CMS Spends $261.8M on Medicare Enrollment System (PECOS) with CGI Federal
Contract Overview
Contract Amount: $261,858,879 ($261.9M)
Contractor: CGI Federal Inc.
Awarding Agency: Department of Health and Human Services
Start Date: 2016-02-01
End Date: 2026-11-30
Contract Duration: 3,955 days
Daily Burn Rate: $66.2K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: FIRM FIXED PRICE
Sector: IT
Official Description: IGF::OT::IGF PECOS IS THE SYSTEM UTILIZED BY CMS TO COLLECT, MANAGE AND MAINTAIN MEDICARE ENROLLMENT.
Place of Performance
Location: FAIRFAX, FAIRFAX County, VIRGINIA, 22033
State: Virginia Government Spending
Plain-Language Summary
Department of Health and Human Services obligated $261.9 million to CGI FEDERAL INC. for work described as: IGF::OT::IGF PECOS IS THE SYSTEM UTILIZED BY CMS TO COLLECT, MANAGE AND MAINTAIN MEDICARE ENROLLMENT. Key points: 1. PECOS is critical for Medicare enrollment management. 2. CGI Federal is the sole contractor for this system. 3. The contract runs through November 2026. 4. This is a significant IT services contract for HHS.
Value Assessment
Rating: fair
The total award amount is substantial at $261.8M. Benchmarking against similar large-scale IT system development and maintenance contracts is difficult without more granular cost data. The firm-fixed-price structure provides some cost certainty.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the data indicates this is a Delivery Order, and the specific competition for this order is not detailed, which could impact price discovery.
Taxpayer Impact: The significant investment in PECOS aims to ensure efficient Medicare operations, which indirectly benefits taxpayers by supporting a vital healthcare program.
Public Impact
Ensures accurate and efficient management of Medicare beneficiary enrollment. Supports the operational integrity of the Medicare program. Impacts millions of Medicare beneficiaries and healthcare providers. Facilitates data collection and maintenance for CMS.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of transparency on competition for individual delivery orders.
- Potential for vendor lock-in with a single provider for critical systems.
- Reliance on one vendor for a system as crucial as PECOS.
Positive Signals
- Firm-fixed-price contract provides cost predictability.
- Long-term contract ensures continuity of essential services.
- System is vital for Medicare operations.
Sector Analysis
This contract falls within the Computer Systems Design Services sector, a critical area for government IT infrastructure. Spending benchmarks for similar large-scale, long-term IT system development and maintenance contracts can vary widely based on scope and complexity.
Small Business Impact
The data indicates that small businesses were not directly involved in this specific contract award. Further analysis would be needed to determine if subcontracting opportunities exist.
Oversight & Accountability
Oversight is provided by the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS). The firm-fixed-price contract type offers some level of cost control, but ongoing monitoring of performance and value is essential.
Related Government Programs
- Computer Systems Design Services
- Department of Health and Human Services Contracting
- Centers for Medicare and Medicaid Services Programs
Risk Flags
- Sole source provider for a critical system.
- Long contract duration.
- Lack of detailed competition data for delivery orders.
- High contract value.
Tags
computer-systems-design-services, department-of-health-and-human-services, va, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $261.9 million to CGI FEDERAL INC.. IGF::OT::IGF PECOS IS THE SYSTEM UTILIZED BY CMS TO COLLECT, MANAGE AND MAINTAIN MEDICARE ENROLLMENT.
Who is the contractor on this award?
The obligated recipient is CGI FEDERAL 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 $261.9 million.
What is the period of performance?
Start: 2016-02-01. End: 2026-11-30.
What is the cost-effectiveness of CGI Federal's services in managing the PECOS system over its lifecycle?
Assessing cost-effectiveness requires comparing CGI Federal's performance against industry benchmarks and evaluating the system's uptime, efficiency gains, and reduction in manual processing. Without detailed performance metrics and cost breakdowns, it's challenging to definitively state the cost-effectiveness. The firm-fixed-price nature provides budget certainty but doesn't inherently guarantee optimal value.
What are the risks associated with relying on a single vendor, CGI Federal, for the critical PECOS system?
The primary risk is vendor lock-in, which can limit negotiation leverage and potentially lead to price increases. Dependence on a single vendor also poses a risk to operational continuity if the vendor faces financial instability, security breaches, or fails to innovate. Contingency planning and robust contract management are crucial to mitigate these risks.
How effectively does the PECOS system, managed by CGI Federal, contribute to the overall efficiency and accuracy of Medicare enrollment processes?
The PECOS system is fundamental to Medicare enrollment, implying a high degree of effectiveness in its core function. Its continued operation under a long-term contract suggests it meets CMS's needs. However, measuring 'effectiveness' quantitatively would require data on error rates, processing times, and user satisfaction, which are not provided in this data.
Industry Classification
NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services
Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: NIHJT2010001
Offers Received: 2
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: THE Timken Company
Address: 12601 FAIR LAKES CIR, FAIRFAX, VA, 22033
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $264,256,334
Exercised Options: $261,858,879
Current Obligation: $261,858,879
Actual Outlays: $112,554,296
Subaward Activity
Number of Subawards: 64
Total Subaward Amount: $40,105,864
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Parent Contract
Parent Award PIID: HHSN316201200011W
IDV Type: GWAC
Timeline
Start Date: 2016-02-01
Current End Date: 2026-11-30
Potential End Date: 2027-02-28 00:00:00
Last Modified: 2026-04-01
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