Treasury's dental insurance contract with Delta Dental Insurance Company valued at $46.4M, awarded via full and open competition

Contract Overview

Contract Amount: $46,365,322 ($46.4M)

Contractor: Delta Dental Insurance Company

Awarding Agency: Department of the Treasury

Start Date: 2014-10-01

End Date: 2025-06-30

Contract Duration: 3,925 days

Daily Burn Rate: $11.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: IGF::OT::IGF FOR OTHER FUNCTIONS DENTAL INSURANCE FOR THE OCC AND OFR EMPLOYEES AND THEIR DEPENDENTS

Place of Performance

Location: SAN FRANCISCO, SAN FRANCISCO County, CALIFORNIA, 94105

State: California Government Spending

Plain-Language Summary

Department of the Treasury obligated $46.4 million to DELTA DENTAL INSURANCE COMPANY for work described as: IGF::OT::IGF FOR OTHER FUNCTIONS DENTAL INSURANCE FOR THE OCC AND OFR EMPLOYEES AND THEIR DEPENDENTS Key points: 1. The contract represents a significant investment in employee benefits, ensuring access to dental care for OCC and OFR personnel. 2. Full and open competition suggests a potentially competitive bidding process, which could lead to favorable pricing. 3. The contract duration of over 10 years (from 2014 to 2025) indicates a long-term commitment to this service provider. 4. The firm fixed-price contract type provides cost certainty for the government, mitigating risks associated with fluctuating service costs. 5. The contract's focus on dental insurance places it within the broader healthcare services sector, specifically health and medical insurance carriers. 6. The award to Delta Dental Insurance Company, a major player in the dental insurance market, suggests a reliance on established providers for essential services.

Value Assessment

Rating: good

The contract's value of approximately $46.4 million over its extended period suggests a substantial commitment to employee dental benefits. Benchmarking this against similar government contracts for health and medical insurance carriers is challenging without more specific data on coverage levels and employee populations. However, the firm fixed-price structure implies that the government has negotiated a set price, which is generally a positive indicator for value, assuming the scope of services is well-defined and competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bidders (no: 2) suggests a degree of competition, though the exact number of interested parties and the intensity of the bidding process are not detailed. A competitive process is generally expected to drive down prices and ensure the government receives fair market value for the services provided.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the most cost-effective dental insurance coverage for federal employees and their dependents.

Public Impact

Employees of the Office of the Comptroller of the Currency (OCC) and the Office of Financial Research (OFR) and their dependents benefit from access to dental care services. The contract ensures the provision of dental insurance, covering a range of preventative, diagnostic, and treatment services. The geographic impact is primarily within California, where the contract is noted as being administered (sn: CALIFORNIA). The contract supports the healthcare services sector by engaging a major insurance provider and potentially utilizing a network of dental professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract renewals if competition diminishes.
Dependence on a single provider for a critical employee benefit could lead to service disruptions if the contractor faces operational issues.

Positive Signals

The firm fixed-price contract provides budget certainty for the agency.
Full and open competition suggests a robust procurement process that likely secured competitive pricing.
The long contract duration indicates a stable and reliable benefit for employees.

Sector Analysis

This contract falls within the broader healthcare sector, specifically the health and medical insurance carriers sub-sector (na: 524114). This industry is characterized by large, established companies offering a wide array of insurance products. Government contracts for such services are common, aiming to provide benefits to federal employees. The market size for dental insurance is substantial, with numerous private and public sector entities seeking coverage solutions. This contract represents a portion of the federal government's overall spending on employee health and welfare benefits.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). As a large-scale insurance contract, it is likely that the prime contractor, Delta Dental Insurance Company, is a large business. There is no explicit information regarding subcontracting plans or performance related to small businesses within this specific contract award notice. Therefore, the direct impact on the small business ecosystem is likely minimal, though the prime contractor may engage small businesses within its broader network of service providers.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Treasury and the Office of the Comptroller of the Currency. As a firm fixed-price contract, performance monitoring would focus on ensuring the delivery of promised dental insurance services and adherence to contract terms. Transparency is generally maintained through contract award databases and reporting requirements. While specific Inspector General jurisdiction for this particular contract isn't detailed, the Treasury Inspector General for Tax Administration (TIGTA) or other relevant oversight bodies could investigate if concerns arise regarding waste, fraud, or abuse.

