HHS awards $27.3M for state health insurance exchange implementation support to Booz Allen Hamilton

Contract Overview

Contract Amount: $27,259,681 ($27.3M)

Contractor: Booz Allen Hamilton Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2016-06-01

End Date: 2019-08-12

Contract Duration: 1,167 days

Daily Burn Rate: $23.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: TIME AND MATERIALS

Sector: Other

Official Description: IGF::OT::IGF STATE HEALTH INSURANCE EXCHANGE IMPLEMENTATION SUPPORT

Place of Performance

Location: WINDSOR MILL, BALTIMORE County, MARYLAND, 21244

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $27.3 million to BOOZ ALLEN HAMILTON INC for work described as: IGF::OT::IGF STATE HEALTH INSURANCE EXCHANGE IMPLEMENTATION SUPPORT Key points: 1. Contract awarded through full and open competition, suggesting a robust market for these services. 2. The contract duration of nearly 4 years indicates a significant, long-term need for consulting expertise. 3. Administrative Management and General Management Consulting Services (NAICS 541611) is a common category for federal support. 4. The award was a delivery order, implying it was part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 5. The use of Time and Materials pricing can sometimes lead to cost overruns if not closely managed. 6. The relatively small number of bids (3) might warrant further investigation into competition dynamics.

Value Assessment

Rating: fair

Benchmarking the value for this specific delivery order is challenging without knowing the parent IDIQ contract's terms and the specific services rendered. However, the total award amount of $27.3 million over approximately 3.8 years suggests a moderate annual spend for specialized consulting. Comparing this to similar large-scale federal IT and management consulting contracts, the pricing appears within a typical range, though the Time and Materials (T&M) pricing structure necessitates careful oversight to ensure cost-effectiveness and prevent scope creep.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that the agency sought proposals from all responsible sources. While the data shows 3 bids were received, the specific details of the solicitation and evaluation process are not provided. A higher number of bidders typically suggests more competitive pricing and a wider selection of qualified contractors. The limited number of bids could indicate a specialized niche or high barriers to entry for potential competitors.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple companies to bid, driving down prices and ensuring the government receives the best value. However, with only three bids, the potential for significant cost savings might be constrained compared to a more crowded field.

Public Impact

The primary beneficiaries are the Centers for Medicare and Medicaid Services (CMS) and potentially state health insurance exchanges that receive implementation support. Services delivered likely include strategic planning, technical assistance, policy analysis, and program management related to health insurance exchanges. The geographic impact is national, as state health insurance exchanges operate across the United States. Workforce implications include the employment of consultants and potentially government personnel involved in managing the contract and overseeing exchange implementation.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Time and Materials (T&M) pricing can lead to higher costs if not managed diligently, as it directly links costs to labor hours and material expenses.
A limited number of bidders (3) might suggest less competitive pressure on pricing and potentially fewer innovative solutions.
The specific deliverables and performance metrics are not detailed, making it difficult to assess the contractor's performance against expectations.
The contract's duration and significant value could represent a substantial, ongoing financial commitment for the agency.

Positive Signals

Awarded through full and open competition, indicating a fair and accessible process for potential contractors.
The contractor, Booz Allen Hamilton, is a well-established firm with extensive experience in government consulting.
The contract addresses a critical area of federal policy and implementation (health insurance exchanges), suggesting strategic importance.
The delivery order mechanism allows for flexibility within a potentially larger IDIQ framework.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically management consulting. The federal government is a significant purchaser of these services to support policy implementation, program management, and IT modernization. Spending in this category often fluctuates with legislative priorities and the need for specialized expertise. Comparable spending benchmarks would involve analyzing other large consulting contracts awarded by HHS or related agencies for similar policy initiatives.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, large businesses like Booz Allen Hamilton were eligible to bid and were awarded the contract. There is no direct information on subcontracting plans or their impact on the small business ecosystem from this data alone. However, large prime contractors are often encouraged or required to subcontract portions of their work to small businesses, which can provide opportunities for smaller firms.

Oversight & Accountability

Oversight for this contract would primarily reside with the Centers for Medicare and Medicaid Services (CMS) contracting officers and program managers. They are responsible for monitoring performance, approving invoices, and ensuring compliance with contract terms. Transparency is facilitated through contract databases like FPDS. While no specific Inspector General (IG) jurisdiction is mentioned, the HHS Office of Inspector General (OIG) has broad authority to investigate waste, fraud, and abuse in HHS programs and contracts.

Related Government Programs

Affordable Care Act Implementation
Health Insurance Marketplace
Federal Consulting Services
Management and Administrative Support
Healthcare IT Services

Risk Flags

Potential for cost overruns due to T&M pricing.
Limited number of bidders may reduce competitive pricing.
Need for robust oversight to ensure value for money.
Scope creep risk inherent in consulting engagements.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $27.3 million to BOOZ ALLEN HAMILTON INC. IGF::OT::IGF STATE HEALTH INSURANCE EXCHANGE IMPLEMENTATION SUPPORT

Who is the contractor on this award?

The obligated recipient is BOOZ ALLEN HAMILTON 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 $27.3 million.

What is the period of performance?

Start: 2016-06-01. End: 2019-08-12.

What specific services did Booz Allen Hamilton provide under this delivery order?

The provided data indicates the contract was for 'STATE HEALTH INSURANCE EXCHANGE IMPLEMENTATION SUPPORT' under the NAICS code for 'Administrative Management and General Management Consulting Services'. While the specific tasks are not detailed, such support typically involves a range of activities including strategic planning, policy analysis, technical assistance, program management, stakeholder engagement, and operational guidance to states as they develop and implement their health insurance exchanges under the Affordable Care Act. Booz Allen Hamilton, as a large consulting firm, likely provided expertise in areas such as system design, vendor selection, project management, and regulatory compliance to facilitate the successful rollout and operation of these exchanges.

How does the $27.3 million award compare to historical spending on similar consulting services by CMS?

Comparing this $27.3 million award requires context on the specific period and scope of services. CMS has historically awarded substantial contracts for the implementation and ongoing support of the Health Insurance Marketplace. Annual spending on consulting and related professional services can range from tens to hundreds of millions of dollars, depending on the phase of implementation, policy changes, and operational needs. This particular award, spread over approximately 3.8 years, represents a significant but not necessarily outlier investment for a critical program like state exchange support. A deeper analysis would involve examining CMS's historical spending trends for NAICS 541611 and similar service categories over multiple fiscal years.

What are the potential risks associated with the Time and Materials (T&M) pricing structure used in this contract?

The primary risk with Time and Materials (T&M) contracts is the potential for cost overruns, as the government pays for the actual labor hours and material costs incurred by the contractor. Unlike fixed-price contracts, T&M offers less upfront certainty on the total cost. This structure can incentivize contractors to extend project timelines or increase labor hours if not rigorously monitored. For this contract, CMS would need robust oversight mechanisms, including detailed timesheet reviews, work-in-progress reports, and clear performance metrics, to ensure that the hours billed are reasonable, necessary, and directly related to the contract's objectives. Without such controls, the final cost could exceed initial estimates.

Given only 3 bids were received, what does this imply about the competition for this specific contract?

Receiving only three bids for a contract valued at $27.3 million suggests a potentially limited competitive landscape for this particular requirement. While 'full and open competition' was advertised, the low number of bidders could indicate several factors: the specialized nature of the services required, high barriers to entry (e.g., specific expertise, security clearances, past performance requirements), or perhaps the contract was structured as a delivery order under an existing IDIQ where only a subset of awardees were solicited. It implies that while the process was open, the pool of qualified and interested large businesses might be relatively small, potentially reducing the downward pressure on pricing that a larger number of bids might generate.

What is Booz Allen Hamilton's track record with federal health IT and consulting contracts?

Booz Allen Hamilton is a major government contractor with a long history of providing a wide array of services, including extensive work in the federal health sector. They have supported numerous agencies, including HHS and its sub-agencies like CMS, on complex initiatives ranging from IT modernization and data analytics to policy implementation and strategic planning. Their track record includes significant involvement in projects related to the Affordable Care Act, Medicare, and Medicaid. While generally considered a reputable contractor, like any large firm, they have experienced scrutiny and contract reviews on various projects over the years. Their extensive experience suggests a strong capability to handle large, complex federal contracts such as this one.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Administrative Management and General Management Consulting Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: FCO00CORP0000C

Offers Received: 3

Pricing Type: TIME AND MATERIALS (Y)

Evaluated Preference: NONE

Contractor Details

Parent Company: Booz Allen Hamilton Holding Corporation (UEI: 964725688)

Address: 8283 GREENSBORO DR, MCLEAN, VA, 22102

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,259,681

Exercised Options: $27,259,681

Current Obligation: $27,259,681

Subaward Activity

Number of Subawards: 2

Total Subaward Amount: $923,256

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: GS00F008DA

IDV Type: FSS

Timeline