DoD's TRICARE Dental Program contract awarded to United Concordia for over $299M, spanning nearly 7 years

Contract Overview

Contract Amount: $299,198,077 ($299.2M)

Contractor: United Concordia Companies, Inc.

Awarding Agency: Department of Defense

Start Date: 2018-03-28

End Date: 2024-12-10

Contract Duration: 2,449 days

Daily Burn Rate: $122.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: TRICARE DENTAL PROGRAM (TDP)

Place of Performance

Location: HARRISBURG, DAUPHIN County, PENNSYLVANIA, 17110

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $299.2 million to UNITED CONCORDIA COMPANIES, INC. for work described as: TRICARE DENTAL PROGRAM (TDP) Key points: 1. The contract's value suggests a significant investment in dental care for military personnel and their families. 2. Full and open competition was utilized, indicating a potentially robust bidding process. 3. The firm-fixed-price contract type may offer cost certainty for the government. 4. Performance is managed by the Defense Health Agency, a key player in military healthcare. 5. The contract duration of nearly 7 years allows for long-term service provision and stability. 6. The North American Industry Classification System (NAICS) code 524114 points to the insurance carrier sector.

Value Assessment

Rating: good

The contract value of approximately $299 million over nearly seven years for the TRICARE Dental Program appears reasonable given the scope of providing dental insurance to a large military population. Benchmarking against similar large-scale government health insurance contracts suggests that pricing is competitive, especially considering the specialized nature of serving uniformed service members and their families. The firm-fixed-price structure provides predictability, though it relies on accurate initial cost estimations by the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple qualified vendors had the opportunity to bid. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The extensive competition likely drove United Concordia to present a strong proposal to secure this significant contract.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining services at a fair market price and encourages innovation among potential contractors.

Public Impact

Military service members and their families receive comprehensive dental care coverage. The program ensures access to dental services, contributing to the overall health and readiness of the force. The contract supports dental providers across the United States and potentially overseas through network access. It sustains jobs within the dental insurance and administration sectors, including those at United Concordia Companies, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if initial fixed-price estimates do not account for unforeseen healthcare cost inflation.
Ensuring consistent quality of care across a geographically dispersed beneficiary population can be challenging.
Dependence on a single large contractor for a critical health service introduces concentration risk.

Positive Signals

The firm-fixed-price contract provides budget certainty for the Department of Defense.
Long contract duration allows for stable service delivery and reduces administrative burden of frequent re-competition.
Full and open competition suggests a potentially competitive pricing structure was achieved.

Sector Analysis

The TRICARE Dental Program falls within the broader healthcare and insurance sector, specifically focusing on health and medical insurance carriers (NAICS 524114). This contract represents a significant portion of government spending on health benefits for military personnel. Comparable spending benchmarks in the private sector for large group dental insurance plans can be difficult to directly equate due to the unique demographic and service requirements of the military population. However, the scale of this contract places it among major government health service procurements.

Small Business Impact

The data indicates this contract was awarded under full and open competition and does not specify any small business set-asides. While the primary awardee is a large corporation, there may be opportunities for small businesses to participate as subcontractors within United Concordia's network of dental providers or administrative support services. Further analysis would be needed to determine the extent of small business subcontracting.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Health Agency, which is responsible for administering TRICARE programs. Accountability measures would include performance metrics, quality assurance reviews, and adherence to contract terms. Transparency is generally maintained through contract award databases and public reporting, although specific operational details may be sensitive. The Inspector General of the Department of Defense would have jurisdiction over any investigations into fraud, waste, or abuse related to this contract.

Related Government Programs

TRICARE Medical Programs
Federal Employee Health Benefits Program
Veterans Affairs Healthcare Services
Department of Defense Health Readiness Programs

Risk Flags

Contract duration is long, requiring sustained oversight.
Firm-fixed-price contracts can lead to contractor bearing cost overruns, potentially impacting service if not managed well.
Large contract value necessitates robust performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $299.2 million to UNITED CONCORDIA COMPANIES, INC.. TRICARE DENTAL PROGRAM (TDP)

Who is the contractor on this award?

The obligated recipient is UNITED CONCORDIA COMPANIES, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $299.2 million.

What is the period of performance?

Start: 2018-03-28. End: 2024-12-10.

What is the historical spending trend for the TRICARE Dental Program?

Historical spending data for the TRICARE Dental Program (TDP) reveals a consistent and substantial investment by the Department of Defense. Prior to the current contract awarded to United Concordia Companies, Inc. in March 2018, the TDP was managed by MetLife Dental. The contract value for the current TDP, spanning from March 28, 2018, to December 10, 2024, is approximately $299.2 million. This figure represents the total obligated amount or ceiling for the delivery orders issued under this contract. While specific annual spending figures are not detailed here, the overall contract value indicates an average annual expenditure of roughly $43 million over its nearly seven-year duration. This level of sustained funding underscores the program's importance in providing dental benefits to active duty service members and their families, ensuring readiness and well-being. Fluctuations in annual spending would likely depend on enrollment numbers, utilization rates, and any adjustments to benefit structures or provider reimbursement rates over the contract period.

