Active Duty Dental Program contract awarded to United Concordia for $147M, supplementing care for service members

Contract Overview

Contract Amount: $146,960,491 ($147.0M)

Contractor: United Concordia Companies, Inc.

Awarding Agency: Department of Defense

Start Date: 2021-02-01

End Date: 2022-01-31

Contract Duration: 364 days

Daily Burn Rate: $403.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: THE ACTIVE DUTY DENTAL PROGRAM SUPPLEMENTS DENTAL CARE PROVIDED IN DENTAL TREATMENT FACILITIES (DTFS)AND PROVIDES DENTAL SERVICES TO ACTIVE DUTY SERVICE MEMBERS WITHOUT ACCESS TO A DTF.

Place of Performance

Location: HARRISBURG, DAUPHIN County, PENNSYLVANIA, 17110

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $147.0 million to UNITED CONCORDIA COMPANIES, INC. for work described as: THE ACTIVE DUTY DENTAL PROGRAM SUPPLEMENTS DENTAL CARE PROVIDED IN DENTAL TREATMENT FACILITIES (DTFS)AND PROVIDES DENTAL SERVICES TO ACTIVE DUTY SERVICE MEMBERS WITHOUT ACCESS TO A DTF. Key points: 1. The contract aims to ensure dental care access for active duty service members, particularly those without immediate access to military dental facilities. 2. Performance is measured against the delivery of dental services and the supplementation of existing military dental care infrastructure. 3. Potential risks include service member satisfaction, network adequacy, and the ability to meet demand across diverse geographic locations. 4. This contract operates within the broader Defense Health Agency's mission to provide comprehensive healthcare to the military community. 5. The program's success is tied to maintaining a healthy and ready fighting force by addressing dental health needs.

Value Assessment

Rating: good

The contract value of approximately $147 million over one year appears reasonable for a program of this scale, covering dental services for active duty personnel. Benchmarking against similar large-scale health insurance or managed care contracts for government personnel suggests a competitive pricing structure. The firm-fixed-price nature of the contract provides cost certainty for the government, assuming the scope of services is well-defined and managed effectively. The value proposition lies in ensuring a critical health service is available to a key demographic.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. This competitive process is expected to drive favorable pricing and service quality. The number of bidders is not specified, but the use of full and open competition generally suggests a robust market response for such a significant healthcare service contract.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to lower prices and better value by encouraging multiple companies to vie for the contract, driving efficiency and innovation.

Public Impact

Active duty service members benefit from supplemental dental care, ensuring readiness and well-being. The program delivers essential dental services, including preventative, diagnostic, and treatment procedures. Geographic impact is nationwide, covering all locations where active duty personnel are stationed. Workforce implications include the utilization of civilian dental providers within the United Concordia network.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Ensuring adequate network coverage in remote or less populated areas.
Monitoring service quality and patient satisfaction across a large, dispersed population.
Managing potential cost escalations if utilization rates exceed projections.

Positive Signals

Successful delivery of dental services to a critical population.
Established provider network through a reputable insurance carrier.
Firm-fixed-price contract provides budget predictability.

Sector Analysis

The Active Duty Dental Program falls within the broader healthcare services sector, specifically focusing on managed care and insurance for government beneficiaries. This sector is characterized by large, complex contracts requiring extensive provider networks and robust administrative capabilities. Comparable spending benchmarks in the health insurance industry for large employer groups or government programs can provide context for the scale of this contract.

Small Business Impact

There is no indication of small business set-asides for this particular contract. However, the prime contractor, United Concordia Companies, Inc., may engage small businesses as subcontractors for various support services, though this is not explicitly detailed in the provided data. The primary focus appears to be on the direct delivery of dental services through an established network.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Health Agency (DHA), which is responsible for the administration and execution of healthcare programs for the Department of Defense. Accountability measures would include performance metrics, quality assurance reviews, and financial audits. Transparency is generally maintained through contract awards databases and reporting requirements, though specific operational details may be sensitive.

Related Government Programs

TRICARE Dental Program
Active Duty Dental Care Demonstration
Military Health System

Risk Flags

Potential for network adequacy issues in remote locations.
Risk of service member dissatisfaction if appointment wait times are long.
Contractor profitability could be impacted by higher-than-expected service utilization.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $147.0 million to UNITED CONCORDIA COMPANIES, INC.. THE ACTIVE DUTY DENTAL PROGRAM SUPPLEMENTS DENTAL CARE PROVIDED IN DENTAL TREATMENT FACILITIES (DTFS)AND PROVIDES DENTAL SERVICES TO ACTIVE DUTY SERVICE MEMBERS WITHOUT ACCESS TO A DTF.

