State Department awards $14.2M pharmacy benefit contract to Seven Corners Inc. for global health support

Contract Overview

Contract Amount: $14,207,027 ($14.2M)

Contractor: Seven Corners Inc

Awarding Agency: Department of State

Start Date: 2018-12-16

End Date: 2026-06-30

Contract Duration: 2,753 days

Daily Burn Rate: $5.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: ASPE HEALTH BENEFITS PROGRAM

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20547

State: District of Columbia Government Spending

Plain-Language Summary

Department of State obligated $14.2 million to SEVEN CORNERS INC for work described as: ASPE HEALTH BENEFITS PROGRAM Key points: 1. Contract value appears reasonable given the scope of global pharmacy benefit management. 2. Full and open competition suggests a competitive bidding process was utilized. 3. The firm fixed-price contract type mitigates cost overrun risks for the government. 4. This contract supports the health and well-being of government personnel and dependents abroad. 5. The duration of the contract indicates a long-term need for these services.

Value Assessment

Rating: good

The contract value of $14.2 million over its period of performance appears to be within a reasonable range for comprehensive pharmacy benefit management services supporting a global population. Benchmarking against similar contracts for third-party administration of insurance and pension funds, especially those with international reach, would provide a more precise value assessment. However, the firm fixed-price nature suggests that the government has secured a defined cost for these services, which is a positive indicator of value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. With three bidders participating, the competition level suggests a healthy market interest in providing these services. This level of competition is generally conducive to price discovery and can lead to more favorable pricing for the government.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

Benefits government employees, their families, and other eligible beneficiaries stationed or traveling abroad. Provides essential pharmacy benefit management, including prescription drug claims processing and network management. Impacts individuals across various global locations where State Department personnel are assigned. Ensures access to necessary medications and pharmacy services, contributing to the health and readiness of the workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased administrative burden if claims processing is complex.
Reliance on Seven Corners Inc. for critical health services necessitates strong performance monitoring.

Positive Signals

Firm fixed-price contract limits financial risk for the government.
Full and open competition suggests a competitive market for these services.
Long contract duration allows for stable service provision.

Sector Analysis

The contract falls within the broader healthcare services sector, specifically focusing on pharmacy benefit management (PBM) and third-party administration of insurance programs. This market is characterized by a mix of large, established players and specialized firms. The State Department's need for global reach and specialized services positions this contract within a niche but critical segment of the healthcare administration industry. Comparable spending benchmarks would involve looking at other agencies with large overseas workforces or international health programs.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized nature of global pharmacy benefit management, it is possible that larger, more experienced contractors are better positioned to meet the requirements. Subcontracting opportunities for small businesses might exist within the broader scope of services provided by Seven Corners Inc., but this is not explicitly detailed in the award information.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of State. Accountability measures are inherent in the firm fixed-price contract type, requiring the contractor to deliver services within the agreed-upon cost. Transparency is facilitated through contract award databases, though detailed performance metrics and oversight reports may not always be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

TRICARE Pharmacy Program
Federal Employees Health Benefits Program (FEHBP)
Department of Defense Overseas Pharmacy Services

Risk Flags

Contract performance risk
Geopolitical instability impacting service delivery
Cybersecurity of sensitive health data

Frequently Asked Questions

What is this federal contract paying for?

Department of State awarded $14.2 million to SEVEN CORNERS INC. ASPE HEALTH BENEFITS PROGRAM

Who is the contractor on this award?

The obligated recipient is SEVEN CORNERS INC.

Which agency awarded this contract?

Awarding agency: Department of State (Department of State).

What is the total obligated amount?

The obligated amount is $14.2 million.

What is the period of performance?

Start: 2018-12-16. End: 2026-06-30.

What is the track record of Seven Corners Inc. in managing government contracts, particularly those involving pharmacy benefit management?

Seven Corners Inc. has a history of providing travel insurance and assistance services, including medical and emergency assistance, which often involves managing healthcare claims and networks. While specific details on their performance managing large-scale government pharmacy benefit programs are not readily available in this summary, their experience in related fields suggests a foundational capability. A deeper dive into their past performance evaluations, any past performance questionnaires (PPQs) submitted during the bidding process, and any documented issues or successes on previous government contracts would be necessary for a comprehensive assessment of their track record. Their ability to handle the complexities of international pharmacy networks and compliance with government regulations would be key factors.

How does the per-unit cost or administrative fee structure of this contract compare to industry benchmarks for pharmacy benefit management?

Without specific details on the administrative fees or per-unit costs (e.g., cost per prescription, per member per month fees) within the contract's pricing structure, a direct comparison to industry benchmarks is challenging. Pharmacy Benefit Managers (PBMs) typically operate on a model that includes dispensing fees, rebate management, and administrative fees. Industry benchmarks vary significantly based on the scope of services, the size of the covered population, the network of pharmacies, and the specific negotiated rebates. To assess value, one would need to compare Seven Corners' fee structure against PBMs serving similar populations (e.g., government employees, international organizations) and analyze the net cost of drugs after rebates. The firm fixed-price nature suggests these components are bundled into a total price, making granular benchmarking difficult without further data.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Primary risks include potential disruptions in pharmacy services due to geopolitical instability affecting international supply chains or network access, contractor performance issues in managing a complex global network, and cybersecurity threats to sensitive health information. Mitigation strategies likely include robust contract performance standards, contingency plans for service continuity, strong cybersecurity protocols mandated by the contract, and regular performance reviews by the Department of State. The firm fixed-price nature also mitigates financial risk for the government, but performance risk remains. The contractor's experience in international operations is a key factor in managing geopolitical risks.

How effective is the current pharmacy benefit management system in meeting the healthcare needs of State Department personnel abroad?

The effectiveness of the system is primarily measured by the accessibility and affordability of prescription medications for beneficiaries, the efficiency of claims processing, and overall member satisfaction. Data on prescription utilization rates, patient access to formulary drugs, out-of-pocket costs for beneficiaries, and turnaround times for claims processing would be crucial indicators. Anecdotal feedback from users and patient surveys would also provide valuable insights. The transition to Seven Corners Inc. suggests a need for improved or sustained effectiveness, and ongoing monitoring of key performance indicators (KPIs) by the Department of State is essential to gauge the system's success in meeting healthcare needs.

What has been the historical spending trend for pharmacy benefit management services by the Department of State or similar agencies?

Historical spending data for pharmacy benefit management by the Department of State or comparable agencies would provide context for the $14.2 million award. Analyzing trends in spending over the past 5-10 years would reveal whether costs have been increasing, decreasing, or remaining stable. This analysis should consider factors such as changes in healthcare utilization, drug pricing, and contract scope. Comparing this spending to that of other agencies with large overseas personnel, such as the Department of Defense or USAID, could also offer valuable benchmarks and insights into the efficiency and cost-effectiveness of their respective PBM contracts.

Industry Classification

NAICS: Finance and Insurance › Agencies, Brokerages, and Other Insurance Related Activities › Pharmacy Benefit Management and Other Third Party Administration of Insurance and Pension Funds

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

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

Address: 303 CONGRESSIONAL BLVD, CARMEL, IN, 46032

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $21,793,457

Exercised Options: $21,793,457

Current Obligation: $14,207,027

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline