DoD Awards $265M for Health Insurance to United Concordia, Highlighting Direct Carrier Services
Contract Overview
Contract Amount: $265,241,549 ($265.2M)
Contractor: United Concordia Companies, Inc.
Awarding Agency: Department of Defense
Start Date: 2011-08-01
End Date: 2012-04-30
Contract Duration: 273 days
Daily Burn Rate: $971.6K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIXED PRICE AWARD FEE
Sector: Healthcare
Official Description: PERIOD OF PERFORMANCE FOR THIS DELIVERY ORDER IS AUGUST 1, 2011 THROUGH APRIL 30, 2012.
Place of Performance
Location: HARRISBURG, DAUPHIN County, PENNSYLVANIA, 17110
Plain-Language Summary
Department of Defense obligated $265.2 million to UNITED CONCORDIA COMPANIES, INC. for work described as: PERIOD OF PERFORMANCE FOR THIS DELIVERY ORDER IS AUGUST 1, 2011 THROUGH APRIL 30, 2012. Key points: 1. The contract awarded to United Concordia Companies, Inc. represents a significant investment in direct health and medical insurance carriers. 2. Competition was full and open, suggesting a robust market for these services. 3. The award value of $265M warrants scrutiny for cost-effectiveness and value for taxpayer dollars. 4. This spending falls within the healthcare sector, specifically focusing on insurance provision.
Value Assessment
Rating: fair
The award value of $265M for a 9-month period is substantial. Benchmarking against similar large-scale health insurance contracts is necessary to assess if the pricing reflects market rates and value for the services provided.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating multiple vendors had the opportunity to bid. This method generally promotes competitive pricing and allows the government to select the best value offering.
Taxpayer Impact: The substantial award amount means taxpayer funds are directly supporting health insurance services, emphasizing the need for efficient and effective use of these resources.
Public Impact
Military personnel and their families will receive health insurance coverage through this contract. The contract supports the Defense Health Agency's mission to provide healthcare services to the armed forces. This award impacts the healthcare insurance market, particularly for government contracts.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Large contract value requires careful monitoring for cost efficiency.
- Short performance period for a large award may indicate urgency or specific needs.
- Fixed Price Award Fee structure can incentivize performance but requires clear metrics.
Positive Signals
- Full and open competition suggests a healthy market and potential for good pricing.
- Award to an established carrier likely ensures continuity of service.
- Focus on direct health and medical insurance aligns with core healthcare needs.
Sector Analysis
This contract falls within the healthcare sector, specifically focusing on health insurance carriers. The award value of $265M for a 9-month period is significant, suggesting a large scope of coverage or a high-demand service area.
Small Business Impact
The data does not indicate whether small businesses were involved as subcontractors or prime contractors in this award. Further analysis would be needed to determine small business participation.
Oversight & Accountability
The Defense Health Agency is responsible for overseeing this contract. Oversight would focus on ensuring United Concordia meets performance standards, manages costs effectively, and provides quality healthcare insurance to beneficiaries.
Related Government Programs
- Direct Health and Medical Insurance Carriers
- Department of Defense Contracting
- Defense Health Agency Programs
Risk Flags
- High contract value requires diligent cost management.
- Short performance period may indicate potential for future re-competition or scope changes.
- Reliance on a single carrier for a large population necessitates robust performance monitoring.
- Award fee structure requires clear and measurable performance metrics to ensure value.
Tags
direct-health-and-medical-insurance-carr, department-of-defense, pa, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $265.2 million to UNITED CONCORDIA COMPANIES, INC.. PERIOD OF PERFORMANCE FOR THIS DELIVERY ORDER IS AUGUST 1, 2011 THROUGH APRIL 30, 2012.
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 $265.2 million.
What is the period of performance?
Start: 2011-08-01. End: 2012-04-30.
What was the specific scope of services covered by this $265M award to United Concordia, and how did it align with the Defense Health Agency's strategic healthcare objectives?
The award was for direct health and medical insurance carriers, serving military personnel and their families. The scope likely encompassed a broad range of medical services, prescription drug coverage, and potentially dental or vision benefits, depending on the specific contract details. This aligns with the DHA's objective of providing comprehensive healthcare to the uniformed services, ensuring readiness and well-being.
Given the full and open competition, what were the key differentiators that led to United Concordia being selected, and how were potential risks managed in the contract's fixed-price award fee structu
United Concordia was likely selected based on a combination of factors including proposed cost, technical approach, past performance, and understanding of military healthcare needs. The fixed-price award fee structure would have included specific performance metrics and award criteria, allowing the government to incentivize high performance while managing overall cost. Risks would be mitigated through clear contract terms, performance monitoring, and defined award fee adjustments.
What was the estimated cost per beneficiary or per service provided under this contract, and how does it compare to industry benchmarks for similar health insurance services?
Without detailed service utilization data and specific benefit packages, calculating a precise per-beneficiary or per-service cost is challenging. However, the $265M award over approximately 9 months suggests a significant per-member-per-month cost. A thorough analysis would require comparing this to benchmarks for large group health insurance plans, adjusted for the unique population and regulatory environment of military healthcare.
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: United Concordia Companies Inc. (UEI: 071260375)
Address: 4401 DEER PATH ROAD, HARRISBURG, PA, 17110
Business Categories: Category Business, Not Designated a Small Business
Financial Breakdown
Contract Ceiling: $265,241,549
Exercised Options: $265,241,549
Current Obligation: $265,241,549
Contract Characteristics
Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: H9400205D0001
IDV Type: IDC
Timeline
Start Date: 2011-08-01
Current End Date: 2012-04-30
Potential End Date: 2012-04-30 00:00:00
Last Modified: 2017-03-22
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