TRICARE Dental Program contract awarded to United Concordia for over $300M, highlighting significant defense health spending

Contract Overview

Contract Amount: $300,031,932 ($300.0M)

Contractor: United Concordia Companies, Inc.

Awarding Agency: Department of Defense

Start Date: 2020-03-25

End Date: 2021-04-30

Contract Duration: 401 days

Daily Burn Rate: $748.2K/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 $300.0 million to UNITED CONCORDIA COMPANIES, INC. for work described as: TRICARE DENTAL PROGRAM (TDP) Key points: 1. The contract represents a substantial investment in dental insurance for military personnel and their families. 2. Competition dynamics for this large-scale health insurance contract are crucial for ensuring fair pricing. 3. Performance context is vital to understand the effectiveness of dental services delivered under this program. 4. Sector positioning within defense health services indicates a critical role in supporting military readiness. 5. Risk indicators may include service delivery continuity and beneficiary satisfaction levels.

Value Assessment

Rating: good

This contract value of over $300 million for the TRICARE Dental Program is significant within the defense health sector. Benchmarking against similar large-scale health insurance contracts for government beneficiaries is necessary to fully assess value. Given the scale, the pricing is likely competitive, but detailed cost breakdowns would be needed for a definitive value-for-money assessment. The firm fixed-price structure suggests predictable costs for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. This level of competition is generally favorable for price discovery and can lead to more competitive pricing for the government. The specific number of bidders and the evaluation criteria would provide further insight into the intensity of the competition.

Taxpayer Impact: Full and open competition suggests that taxpayers benefit from a more rigorous bidding process, potentially leading to lower overall costs for the dental program.

Public Impact

Military service members and their families receive essential dental care coverage. The program supports the health and readiness of the U.S. armed forces. Geographic impact is nationwide, covering all eligible beneficiaries regardless of duty station. Workforce implications include the employment of dental professionals and administrative staff supporting the program.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Ensuring consistent quality of care across all contracted dental providers.
Managing beneficiary enrollment and disenrollment processes efficiently.
Addressing potential gaps in dental network coverage in remote areas.

Positive Signals

The firm fixed-price contract provides cost certainty for the government.
Full and open competition likely drove competitive pricing.
The TRICARE program has a long-standing history of serving military families.

Sector Analysis

The defense health sector is a critical component of military readiness, encompassing a wide range of medical and dental services. This contract for the TRICARE Dental Program falls within the health insurance and managed care sub-sector. Spending in this area is substantial, driven by the need to provide comprehensive benefits to active duty and retired military personnel and their dependents. Comparable spending benchmarks would involve analyzing other large government health insurance contracts, such as those for civilian employee health benefits or other military health programs.

Small Business Impact

This contract does not appear to have specific small business set-aside provisions, as indicated by 'sb': false. However, the prime contractor, United Concordia Companies, Inc., may engage small businesses for subcontracting opportunities related to administrative support, claims processing, or specialized services. The extent of small business participation would depend on the prime contractor's subcontracting plan and the nature of the services required.

Oversight & Accountability

Oversight for the TRICARE Dental Program is primarily managed by the Defense Health Agency (DHA), a component of the Department of Defense. Accountability measures are embedded in the contract through performance standards, quality metrics, and reporting requirements. Transparency is facilitated through public contract awards and program information available on government websites. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

TRICARE Prime
TRICARE Select
Federal Employees Health Benefits Program
Veterans Affairs Health Care System

Risk Flags

Contract Duration
Performance Metrics
Beneficiary Satisfaction

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $300.0 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 $300.0 million.

What is the period of performance?

Start: 2020-03-25. End: 2021-04-30.

What is the historical spending trend for the TRICARE Dental Program over the past five years?