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 $147.0 million.

What is the period of performance?

Start: 2021-02-01. End: 2022-01-31.

What is the historical spending trend for the Active Duty Dental Program?

Historical spending data for the Active Duty Dental Program indicates a consistent need for supplemental dental care services for active duty service members. While the specific contract awarded to United Concordia Companies, Inc. covers the period from February 1, 2021, to January 31, 2022, with a value of approximately $147 million, previous iterations of this program and similar contracts have likely seen significant annual expenditures. The Defense Health Agency manages these programs to ensure dental readiness, and funding levels typically reflect the size of the active duty force and the scope of services covered. Analyzing year-over-year spending would reveal trends in utilization, cost per service, and potential adjustments based on healthcare inflation or changes in military personnel numbers. Without access to multi-year historical data, it's challenging to pinpoint precise trends, but the program's ongoing nature suggests sustained budgetary allocation.

How does the cost per service under this contract compare to civilian dental insurance plans?

Comparing the cost per service under this Active Duty Dental Program contract to civilian dental insurance plans is complex due to varying methodologies and benefit structures. The $147 million contract value is an aggregate for a year's worth of services for active duty members, not a direct per-service cost. Civilian plans often have different co-pays, deductibles, and network agreements. However, government contracts like this, especially those awarded through full and open competition, aim for cost-effectiveness. Benchmarking would require analyzing the average cost of specific procedures (e.g., cleanings, fillings, root canals) provided through the United Concordia network against comparable civilian PPO or managed care plans. Given the scale and the firm-fixed-price nature, the government likely negotiates rates that are competitive, potentially leveraging bulk purchasing power. However, administrative overhead and specific benefit inclusions can influence the overall cost-effectiveness compared to civilian alternatives.

What are the key performance indicators (KPIs) used to evaluate United Concordia's performance?

Key performance indicators (KPIs) for the Active Duty Dental Program contract would typically focus on ensuring the availability and quality of dental care for active duty service members. While specific KPIs are not detailed in the provided data, common metrics in such healthcare contracts include network adequacy (ensuring sufficient dentists are available in geographic areas), timeliness of appointments (how quickly members can schedule appointments), patient satisfaction scores, claims processing efficiency, and adherence to clinical quality standards. The Defense Health Agency would monitor these KPIs to ensure United Concordia is meeting its contractual obligations. Performance failures against these metrics could lead to corrective actions or penalties, underscoring the importance of robust monitoring and reporting mechanisms.

What is the track record of United Concordia Companies, Inc. in managing large government healthcare contracts?

United Concordia Companies, Inc. has a significant track record in managing large government healthcare contracts, particularly within the dental insurance and managed care space. They have been a long-standing provider for various military dental programs, including previous iterations of the Active Duty Dental Program and the TRICARE Dental Program. Their experience encompasses managing extensive provider networks, processing claims, and ensuring compliance with government regulations. This history suggests a familiarity with the unique demands of serving military personnel and their families, as well as navigating the complexities of government contracting. While past performance doesn't guarantee future success, their established presence indicates a capacity to handle the scale and scope of contracts like the Active Duty Dental Program.

Are there any specific risks associated with the firm-fixed-price contract type for this program?

The firm-fixed-price (FFP) contract type for the Active Duty Dental Program offers cost certainty to the government, meaning the price is set and generally not subject to upward adjustment regardless of the contractor's actual costs. For the government, this mitigates the risk of cost overruns. However, for the contractor, United Concordia, the risk lies in potentially underestimating the costs associated with providing the services. If utilization is higher than anticipated, or if unforeseen operational costs arise (e.g., network expansion challenges, increased administrative burden), the contractor may experience reduced profit margins or even a loss. Conversely, if the contractor manages costs efficiently, an FFP contract can yield higher profits. The primary risk for the program's success under FFP is ensuring the contract terms and scope are precise enough to avoid disputes and that the contractor remains incentivized to maintain service quality despite cost pressures.

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: HT940213R0002

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Highmark Inc

Address: 4401 DEER PATH RD, HARRISBURG, PA, 17110

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

Financial Breakdown

Contract Ceiling: $153,999,737

Exercised Options: $153,999,737

Current Obligation: $146,960,491

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HT940214D0001

IDV Type: IDC

Timeline