DoD's TRICARE Dental Program contract awarded to United Concordia for $311M, covering over 365 days

Contract Overview

Contract Amount: $311,053,847 ($311.1M)

Contractor: United Concordia Companies, Inc.

Awarding Agency: Department of Defense

Start Date: 2023-05-01

End Date: 2024-04-30

Contract Duration: 365 days

Daily Burn Rate: $852.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: THE TRICARE DENTAL PROGRAM OFFERS WORLDWIDE COVERAGE FOR DENTAL SERVICES TO ALL ELIGIBLE FAMILY MEMBERS OF UNIFORMED SERVICE ACTIVE DUTY PERSONNEL AND THE SELECTED RESERVE AND INDIVIDUAL READY RESERVE

Place of Performance

Location: CAMP HILL, CUMBERLAND County, PENNSYLVANIA, 17011

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $311.1 million to UNITED CONCORDIA COMPANIES, INC. for work described as: THE TRICARE DENTAL PROGRAM OFFERS WORLDWIDE COVERAGE FOR DENTAL SERVICES TO ALL ELIGIBLE FAMILY MEMBERS OF UNIFORMED SERVICE ACTIVE DUTY PERSONNEL AND THE SELECTED RESERVE AND INDIVIDUAL READY RESERVE Key points: 1. The contract provides comprehensive dental coverage to military families worldwide. 2. Awarded through full and open competition, suggesting a competitive bidding process. 3. The firm-fixed-price structure aims to control costs for the government. 4. Performance is tracked over a 365-day period, indicating a standard contract duration. 5. The Defense Health Agency oversees this critical healthcare support service. 6. This contract falls under the Direct Health and Medical Insurance Carriers NAICS code.

Value Assessment

Rating: good

The contract value of $311 million for the TRICARE Dental Program appears reasonable given the scope of worldwide coverage for eligible family members of uniformed service personnel. Benchmarking against similar large-scale government health insurance contracts would provide a more precise value-for-money assessment. The firm-fixed-price type suggests that the contractor bears the risk of cost overruns, which is generally favorable for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded using full and open competition, indicating that all responsible sources were permitted to submit a bid. This process typically fosters a competitive environment, encouraging multiple bidders to offer their best pricing and service terms to secure the contract. The number of bidders is not specified, but the method itself suggests a robust price discovery mechanism.

Taxpayer Impact: Full and open competition generally leads to more competitive pricing, potentially saving taxpayer dollars by ensuring the government receives services at a fair market value.

Public Impact

Eligible family members of active duty, selected reserve, and individual ready reserve personnel receive essential dental care. The program ensures access to dental services across the globe, supporting military readiness and family well-being. This contract directly impacts the healthcare benefits provided to a significant portion of the military community. It supports the operational readiness of the armed forces by ensuring the health of service members' families.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if additional services are requested beyond the initial contract terms.
Ensuring consistent quality of care across diverse geographic locations worldwide can be challenging.

Positive Signals

Firm-fixed-price contract helps manage budget predictability.
Worldwide coverage ensures comprehensive support for geographically dispersed military families.
Awarded through full and open competition, indicating a competitive market for these services.

Sector Analysis

This contract operates within the health insurance and managed care sector, specifically focusing on government-sponsored healthcare programs. The market for large-scale dental insurance providers capable of offering worldwide coverage is relatively concentrated. Comparable spending benchmarks would involve analyzing other large federal health insurance contracts, such as those for other TRICARE regions or other federal employee health benefits programs.

Small Business Impact

The data does not indicate any specific small business set-aside provisions or subcontracting requirements for this contract. As a large-scale service contract, it is possible that United Concordia may engage small businesses for certain support functions, but this is not explicitly detailed. The primary focus appears to be on the prime contractor's ability to deliver comprehensive dental services globally.