Analyzing historical spending for the TRICARE Dental Program (TDP) requires accessing detailed contract award data beyond the single delivery order provided. Typically, TDP contracts are awarded for multi-year periods, often with options. For instance, if this $300 million award represents a single year's expenditure or a portion of a larger contract, the total annual spending could be significantly higher. Past TDP contracts have seen annual expenditures in the hundreds of millions of dollars, reflecting the large beneficiary population. For a comprehensive trend analysis, one would need to aggregate data from all active TDP contracts and delivery orders over the specified period, accounting for any contract modifications or option exercises. This would reveal fluctuations due to enrollment changes, benefit adjustments, or shifts in healthcare costs.

How does the per-member-per-month cost of this TRICARE dental contract compare to similar government health insurance programs?

To compare the per-member-per-month (PMPM) cost, we first need to estimate the number of covered members under this specific contract. Assuming the $300 million award covers approximately 401 days (as indicated by 'dur'), and estimating a daily cost, we can derive an approximate annual cost. If we assume a beneficiary base similar to previous TDP contracts, which served hundreds of thousands of individuals, the PMPM cost could be estimated. For example, if the annual cost is roughly $270 million (annualized from the award value over its duration) and covers 500,000 beneficiaries, the PMPM would be around $45. This figure needs to be benchmarked against other large government programs like the Federal Employees Dental and Vision Insurance Program (FEDVIP) or other TRICARE dental contracts. PMPM costs can vary significantly based on benefit levels, geographic coverage, and administrative overhead. A detailed comparison would require access to the specific benefit structures and enrollment numbers for each program.

What are the key performance indicators (KPIs) used to evaluate the performance of United Concordia Companies, Inc. under this contract?

Key performance indicators (KPIs) for a contract like the TRICARE Dental Program (TDP) typically focus on service delivery, beneficiary satisfaction, and administrative efficiency. Common KPIs include network adequacy (ensuring sufficient dentists are available in all geographic areas), claims processing timeliness (e.g., percentage of claims processed within 30 days), accuracy of claims payments, beneficiary complaint resolution rates, and overall beneficiary satisfaction scores derived from surveys. For this specific contract with United Concordia Companies, Inc., the Defense Health Agency (DHA) would have established specific performance standards and metrics within the contract's Performance Work Statement (PWS). Failure to meet these KPIs could result in financial penalties or impact future contract awards. The 'PA' status likely relates to performance assessment, suggesting a review of these metrics.

What is the track record of United Concordia Companies, Inc. in managing large-scale government health insurance contracts?

United Concordia Companies, Inc. has a significant track record in managing large-scale government health insurance contracts, particularly within the TRICARE program. They have been a long-standing provider of dental services for the U.S. military community. Their experience includes managing complex networks, processing high volumes of claims, and meeting stringent performance requirements set by the Department of Defense. Past performance evaluations and contract awards indicate their capability in handling such extensive programs. However, like any large contractor, there may have been periods of scrutiny or challenges related to specific aspects of service delivery or cost management, which would be reflected in past performance reviews and contract histories.

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

This contract was awarded under 'FULL AND OPEN COMPETITION', not sole-source or limited competition. Therefore, the risks typically associated with non-competitive awards are mitigated. Risks in sole-source or limited-competition scenarios for large programs like TDP could include higher costs due to lack of competitive pressure, potential for complacency from the contractor, reduced innovation, and limited options for the government if performance issues arise. In a full and open competition, the government benefits from a wider range of potential solutions and pricing, and the incumbent contractor faces pressure to remain competitive. The primary risks for this specific contract, despite full competition, would relate to execution: ensuring network stability, managing costs effectively over time, and maintaining high levels of beneficiary satisfaction.

How does the scope of services under this contract align with the overall mission of the Defense Health Agency?

The scope of services under this TRICARE Dental Program (TDP) contract directly aligns with the Defense Health Agency's (DHA) overarching mission to provide a medically ready force and a ready medical force, as well as ensuring the health and well-being of military members and their families. Comprehensive dental care is a critical component of overall health and readiness. By ensuring access to dental services, the DHA supports the deployability of service members and maintains the quality of life for military families. This contract enables the DHA to fulfill its responsibility of providing essential healthcare benefits, contributing to the retention and morale of the armed forces.

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: $300,031,932

Exercised Options: $300,031,932

Current Obligation: $300,031,932

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