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The Centers for Medicare and Medicaid Services (CMS) intends to award a fixed cost plus award fee contract to a statistical contractor, with a base performance period of 26-months/one production cycle and two 26-months/production cycles options beginning each year thereafter, to assist CMS in providing statistical and analytical functions necessary to implement an error rate under the Payment Error Rate Measurement Program (PERM) for Medicaid and the State Children?s Health Insurance Program (SCHIP). The NAICS code used is 541990 however, CMS has not determined if this will be a small business set-aside. Small businesses should meet all requirements for a cost type contract at time of award such as accounting system must be adequate for determining costs applicable to the contract and that FAR Clause 52.219-14 Limitations of Subcontracting will be incorporated into the solicitation and resultant contract. BACKGROUND/DESCRIPTION OF SERVICES: CMS must estimate payment error rates in Medicaid and SCHIP as directed by the Improper Payments Information Act (IPIA) of 2002 (Public Law 107-300). The IPIA directs each executive agency, in accordance with the Office of Management and Budget (OMB) guidance, to review all of its programs and activities annually, identify those that may be susceptible to significant improper payments, estimate the annual amount of improper payments, and submit those estimates to Congress. The IPIA defines improper payments as: (a) any payment that should not have been made or that was made in an incorrect amount, including both overpayments and underpayments, under statutory, contractual, administrative, or other legally applicable requirements; and (b) payments made to an ineligible beneficiary, any duplicate payments, payments for services not received, and any payment that does not account for credit for applicable discounts. CMS has been testing and refining various methodologies to estimate payment accuracy and payment error in Medicaid and SCHIP since fiscal year (FY) 2002. CMS explored several pilot projects to develop its error rate methodologies from FY 2002 through FY 2005. After the error rate pilots concluded, CMS implemented the PERM methodology to produce FY 2006 and FY 2007 State error rates for fee-for-service claims, managed care capitation payments, and eligibility determinations. This is the methodology that CMS intends to continue to use into the foreseeable future to produce national error rates that comply with the requirements of IPIA. Under the current strategy for PERM, CMS contracts with three entities to identify error rates in the Medicaid and SCHIP programs: (1) a statistical contractor; (2) a documentation/database contractor; and (3) a review contractor. The statistical contractor performs all statistical, sampling and error rate calculation functions; the documentation/database contractor formats State claims data, gathers medical policies from States, and requests medical records from providers; and the review contractor performs the data processing and medical reviews in the States selected for review. All three contractors exchange information and work together to produce the fee-for-service (FFS), managed care, and eligibility error rates for the Medicaid and SCHIP programs. The statistical contractor selected through the forthcoming solicitation will perform the statistical functions for the PERM measurement of each program, which include: 1) collecting State quarterly FFS and managed care claims data; 2) stratifying Medicaid and SCHIP FFS claims by dollar value; 3) selecting quarterly FFS and managed care claims samples for each of the sampled States; 4) calculating the State-specific FFS and managed care error rates; 5) calculating the national error rates for the FFS, managed care, and eligibility components; and 6) calculating the overall national program error rate. The statistical contractor is also responsible for reviewing the eligibility sampling plans of the States selected for review and for all of the tasks outlined in the attached draft Statement of Work (SOW). The statistical contractor must work effectively and efficiently with CMS, the documentation/database contractor, the review contractor, and Medicaid /SCHIP State representatives in meeting its responsibilities. The North American Industrial Classification System (NAICS) code is 541990. This is not an invitation for proposals, request for proposal (RFP), or other solicitation and in no way obligates the Government to award a contract. CMS anticipates release of the Request for Proposal on July 20, 2007 and it will be made available electronically at http://www.fedbizopps.gov. We anticipate oral presentations of technical proposals beginning the week of August 20th and an award date of no later that September 28, 2007.