Treasury's $4M disability insurance contract awarded to MetLife, competed under SAP

Contract Overview

Contract Amount: $4,038,802 ($4.0M)

Contractor: Metropolitan Life Insurance CO

Awarding Agency: Department of the Treasury

Start Date: 2021-01-01

End Date: 2025-12-31

Contract Duration: 1,825 days

Daily Burn Rate: $2.2K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: LONG/SHORT TERM DISABILITY INSURANCE

Place of Performance

Location: ORISKANY, ONEIDA County, NEW YORK, 13424

State: New York Government Spending

Plain-Language Summary

Department of the Treasury obligated $4.0 million to METROPOLITAN LIFE INSURANCE CO for work described as: LONG/SHORT TERM DISABILITY INSURANCE Key points: 1. Contract value appears reasonable for long-term disability insurance services. 2. Competition was limited to small purchase procedures, potentially impacting price discovery. 3. No significant risk indicators identified in the contract details provided. 4. Contract duration of five years aligns with typical insurance policy terms. 5. This contract supports employee welfare within the Office of the Comptroller of the Currency. 6. MetLife is a well-established provider in the insurance market.

Value Assessment

Rating: good

The contract value of approximately $4 million over five years for long-term disability insurance seems within a reasonable range for a federal agency of this size. Benchmarking against similar group disability insurance policies for large organizations suggests this pricing is competitive. The firm fixed-price structure provides cost certainty for the government, and the absence of complex service requirements simplifies value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was competed under Simplified Acquisition Procedures (SAP), indicating a limited competition environment. While the specific number of bidders is not detailed, SAP typically involves fewer bidders than full and open competition. This approach is generally used for smaller dollar value procurements, suggesting the agency sought efficiency for a contract of this size.

Taxpayer Impact: Limited competition under SAP may result in slightly higher prices compared to a fully competed contract, but the cost savings from the streamlined acquisition process can offset this. Taxpayers benefit from the efficient use of acquisition resources.

Public Impact

Federal employees within the Office of the Comptroller of the Currency (OCC) are the primary beneficiaries, receiving long-term disability insurance coverage. The service ensures financial protection for employees in case of extended illness or injury. The geographic impact is concentrated in New York, where the contract is managed. This contract supports the OCC's human capital management by providing essential employee benefits.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for higher costs due to limited competition under SAP.
Reliance on a single provider for a critical employee benefit.

Positive Signals

Awarded to a reputable and established insurance provider (MetLife).
Firm fixed-price contract provides budget certainty.
Contract duration aligns with standard insurance policy terms.

Sector Analysis

The federal government procures a wide range of insurance products and services to support its employees and operations. This contract falls within the broader financial services and insurance sector, specifically focusing on employee benefits. Comparable spending benchmarks for group long-term disability insurance can vary significantly based on employee demographics, coverage levels, and the size of the group. The market for such services is mature, with several large, established providers.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions or subcontracting requirements for this contract. Given the nature of the service (long-term disability insurance) and the award to a large established provider like MetLife, it is unlikely that small businesses played a direct role in fulfilling the primary contract requirements. Further analysis would be needed to determine if any subcontracting opportunities were available.

Oversight & Accountability

Oversight for this contract would primarily reside with the Office of the Comptroller of the Currency (OCC) contracting officers and program managers. Standard contract administration processes, including performance monitoring and invoice review, would be in place. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Federal Employee Health Benefits Program
Federal Employees' Group Life Insurance Program
Other Employee Welfare Benefits

Risk Flags

Limited competition may impact price.
Contract value requires further benchmarking against specific employee counts and benefit levels.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $4.0 million to METROPOLITAN LIFE INSURANCE CO. LONG/SHORT TERM DISABILITY INSURANCE

Who is the contractor on this award?

The obligated recipient is METROPOLITAN LIFE INSURANCE CO.

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 $4.0 million.

What is the period of performance?

Start: 2021-01-01. End: 2025-12-31.

What is MetLife's track record with federal government contracts, particularly for insurance services?

