OptumHealth Care Solutions awarded $210M for global nurse advice line services by the Defense Health Agency

Contract Overview

Contract Amount: $210,151,104 ($210.2M)

Contractor: Optumhealth Care Solutions, LLC

Awarding Agency: Department of Defense

Start Date: 2017-06-12

End Date: 2023-11-09

Contract Duration: 2,341 days

Daily Burn Rate: $89.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: IGF::OT::IGF GLOBAL NURSE ADVICE LINE SERVICES

Place of Performance

Location: EDEN PRAIRIE, HENNEPIN County, MINNESOTA, 55344

State: Minnesota Government Spending

Plain-Language Summary

Department of Defense obligated $210.2 million to OPTUMHEALTH CARE SOLUTIONS, LLC for work described as: IGF::OT::IGF GLOBAL NURSE ADVICE LINE SERVICES Key points: 1. The contract's value of $210 million over its duration suggests a significant investment in healthcare support services. 2. Full and open competition was utilized, indicating a broad market solicitation for these specialized services. 3. The contract's fixed-price nature aims to control costs and provide predictability for the agency. 4. Performance duration of 2341 days (approximately 6.4 years) points to a long-term need for these services. 5. The 'All Other Professional, Scientific, and Technical Services' NAICS code suggests a broad scope of work. 6. The contract was awarded as a definitive contract, implying a clear scope and terms.

Value Assessment

Rating: good

The contract value of $210 million over approximately 6.4 years averages to about $32.8 million annually. Benchmarking this against similar large-scale healthcare support contracts is challenging without more specific service details. However, the fixed-price structure suggests an effort to ensure cost-effectiveness. The absence of specific performance metrics or comparison data makes a definitive value-for-money assessment difficult, but the competitive award process is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. This approach typically fosters a competitive environment, encouraging multiple bidders to vie for the contract. The fact that it was competed broadly suggests that the agency sought the best possible solution and pricing from the market. The number of bids received (4) indicates a moderate level of interest and competition for this service.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces and ensuring that the government receives competitive offers, leading to better value for public funds.

Public Impact

Beneficiaries include military personnel, their families, and other eligible beneficiaries of the TRICARE program, providing them with accessible healthcare advice. The services delivered likely encompass a global nurse advice line, offering 24/7 support for health-related inquiries and guidance. Geographic impact is global, supporting beneficiaries worldwide, which is crucial for a dispersed military population. Workforce implications may include the need for a substantial number of qualified nurses and support staff to operate the advice line effectively.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep given the broad NAICS code if not tightly managed.
Ensuring consistent quality of advice across a global, 24/7 operation presents a management challenge.
Dependence on a single contractor for a critical health service line requires robust oversight.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing and service offering.
Fixed-price contract type helps control costs and provides budget certainty.
Long contract duration indicates a stable, ongoing need and potential for contractor expertise development.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically related to healthcare support. The market for such services is substantial, driven by government and private sector demand for outsourced health management and advisory functions. Comparable spending benchmarks would typically involve other large-scale government contracts for call center operations, telehealth, or health information services, often awarded through competitive processes.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside. There is no explicit mention of subcontracting plans for small businesses. This suggests that the primary award went to a large business, and the impact on the small business ecosystem would depend on whether OptumHealth engages small businesses for subcontracting opportunities, which is not detailed in the provided data.

Oversight & Accountability

Oversight mechanisms would typically involve the Defense Health Agency's contracting officers and program managers. Accountability measures are inherent in the fixed-price contract structure, requiring the contractor to deliver services as specified. Transparency is generally facilitated through contract award databases, though detailed performance reports may be internal. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse related to the contract.

Related Government Programs

TRICARE Health Services
Military Health System Support Services
Global Health Advisory Contracts
Nurse Call Center Operations
Healthcare Information Services

Risk Flags

Potential for service disruption if contractor faces unforeseen issues.
Ensuring consistent quality of care across a global operation.
Dependence on a single vendor for critical health information.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $210.2 million to OPTUMHEALTH CARE SOLUTIONS, LLC. IGF::OT::IGF GLOBAL NURSE ADVICE LINE SERVICES

Who is the contractor on this award?

