the contractor is reimbursed for allowable costs plus a fee that consists of a fixed base amount and an award amount. The award amount is contingent upon meeting or exceeding certain performance objectives. The risk for the government is that the contractor may have less incentive to control costs rigorously compared to a fixed-price contract, as costs are reimbursed. Furthermore, defining and objectively measuring performance objectives to fairly determine the award fee can be challenging, potentially leading to disputes or subjective assessments. Diligent oversight and clear performance metrics are crucial to mitigate these risks and ensure value for taxpayer money.

What does the 'limited competition' status imply for the effectiveness of this contract?

The 'limited competition' status for this contract suggests that the solicitation was not broadly advertised or that only a select number of sources were solicited. This can occur for various reasons, such as utilizing specific contract vehicles, agency-specific justifications for limiting sources, or if only a few contractors possess the required specialized capabilities. While limited competition can sometimes expedite the acquisition process, it generally reduces the government's ability to leverage market forces to achieve the lowest possible price. Consequently, there is a heightened risk that the government may not have secured the most cost-effective solution or the best value available in the broader marketplace. The effectiveness, therefore, hinges more critically on the government's ability to negotiate favorable terms and closely manage the contractor's performance within the established scope.

What is the track record of MASSACHUSETTS PEER REVIEW ORGANIZATION, INC. in federal contracting, particularly with HHS?

MASSACHUSETTS PEER REVIEW ORGANIZATION, INC. has a history of federal contracting, as indicated by its involvement in this HHS contract. To fully assess their track record, a deeper dive into their contract history would be necessary. This would involve examining past performance evaluations, the types and values of previous contracts awarded, their performance on those contracts (e.g., adherence to schedule, budget, quality standards), and any history of disputes or contract terminations. Their longevity and continued awards suggest a capacity to meet federal requirements. However, without specific performance data or reviews, it's difficult to definitively characterize their track record beyond their established presence as a federal contractor.

How has spending on 'Other Management Consulting Services' evolved within HHS over time?

Analyzing the historical spending trends for 'Other Management Consulting Services' within HHS requires access to comprehensive federal procurement data over multiple fiscal years. Generally, spending in this category can fluctuate based on agency priorities, the complexity of challenges faced, and the availability of internal expertise. Agencies like HHS often engage consultants to support large-scale initiatives, policy development, program evaluations, and operational improvements. Increased focus on areas like healthcare reform, public health emergencies, or technological modernization could lead to higher demand for consulting services. Conversely, budget constraints or shifts towards in-house capabilities might reduce such spending. A detailed analysis would reveal specific patterns and drivers of this spending category within HHS.

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 COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 245 WINTER ST, WALTHAM, MA, 02451

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

Financial Breakdown

Contract Ceiling: $13,781,245

Exercised Options: $13,781,245

Current Obligation: $13,781,245

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline