HHS Awards $988M Contract to National Government Services for Health Insurance Carrier Services
Contract Overview
Contract Amount: $988,211,461 ($988.2M)
Contractor: National Government Services, Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2013-03-01
End Date: 2022-04-30
Contract Duration: 3,347 days
Daily Burn Rate: $295.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 1
Pricing Type: COST PLUS AWARD FEE
Sector: Healthcare
Official Description: IGF::OT::IGF AB MAC JURISDICTION K
Place of Performance
Location: EAST SYRACUSE, ONONDAGA County, NEW YORK, 13057
State: New York Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $988.2 million to NATIONAL GOVERNMENT SERVICES, INC. for work described as: IGF::OT::IGF AB MAC JURISDICTION K Key points: 1. The contract, valued at $988.2 million, was awarded to National Government Services, Inc. 2. This represents a significant investment in direct health and medical insurance carriers. 3. The contract spans nearly a decade, indicating a long-term need for these services. 4. The sector is crucial for the functioning of Medicare and Medicaid. 5. The use of Cost Plus Award Fee suggests performance-based incentives.
Value Assessment
Rating: good
The contract value of $988.2 million over 3347 days (approximately 9.2 years) suggests a substantial but potentially reasonable cost for comprehensive health insurance carrier services. Benchmarking against similar large-scale government health insurance contracts would be necessary for a precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically fosters competitive pricing and encourages multiple bidders to offer their best terms. This method is designed to ensure the government receives fair market value.
Taxpayer Impact: Full and open competition aims to maximize taxpayer value by ensuring the most cost-effective solutions are selected for essential government services like health insurance.
Public Impact
Ensures continued operation of critical health insurance programs for beneficiaries. Supports the administrative infrastructure for Medicare and Medicaid. Impacts a large number of citizens relying on government-funded healthcare. Provides stability for healthcare providers interacting with these insurance systems.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee contracts can lead to cost overruns if not managed carefully.
- Long contract duration may not fully account for evolving healthcare needs or technologies.
- Lack of specific small business participation noted.
Positive Signals
- Awarded under full and open competition, suggesting competitive pricing.
- Long-term contract provides stability for essential services.
- Contractor has experience in government health insurance.
Sector Analysis
This contract falls within the Health Insurance sector, specifically supporting government-administered programs like Medicare and Medicaid. Spending in this area is substantial due to the scale of healthcare services provided to millions of Americans.
Small Business Impact
The data indicates that small business participation was not a factor in this award (ss: false, sb: false). Further analysis would be needed to determine if opportunities for small businesses were overlooked or if the nature of the contract precluded their involvement.
Oversight & Accountability
The Centers for Medicare and Medicaid Services (CMS) is responsible for overseeing this contract. Robust oversight is crucial, especially with Cost Plus Award Fee structures, to ensure performance targets are met and costs remain controlled.
Related Government Programs
- Direct Health and Medical Insurance Carriers
- Department of Health and Human Services Contracting
- Centers for Medicare and Medicaid Services Programs
Risk Flags
- Potential for cost overruns with Cost Plus Award Fee structure.
- Long contract duration may limit adaptability to future changes.
- Lack of explicit small business participation noted.
- Complexity of managing large-scale health insurance contracts.
Tags
direct-health-and-medical-insurance-carr, department-of-health-and-human-services, ny, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $988.2 million to NATIONAL GOVERNMENT SERVICES, INC.. IGF::OT::IGF AB MAC JURISDICTION K
Who is the contractor on this award?
The obligated recipient is NATIONAL GOVERNMENT SERVICES, 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 $988.2 million.
What is the period of performance?
Start: 2013-03-01. End: 2022-04-30.
What specific performance metrics are tied to the 'Award Fee' component, and how are they measured to ensure value for money?
The 'Award Fee' component is typically tied to specific performance standards outlined in the contract. These could include metrics related to claims processing efficiency, beneficiary satisfaction, accuracy of payments, and adherence to regulatory requirements. The government's contracting officer assesses the contractor's performance against these predefined criteria, and the award fee is determined based on that evaluation. Robust measurement and transparent reporting are key to ensuring this structure drives desired outcomes and provides value.
Given the nearly decade-long duration, what mechanisms are in place to adapt to potential changes in healthcare policy or technology?
Long-term contracts often include clauses for contract modifications or re-negotiations to accommodate significant shifts in policy or technology. The government may have options to incorporate new requirements or adjust service levels through contract amendments. However, the extent to which the contract allows for proactive adaptation versus reactive adjustments is a key consideration for long-term effectiveness and value.
How does the government ensure that the 'Direct Health and Medical Insurance Carriers' services provided by National Government Services, Inc. are cost-effective compared to alternative service delive
The initial 'full and open competition' is the primary mechanism for ensuring cost-effectiveness at the outset. During the contract period, ongoing performance monitoring and potentially periodic reviews of market rates for similar services help assess cost-effectiveness. The 'Award Fee' structure also incentivizes efficiency. However, a formal cost-benefit analysis comparing this contract to other potential models would provide a more definitive answer.
Industry Classification
NAICS: Finance and Insurance › Insurance Carriers › Direct Health and Medical Insurance Carriers
Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: RFPCMS20120005
Offers Received: 1
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Parent Company: Elevance Health, Inc.
Address: 8115 KNUE RD, INDIANAPOLIS, IN, 46250
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $1,167,821,095
Exercised Options: $1,166,821,093
Current Obligation: $988,211,461
Actual Outlays: $80,895,716
Subaward Activity
Number of Subawards: 20
Total Subaward Amount: $57,354,563
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2013-03-01
Current End Date: 2022-04-30
Potential End Date: 2022-04-30 00:00:00
Last Modified: 2024-08-26
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