[Federal Register Volume 77, Number 61 (Thursday, March 29, 2012)]
[Notices]
[Pages 19019-19020]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-7495]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-7031-N]


Announcement Notice; Establishment of a Federally Funded Research 
and Development Center

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Notice.

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SUMMARY: This notice announces our intention to establish a Federally 
Funded Research and Development Center (FFRDC) to facilitate the 
modernization of business processes and supporting systems and their 
operations.

DATES: Effective Date: This notice is effective on March 29, 2012.

FOR FURTHER INFORMATION CONTACT: Candice Savoy, (410) 786-7494 or 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    Section 219 of the fiscal year 2012 Omnibus Bill requires Centers 
for Medicare & Medicaid Services (CMS) to issue a Federal Register 
notice that outlines how a CMS Federally Funded Research and 
Development Center (FFRDC) would meet the specific requirements 
identified in Federal Acquisition Regulation (FAR 35.017-2), CMS' 
agency procedures that ensure small business competitiveness is 
maintained, and the outline of a transparent award and governance 
process to be employed by the CMS FFRDC. This notice is CMS' intent to 
sponsor an FFRDC, which complies with FAR 35.017-2 as discussed below.
    CMS has a need for assistance in developing requirements, 
identifying strategies for meeting statutory and programmatic 
requirements, analyzing existing CMS systems and approaches to meeting 
needs and developing metrics and measures for assessing agency 
performance. Meeting these various needs will require the services of 
an organization that will have access to confidential and proprietary 
agency information. An FFRDC would be appropriate to provide these 
needed services. CMS has surveyed the existing FFRDCs and does not 
believe that there is an established FFRDC that could effectively meet 
all of its requirements. Currently, CMS has obtained specialized 
consulting services from the Internal Revenue Service (IRS) FFRDC. 
However, this work has been focused on the modernization of CMS' 
Information Technology resources in accordance with the scope of the 
IRS contract. The IRS FFRDC, other FFRDC's, and other Government wide 
contracts analyzed will not meet the needs of CMS. CMS has examined 
other contract vehicles available, for example, the Government Wide 
Acquisition Contracts, the National Institutes of Health Chief 
Information Officer Solutions and Partners, Alliant and (8)a 
Streamlined Technology Acquisition Resources for Services and the 
General Services Administration schedules. Based on a market assessment 
of those vehicles, there is not a single source to fit CMS' unique 
needs. In addition, since the contractors on these contract vehicles 
have other Government contracts and compete for business, it may 
interfere with their ability to maintain objectivity and independence 
for the sponsoring agency, which cause conflicts of interest concerns. 
Therefore, it is appropriate to establish an FFRDC for CMS, since 
existing alternative sources cannot satisfy current and future agency 
requirements.
    CMS proposes to establish an FFRDC to encompass all of CMS' needs, 
including those associated with the Patient Protection and Affordable 
Care Act (Pub. L. 111-148), which was enacted on March 30, 2010 (the 
Affordable Care Act), and other current and future statutorily driven 
requirements. There is a need for an independent organization to assist 
in strategic/tactical planning and analysis, conceptual planning and 
prototyping, long term acquisition planning and requirements 
development, organizational planning and relationship management, 
continuous process improvement, strategic technology evaluation, and 
feasibility analysis and design in the areas of policy, business 
operations and technology.
    CMS has transmitted the required three notices over a 90-day period 
to the Government wide Point of Entry (Federal Business Opportunities) 
and published these notices in the Federal Register on April 13, 2011 
(76 FR 20673), May 13, 2011 (76 FR 28042), and June 14, 2011 (76 FR 
34713) respectively, indicating the agency's intention to sponsor an 
FFRDC. These notices indicated the scope and nature of the effort to be 
performed and requested comments. Additionally, CMS has considered the 
concerns and interest expressed by many Federal Government contractors 
and contractor organizations to ensure the establishment of the FFRDC 
is operated

[[Page 19020]]

within the parameters of its original intent.
    There is sufficient Government expertise available to adequately 
and objectively evaluate the work of the FFRDC. Program management 
responsibilities for the FFRDC will be placed in CMS' Office of the 
Administrator, Chief Operating Office to ensure the proper use and 
evaluation of the FFRDC. CMS has established an Executive Steering 
Committee comprised of senior agency leadership to oversee and monitor 
performance occurring under the FFRDC. We note that the Executive 
Office of the President, Office of Science and Technology was notified 
in March 2011 of our intent to establish an FFRDC.
    CMS will use established controls to ensure the costs of services 
under the FFRDC are reasonable. In accordance with FAR 15.404, the 
Contracting Officer is required to ensure the final agreed-to contract 
price is fair and reasonable. The CMS Contracting Officer will ensure 
that any FFRDC contract costs are fair and reasonable by performing a 
combination of cost, price, and cost realism analysis and obtaining 
cost audit support, as necessary, to assess the offerors understanding 
of the work and to verify that the offeror has proposed realistic costs 
commensurate with the methods and approaches proposed. Additionally, 
CMS will seek competition for the establishment and award of the basic 
FFRDC contract to help ensure that costs are fair and reasonable.
    CMS clearly defines the scope of the FFRDC's responsibilities to 
enable differentiation between the work that the FFRDC can perform and 
the work that should be performed by non-FFRDCs. The FFRDC sponsoring 
agreement fully describes the activities to be performed by the FFRDC 
as follows:
    1. Strategic/Tactical Planning and Analysis.
    2. Conceptual Planning and Prototyping.
    3. Acquisition Assistance.
    4. Organizational Planning and Relationship Management.
    5. Continuous Process Improvement.
    6. Strategic Technology Evaluation.
    7. Feasibility Analysis and Design.
    CMS will maintain a reasonable continuity in the level of support 
to the FFRDC. Current CMS and legislative requirements will provide 
sufficient activities to an FFRDC to ensure they are a viable entity to 
meet CMS' needs. CMS intends on awarding a single Indefinite Delivery--
Indefinite Quantity contract and will issue live task orders for the 
offerors to propose during the competition, therefore, we will award 
these task orders with the award of the contract and periodic task 
orders will be awarded thereafter.
    CMS will ensure that the organization meets all of the prescribed 
requirements for independence and objectivity in performing CMS' work. 
The sponsoring program management office will review the FFRDC 
regularly to ensure compliance with this requirement. The sponsoring 
agreement between CMS and the FFRDC will require a clause that 
prohibits the FFRDC from competing with other non-FFRDCs for Federal 
procurements. Additionally, CMS will conduct an annual organizational 
conflicts of interest audit of the FFRDC. The FFRDC will not perform 
quantity production or manufacturing of items. We note that the 
Secretary of the Department of Health and Human Services approved the 
establishment of the FFRDC on March 17, 2011.

II. Small Business Competitiveness

    CMS has a long-standing history of exceeding its small business 
goals and is committed to continuing to maintain small business 
participation in its programs by following established FAR and Health 
and Human Services Acquisition Regulation requirements to ensure small 
businesses are provided maximum practicable opportunity. CMS will 
ensure that every requirement, as part of its governance process, will 
be reviewed by the Department small business specialist before 
initiating any contracting action under the FFRDC. Additionally, 
contracting staff and senior executives at CMS who are responsible for 
meeting small business goals have a performance element established in 
their performance plans to ensure we maximize the use of small business 
contracting at CMS. Finally, the HHS Office of Small and Disadvantaged 
Business has directed CMS and all HHS Operating Divisions to develop a 
fiscal year 2012 Small Business Strategic Plan to ensure we meet or 
exceed our specific small business goals. We note that CMS has recently 
submitted this plan to HHS as requested.

III. Transparent Award and Governance Process

    CMS will conduct the FFRDC award in accordance with FAR 15 
Contracting by Negotiation procedures. CMS posted a draft solicitation 
on the Federal Business Opportunities Web site in November 2011, 
soliciting comments from the industry. The final solicitation will be 
posted on the Federal Business Opportunities Web site as a full and 
open competition (see https://www.fbo.gov/index?s=opportunity&mode=form&id=39f12bfda712bdd2248a8a94795fb1b3&tab=core&tabmode=list&=). CMS will make all required public announcements of 
the contract award through the Federal Business Opportunity Web site, 
HHS award notice requirements and the Federal Procurement Data System. 
This FFRDC will be awarded via FAR 15 procedures. Therefore, all task 
orders awarded to the FFRDC will be submitted to the Federal 
Procurement Data System and will be publically available on the 
usaspending.gov Web site.
    The FFRDC will be governed by an Executive Steering Committee and a 
Charter, managed by CMS' Office of the Administrator, Chief Operating 
Office, that defines CMS' policies and procedures for managing and 
using the FFRDC. It also provides guidelines and procedures for 
ensuring compliance with the Government-wide policies set forth in FAR 
35.017.
    Additionally, CMS will evaluate the effectiveness of the FFRDC by 
establishing a quality performance plan for monitoring performance of 
the FFRDC. The Executive Steering Committee will establish goals and 
objectives each year for the FFRDC that strive for improvements in 
operations and financial savings of CMS operations as well as all the 
programs CMS oversees. The Executive Steering Committee will appoint 
staff to create and monitor a quality performance plan for assessing 
these goals and objectives.

    Dated: March 12, 2012.
Marilyn Tavenner,
Acting Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2012-7495 Filed 3-28-12; 8:45 am]
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