Peace Corps health benefits contract awarded to Seven Corners Inc. for over $41 million

Contract Overview

Contract Amount: $41,017,263 ($41.0M)

Contractor: Seven Corners Inc

Awarding Agency: Peace Corps

Start Date: 2011-12-16

End Date: 2017-05-31

Contract Duration: 1,993 days

Daily Burn Rate: $20.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: CLAIMS ADMINISTRATION FOR PEACE CORPS HEALTH BENEFITS PROGRAM

Place of Performance

Location: CARMEL, HAMILTON County, INDIANA, 46032

State: Indiana Government Spending

Plain-Language Summary

Peace Corps obligated $41.0 million to SEVEN CORNERS INC for work described as: CLAIMS ADMINISTRATION FOR PEACE CORPS HEALTH BENEFITS PROGRAM Key points: 1. Contract value of over $41 million suggests a significant need for health benefits administration. 2. The contract was awarded through full and open competition, indicating a competitive bidding process. 3. The duration of the contract (over 1900 days) points to a long-term service requirement. 4. The fixed-price nature of the contract helps to control costs for the Peace Corps. 5. The award to a single contractor suggests a focus on specialized claims administration services. 6. The contract's geographic scope is national, serving beneficiaries across the United States.

Value Assessment

Rating: good

The contract value of $41 million over its period of performance appears reasonable for administering health benefits for a federal agency like the Peace Corps. Benchmarking against similar contracts for federal employee health benefits administration would provide a more precise value-for-money assessment. The firm fixed-price structure is a positive indicator for cost control, assuming the scope of services was well-defined.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, meaning that all responsible sources were permitted to submit a bid. The presence of three bidders suggests a moderate level of competition for this specialized service. While not a large number of bidders, it indicates that the market for such services is not entirely concentrated.

Taxpayer Impact: Full and open competition generally leads to better price discovery and potentially lower costs for taxpayers compared to sole-source or limited competition awards.

Public Impact

Peace Corps personnel and their dependents benefit from comprehensive health insurance coverage. The contract ensures the administration of claims, processing of benefits, and potentially access to a network of healthcare providers. The services provided are crucial for maintaining the health and well-being of individuals serving the nation abroad and their families. The contract supports the operational readiness and morale of the Peace Corps workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if not managed tightly given the long duration.
Reliance on a single contractor for critical health benefits administration could pose a risk if performance falters.

Positive Signals

Awarded through full and open competition, suggesting a fair and transparent process.
Firm fixed-price contract provides cost certainty for the government.
The contractor, Seven Corners Inc., likely has specialized expertise in managing health benefits programs.

Sector Analysis

The health insurance and benefits administration sector is a critical component of the broader insurance industry. This contract falls within the 'All Other Insurance Related Activities' category, highlighting specialized administrative functions rather than direct insurance underwriting. The market for federal health benefits administration is substantial, with numerous private sector companies competing for these contracts.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized nature of health benefits administration and the contract value, it is likely that larger, established firms were the primary bidders. Subcontracting opportunities for small businesses might exist within the broader ecosystem of healthcare providers or administrative support services, but are not explicitly detailed in the award information.

Oversight & Accountability

Oversight for this contract would typically be managed by the Peace Corps' contracting officer and program managers. Accountability measures are inherent in the firm fixed-price contract structure, requiring the contractor to deliver services within the agreed-upon terms. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance metrics are not detailed here.

Related Government Programs

Federal Employee Health Benefits Program (FEHBP)
TRICARE Health Program
Veterans Health Administration (VHA)

Risk Flags

Long-term contract duration may increase risk of cost escalation or performance degradation.
Reliance on a single vendor for critical services can create dependency.
Lack of detailed performance metrics in summary data hinders effectiveness assessment.

Frequently Asked Questions

What is this federal contract paying for?

Peace Corps awarded $41.0 million to SEVEN CORNERS INC. CLAIMS ADMINISTRATION FOR PEACE CORPS HEALTH BENEFITS PROGRAM

Who is the contractor on this award?

The obligated recipient is SEVEN CORNERS INC.

Which agency awarded this contract?

Awarding agency: Peace Corps (Peace Corps).

What is the total obligated amount?

The obligated amount is $41.0 million.

What is the period of performance?

Start: 2011-12-16. End: 2017-05-31.

What is the track record of Seven Corners Inc. in administering federal health benefits contracts?

Seven Corners Inc. has a significant history of providing travel and health insurance solutions, including for government programs. While specific details on their track record with the Peace Corps health benefits program are not fully elaborated in the provided data, their long-standing presence in the insurance market suggests experience. Further investigation into their past performance on similar federal contracts, including any performance reviews or past performance questionnaires, would be necessary for a comprehensive assessment. Their ability to secure this contract through full and open competition indicates they met the government's requirements at the time of award.

How does the per-member-per-month cost of this contract compare to similar federal health benefits programs?

The provided data does not include the number of beneficiaries covered under this Peace Corps health benefits program, nor does it break down the costs on a per-member-per-month basis. Therefore, a direct comparison to similar federal health benefits programs like FEHBP or TRICARE is not possible with the current information. To conduct such a comparison, one would need to know the total number of individuals insured and the total contract value over a specific period, allowing for the calculation of a per-member-per-month cost to benchmark against industry averages and other government programs.

What are the primary risks associated with a long-term, firm-fixed-price contract for health benefits administration?

A primary risk with long-term, firm-fixed-price contracts for health benefits administration is the potential for the contractor to experience cost overruns if utilization or healthcare costs increase beyond initial projections, potentially leading to reduced service quality or contractor financial distress. Conversely, if costs are lower than anticipated, the government might be overpaying. Another risk is scope creep, where the government may request additional services not originally envisioned, leading to disputes or the need for contract modifications. Ensuring robust performance monitoring and clear contract terms are crucial to mitigate these risks.

How effective has Seven Corners Inc. been in managing claims and providing timely benefit payments under this contract?

The provided data does not contain specific metrics on the effectiveness of Seven Corners Inc. in managing claims and providing timely benefit payments for the Peace Corps health benefits program. Effectiveness would typically be assessed through performance reports, user satisfaction surveys, and analysis of key performance indicators such as claims processing times, accuracy rates, and member satisfaction. Without access to these performance evaluations or Inspector General reports related to this contract, a definitive assessment of effectiveness cannot be made.

What has been the historical spending trend for Peace Corps health benefits administration over the past decade?

The provided data pertains to a single contract awarded in 2011 and ending in 2017, with a value of over $41 million. This represents a snapshot of spending for a specific period. To understand historical spending trends, data from previous contracts for Peace Corps health benefits administration, as well as any subsequent contracts, would be required. Analyzing these would reveal whether spending has increased, decreased, or remained relatively stable over time, potentially influenced by factors like beneficiary numbers, healthcare cost inflation, and changes in benefit structures.

Were there any significant contract modifications or disputes during the life of this contract?

The provided summary data does not detail any contract modifications or disputes that may have occurred during the performance period of this contract (2011-2017). Such information would typically be found in contract modification logs, agency procurement records, or potentially in Inspector General reports if disputes escalated. Without access to these detailed records, it is not possible to determine if the contract terms were altered or if any significant disagreements arose between the Peace Corps and Seven Corners Inc.

Industry Classification

NAICS: Finance and Insurance › Agencies, Brokerages, and Other Insurance Related Activities › All Other Insurance Related Activities

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 303 CONGRESSIONAL BLVD, CARMEL, IN, 46032

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

Financial Breakdown

Contract Ceiling: $41,017,263

Exercised Options: $41,017,263

Current Obligation: $41,017,263

Actual Outlays: $-156

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline