HHS awarded $15.8M for customer service support, with a 3-year duration and competitive pricing

Contract Overview

Contract Amount: $15,854,384 ($15.9M)

Contractor: Palmetto GBA, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2009-08-01

End Date: 2012-07-31

Contract Duration: 1,095 days

Daily Burn Rate: $14.5K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 1

Pricing Type: TIME AND MATERIALS

Sector: IT

Official Description: TAS::75 0511::TAS RISK ADJUSTMENT DATA CUSTIONER SERVICE AND SUPPORT CENTER

Place of Performance

Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29202

State: South Carolina Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $15.9 million to PALMETTO GBA, LLC for work described as: TAS::75 0511::TAS RISK ADJUSTMENT DATA CUSTIONER SERVICE AND SUPPORT CENTER Key points: 1. Value for money appears reasonable given the 3-year term and competitive award. 2. Competition dynamics indicate a single award under a larger IDIQ, suggesting some level of pre-qualification. 3. Risk indicators are moderate, with a Time and Materials contract type potentially leading to cost overruns if not managed closely. 4. Performance context involves essential customer service for Medicare and Medicaid beneficiaries. 5. Sector positioning is within IT services, specifically data customer service and support.

Value Assessment

Rating: good

The contract's total value of $15.8 million over three years averages to approximately $5.28 million annually. This appears to be a fair price for comprehensive customer service and support for major federal health programs. Benchmarking against similar IT support contracts for large government agencies suggests this is within a reasonable range, especially considering the specialized nature of healthcare data and beneficiary support.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This was awarded as a competitive delivery order under a larger Indefinite Delivery/Indefinite Quantity (IDIQ) contract. While the specific number of bidders for this particular order is not detailed, the underlying IDIQ structure implies a competitive process to establish the pool of potential awardees. This approach generally fosters price discovery and ensures a baseline level of competition.

Taxpayer Impact: The competitive nature of the IDIQ contract likely resulted in a more favorable price for taxpayers compared to a sole-source award. It ensures that multiple qualified vendors were considered, driving down costs through market forces.

Public Impact

Beneficiaries of Medicare and Medicaid programs receive essential customer service and support. The services delivered ensure smooth operation and accessibility of critical healthcare information for beneficiaries. The geographic impact is national, serving beneficiaries across the United States. Workforce implications include jobs in customer service, IT support, and program administration within the contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials contract type can lead to cost overruns if not closely monitored.
The specific performance metrics and service level agreements are not detailed, making it difficult to assess effectiveness.
Reliance on a single contractor for critical customer service functions poses a potential risk if performance degrades.

Positive Signals

Awarded competitively, indicating potential for good value.
Contract duration of three years provides stability for service delivery.
The contractor is supporting essential government functions for healthcare programs.

Sector Analysis

This contract falls within the Information Technology (IT) services sector, specifically focusing on customer relationship management and support for government programs. The market for IT support services is vast and highly competitive, with numerous firms capable of providing such solutions. Comparable spending benchmarks for IT support services for federal agencies often range from millions to tens of millions annually, depending on the scope and complexity of the services required.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, Palmetto GBA, LLC, is likely a larger entity. There is no explicit information on subcontracting plans for small businesses within this award. The impact on the small business ecosystem would depend on whether Palmetto GBA engages small businesses as subcontractors, which is not detailed here.

Oversight & Accountability

Oversight is provided by the Centers for Medicare and Medicaid Services (CMS) within the Department of Health and Human Services. Accountability measures would be embedded in the contract's performance work statement and service level agreements. Transparency is facilitated through contract award databases, though detailed performance reports may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Medicare Customer Support
Medicaid Customer Support
Healthcare IT Services
Federal Customer Service Contracts
IT Support Services

Risk Flags

Potential for cost overruns due to Time and Materials contract type.
Lack of detailed public information on specific performance metrics and outcomes.
Dependence on a single contractor for critical beneficiary support functions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $15.9 million to PALMETTO GBA, LLC. TAS::75 0511::TAS RISK ADJUSTMENT DATA CUSTIONER SERVICE AND SUPPORT CENTER

Who is the contractor on this award?

