HHS awards $205M UPIC contract to Qlarant Integrity Solutions LLC for program integrity services

Contract Overview

Contract Amount: $205,401,682 ($205.4M)

Contractor: Qlarant Integrity Solutions LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2017-09-15

End Date: 2027-11-30

Contract Duration: 3,728 days

Daily Burn Rate: $55.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: COST PLUS AWARD FEE

Sector: Healthcare

Official Description: IGF::CT::IGF AWARD OF THE UNIFIED PROGRAM INTEGRITY CONTRACT (UPIC)SOUTH-WESTERN JURISDICTION (SWJ)

Place of Performance

Location: EASTON, TALBOT County, MARYLAND, 21601

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $205.4 million to QLARANT INTEGRITY SOLUTIONS LLC for work described as: IGF::CT::IGF AWARD OF THE UNIFIED PROGRAM INTEGRITY CONTRACT (UPIC)SOUTH-WESTERN JURISDICTION (SWJ) Key points: 1. Contract awarded through full and open competition, suggesting a robust market for these services. 2. The contract duration of over 10 years indicates a long-term need for program integrity oversight. 3. The cost-plus award fee structure incentivizes performance and cost control. 4. The North American Industry Classification System (NAICS) code 541990 covers a broad range of professional, scientific, and technical services. 5. The contract's value is significant, reflecting the importance of preventing fraud, waste, and abuse in federal healthcare programs. 6. The award to a single contractor suggests specialized capabilities are required for this complex task.

Value Assessment

Rating: good

The contract value of $205.4 million over approximately 10 years represents a substantial investment in program integrity. Benchmarking this against similar large-scale contracts for fraud detection and prevention services within HHS or other agencies would provide further context. The cost-plus award fee (CPAF) structure allows for contractor reimbursement of allowable costs plus a fee that is adjusted based on performance, which can be an effective mechanism for managing complex services where outcomes are not entirely predictable. However, it requires diligent oversight to ensure costs remain reasonable and the award fee is appropriately tied to measurable performance metrics.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The presence of 4 bidders suggests a competitive market for program integrity services. A competitive process generally leads to better price discovery and potentially more innovative solutions as contractors vie for the award. The government's ability to select from multiple proposals allows for a thorough evaluation of technical capabilities, past performance, and price.

Taxpayer Impact: A full and open competition is favorable for taxpayers as it increases the likelihood of securing the best value by fostering a competitive environment that drives down costs and encourages high-quality service delivery.

Public Impact

The primary beneficiaries are the Centers for Medicare and Medicaid Services (CMS) and ultimately, taxpayers, through enhanced efforts to prevent fraud, waste, and abuse in federal healthcare programs. The contract delivers essential services related to program integrity, including data analysis, investigation, and case management to identify and address improper payments. The geographic impact is national, as CMS operates nationwide, and the services provided support the integrity of federal healthcare programs across all states and territories. Workforce implications include the direct employment of personnel by Qlarant Integrity Solutions LLC and potentially indirect impacts on government personnel involved in program oversight and enforcement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The long contract duration could lead to vendor lock-in if not managed carefully.
The complexity of program integrity services makes performance measurement and oversight critical to ensure value for money.
Reliance on a single contractor for such a critical function warrants robust oversight to mitigate risks associated with potential performance degradation or unforeseen issues.

Positive Signals

Award through full and open competition suggests a competitive process that likely yielded a strong offer.
The cost-plus award fee structure incentivizes contractor performance and efficiency.
The significant investment signals a commitment by HHS to robust program integrity, which is crucial for fiscal responsibility.

Sector Analysis

The healthcare sector, particularly the area of program integrity, is a critical component of managing federal healthcare spending. This contract falls under professional, scientific, and technical services, a broad category that supports various government functions. The market for such services is driven by regulatory requirements and the government's need to ensure accountability and efficiency in its programs. Comparable spending benchmarks would involve looking at other large contracts awarded by CMS or other agencies for similar anti-fraud, waste, and abuse initiatives.

Small Business Impact

This contract was not set aside for small businesses and was awarded to Qlarant Integrity Solutions LLC, which is not identified as a small business in the provided data. There is no explicit information regarding subcontracting plans for small businesses. The absence of a small business set-aside suggests that the scope and requirements of this contract were deemed best met by larger, potentially more specialized firms, or that the competition was open to all qualified offerors regardless of size.

Oversight & Accountability

Oversight for this contract is primarily the responsibility of the Centers for Medicare and Medicaid Services (CMS). As a Cost Plus Award Fee (CPAF) contract, performance metrics and deliverables are crucial for determining the award fee, necessitating close monitoring. Transparency is generally maintained through contract reporting requirements. While specific Inspector General (IG) jurisdiction isn't detailed, the HHS Office of Inspector General (OIG) typically has oversight over HHS programs and contracts to detect and prevent fraud, waste, and abuse.

