DoD's $1.3B contract for HMO Medical Centers awarded to Martins Point Health Care Inc. over 5 years

Contract Overview

Contract Amount: $1,308,072,245 ($1.3B)

Contractor: Martins Point Health Care Inc

Awarding Agency: Department of Defense

Start Date: 2008-10-01

End Date: 2013-09-30

Contract Duration: 1,825 days

Daily Burn Rate: $716.8K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: AWARD OF CONTRACT

Place of Performance

Location: PORTLAND, CUMBERLAND County, MAINE, 04104

State: Maine Government Spending

Plain-Language Summary

Department of Defense obligated $1.31 billion to MARTINS POINT HEALTH CARE INC for work described as: AWARD OF CONTRACT Key points: 1. Contract value suggests significant investment in healthcare services for military personnel and families. 2. Sole-source award raises questions about potential lack of competition and price optimization. 3. Long contract duration of 5 years indicates a stable, long-term need for these services. 4. The specific NAICS code 621491 points to a focus on outpatient mental health and substance abuse centers. 5. Geographic focus on Maine (ST=ME, SN=MAINE) suggests a regional service delivery model. 6. Firm Fixed Price contract type provides cost certainty for the government but may limit flexibility.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without comparable sole-source awards for HMO Medical Centers. The total award of over $1.3 billion over five years averages to approximately $261 million annually. This figure needs to be assessed against the scope of services provided, patient volume, and the specific healthcare needs of the covered population in Maine. Without competitive bids, it's difficult to ascertain if this represents optimal value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning there was no open competition. The 'NOT AVAILABLE FOR COMPETITION' (CT) code indicates that only one source was considered or available. This approach bypasses the typical competitive bidding process, which can lead to higher prices and reduced innovation as there is no market pressure to offer the best value.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the most competitive pricing. The absence of competition limits the government's ability to negotiate favorable terms and potentially overpays for services.

Public Impact

Military personnel and their families in Maine benefit from comprehensive HMO medical center services. The contract ensures the provision of outpatient mental health and substance abuse treatment. Services are geographically concentrated in Maine, impacting the local healthcare landscape. Potential workforce implications for healthcare professionals employed by or contracting with Martins Point Health Care Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated costs for taxpayers.
Sole-source awards can reduce transparency and accountability in government spending.
Potential for complacency from the contractor due to the absence of competitive pressure.

Positive Signals

Ensures continuity of care for a specific population in a defined region.
Firm Fixed Price contract provides budget predictability for the Department of Defense.
Long-term award may foster a stable relationship and specialized service delivery.

Sector Analysis

The healthcare services sector, particularly outpatient care centers, is a significant area of federal spending. This contract falls under the broader category of healthcare services for military beneficiaries, often managed through specific agencies like the Defense Health Agency. Comparable spending benchmarks would typically involve analyzing per-member-per-month costs for similar managed care contracts within the TRICARE program or other government health initiatives.

Small Business Impact

The provided data indicates that small business participation (SB=false) was not a factor in this contract award. There is no indication of small business set-asides or subcontracting requirements. This suggests that the primary contractor, Martins Point Health Care Inc., is likely a larger entity, and the contract's structure did not prioritize or necessitate small business involvement.

Oversight & Accountability

Oversight for this contract would typically fall under the purview of the Defense Health Agency (DHA) and potentially the Department of Defense's Inspector General. Mechanisms would include contract performance reviews, audits, and compliance checks to ensure services are delivered as specified. Transparency is limited due to the sole-source nature, but reporting requirements on service delivery and costs would still apply.

Related Government Programs

TRICARE Prime
Military Health System
Outpatient Mental Health Services
HMO Contracts

Risk Flags

Sole-source award lacks competitive pricing pressure.
Limited transparency due to non-competitive nature.
Potential for cost overruns without market comparison.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $1.31 billion to MARTINS POINT HEALTH CARE INC. AWARD OF CONTRACT

Who is the contractor on this award?

The obligated recipient is MARTINS POINT HEALTH CARE INC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Health Agency).

What is the total obligated amount?

The obligated amount is $1.31 billion.

What is the period of performance?

Start: 2008-10-01. End: 2013-09-30.

What is the historical spending pattern for Martins Point Health Care Inc. with the Department of Defense?

Analyzing historical spending for Martins Point Health Care Inc. with the Department of Defense requires access to broader contract databases. However, this specific contract, awarded in 2008 and ending in 2013, represents a significant outlay of over $1.3 billion. Without further data, it's difficult to establish a trend, but the substantial value suggests a long-standing and important relationship. Future analysis should investigate if this was a sole-source continuation of previous contracts or a new award under similar circumstances, and whether the company holds other DoD contracts.

How does the per-member-per-month cost of this contract compare to other TRICARE Prime contracts?

A direct per-member-per-month (PMPM) cost comparison is not feasible with the provided data alone. To perform such an analysis, we would need the total number of covered lives (beneficiaries) under this contract and the specific services included in the PMPM calculation. Additionally, comparing it to other TRICARE Prime contracts would require accessing similar data for those contracts, ideally those with comparable service areas and populations. Given this is a sole-source award, a benchmark against competitively procured contracts would be essential to assess value for money.

What are the specific performance metrics and quality standards outlined in this contract?

The provided contract abstract does not detail specific performance metrics or quality standards. Typically, such a large healthcare contract would include Service Level Agreements (SLAs), quality indicators (e.g., patient satisfaction scores, wait times, clinical outcomes), and reporting requirements. These would be crucial for the Defense Health Agency to monitor the contractor's performance and ensure the delivery of adequate healthcare services. A thorough review of the full contract document would be necessary to ascertain these details.

What is the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award, indicated by 'NOT AVAILABLE FOR COMPETITION,' typically stems from specific circumstances outlined in federal acquisition regulations. Common reasons include the existence of only one responsible source capable of providing the required services, urgent and compelling needs where competition is not feasible, or if the contract is a follow-on to a previous competition where the original contractor possesses unique knowledge or capabilities. For this specific contract, the rationale would need to be documented by the awarding agency, likely the Defense Health Agency, detailing why competition was not pursued.

What is the geographic scope and population served by this contract?

This contract specifically serves the state of Maine (ST=ME, SN=MAINE). The population served would primarily consist of active-duty military personnel, their dependents, and potentially retired military personnel and their families residing in Maine who are eligible for TRICARE benefits. The contract's focus on 'HMO Medical Centers' suggests a managed care approach to delivering healthcare services within this defined geographic region.

Industry Classification

NAICS: Health Care and Social Assistance › Outpatient Care Centers › HMO Medical Centers

Product/Service Code: MEDICAL SERVICES › GENERAL HEALTH CARE SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: H9400207R0006

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 331 VERANDA ST STE 1, PORTLAND, ME, 01

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

Financial Breakdown

Contract Ceiling: $1,308,572,245

Exercised Options: $1,308,322,245

Current Obligation: $1,308,072,245

Contract Characteristics

Cost or Pricing Data: NO

Timeline