Healthcare Business News

CMS searching for small biz vendors for next contract

By Virgil Dickson
Posted: April 21, 2014 - 2:45 pm ET

Correction: The headline on an earlier version of this story incorrectly suggested the CMS is considering ending its contract with Accenture.

The CMS is in the early stages of determining if a smaller vendor could take over when Accenture’s one-year contract expires.

The federal agency has released a “sources sought” notice (PDF) soliciting information from small companies, defined as those with annual revenue under $25 million, that are capable of taking over the site. Responses are due May 2.

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Depending on the quality of the responses, the CMS would release a formal request for proposals in which only small companies could win the contract. This would take Accenture, which earned $7.13 billion in 2013, out of the running for the contract.

A small company could team up with a larger vendor to bid on the contract, but the large vendor would be regarded as a subcontractor and legally prohibited from doing more than 49% of work on the project.

If there are not enough small vendors that can compete for the work, the CMS would release a general RFP that welcomes bids from any company, including Accenture.

Accenture was hired with a $90 million one-year contract in January to take over control of the site from CGI Federal, the company that built The site was crippled by technology problems for several weeks after it launched last fall.

At the time, some wondered if the new hire was a good fit, as Accenture had no history of doing substantial work on an HHS program.

Experts said it isn't clear yet whether the CMS is happy with Accenture's work.

“Currently, there is not sufficient transparency in the government's dealings with Accenture to judge fairly the success of the relationship so far,” said Kev Coleman, head of data and research at HealthPocket, a website that compares and ranks health insurance plans.

The true test on whether the two are a good match is the federal exchange's website performance and data security for the next open enrollment period in November, Coleman said.

However, the notice seeking potential bidders for the contract implies that the CMS may not wait that long to find out. Even though Accenture's contract with the agency doesn't end until January 2015, the new contractor would be expected to begin working “at least two months prior to the start of the 2015 open enrollment period,” according to the document. Open enrollment for next year starts Nov. 15.

Should the agency hire a new contractor, Accenture would help train the new vendor's staff during a 60-day transition period before relinquishing operational control over, according to the notice.

Accenture declined to comment on the search notice.

Follow Virgil Dickson on Twitter: @MHvdickson

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