Related Government Programs

Medicare Integrity Program
Medicaid Integrity Program
Program Fraud Civil Remedies Act
False Claims Act Enforcement
Healthcare Fraud Prevention Partnership

Risk Flags

Long contract duration may reduce flexibility.
Performance metrics for CPAF contracts require rigorous oversight.
Dependence on a single vendor for critical services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $205.4 million to QLARANT INTEGRITY SOLUTIONS LLC. IGF::CT::IGF AWARD OF THE UNIFIED PROGRAM INTEGRITY CONTRACT (UPIC)SOUTH-WESTERN JURISDICTION (SWJ)

Who is the contractor on this award?

The obligated recipient is QLARANT INTEGRITY SOLUTIONS 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 $205.4 million.

What is the period of performance?

Start: 2017-09-15. End: 2027-11-30.

What is the historical spending trend for program integrity services within CMS?

Historical spending on program integrity services by CMS has generally trended upwards, reflecting an increasing focus on combating fraud, waste, and abuse within the Medicare and Medicaid programs. Agencies like CMS are mandated by Congress to recover improper payments and prevent future losses. This often translates into significant investments in technology, data analytics, and specialized personnel to identify and investigate potential fraud schemes. The UPIC contract itself, awarded in 2017 and extending through 2027, represents a substantial, long-term commitment to these efforts. Analyzing year-over-year spending on similar contracts, internal program costs, and the effectiveness of these expenditures in recouping funds or preventing losses would provide a comprehensive view of the historical financial commitment and its perceived return on investment.

How does the performance of Qlarant Integrity Solutions LLC compare to similar contractors in the program integrity space?

Assessing the performance of Qlarant Integrity Solutions LLC requires access to specific performance evaluations, award fee determinations, and potentially past performance reviews from this and other contracts they may have held. Without direct access to these internal government assessments, a direct comparison to similar contractors is challenging. However, the fact that they were awarded this significant, long-term contract through full and open competition suggests they met the government's criteria for technical capability, past performance, and price. Benchmarking would typically involve comparing metrics such as the number of cases investigated, the value of funds recovered or protected, the efficiency of their processes, and client satisfaction ratings against industry averages or specific competitor performance data, all of which are usually proprietary or held within government contract management systems.

What are the key performance indicators (KPIs) used to evaluate the success of the UPIC contract?

Key Performance Indicators (KPIs) for a contract like the Unified Program Integrity Contract (UPIC) typically revolve around the effectiveness and efficiency of fraud, waste, and abuse detection and prevention efforts. These could include metrics such as the dollar value of improper payments identified and prevented, the number of investigations initiated and successfully concluded, the rate of successful recoveries of misused funds, the timeliness of case processing, and the accuracy of data analysis leading to actionable intelligence. For a Cost Plus Award Fee (CPAF) contract, these KPIs are directly tied to the 'award fee' component, meaning the contractor's performance against these metrics directly impacts their overall compensation. CMS would have established specific, measurable, achievable, relevant, and time-bound (SMART) goals for these KPIs during the contract's inception and would monitor them throughout the contract's lifecycle.

What is the potential risk associated with relying on a single contractor for such a critical function?

Relying on a single contractor for a critical function like program integrity carries several potential risks. Firstly, there's the risk of vendor lock-in, where the government becomes heavily dependent on the contractor's proprietary systems, processes, or expertise, making it difficult and costly to switch providers. Secondly, performance degradation is a concern; if the contractor's capabilities wane or they face internal challenges, the government's program integrity efforts could be significantly hampered. Thirdly, a lack of direct competition after the initial award can reduce the incentive for the contractor to innovate or maintain peak efficiency. To mitigate these risks, robust contract management, regular performance reviews, clear exit strategies, and contingency planning are essential. The government must maintain strong oversight to ensure the contractor consistently meets or exceeds performance expectations and to be prepared to address any potential shortcomings.

How does the UPIC contract contribute to the overall mission of the Centers for Medicare and Medicaid Services (CMS)?

The UPIC contract is fundamental to the mission of the Centers for Medicare and Medicaid Services (CMS), which is to advance the health of the American people. A core aspect of this mission involves ensuring the fiscal integrity of the Medicare and Medicaid programs. The UPIC contract directly supports this by providing essential services to detect, prevent, and investigate fraud, waste, and abuse within these massive healthcare programs. By identifying and addressing improper payments, CMS can safeguard billions of taxpayer dollars, ensure that healthcare resources are used appropriately, and maintain public trust in the healthcare system. The contract enables CMS to proactively manage risks, improve program performance, and ultimately deliver more efficient and effective healthcare services to beneficiaries.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical 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: HHSM5002017RFP0002

Offers Received: 4

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Address: 28464 MARLBORO AVE, EASTON, MD, 21601

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

Financial Breakdown

Contract Ceiling: $238,639,959

Exercised Options: $205,401,682

Current Obligation: $205,401,682

Actual Outlays: $108,225,331

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Parent Contract

Parent Award PIID: HHSM500201600080I

IDV Type: IDC

Timeline