DoD Awards $116.8M for Health Insurance Services, Extending Contract for 4 Months
Contract Overview
Contract Amount: $116,812,018 ($116.8M)
Contractor: United Concordia Companies, Inc.
Awarding Agency: Department of Defense
Start Date: 2010-09-30
End Date: 2011-01-31
Contract Duration: 123 days
Daily Burn Rate: $949.7K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIXED PRICE AWARD FEE
Sector: Healthcare
Official Description: DELIVERY ORDER FOR OPTION PERIOD 5 SERVICES UNDER CONTRACT H94002-05-D-0001, FOR THE PERIOD OF OCTOBER 1, 2010 THROUGH JANUARY 31, 2011. THIS DELIVERY ORDER IS SUBJECT TO THE AVAILABILITY OF FISCAL YEAR 2011 (FY11) FUNDS IN ACCORDANCE WITH FEDERAL ACQUISITION REGULATION CLAUSE 52.232-19.
Place of Performance
Location: HARRISBURG, DAUPHIN County, PENNSYLVANIA, 17110, UNITED STATES OF AMERICA
Plain-Language Summary
Department of Defense obligated $116.8 million to UNITED CONCORDIA COMPANIES, INC. for work described as: DELIVERY ORDER FOR OPTION PERIOD 5 SERVICES UNDER CONTRACT H94002-05-D-0001, FOR THE PERIOD OF OCTOBER 1, 2010 THROUGH JANUARY 31, 2011. THIS DELIVERY ORDER IS SUBJECT TO THE AVAILABILITY OF FISCAL YEAR 2011 (FY11) FUNDS IN ACCORDANCE WITH FEDERAL ACQUISITION REGULATION CLAUSE 5… Key points: 1. Significant contract value of $116.8 million for a short 4-month period. 2. Competition was full and open, suggesting a competitive bidding process. 3. Fixed Price Award Fee contract type introduces performance incentives. 4. Spending is concentrated in the Healthcare sector, specifically health insurance.
Value Assessment
Rating: good
The contract value of $116.8 million for a 4-month period suggests a high per-month cost. Benchmarking against similar health insurance carrier contracts would be necessary for a precise assessment, but the duration is notably short for such a substantial award.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically leads to better price discovery and potentially more competitive pricing for the government. The fixed-price award fee structure further incentivizes performance.
Taxpayer Impact: Taxpayers benefit from a competitive bidding process that aims to secure services at a reasonable cost, though the high value for a short period warrants scrutiny.
Public Impact
Ensures continued health insurance coverage for beneficiaries. Supports military personnel and their families through essential healthcare services. Potential for performance-based bonuses impacting the final cost to taxpayers.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- High value for a short duration
- Award Fee component requires careful monitoring
Positive Signals
- Full and open competition
- Fixed Price structure
Sector Analysis
This contract falls within the Healthcare sector, specifically for direct health and medical insurance carriers. The spending benchmark for this type of service can vary widely based on the scope of coverage and beneficiary population.
Small Business Impact
The data indicates this contract was awarded under full and open competition and does not specify any set-asides for small businesses. Therefore, it is unlikely that small businesses were the primary focus or beneficiaries of this particular award.
Oversight & Accountability
The contract's award fee structure necessitates robust oversight to ensure performance aligns with expectations and that the awarded fee is justified. Monitoring the availability of FY11 funds is also a key oversight requirement.
Related Government Programs
- Direct Health and Medical Insurance Carriers
- Department of Defense Contracting
- Defense Health Agency Programs
Risk Flags
- High cost for a short duration
- Award fee requires diligent oversight
- Contingent on FY11 fund availability
- Lack of small business participation noted
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 $116.8 million to UNITED CONCORDIA COMPANIES, INC.. DELIVERY ORDER FOR OPTION PERIOD 5 SERVICES UNDER CONTRACT H94002-05-D-0001, FOR THE PERIOD OF OCTOBER 1, 2010 THROUGH JANUARY 31, 2011. THIS DELIVERY ORDER IS SUBJECT TO THE AVAILABILITY OF FISCAL YEAR 2011 (FY11) FUNDS IN ACCORDANCE WITH FEDERAL ACQUISITION REGULATION CLAUSE 52.232-19.
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 $116.8 million.
What is the period of performance?
Start: 2010-09-30. End: 2011-01-31.
What was the specific scope of services covered by this $116.8 million delivery order for a 4-month period?
The delivery order covers services for option period 5 under a larger contract. While the specific services are not detailed here, it pertains to health and medical insurance carrier functions for the Department of Defense. The substantial value for a short duration suggests a broad scope or a critical, high-demand period for these insurance services.
How did the fixed-price award fee structure influence the final cost and contractor performance?
The fixed-price award fee structure sets a base price but allows for additional payment based on performance metrics. This incentivizes the contractor, United Concordia Companies, Inc., to exceed minimum requirements. Effective oversight is crucial to ensure that any awarded fees are justified by superior performance and represent good value for the government.
What is the potential impact of relying on FY11 funds for this contract award?
The contract is subject to the availability of FY11 funds, as stated in FAR clause 52.232-19. This means the contract's execution is contingent on Congress appropriating sufficient funds for the specified period. If funds are not available, the government may not be obligated to continue performance, potentially disrupting services.
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: FIXED PRICE AWARD FEE (M)
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: $116,812,018
Exercised Options: $116,812,018
Current Obligation: $116,812,018
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: H9400205D0001
IDV Type: IDC
Timeline
Start Date: 2010-09-30
Current End Date: 2011-01-31
Potential End Date: 2011-01-31 00:00:00
Last Modified: 2015-02-17
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