Oversight & Accountability

The Defense Health Agency, as the awarding agency, is responsible for overseeing the performance and compliance of United Concordia. Oversight mechanisms likely include regular performance reviews, audits, and adherence to contract terms and conditions. Transparency is generally maintained through contract award databases and reporting requirements, though specific details of ongoing oversight are not provided.

Related Government Programs

TRICARE Prime
TRICARE Select
Federal Employees Health Benefits Program (FEHBP)
Veterans Affairs Dental Care

Risk Flags

Potential for service disruptions if network providers are not adequately managed.
Ensuring consistent quality of care across a global network presents logistical challenges.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $311.1 million to UNITED CONCORDIA COMPANIES, INC.. THE TRICARE DENTAL PROGRAM OFFERS WORLDWIDE COVERAGE FOR DENTAL SERVICES TO ALL ELIGIBLE FAMILY MEMBERS OF UNIFORMED SERVICE ACTIVE DUTY PERSONNEL AND THE SELECTED RESERVE AND INDIVIDUAL READY RESERVE

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 $311.1 million.

What is the period of performance?

Start: 2023-05-01. End: 2024-04-30.

What is the historical spending trend for the TRICARE Dental Program under United Concordia?

Analyzing historical spending for the TRICARE Dental Program under United Concordia requires access to past contract data. Typically, such large-scale programs see consistent annual spending, often in the hundreds of millions of dollars, reflecting the ongoing need for dental services for military families. Fluctuations might occur due to changes in eligible populations, benefit structures, or contract modifications. Without specific historical data, it's presumed that the $311 million awarded for the current period is in line with previous years' expenditures, adjusted for inflation and potential service expansions or contractions. Further investigation into prior contract awards and modifications would reveal detailed spending patterns and identify any significant deviations.

How does the per-member-per-month cost of this contract compare to commercial dental insurance plans?

A direct comparison of the per-member-per-month (PMPM) cost for the TRICARE Dental Program to commercial plans is complex due to differing benefit structures, administrative costs, and population demographics. The TRICARE program serves a specific, often younger and healthier, demographic compared to the general commercial market, which can influence costs. Additionally, the government's purchasing power and the firm-fixed-price nature of the contract may lead to different cost structures. To perform a valid comparison, one would need to isolate the PMPM cost for United Concordia's TRICARE contract and benchmark it against PMPM rates for similar benefit plans offered by commercial insurers to comparable demographic groups, accounting for administrative overhead and profit margins.

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

Key Performance Indicators (KPIs) for the TRICARE Dental Program contract likely focus on service accessibility, quality of care, beneficiary satisfaction, and administrative efficiency. Specific KPIs could include network adequacy (availability of dentists), claims processing timeliness, accuracy of claims adjudication, beneficiary complaint resolution rates, and patient satisfaction survey results. The Defense Health Agency would establish these metrics in the contract's Performance Work Statement (PWS). Failure to meet these KPIs could result in contract deficiencies, financial penalties, or even termination, ensuring accountability for the contractor.

What is the potential impact of this contract on the broader dental insurance market?

This contract represents a significant portion of the government-sponsored dental insurance market. Its award to United Concordia signifies the company's strong position and capability to manage large-scale, complex healthcare contracts. The existence of such a large program also influences market dynamics by setting benchmarks for service delivery and pricing, potentially impacting how other large insurers structure their offerings. Furthermore, it underscores the government's role as a major purchaser of healthcare services, influencing competition and innovation within the sector.

Are there any known issues or controversies associated with United Concordia's previous performance on TRICARE dental contracts?

Assessing past performance requires reviewing contract performance reports, Inspector General audits, and any publicly documented disputes or controversies related to United Concordia's previous TRICARE dental contracts. While specific issues are not detailed in the provided data, large government contracts can sometimes face challenges related to claims processing, network provider issues, or beneficiary complaints. A thorough review of government accountability databases and news archives would be necessary to identify any significant performance concerns or controversies that might inform the current contract's risk assessment.

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

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: $323,809,678

Exercised Options: $323,809,678

Current Obligation: $311,053,847

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