HHS Awards $496M Contract to Palmetto GBA for MAC Jurisdiction J Services
Contract Overview
Contract Amount: $496,460,551 ($496.5M)
Contractor: Palmetto GBA, LLC
Awarding Agency: Department of Health and Human Services
Start Date: 2017-09-08
End Date: 2024-12-07
Contract Duration: 2,647 days
Daily Burn Rate: $187.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 6
Pricing Type: COST PLUS AWARD FEE
Sector: Healthcare
Official Description: IGF::OT::IGF A/B MAC JURISDICTION J
Place of Performance
Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29202
Plain-Language Summary
Department of Health and Human Services obligated $496.5 million to PALMETTO GBA, LLC for work described as: IGF::OT::IGF A/B MAC JURISDICTION J Key points: 1. Contract value of $496.5M over 7 years indicates significant long-term commitment. 2. Palmetto GBA, LLC is the sole awardee, raising questions about competition. 3. The contract type (Cost Plus Award Fee) can incentivize performance but requires careful oversight. 4. This spending falls within the Direct Health and Medical Insurance Carriers sector.
Value Assessment
Rating: fair
The contract's Cost Plus Award Fee structure allows for flexibility but necessitates robust performance metrics to ensure value. Benchmarking against similar large-scale health insurance carrier contracts is difficult without detailed cost breakdowns.
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 single awardee implies Palmetto GBA was the most competitive bidder for this specific jurisdiction.
Taxpayer Impact: Taxpayer funds are being utilized for essential Medicare administrative services, with the competitive award process intended to secure the best value.
Public Impact
Ensures continued processing of Medicare claims for Jurisdiction J beneficiaries. Supports the operational efficiency of the Centers for Medicare and Medicaid Services (CMS). Impacts healthcare providers within Jurisdiction J through claims processing and payment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Award Fee structure requires diligent monitoring.
- Long contract duration may not adapt to evolving healthcare needs.
- Lack of specific performance metrics makes value assessment challenging.
Positive Signals
- Awarded under full and open competition.
- Significant contract value suggests a critical service is being provided.
- Palmetto GBA has experience in Medicare administrative contracting.
Sector Analysis
This contract falls under the Direct Health and Medical Insurance Carriers sector, which is crucial for the administration of government healthcare programs like Medicare. Spending benchmarks in this area are highly variable due to the specialized nature of administrative services.
Small Business Impact
The data does not indicate any specific provisions or subcontracting goals for small businesses within this contract. Further analysis would be needed to determine if small businesses are involved.
Oversight & Accountability
The Cost Plus Award Fee contract type necessitates strong oversight from CMS to ensure Palmetto GBA meets performance expectations and manages costs effectively. Regular audits and performance reviews are critical.
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 creep in Cost Plus Award Fee contracts.
- Long-term contract duration may limit adaptability to future healthcare policy changes.
- Dependence on a single contractor for critical administrative functions.
- Need for robust oversight to ensure performance and value.
Tags
direct-health-and-medical-insurance-carr, department-of-health-and-human-services, sc, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Health and Human Services awarded $496.5 million to PALMETTO GBA, LLC. IGF::OT::IGF A/B MAC JURISDICTION J
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 $496.5 million.
What is the period of performance?
Start: 2017-09-08. End: 2024-12-07.
How does the performance of Palmetto GBA under this contract compare to previous Medicare Administrative Contractor (MAC) awards in terms of efficiency and cost-effectiveness?
Assessing Palmetto GBA's performance requires detailed review of award fee determinations and operational metrics against historical benchmarks. Without access to these specific performance data and comparisons to prior MAC contracts, it's difficult to definitively state how cost-effective this contract is. However, the full and open competition suggests an effort to achieve competitive pricing.
What are the primary risks associated with a Cost Plus Award Fee contract for Medicare administrative services, and how are they being mitigated?
Key risks include potential for cost overruns if performance targets are not well-defined or monitored, and the possibility of the contractor prioritizing award fee achievement over optimal cost control. Mitigation strategies likely involve rigorous CMS oversight, clear performance metrics tied to the award fee, and regular audits to ensure compliance and efficiency.
To what extent does this contract contribute to the overall effectiveness of the Medicare program in Jurisdiction J?
The effectiveness of this contract is directly tied to Palmetto GBA's ability to efficiently and accurately process Medicare claims, manage provider inquiries, and ensure program integrity within Jurisdiction J. Positive award fee determinations and low error rates would indicate high effectiveness, contributing to beneficiary access to care and program solvency.
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: HHSM5002016RFP0012
Offers Received: 6
Pricing Type: COST PLUS AWARD FEE (R)
Evaluated Preference: NONE
Contractor Details
Address: 17 TECHNOLOGY CIR, COLUMBIA, SC, 29203
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $574,722,855
Exercised Options: $574,722,855
Current Obligation: $496,460,551
Actual Outlays: $257,547,421
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2017-09-08
Current End Date: 2024-12-07
Potential End Date: 2026-08-14 00:00:00
Last Modified: 2025-08-26
More Contracts from Palmetto GBA, LLC
- JM AB MAC Award — $1.1B (Department of Health and Human Services)
- Part A/Part B Medicare Administrative Contractor (MAC) Jurisdiction M (JM) — $635.6M (Department of Health and Human Services)
- Other Government Insurance Programs — $455.0M (Department of Health and Human Services)
- TAS::75 0511::TAS Jurisdiction 11 A/B Medicare Administrative Contractor Services — $429.1M (Department of Health and Human Services)
- National Supplier Clearinghouse Medicare Administrative Contractor — $212.5M (Department of Health and Human Services)
Other Department of Health and Human Services Contracts
- Contact Center Operations (CCO) — $5.5B (Maximus Federal Services, Inc.)
- TAS::75 0849::TAS Oper of Govt R&D Goco Facilities — $4.8B (Leidos Biomedical Research Inc)
- THE Purpose of This Contract IS to Provide the Full Complement of Services Necessary to Care for UC in ORR Custody Including Facilities Set-Up, Maintenance, and Support Internal and Perimeter (IF Applicable) Security, Direct Care and Supervision Inc — $3.5B (Rapid Deployment Inc)
- Contact Center Operations — $2.6B (Maximus Federal Services, Inc.)
- Federal Contract — $2.4B (Leidos Biomedical Research Inc)
View all Department of Health and Human Services contracts →