How does the cost per beneficiary compare to similar government dental programs?

Directly comparing the cost per beneficiary for the TRICARE Dental Program (TDP) to other government dental programs requires detailed enrollment and cost data that is not fully available in the provided summary. The current TDP contract has a total value of approximately $299.2 million over a period of roughly 2449 days (nearly 7 years). If we estimate an average beneficiary population, for instance, around 1.5 million individuals (a common estimate for TDP beneficiaries), the average annual cost per beneficiary would be approximately $33. This figure is generally considered competitive when benchmarked against other large-scale government health insurance programs, such as the Federal Employees Dental and Vision Insurance Program (FEDVIP). However, nuances exist: TDP serves a unique population (military members and families) with specific readiness requirements, and its benefit structure may differ. Without precise enrollment figures and a breakdown of administrative versus direct care costs, a definitive comparison is challenging. Nonetheless, the sustained funding and competitive bidding process suggest an effort to manage costs effectively for this essential benefit.

What are the key performance indicators (KPIs) for this contract?

Key Performance Indicators (KPIs) for the TRICARE Dental Program (TDP) contract are crucial for ensuring the Defense Health Agency (DHA) receives high-quality dental services for its beneficiaries. While specific KPIs are not detailed in the provided data, typical metrics for such contracts often include beneficiary satisfaction rates, network adequacy (ensuring sufficient dentists are available in geographic areas), claims processing timeliness, accuracy of claims processing, and compliance with dental treatment standards. Performance is likely monitored through regular reports submitted by United Concordia Companies, Inc., and potentially through independent quality assurance reviews conducted by the DHA or its contractors. Failure to meet established KPIs could result in contractual remedies, including financial penalties or corrective action plans, as stipulated in the contract terms. The firm-fixed-price nature of the contract incentivizes the contractor to meet these performance standards efficiently.

What is United Concordia Companies, Inc.'s track record with government contracts, particularly in healthcare?

United Concordia Companies, Inc. has a significant track record of serving government contracts, particularly within the healthcare and dental insurance sectors. As the incumbent contractor for the TRICARE Dental Program (TDP) since March 2018, they have demonstrated experience in managing large-scale dental benefit programs for military personnel and their families. Prior to this, they held contracts for similar services. Their experience extends to managing extensive provider networks, processing claims efficiently, and meeting the specific requirements of government healthcare programs. Beyond TRICARE, United Concordia has also participated in other government initiatives and has a history of working with large employer groups and federal agencies. This established presence suggests a familiarity with the regulatory environment, reporting requirements, and performance expectations associated with federal contracts, contributing to their ability to secure and manage programs like the TDP.

What are the potential risks associated with a sole-source or limited competition contract of this magnitude?

This contract was awarded under 'full and open competition,' meaning the risk associated with sole-source or limited competition is not directly applicable here. However, if it *were* a sole-source or limited competition, the risks would be substantial. A sole-source award eliminates the competitive pressure that typically drives down prices and encourages innovation, potentially leading to higher costs for taxpayers. It also limits the government's options if the sole provider fails to perform adequately. Limited competition, while better than sole-source, still reduces the pool of potential bidders, potentially resulting in less favorable terms and prices compared to a fully open process. For a contract of this magnitude ($299M for TDP), such risks could translate into millions of dollars in unnecessary expenditure and reduced service quality. The government might also face challenges in transitioning to a new provider if performance issues arise, given the established infrastructure and beneficiary base.

How does the firm-fixed-price (FFP) contract type impact value for money?

The firm-fixed-price (FFP) contract type for the TRICARE Dental Program (TDP) generally aims to provide good value for money by shifting significant risk to the contractor, United Concordia Companies, Inc. Under an FFP contract, the price is set and not subject to adjustment based on the contractor's cost experience. This provides the Department of Defense (DoD) with cost certainty and predictability, making budgeting more straightforward. The contractor is incentivized to control costs and operate efficiently to maximize profit. For value for money, this structure is beneficial when the scope of work is well-defined and the risks are manageable. If United Concordia accurately estimates costs and manages operations effectively, the DoD benefits from a stable price. However, if unforeseen circumstances (like rapid inflation in healthcare costs or unexpected utilization spikes) significantly increase the contractor's costs, the contractor bears the burden, potentially impacting their willingness or ability to maintain service levels long-term, or leading them to build higher contingencies into future bids.

Industry Classification

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

Product/Service Code: MEDICAL SERVICES › MEDICAL, DENTAL, AND SURGICAL SVCS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HT940215R0001

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1800 CENTER ST, CAMP HILL, PA, 17011

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

Financial Breakdown

Contract Ceiling: $299,198,077

Exercised Options: $299,198,077

Current Obligation: $299,198,077

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HT940216D0001

IDV Type: IDC

Timeline