VA awards $786M contract to TriWest Healthcare Alliance Corp for health insurance services in October FY24

Contract Overview

Contract Amount: $785,953,061 ($786.0M)

Contractor: Triwest Healthcare Alliance Corp

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-10-01

End Date: 2023-10-31

Contract Duration: 30 days

Daily Burn Rate: $26.2M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT FOR OCTOBER FY24 REGION 4

Place of Performance

Location: FREDERICKSBURG, SPOTSYLVANIA County, VIRGINIA, 22408

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $786.0 million to TRIWEST HEALTHCARE ALLIANCE CORP for work described as: EXPRESS REPORT FOR OCTOBER FY24 REGION 4 Key points: 1. The contract value of $785.96 million represents a significant investment in healthcare services. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract is for direct health and medical insurance carriers, a critical sector. 4. The duration of 30 days for this delivery order indicates a short-term need or task.

Value Assessment

Rating: good

The contract value of $785.96 million for a 30-day period is substantial. Benchmarking against similar contracts for health insurance carriers would be necessary to fully assess pricing effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

Full and open competition was employed, which typically leads to better price discovery and value for the government. This method allows all eligible vendors to bid, fostering a competitive environment.

Taxpayer Impact: The competitive nature of the award is expected to yield favorable pricing for taxpayers, although the specific value proposition requires further analysis of the service details.

Public Impact

Veterans will receive direct health and medical insurance services under this contract. The large contract value suggests a broad scope of services impacting a significant number of beneficiaries. The short 30-day duration of the delivery order may indicate a bridge contract or a specific, time-bound requirement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Short contract duration (30 days) for a large value may warrant scrutiny.
Lack of specific performance metrics or outcomes in the provided data.
Potential for follow-on contracts needs to be monitored for sustained spending.

Positive Signals

Awarded through full and open competition.
Contractor is a known entity in healthcare services for veterans.
Firm fixed price contract provides cost certainty.

Sector Analysis

The healthcare sector, particularly direct health and medical insurance carriers, is a major area of federal spending. This contract falls within the Department of Veterans Affairs' mission to provide comprehensive healthcare to veterans.

Small Business Impact

The provided data does not indicate any specific set-asides for small businesses. Further analysis would be needed to determine the extent of small business participation in this contract.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Standard oversight mechanisms for delivery orders and contract performance should be in place to ensure accountability.

Related Government Programs

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

Risk Flags

Short contract duration for a large value.
Limited detail on specific services provided.
Potential for undefined follow-on needs.
Need for detailed cost-benefit analysis post-award.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $786.0 million to TRIWEST HEALTHCARE ALLIANCE CORP. EXPRESS REPORT FOR OCTOBER FY24 REGION 4

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 $786.0 million.

What is the period of performance?

Start: 2023-10-01. End: 2023-10-31.

What specific health and medical insurance services are covered under this $786 million delivery order, and how do they align with the VA's long-term healthcare strategy?

The provided data identifies the contract as being for 'Direct Health and Medical Insurance Carriers' but lacks specifics on the exact services. Understanding the scope is crucial to assess its alignment with the VA's strategic healthcare goals and to determine if it addresses critical needs or fills temporary gaps in service provision.

Given the $786 million value and a 30-day duration, what is the rationale behind this delivery order, and what are the potential risks associated with such a short timeframe for a large award?

A 30-day duration for a $786 million award suggests it might be a bridge contract to maintain services while a longer-term solution is procured, or it could be for an immediate, large-scale event. Risks include potential service disruptions if follow-on actions are delayed, and the possibility that the short timeframe limited thorough vetting or competitive pricing, despite the 'full and open' designation.

How does the firm fixed price structure for this large delivery order ensure cost-effectiveness and prevent potential cost overruns for the VA, especially within a compressed 30-day period?

A firm fixed price contract aims to provide cost certainty by establishing a set price regardless of the contractor's actual costs. For this large, short-duration order, it suggests the scope of work and associated costs were well-defined and predictable. However, effectiveness hinges on the accuracy of the initial cost estimation and the contractor's ability to deliver within that budget without compromising quality.

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: $785,953,061

Exercised Options: $785,953,061

Current Obligation: $785,953,061

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10G19D0038

IDV Type: IDC

Timeline