Related Government Programs

Federal Employee Health Benefits Program (FEHBP)
TRICARE Dental Program
Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)
Federal Employees Dental and Vision Insurance Program (FEDVIP)

Risk Flags

Long contract duration may limit flexibility to adopt newer, potentially more cost-effective insurance products.
Potential for price increases in future renewals if competition is not sustained.
Dependence on a single provider for a critical employee benefit.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $46.4 million to DELTA DENTAL INSURANCE COMPANY. IGF::OT::IGF FOR OTHER FUNCTIONS DENTAL INSURANCE FOR THE OCC AND OFR EMPLOYEES AND THEIR DEPENDENTS

Who is the contractor on this award?

The obligated recipient is DELTA DENTAL INSURANCE COMPANY.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Office of the Comptroller of the Currency).

What is the total obligated amount?

The obligated amount is $46.4 million.

What is the period of performance?

Start: 2014-10-01. End: 2025-06-30.

What is the historical spending trend for dental insurance for OCC and OFR employees?

The provided data focuses on a single contract awarded in 2014 with an end date of June 30, 2025, totaling $46.4 million. This suggests an average annual spending of approximately $4.64 million over the 10-year period. To understand historical trends, one would need to examine prior contracts for dental insurance for these specific offices or similar federal entities. Without access to historical contract databases or agency budget reports specifically detailing dental insurance expenditures prior to this award, a comprehensive trend analysis is not possible. However, the longevity of this contract and its significant value imply a consistent need and budget allocation for dental benefits over an extended period.

How does the per-member-per-month (PMPM) cost of this contract compare to industry benchmarks?

Determining the precise per-member-per-month (PMPM) cost requires knowing the total number of covered individuals (employees and dependents) throughout the contract period and the total cost incurred. The contract value is $46.4 million over approximately 10 years (3925 days). If we assume an average of 10,000 covered individuals (a hypothetical number for illustration), the average annual cost would be $4.64 million, leading to a PMPM cost of approximately $38.67 ($4.64M / 12 months / 10,000 members). Industry benchmarks for dental PMPM costs can vary widely based on plan design, region, and demographics, but often range from $25 to $50. Without the exact number of covered lives, a definitive comparison is not feasible, but the estimated range suggests the pricing could be within typical market rates.

What are the specific dental services covered under this contract?

The contract is for 'Direct Health and Medical Insurance Carriers' (nd: 524114), specifically dental insurance. While the award notice does not detail the specific coverage plan, dental insurance contracts typically cover a spectrum of services including preventative care (e.g., cleanings, exams, X-rays), basic restorative services (e.g., fillings, simple extractions), major restorative services (e.g., crowns, bridges, dentures), and sometimes orthodontics. The exact scope and limitations (e.g., deductibles, co-payments, annual maximums, waiting periods) would be defined in the contract's statement of work and benefit ವಿವರಣೆ. The goal is to provide comprehensive dental care access to the insured population.

What is Delta Dental Insurance Company's track record with federal contracts?

Delta Dental Insurance Company is a major provider of dental benefits and has a significant presence in both the commercial and government sectors. While this specific contract is with the Department of the Treasury for OCC and OFR employees, Delta Dental also participates in federal programs like the Federal Employees Dental and Vision Insurance Program (FEDVIP). Their extensive experience in administering large-scale dental benefit plans suggests a proven track record in managing federal contracts. Performance metrics and past performance evaluations from other federal agencies would provide a more detailed assessment, but their continued participation in federal programs indicates a generally satisfactory performance history.

What are the risks associated with a long-term, firm fixed-price contract for dental insurance?

A primary risk with long-term, firm fixed-price contracts is the potential for the government to overpay if market rates decrease significantly over the contract's duration, or if the contractor experiences unexpectedly low costs. Conversely, the contractor bears the risk if costs escalate beyond projections. For dental insurance, changes in healthcare utilization patterns, new dental technologies, or shifts in employee demographics could impact the contractor's profitability. Ensuring the contract includes mechanisms for periodic review or adjustment based on objective market data, or that the initial pricing was sufficiently robust to account for long-term variables, is crucial for mitigating these risks.

Industry Classification

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

Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 100 1ST ST, SAN FRANCISCO, CA, 94105

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

Financial Breakdown

Contract Ceiling: $48,870,681

Exercised Options: $48,870,681

Current Obligation: $46,365,322

Actual Outlays: $24,317,323

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline