VA awards $1.51B contract to TriWest Healthcare for Direct Health and Medical Insurance Carriers

Contract Overview

Contract Amount: $1,510,328,699 ($1.5B)

Contractor: Triwest Healthcare Alliance Corp

Awarding Agency: Department of Veterans Affairs

Start Date: 2019-08-06

End Date: 2027-03-31

Contract Duration: 2,794 days

Daily Burn Rate: $540.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT: QUARTER 1

Place of Performance

Location: FREDERICKSBURG, SPOTSYLVANIA County, VIRGINIA, 22408

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $1.51 billion to TRIWEST HEALTHCARE ALLIANCE CORP for work described as: EXPRESS REPORT: QUARTER 1 Key points: 1. Contract value of $1.51 billion over its period of performance. 2. Awarded under full and open competition, indicating a competitive bidding process. 3. Potential risks include performance execution and long-term cost management. 4. The sector is healthcare services, specifically medical insurance carriers.

Value Assessment

Rating: good

The contract value is substantial, and pricing will be assessed against similar large-scale healthcare service contracts. The firm fixed-price structure aims to control costs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, suggesting a robust price discovery process. This method typically leads to more competitive pricing.

Taxpayer Impact: The competitive nature of the award is expected to yield favorable pricing for taxpayers, ensuring value for money in healthcare services.

Public Impact

Ensures continued access to healthcare services for veterans. Supports a large healthcare network and associated jobs. Potential for improved health outcomes through managed care.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (2019-2027) may lead to scope creep or evolving needs.
Reliance on a single carrier for a large population requires robust oversight.

Positive Signals

Awarded through full and open competition.
Firm fixed-price contract type provides cost certainty.

Sector Analysis

This contract falls within the healthcare sector, specifically focusing on medical insurance carriers. Benchmarks for similar large-scale healthcare service contracts would involve comparing per-member-per-month costs and administrative overhead.

Small Business Impact

The provided data does not indicate specific subcontracting goals or participation by small businesses in this contract. Further analysis would be needed to assess small business impact.

Oversight & Accountability

The Department of Veterans Affairs is responsible for oversight. Given the contract's duration and value, regular performance reviews and financial audits are crucial for accountability.

Related Government Programs

Direct Health and Medical Insurance Carriers
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Long contract duration
Potential for vendor lock-in
Complexity of managing large healthcare networks
Dependence on a single provider for critical services

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $1.51 billion to TRIWEST HEALTHCARE ALLIANCE CORP. EXPRESS REPORT: QUARTER 1

Who is the contractor on this award?

The obligated recipient is TRIWEST HEALTHCARE ALLIANCE CORP.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $1.51 billion.

What is the period of performance?

Start: 2019-08-06. End: 2027-03-31.

How does the per-member-per-month cost compare to similar VA contracts or private sector benchmarks?

A detailed analysis of the contract's financial structure, including administrative fees and profit margins, is necessary to benchmark the per-member-per-month cost. Comparing this to other VA contracts for similar services or industry standards for private health insurance providers will reveal if the pricing is competitive and offers good value for the taxpayer.

What are the key performance indicators (KPIs) and how is TriWest's performance being monitored?

The contract likely includes specific KPIs related to network adequacy, claims processing times, patient satisfaction, and quality of care. The VA's oversight mechanism should involve regular performance reviews against these KPIs, with clear procedures for addressing any deficiencies or performance shortfalls to mitigate risks.

What is the potential impact of this long-term contract on future healthcare innovation and competition within the VA system?

A long-term, sole-source-like award (even if initially competed) can potentially limit opportunities for newer, innovative companies to enter the VA healthcare market. While ensuring continuity, it might reduce pressure for TriWest to innovate aggressively and could impact the VA's ability to adopt cutting-edge solutions from emerging providers.

Industry Classification

NAICS: Finance and Insurance › Insurance Carriers › Direct Health and Medical Insurance Carriers

Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 15810 N 28TH AVE, PHOENIX, AZ, 85053

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

Financial Breakdown

Contract Ceiling: $1,510,328,699

Exercised Options: $1,510,328,699

Current Obligation: $1,510,328,699

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10G19D0038

IDV Type: IDC

Timeline