VA awards $55.1M to Health Net for PCCC, Choice, and Accountability Act program requirements

Contract Overview

Contract Amount: $55,098,130 ($55.1M)

Contractor: Health NET Federal Services, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2014-10-30

End Date: 2020-09-30

Contract Duration: 2,162 days

Daily Burn Rate: $25.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: Healthcare

Official Description: IGF::CT::IGF PATIENT CENTERED COMMUNITY CARE (PCCC) ADDED VETERANS CHOICE AND ACCOUNTABILITY ACT (CHOICE) PROGRAM REQUIREMENTS.

Place of Performance

Location: RANCHO CORDOVA, SACRAMENTO County, CALIFORNIA, 95742

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $55.1 million to HEALTH NET FEDERAL SERVICES, LLC for work described as: IGF::CT::IGF PATIENT CENTERED COMMUNITY CARE (PCCC) ADDED VETERANS CHOICE AND ACCOUNTABILITY ACT (CHOICE) PROGRAM REQUIREMENTS. Key points: 1. Contract awarded to Health Net Federal Services, LLC for patient-centered community care and related programs. 2. The contract spans over five years, indicating a long-term commitment to these services. 3. Awarded under full and open competition, suggesting a robust bidding process. 4. The contract type is Fixed Price Incentive, which aims to balance cost control with performance. 5. This award is part of the Department of Veterans Affairs' broader strategy to expand healthcare access. 6. The geographic scope appears to be California, based on the state name provided.

Value Assessment

Rating: good

The total award of $55.1 million over approximately five years for patient-centered community care and related programs appears reasonable given the scope. Benchmarking against similar large-scale healthcare delivery contracts within the VA or other federal agencies would provide a clearer picture of value for money. The fixed-price incentive structure suggests an attempt to manage costs while ensuring quality outcomes, but the ultimate value depends on performance metrics and potential incentive payouts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. This suggests a competitive environment where multiple companies likely vied for the contract. The number of bidders is not specified, but the 'full and open' designation generally implies a healthy level of competition, which can lead to better pricing and service offerings.

Taxpayer Impact: A competitive bidding process for this contract is beneficial for taxpayers as it likely drove down costs and encouraged innovation from potential contractors, ensuring the VA receives the best possible value for its investment.

Public Impact

Veterans in California will benefit from expanded access to community-based healthcare services. The contract supports the implementation of the Patient Centered Community Care (PCCC) program. It also addresses requirements for the Veterans Choice and Accountability Act (Choice) program. This initiative aims to improve healthcare delivery and patient satisfaction for veterans. The contract may have implications for the healthcare workforce in the region through service provision.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if incentive targets are not met efficiently.
Complexity of managing a multi-year contract involving multiple program requirements.
Ensuring consistent quality of care across a wide network of community providers.

Positive Signals

Addresses critical veteran healthcare needs through community care.
Awarded through a competitive process, suggesting potential for good value.
Fixed-price incentive contract structure can align contractor and government interests.
Long-term contract duration provides stability for service delivery.

Sector Analysis

This contract falls within the Healthcare sector, specifically focusing on healthcare services delivery and administration for veterans. The Department of Veterans Affairs is a major procurer of healthcare services, often utilizing community-based providers to supplement its own facilities. The market for such services is substantial, with numerous private healthcare providers and insurance companies capable of fulfilling these requirements. This contract represents a significant portion of the VA's strategy to leverage external healthcare networks.

Small Business Impact

The provided data indicates that small business participation (sb) was false and there was no small business set-aside (ss). This suggests the contract was not specifically targeted towards small businesses. While there's no explicit mention of subcontracting requirements, large prime contractors are often encouraged or mandated to include small businesses in their subcontracting plans. The absence of set-aside status means the primary competition was likely among larger entities, with potential downstream impacts on small business opportunities if they are not actively sought as subcontractors.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs contracting officers and program managers. The contract's fixed-price incentive structure implies performance monitoring to ensure targets are met and incentives are appropriately applied. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected within the contract's execution.

Related Government Programs

Veterans Choice Program
Patient-Centered Community Care Program
VA Community Care Network
TRICARE
Medicare

Risk Flags

Contract duration is lengthy (over 5 years), increasing exposure to potential changes in healthcare policy or veteran needs.
Fixed Price Incentive contracts can be complex to administer and may lead to disputes over cost sharing if not managed carefully.
Reliance on community providers necessitates robust network management and quality assurance to ensure consistent veteran care.
Potential for scope creep if additional requirements are added without formal contract modifications.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $55.1 million to HEALTH NET FEDERAL SERVICES, LLC. IGF::CT::IGF PATIENT CENTERED COMMUNITY CARE (PCCC) ADDED VETERANS CHOICE AND ACCOUNTABILITY ACT (CHOICE) PROGRAM REQUIREMENTS.

Who is the contractor on this award?

The obligated recipient is HEALTH NET FEDERAL SERVICES, LLC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $55.1 million.

What is the period of performance?

Start: 2014-10-30. End: 2020-09-30.

What is the historical spending pattern for Health Net Federal Services, LLC with the Department of Veterans Affairs?

Analyzing Health Net Federal Services, LLC's historical spending with the Department of Veterans Affairs (VA) requires access to detailed federal procurement data. Based on the provided data, this specific contract represents a significant award of $55.1 million. To understand the broader pattern, one would need to examine all contracts awarded to this entity by the VA over several fiscal years. This would involve looking at the total dollar value of contracts, the types of services procured (e.g., healthcare administration, medical services), and the consistency of awards. A trend analysis could reveal if Health Net is a long-standing, major contractor for the VA or if this represents a more recent or episodic engagement. Without a comprehensive historical dataset, it's difficult to definitively characterize their spending pattern, but this single large award suggests they are a significant player in specific VA healthcare initiatives.

How does the pricing structure of this Fixed Price Incentive (FPI) contract compare to other VA community care contracts?

The Fixed Price Incentive (FPI) pricing structure for this $55.1 million VA contract aims to share cost risks and rewards between the government and the contractor. In an FPI contract, a target cost, target profit, and a price ceiling are established. If the final cost is below the target, both parties share in the savings. If it exceeds the target, they share the overrun up to the ceiling. Comparing this to other VA community care contracts requires analyzing their contract types and pricing mechanisms. Many VA community care contracts might utilize Firm-Fixed Price (FFP) for predictable services or Cost-Plus-Fixed-Fee (CPFF) for research and development where costs are less certain. The FPI structure here suggests a need for performance incentives beyond just cost control, potentially related to quality of care or patient access metrics. A detailed benchmark would involve comparing the target costs, incentive sharing ratios, and price ceilings across similar scope contracts to assess if Health Net's pricing is competitive and reflects appropriate risk allocation.

What are the key performance indicators (KPIs) associated with this contract, and how are they measured?

The provided data does not explicitly detail the Key Performance Indicators (KPIs) for this contract. However, given its nature supporting the Patient Centered Community Care (PCCC) and Veterans Choice and Accountability Act (Choice) programs, KPIs would likely focus on aspects such as veteran access to care (e.g., appointment wait times), quality of care metrics (e.g., patient satisfaction scores, clinical outcomes), network adequacy (e.g., availability of providers), and potentially cost efficiency. Performance measurement in such contracts typically involves regular reporting by the contractor, data analysis by the VA, and potentially site visits or audits. The 'Incentive' aspect of the Fixed Price Incentive contract strongly suggests that achieving specific, measurable performance targets would trigger financial incentives or penalties, directly linking contractor compensation to successful outcomes in serving veterans.

What is the potential impact of this contract on the broader healthcare market for veterans?

This $55.1 million contract awarded to Health Net Federal Services, LLC has a significant potential impact on the broader healthcare market for veterans, particularly in California. By funding the PCCC and Choice programs, it facilitates veterans' access to care within their communities, potentially reducing reliance on VA-owned facilities and increasing the utilization of private healthcare providers. This can stimulate growth for healthcare networks and individual practitioners participating in the PCCC/Choice programs. It also signals the VA's continued commitment to leveraging external healthcare resources, which could encourage other healthcare organizations to position themselves for similar future contracts. Furthermore, the success or challenges of this contract could influence future VA contracting strategies and the design of community care programs nationwide.

Are there any known risks or challenges associated with Health Net Federal Services, LLC's performance on similar VA contracts?

Assessing specific risks associated with Health Net Federal Services, LLC's performance on similar VA contracts requires a review of past performance evaluations, contract disputes, and any reported issues from sources like the Government Accountability Office (GAO) or Inspector General reports. Without direct access to such historical performance data for this specific contractor and contract type, it's challenging to identify concrete risks. However, general risks for large healthcare administration contracts include challenges in network management, ensuring consistent quality of care across numerous providers, managing patient data securely, meeting stringent reporting requirements, and adapting to evolving VA regulations and healthcare policies. The FPI structure itself introduces risk related to cost overruns and the achievement of performance incentives. A thorough risk assessment would necessitate examining Health Net's track record on previous VA contracts, particularly those involving large-scale healthcare delivery or administration.

Industry Classification

NAICS: Health Care and Social Assistance › Offices of Physicians › Offices of Physicians (except Mental Health Specialists)

Product/Service Code: MEDICAL SERVICES › OTHER MEDICAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: Centene Corporation (UEI: 809245525)

Address: 2025 AEROJET RD, RANCHO CORDOVA, CA, 95742

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

Financial Breakdown

Contract Ceiling: $55,098,130

Exercised Options: $55,098,130

Current Obligation: $55,098,130

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA79113D0053

IDV Type: IDC

Timeline