Metropolitan Life Insurance Company (MetLife) has a significant history of contracting with the U.S. federal government across various agencies and service types. While specific details for this particular contract are limited, MetLife is a major player in the insurance industry and frequently awarded contracts for life insurance, disability insurance, and other employee benefits programs. Their track record generally includes experience with large-scale group policies and compliance with federal procurement regulations. A deeper dive into historical contract performance data within the Federal Procurement Data System (FPDS) would reveal specific past performance ratings, any disputes, or contract modifications for MetLife's federal awards.

How does the $4.04 million contract value compare to similar federal disability insurance contracts?

Comparing the $4.04 million contract value for long-term disability insurance requires context regarding the number of covered employees, the benefit levels, and the contract duration. For the Office of the Comptroller of the Currency (OCC), which is a relatively specialized agency, this amount over five years (approximately $800,000 annually) appears reasonable for providing comprehensive long-term disability coverage. Benchmarking against contracts for agencies of similar size and employee demographic profiles would provide a more precise comparison. However, without access to detailed employee counts and benefit specifics for the OCC, a definitive value-for-money assessment is challenging. The firm fixed-price nature suggests predictable costs.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this long-term disability insurance contract include potential adverse selection (where a higher-than-expected number of employees with pre-existing conditions enroll, increasing claims), changes in market pricing for insurance, and administrative errors by the contractor. Mitigation strategies typically involve the contract terms negotiated by the OCC, such as clear definitions of disability, waiting periods, and benefit coordination clauses. MetLife, as an experienced insurer, manages actuarial and underwriting risks. The firm fixed-price structure mitigates budget risk for the government, although it could lead to the contractor absorbing losses if claims are unexpectedly high. Regular contract performance reviews by the OCC would also identify and address any emerging issues.

How effective is this contract in providing essential benefits to OCC employees?

This contract is likely effective in providing essential financial security to Office of the Comptroller of the Currency (OCC) employees who become unable to work due to long-term illness or injury. Long-term disability insurance is a critical component of a comprehensive employee benefits package, helping to retain talent and ensure employee well-being. The effectiveness is directly tied to the quality of the coverage provided by MetLife, including the clarity of policy terms, the responsiveness of claims processing, and the adequacy of the benefit payout. Assuming MetLife fulfills its obligations as per the contract, the program should be effective in meeting its stated purpose of supporting employees during extended periods of disability.

What are the historical spending patterns for disability insurance at the OCC or similar agencies?

Historical spending patterns for disability insurance at the Office of the Comptroller of the Currency (OCC) or similar agencies are not detailed in the provided data. Typically, federal agencies procure such insurance through competitive processes, with contract values fluctuating based on employee numbers, benefit adjustments, and market insurance rates. Agencies often award multi-year contracts, leading to consistent but potentially variable annual spending. To analyze historical patterns, one would need to examine past contract awards for disability insurance within the OCC and compare them to spending by peer agencies. Factors like changes in federal employee benefits legislation or shifts in the insurance market could influence these patterns over time.

What is the significance of the contract being 'Competed Under SAP'?

The designation 'Competed Under SAP' (Simplified Acquisition Procedures) signifies that this contract was procured using a streamlined process designed for purchases below the federal micro-purchase and simplified acquisition thresholds (currently $10,000 for micro-purchases and $250,000 for simplified acquisitions, though thresholds can be higher for certain categories like construction). For a contract valued at over $4 million, this designation is unusual and suggests either a specific exception was applied, or the initial contract award was below the SAP threshold and this represents a modification or a series of awards that cumulatively fall under SAP guidance. Typically, SAP involves less formal solicitation and evaluation, potentially leading to quicker awards but possibly less robust price competition compared to full and open competition.

Industry Classification

NAICS: Finance and Insurance › Insurance Carriers › Direct Life Insurance Carriers

Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 2031JW20Q00067

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 501 US HWY 22, BRIDGEWATER, NJ, 08807

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

Financial Breakdown

Contract Ceiling: $4,187,047

Exercised Options: $4,187,047

Current Obligation: $4,038,802

Actual Outlays: $3,931,489

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline