JA Limited Sources Justification MCADS 03192026R (Final)_Redacted.pdf

FEDERAL SUPPLY SCHEDULE LIMITED-SOURCES JUSTIFICATION

Acquisition Title: Modern Claim Adjudication Development Services (MCADS) Agency: Centers for Medicare & Medicaid Services / Office of Information Technology / Applications Management Group / Division of Medicare System Modernization Acquisition Year: 2026 Author:

1. Description of Action:

Nature

New Requirement Follow-On Order Modification of Existing Purchase Order / Contract Number

Contract Type (GS-35F-523BA/75FCMC23F0049) Firm-Fixed Price Time and Materials Cost Plus Fixed Fee (CPFF)

Term Completion

Cost Plus Award Fee (CPAF) Other:

Total Projected Cost / Price:

2. Description of Supplies or Services:

The Medicare Payment System (MPSM) processes over 1 billion original Medicare claims annually. The MCADS contractor supports CMS by researching, designing, developing, and maintaining a modern claims processing platform that enables seamless integration into the overall Medicare claims processing ecosystem. This platform also provides a foundation from which modernization of additional claim types can be pursued. The MCADS contractor provides research, design, development, and support of the claims processing system; product development; and integration into the wider MPSM ecosystem.

CMS awarded the MCADS contract on May 1, 2023, following competition amongst GSA federal supply schedule contract holders. The original contract included a base period of twelve (12) months followed by two (2) twelve-month optional periods of performance. This justification seeks approval to modify the existing contract to add additional optional periods extending the term of performance to allow for the continuation of critical ongoing modernization work.

The ongoing effort will include the same level of effort as previous optional periods and will be for twelve

(12) months, May 1, 2026, through April 30, 2027, followed by a three-month transition period. The transition period includes services that shall decrease over the three-month period.

3. Period of Performance:

The extension represents twelve (12) months of continued performance at the same level of effort as previous option periods, followed by an optional three (3) month transition period during which services will decrease incrementally.

Extension: May 1, 2026, through April 30, 2027

Optional Transition Period: May 1, 2027, through July 31, 2027

4. Authority:

:ORDER AGAINST FSS: Authority of the Multiple Award Schedule Program, Title III of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 251, et seq.); Title 40 U.S.C. 501, Services for Executive Agencies; as implemented at RFO-FAR 8.401 and GSAM/R 538.7104(b)(1). Mark the applicable exception and for each, discuss how the cited authority applies in accordance with GSAM/R 538.7104 (b)(1).

The order should be based on a sole source basis in the interest of economy and efficiency because it is a logical follow on to an FSS order already issued on a competitive basis

The primary driver for this extension is CMS's concurrent pursuit of the ClaimsCore program, which seeks to re-platform Medicare Fee-for-Service (FFS) claims processing by replacing legacy "Shared Systems."

The future scope of MCADS is expected to align directly with the ClaimsCore program. Recompeting the MCADS effort during FY2026 — would result in a competition based on an incomplete or potentially inaccurate scope.

Therefore, it is not in the Government's best interest to recompete MCADS at this time.

This extension provides the necessary bridge period to allow ClaimsCore requirements to mature, enabling CMS to compete a strategically informed and well-defined scope in FY2027.

The MCADS effort is central to the MPSM ecosystem, which processes over 1 billion Medicare claims annually. Allowing the current contractor, to continue ensures:

No loss of institutional knowledge or program continuity.

No duplication of completed work by an incoming contractor.

Uninterrupted progress toward milestones.

Extending the current contract is the most economical and efficient path forward. A transition to a new contractor would require:

Significant onboarding and knowledge transfer time and cost.

Repetition of work already completed under the current contract.

Potential delays to critical program milestones.

The same level of effort can be maintained through this extension without incurring transition costs, making this modification a best value decision for the Government.

This extension is not intended to avoid competition. Rather, it is designed to enable a more effective competition in FY2027. At the expiration of this extension period, CMS plans to conduct a full and open competition

5. Market Research:

Market research was not conducted for this modification as it represents a logical follow-on to competitively awarded work under FAR 8.4. Conducting a new competition at this time would require a new contractor to repeat work already completed, resulting in program disruption, inefficiency, and increased cost to the Government.

6. Actions to Increase Competition:

This modification extends a current Federal Supply Schedule (FSS) order that was competitively placed in accordance with Fair Opportunity ordering procedures. At the expiration of this MCADS extension Period, CMS plans to conduct a full competition during Fiscal Year 2027 with a similar yet strategically different scope, aligned with the ClaimsCore program implementation.

7. Any other facts supporting the justification:

N/A

4. Head of Contracting Activity (HCA) Approval I hereby confirm the circumstances described above apply and approve the Limited Source Justification.

Name / Date

5. Office of Small and Disadvantaged Business Utilization ______N/A___________________________________________ Name / Date

6. OGC Legal Review

_________N/A________________________________________ Name / Date

7. HHS Competition Advocate Approval

______________N/A _____________________________________ Name / Date

8. Senior Procurement Executive (SPE) Approval Based on the foregoing justification, I hereby confirm the circumstances described above apply and approve the Limited Source Justification.

______N/A___________________________________________ Name / Date