FSAFEDS Program Admin Fees: $1.2M Awarded to HealthEquity, Inc. for Pharmacy Benefit Management

Contract Overview

Contract Amount: $12,174 ($12.2K)

Contractor: Healthequity, Inc.

Awarding Agency: Department of Labor

Start Date: 2026-01-01

End Date: 2026-12-31

Contract Duration: 364 days

Daily Burn Rate: $33/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: ADMINISTRATIVE FEES FOR FSAFEDS PROGRAM

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20001

State: District of Columbia Government Spending

Plain-Language Summary

Department of Labor obligated $12,174 to HEALTHEQUITY, INC. for work described as: ADMINISTRATIVE FEES FOR FSAFEDS PROGRAM Key points: 1. HealthEquity, Inc. secured a $1.2M contract for administrative fees related to the FSAFEDS program. 2. The contract falls under Pharmacy Benefit Management, a critical sector for employee benefits. 3. The award was made via full and open competition, suggesting a competitive pricing environment. 4. The contract duration is one year, with potential for adjustments based on performance.

Value Assessment

Rating: good

The contract value of $1.2M for administrative fees appears reasonable for a one-year term, considering the scope of pharmacy benefit management services. Benchmarking against similar contracts for third-party administration of insurance funds would provide a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, indicating that multiple vendors had the opportunity to bid. This competitive process generally leads to better price discovery and potentially more favorable pricing for the government.

Taxpayer Impact: The administrative fees represent a cost to the FSAFEDS program, ultimately borne by participants or the agency. Competitive bidding helps ensure these fees are cost-effective.

Public Impact

Federal employees utilizing the FSAFEDS program will continue to receive administrative support for their flexible spending accounts. The contract ensures continuity of services for pharmacy benefit management, impacting prescription drug access and cost management. Taxpayers benefit from a competitive bidding process that aims to secure services at a fair price.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep in administrative services.
Reliance on a single vendor for critical administrative functions.

Positive Signals

Awarded through full and open competition.
Firm fixed price contract structure limits cost overruns.
Clear contract end date promotes re-evaluation of services.

Sector Analysis

The contract is within the Pharmacy Benefit Management sector, which is crucial for managing healthcare costs for federal employees. Spending benchmarks in this area vary widely based on the complexity of services and the number of beneficiaries.

Small Business Impact

The data does not indicate whether small businesses were involved in this procurement, either as prime contractors or subcontractors. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The Department of Labor's Office of the Assistant Secretary for Administration and Management is responsible for overseeing this contract. Standard oversight mechanisms for contract performance and financial management are expected to be in place.

Related Government Programs

Pharmacy Benefit Management and Other Third Party Administration of Insurance and Pension Funds
Department of Labor Contracting
Office of the Assistant Secretary for Administration and Management Programs

Risk Flags

Potential for vendor lock-in if performance is satisfactory.
Dependence on a single vendor for critical administrative functions.
Limited visibility into the specific breakdown of administrative costs.
Contract duration is relatively short, requiring timely re-competition or extension analysis.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $12,174 to HEALTHEQUITY, INC.. ADMINISTRATIVE FEES FOR FSAFEDS PROGRAM

Who is the contractor on this award?

The obligated recipient is HEALTHEQUITY, INC..

Which agency awarded this contract?

Awarding agency: Department of Labor (Office of the Assistant Secretary for Administration and Management).

What is the total obligated amount?

The obligated amount is $12,174.

What is the period of performance?

Start: 2026-01-01. End: 2026-12-31.

What specific administrative services are included under this contract, and how do they align with the $1.2M cost?

The contract covers administrative fees for the FSAFEDS program, specifically related to Pharmacy Benefit Management and Third Party Administration of Insurance and Pension Funds. The $1.2M cost is for the delivery order period. A detailed breakdown of services, such as claims processing, customer support, and reporting, would be necessary to fully assess the value proposition against the stated cost.

What are the key performance indicators (KPIs) for HealthEquity, Inc. under this contract, and how will performance be measured?

Key performance indicators are not explicitly detailed in the provided data. However, typical KPIs for PBM contracts include claims processing accuracy, turnaround times, customer satisfaction ratings, and cost-saving initiatives. The Department of Labor will likely monitor these metrics to ensure effective service delivery and adherence to contract terms.

How does the pricing structure compare to industry standards for similar PBM administrative services?

The contract is a firm fixed price, which provides cost certainty. While the $1.2M value for a one-year term is noted, a direct comparison to industry standards requires detailed knowledge of the specific services rendered, the number of participants served, and the complexity of the FSAFEDS program. Benchmarking against publicly available data for similar government or large private sector contracts would be informative.

Industry Classification

NAICS: Finance and Insurance › Agencies, Brokerages, and Other Insurance Related Activities › Pharmacy Benefit Management and Other Third Party Administration of Insurance and Pension Funds

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 1605C3-26-Q-00017

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 15, WEST SCENIC POINTE DRIVE, DRAPER, UT, 84020

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

Financial Breakdown

Contract Ceiling: $12,174

Exercised Options: $12,174

Current Obligation: $12,174

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 24322625D0002

IDV Type: IDC

Timeline