The obligated recipient is OPTUMHEALTH CARE SOLUTIONS, LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $210.2 million.

What is the period of performance?

Start: 2017-06-12. End: 2023-11-09.

What is the historical spending trend for global nurse advice line services by the Department of Defense?

Historical spending data for this specific service category is not directly available from the provided snippet. However, the award of a $210 million definitive contract suggests a sustained and significant requirement for such services over an extended period (2017-2023). To understand historical trends, one would need to analyze past contracts awarded by the Defense Health Agency or its predecessors for similar nurse advice line or healthcare support functions. This would involve searching contract databases for prior awards, noting their values, durations, and the contractors involved. A consistent pattern of awarding large, long-term contracts would indicate a stable or growing demand for these services within the military health system.

How does the per-unit cost of this nurse advice line service compare to industry benchmarks?

Determining a precise per-unit cost for this contract is challenging without knowing the exact volume metrics (e.g., calls handled, minutes of consultation) and the specific services included. The contract value of $210 million over approximately 2341 days averages to roughly $90,000 per day or $32.8 million per year. Industry benchmarks for nurse advice lines can vary widely based on factors like staffing levels, technology used, complexity of cases handled, and geographic coverage. Generally, large-scale, global operations like this may achieve economies of scale. However, without detailed service level agreements and call volume data, a direct comparison to typical per-call costs or per-beneficiary costs in the private sector is speculative. The fixed-price nature suggests an attempt to cap these costs.

What are the key performance indicators (KPIs) used to evaluate OptumHealth Care Solutions' performance on this contract?

The provided data does not specify the key performance indicators (KPIs) for this contract. However, for a global nurse advice line service, typical KPIs would likely include: average call wait time, call abandonment rate, first-call resolution rate, patient satisfaction scores, adherence to clinical protocols, and response times for different urgency levels. The Defense Health Agency would monitor these metrics to ensure the quality and effectiveness of the services provided. Contract performance reviews would assess OptumHealth's ability to meet or exceed these established KPIs, which are crucial for maintaining the health and well-being of military beneficiaries.

What is the potential risk associated with relying on a single contractor for a critical health service like a global nurse advice line?

Relying on a single contractor for a critical health service like a global nurse advice line presents several potential risks. These include: service disruption due to contractor failure (financial, operational, or legal issues), potential for complacency leading to decreased service quality over time, and reduced leverage for the government in negotiating future terms or pricing. To mitigate these risks, the Defense Health Agency would typically implement robust contract oversight, including regular performance reviews, contingency planning, and potentially maintaining a list of backup providers or having clear termination for convenience clauses. The long-term nature of the contract also necessitates careful monitoring of the contractor's financial stability and operational capacity.

How does the $210 million contract value compare to other major healthcare IT or support service contracts awarded by the DoD?

The $210 million contract value is substantial, placing it among significant investments in healthcare support services by the Department of Defense. While not as large as major IT infrastructure overhauls or large-scale electronic health record system implementations (which can run into billions), it represents a considerable commitment for a specialized service like a global nurse advice line. The DoD awards numerous contracts in the tens to hundreds of millions of dollars annually for various healthcare-related services, including medical readiness, health IT, pharmaceuticals, and direct patient care support. This contract's value is consistent with large, long-term service contracts aimed at supporting the health and readiness of the military community globally.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Other Professional, Scientific, and Technical Services › All Other Professional, Scientific, and Technical Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HT001116R0040

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Unitedhealth Group Incorporated

Address: 11000 OPTUM CIRCLE, EDEN PRAIRIE, MN, 55344

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

Financial Breakdown

Contract Ceiling: $241,964,164

Exercised Options: $210,151,104

Current Obligation: $210,151,104

Actual Outlays: $9,796

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline