DoD Obligates $198M for Health Insurance in FY08, Awarded to United Concordia Companies
Contract Overview
Contract Amount: $198,378,664 ($198.4M)
Contractor: United Concordia Companies, Inc.
Awarding Agency: Department of Defense
Start Date: 2008-01-23
End Date: 2011-07-31
Contract Duration: 1,285 days
Daily Burn Rate: $154.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: OBLIGATE FY08 FUNDS FOR FEB. 1, 2008 THRU SEPT. 30,2008 PORTION OF OP-3.
Place of Performance
Location: HARRISBURG, DAUPHIN County, PENNSYLVANIA, 17110, UNITED STATES OF AMERICA
Plain-Language Summary
Department of Defense obligated $198.4 million to UNITED CONCORDIA COMPANIES, INC. for work described as: OBLIGATE FY08 FUNDS FOR FEB. 1, 2008 THRU SEPT. 30,2008 PORTION OF OP-3. Key points: 1. Significant FY08 obligation for health insurance services. 2. Awarded to a single incumbent carrier, United Concordia Companies. 3. Potential for cost savings given the large contract value. 4. Focus on direct health and medical insurance carriers sector.
Value Assessment
Rating: good
The contract value of $198M for a 1285-day period suggests a substantial investment in health insurance. Benchmarking against similar large-scale government health insurance contracts would be necessary for a precise value assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating a competitive bidding process. This method is generally expected to yield fair market prices and good value for the government.
Taxpayer Impact: Taxpayer funds are being used for health insurance for military personnel and their families, a critical but costly benefit.
Public Impact
Ensures healthcare coverage for military members and their families. Supports the operational readiness of the armed forces by providing essential benefits. Represents a significant portion of the Defense Health Agency's budget for insurance services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Long contract duration could lead to price increases over time.
- Reliance on a single carrier for a large population.
Positive Signals
- Awarded through full and open competition.
- Addresses a critical need for healthcare services.
Sector Analysis
This contract falls within the Healthcare sector, specifically focusing on direct health and medical insurance carriers. Government spending in this area is substantial, driven by the need to provide comprehensive benefits to federal employees and military personnel.
Small Business Impact
The data does not indicate any specific set-asides for small businesses. The primary awardee is United Concordia Companies, Inc., which is a large corporation, suggesting limited direct impact on small businesses for this specific contract.
Oversight & Accountability
The contract was awarded by the Department of Defense through the Defense Health Agency, indicating established oversight mechanisms. The firm-fixed-price contract type provides cost certainty, but ongoing monitoring of service delivery and pricing is crucial.
Related Government Programs
- Direct Health and Medical Insurance Carriers
- Department of Defense Contracting
- Defense Health Agency Programs
Risk Flags
- Potential for price escalation over the contract term.
- Limited visibility into the competitive bidding details.
- Lack of explicit small business participation.
- Need for ongoing performance and cost monitoring.
Tags
direct-health-and-medical-insurance-carr, department-of-defense, pa, do, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $198.4 million to UNITED CONCORDIA COMPANIES, INC.. OBLIGATE FY08 FUNDS FOR FEB. 1, 2008 THRU SEPT. 30,2008 PORTION OF OP-3.
Who is the contractor on this award?
The obligated recipient is UNITED CONCORDIA COMPANIES, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Health Agency).
What is the total obligated amount?
The obligated amount is $198.4 million.
What is the period of performance?
Start: 2008-01-23. End: 2011-07-31.
What was the competitive landscape like during the full and open competition for this contract?
While awarded under full and open competition, the specific number of bidders and the details of the competitive process are not provided. Understanding the number of proposals received and the evaluation criteria would offer deeper insight into the effectiveness of the competition in driving down costs and ensuring the best value.
How did the actual costs compare to the initial projections or benchmarks for similar insurance contracts?
The provided data includes an obligation amount but lacks details on initial projections or comparable contract benchmarks. A post-award analysis comparing the per-unit cost of services rendered against industry standards and other government contracts would reveal the true cost-effectiveness of this $198M award.
What mechanisms were in place to ensure the quality and effectiveness of the health insurance services provided by United Concordia Companies?
As a firm-fixed-price contract, the emphasis is on the delivery of defined services. The Defense Health Agency likely has performance metrics and quality assurance protocols. However, specific details on these oversight mechanisms and their effectiveness in ensuring high-quality care are not present in the provided data.
Industry Classification
NAICS: Finance and Insurance › Insurance Carriers › Direct Health and Medical Insurance Carriers
Product/Service Code: MEDICAL SERVICES › MEDICAL, DENTAL, AND SURGICAL SVCS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Highmark Inc (UEI: 067096644)
Address: 4401 DEER PATH ROAD, HARRISBURG, PA, 17110
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $198,378,664
Exercised Options: $198,378,664
Current Obligation: $198,378,664
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: H9400205D0001
IDV Type: IDC
Timeline
Start Date: 2008-01-23
Current End Date: 2011-07-31
Potential End Date: 2011-07-31 00:00:00
Last Modified: 2015-01-21
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