The obligated recipient is PALMETTO GBA, 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 $15.9 million.

What is the period of performance?

Start: 2009-08-01. End: 2012-07-31.

What is the track record of Palmetto GBA, LLC with federal contracts, particularly within HHS?

Palmetto GBA, LLC has a significant history of contracting with the Department of Health and Human Services (HHS), particularly with the Centers for Medicare and Medicaid Services (CMS). They have served as a Medicare Administrative Contractor (MAC) for various regions, handling claims processing, provider services, and other administrative functions. Their experience includes managing large-scale operations and supporting complex healthcare programs. This specific contract for customer service and support aligns with their established expertise in managing beneficiary and provider interactions within the Medicare and Medicaid landscape. Their long-standing relationship with CMS suggests a level of proven performance and familiarity with the agency's requirements and operational environment.

How does the $15.8 million award compare to similar customer service contracts within HHS or other federal agencies?

The $15.8 million award for a three-year period, averaging approximately $5.28 million annually, is a moderate-sized contract for specialized IT customer service and support within a large federal agency like HHS. Comparable contracts for large-scale federal customer service operations, especially those involving sensitive data like healthcare information, can range from a few million to tens of millions of dollars per year. For instance, contracts supporting the IRS taxpayer services or the Social Security Administration's beneficiary support often fall within or exceed this range. Given the critical nature of Medicare and Medicaid beneficiary support, the pricing appears competitive, reflecting the need for reliable, secure, and responsive service delivery.

What are the primary risks associated with this Time and Materials (T&M) contract type?

The primary risk associated with a Time and Materials (T&M) contract, such as this one, is the potential for cost overruns. Unlike fixed-price contracts, T&M contracts reimburse the contractor for the actual labor hours and materials used, plus a fixed fee or profit. If the scope of work is not well-defined, or if project management is weak, the contractor may incur more hours or use more materials than initially anticipated, leading to a higher final cost than budgeted. For this contract, effective oversight by CMS is crucial to monitor labor hours, ensure efficiency, and prevent scope creep. Without stringent management, the total expenditure could exceed the initial $15.8 million estimate.

How effective is the competitive delivery order process in ensuring value for taxpayer money in this context?

The competitive delivery order process, especially when awarded under a pre-established IDIQ contract, is generally effective in ensuring value for taxpayer money. It allows agencies to solicit proposals from a pool of pre-vetted vendors, fostering competition for specific task orders. This competition drives down prices and encourages vendors to offer their best terms and performance capabilities. For this $15.8 million contract, the competitive nature likely resulted in a more favorable price than a sole-source award. However, the ultimate value is also dependent on the contractor's performance and the agency's oversight in managing the contract to meet its objectives efficiently and effectively.

What are the historical spending patterns for customer service and IT support within the Centers for Medicare and Medicaid Services (CMS)?

Historical spending patterns for customer service and IT support within CMS indicate a consistent and significant investment in these areas due to the vast number of beneficiaries and providers they serve. CMS relies heavily on contractors to manage call centers, process claims, provide technical assistance, and maintain complex IT systems that underpin Medicare and Medicaid operations. Annual spending on such services often runs into the hundreds of millions, if not billions, of dollars across various contracts. This $15.8 million award represents a portion of that overall investment, focused specifically on customer service and support functions, and aligns with the agency's ongoing need for robust operational support.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

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

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 1

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Blue Cross & Blue Shield of South Carolina (UEI: 055914089)

Address: 17 TECHNOLOGY CIR, COLUMBIA, SC, 29203

Business Categories: Category Business, Limited Liability Corporation, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $15,854,384

Exercised Options: $15,854,384

Current Obligation: $15,854,384

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS35F0462V

IDV Type: FSS

Timeline