VA Awards $176M Contract to Signature Choice II for Claims Processing and Customer Services

Contract Overview

Contract Amount: $176,437,108 ($176.4M)

Contractor: Signature Choice II, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-05-08

End Date: 2025-05-07

Contract Duration: 364 days

Daily Burn Rate: $484.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: VA CLAIMS PROCESSING AND CUSTOMER SERVICES

Place of Performance

Location: DENVER, DENVER County, COLORADO, 80202

State: Colorado Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $176.4 million to SIGNATURE CHOICE II, LLC for work described as: VA CLAIMS PROCESSING AND CUSTOMER SERVICES Key points: 1. Contract value of $176.4 million over one year. 2. Sole-source award to Signature Choice II, LLC. 3. Focus on Pharmacy Benefit Management and Third Party Administration. 4. Potential risks associated with limited competition.

Value Assessment

Rating: questionable

The contract value of $176.4 million for a one-year period appears high for claims processing and customer services, especially given the lack of publicly available pricing benchmarks for this specific scope. Without competitive bidding, it's difficult to assess if this represents fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no competition. This significantly limits price discovery and may lead to a higher cost for taxpayers than if multiple vendors had competed.

Taxpayer Impact: The sole-source nature of this award raises concerns about potential overspending, as competitive pressures that typically drive down costs were absent.

Public Impact

Veterans may experience changes in claims processing efficiency and customer service quality. The contract's focus on pharmacy benefits could impact prescription access and costs for beneficiaries. Lack of competition may limit innovation and service improvements in the long run.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
High contract value for a one-year term.
Lack of transparency in pricing justification.

Positive Signals

Contract supports critical VA functions for veterans.
Established vendor may provide continuity of services.

Sector Analysis

This contract falls under the 'Pharmacy Benefit Management and Other Third Party Administration of Insurance and Pension Funds' category. Spending in this sector can vary widely, but large sole-source contracts warrant scrutiny due to the potential for inflated costs compared to competitive procurements.

Small Business Impact

The data does not indicate any specific provisions or considerations for small businesses in this sole-source award, suggesting limited opportunities for small business participation.

Oversight & Accountability

The sole-source nature of this award necessitates robust oversight from the Department of Veterans Affairs to ensure the contractor is delivering services effectively and at a reasonable cost, despite the absence of competition.

Related Government Programs

Pharmacy Benefit Management and Other Third Party Administration of Insurance and Pension Funds
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Sole-source award
Lack of competition
High contract value
Limited transparency on pricing justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $176.4 million to SIGNATURE CHOICE II, LLC. VA CLAIMS PROCESSING AND CUSTOMER SERVICES

Who is the contractor on this award?

The obligated recipient is SIGNATURE CHOICE II, LLC.

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 $176.4 million.

What is the period of performance?

Start: 2024-05-08. End: 2025-05-07.

What is the justification for the sole-source award, and how does the VA ensure fair pricing without competition?

The justification for a sole-source award typically involves unique capabilities or circumstances. The VA should have detailed documentation outlining why competition was not feasible. To ensure fair pricing, the agency might rely on historical pricing data, independent cost estimates, or benchmark data from similar, albeit potentially competitively awarded, contracts to validate the proposed price.

What are the potential risks to veterans if Signature Choice II, LLC underperforms in claims processing or customer service?

Underperformance could lead to significant delays in claim adjudication, impacting veterans' access to benefits and financial stability. Poor customer service might result in frustration, difficulty navigating the system, and a diminished overall experience with the VA, potentially eroding trust and satisfaction among the veteran community.

How does this contract contribute to the VA's overall mission effectiveness in serving veterans?

This contract is crucial for the efficient processing of claims and providing essential customer support, directly impacting the VA's ability to deliver timely benefits and services to veterans. Effective execution by Signature Choice II, LLC ensures veterans receive the support they are entitled to, contributing to their well-being and the VA's mission.

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: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5272 GUNSTON HALL DR, WOODBRIDGE, VA, 22193

Business Categories: Category Business, Limited Liability Corporation, Partnership or Limited Liability Partnership, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $186,979,320

Exercised Options: $176,437,108

Current Obligation: $176,437,108

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10G24D0051

IDV Type: IDC

Timeline