VA's $31.3M Community Care Network contract modification awarded to Optum Public Sector Solutions

Contract Overview

Contract Amount: $31,340,592 ($31.3M)

Contractor: Optum Public Sector Solutions, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2019-10-01

End Date: 2020-09-30

Contract Duration: 365 days

Daily Burn Rate: $85.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: COMMUNITY CARE NETWORK (CCN) ADMINISTRATIVE MODIFICATION FOR DEOBLIGATION AND OBLIGATION OF FUNDS

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $31.3 million to OPTUM PUBLIC SECTOR SOLUTIONS, INC. for work described as: COMMUNITY CARE NETWORK (CCN) ADMINISTRATIVE MODIFICATION FOR DEOBLIGATION AND OBLIGATION OF FUNDS Key points: 1. Contract modification represents a significant financial adjustment for administrative services. 2. The awardee, Optum Public Sector Solutions, has a substantial presence in government contracting. 3. This contract falls under the broad category of health and medical insurance carriers. 4. The modification period covers a full fiscal year, indicating ongoing program needs. 5. The contract type is Firm Fixed Price, which typically offers cost certainty. 6. The modification involves deobligation and reobligation of funds, suggesting budget realignments.

Value Assessment

Rating: fair

The modification amount of $31.3 million is substantial for administrative services. Without specific details on the services rendered or the original contract's scope, a direct value-for-money assessment is challenging. However, given the scale, it implies a significant administrative undertaking. Benchmarking against similar administrative support contracts for large federal health programs would be necessary for a more precise valuation. The firm fixed-price nature suggests an attempt to control costs, but the need for a large modification could indicate unforeseen expenses or scope changes.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This competitive process is generally favorable for price discovery and ensuring the government receives competitive pricing. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competition was intended.

Taxpayer Impact: Full and open competition generally leads to better pricing for taxpayers by fostering a competitive environment among potential contractors.

Public Impact

Veterans will benefit from the administrative support facilitating their access to community care. The contract supports the delivery of health and medical insurance carrier services. The geographic impact is likely nationwide, given the scope of the VA's Community Care Network. This contract supports administrative functions within the healthcare sector, potentially impacting administrative roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep or unforeseen administrative needs driving significant fund modifications.
Reliance on a single contractor for extensive administrative functions could pose a risk if performance falters.
The large modification amount warrants scrutiny to ensure funds are used efficiently and effectively.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing environment.
Firm Fixed Price contract type provides cost certainty for the administrative services.
The contractor, Optum Public Sector Solutions, likely has experience with large government contracts.

Sector Analysis

This contract operates within the Health Information and Services sector, specifically focusing on administrative support for healthcare delivery networks. The market for such services is large and competitive, with numerous companies offering IT, administrative, and claims processing solutions to government agencies. The VA's Community Care Network is a significant initiative aimed at expanding healthcare access for veterans, making administrative contracts like this crucial for its operational success. Comparable spending benchmarks would involve looking at other large-scale administrative contracts within federal health agencies.

Small Business Impact

The provided data does not indicate any specific small business set-aside or subcontracting requirements for this modification. As a large administrative contract, it's possible that subcontracting opportunities may exist, but this is not explicitly detailed. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' program management and contracting offices. Transparency is generally facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Veterans Affairs Healthcare Services
Community Care Programs
Federal Health Insurance Administration
Government Health IT Services

Risk Flags

Large modification amount requires justification.
Potential for scope creep in administrative services.
Need for clear performance metrics and oversight.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $31.3 million to OPTUM PUBLIC SECTOR SOLUTIONS, INC.. COMMUNITY CARE NETWORK (CCN) ADMINISTRATIVE MODIFICATION FOR DEOBLIGATION AND OBLIGATION OF FUNDS

Who is the contractor on this award?

The obligated recipient is OPTUM PUBLIC SECTOR SOLUTIONS, INC..

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 $31.3 million.

What is the period of performance?

Start: 2019-10-01. End: 2020-09-30.

What specific administrative services are covered under this $31.3 million modification?

The provided data indicates the modification is for 'COMMUNITY CARE NETWORK (CCN) ADMINISTRATIVE MODIFICATION FOR DEOBLIGATION AND OBLIGATION OF FUNDS.' While the exact breakdown of services isn't detailed, it implies administrative functions essential for the operation of the VA's Community Care Network. This could include tasks such as claims processing support, provider network management, beneficiary enrollment assistance, data management, reporting, and other back-office functions necessary to facilitate veterans' access to care through non-VA providers. The deobligation and reobligation of funds suggest a realignment of budget allocations within the CCN administrative framework, possibly due to changes in projected needs, contract performance, or program adjustments.

How does Optum Public Sector Solutions' pricing compare to market rates for similar administrative services?

A direct comparison of Optum Public Sector Solutions' pricing for this specific $31.3 million modification against market rates is challenging without detailed service breakdowns and pricing structures. However, Optum Public Sector Solutions is a known entity in the government contracting space, often handling large-scale health and administrative contracts. The 'full and open competition' award mechanism suggests that pricing was evaluated against other potential bidders. To benchmark effectively, one would need to analyze the per-unit costs (if applicable) or overall administrative cost as a percentage of total contract value against similar contracts awarded by the VA or other federal health agencies for managing large care networks or insurance-related administrative functions. The firm fixed-price nature implies a negotiated price intended to be competitive at the time of award.

What are the key performance indicators (KPIs) for this contract, and how has the contractor performed against them?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract modification. Typically, administrative support contracts for large networks like the VA's Community Care Network would include KPIs related to claims processing timeliness, accuracy rates, provider network adequacy, beneficiary satisfaction, data reporting compliance, and operational efficiency. Performance against these KPIs would be monitored by the contracting officer's representative (COR) at the VA. Without access to performance reports or contract-specific documentation, it's impossible to assess Optum Public Sector Solutions' performance. However, the fact that this is a modification, rather than a termination, might suggest satisfactory performance or necessary adjustments to an ongoing program.

What is the historical spending pattern for administrative support of the Community Care Network?

The provided data focuses on a single contract modification of $31.3 million for the period of October 1, 2019, to September 30, 2020. To understand historical spending patterns for the Community Care Network's administrative support, a broader analysis of prior and subsequent contracts, including base contracts and modifications, would be necessary. This would involve examining spending trends over multiple fiscal years, identifying the primary contractors, and understanding the evolution of administrative support needs and costs. The current modification's amount provides a snapshot but not a trend. Analyzing the total obligated amounts and contract actions over several years would reveal patterns in investment and potential cost efficiencies or increases.

What are the potential risks associated with a large administrative modification like this?

A significant risk associated with a large administrative modification, such as this $31.3 million adjustment, is the potential for inefficient use of funds if the scope or necessity of the administrative work has not been adequately justified or if costs have escalated unexpectedly. Another risk is the potential for scope creep, where the administrative tasks expand beyond the original intent without commensurate adjustments in oversight or pricing. Furthermore, over-reliance on a single contractor for critical administrative functions can pose a risk if the contractor experiences performance issues, financial instability, or strategic shifts. The deobligation and reobligation also introduce a layer of complexity in financial tracking and could indicate budget management challenges or unforeseen program demands that require careful monitoring.

Industry Classification

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

Product/Service Code: MEDICAL SERVICES › GENERAL HEALTH CARE SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Unitedhealth Group Incorporated

Address: 800 KING FARM BLVD STE 500, ROCKVILLE, MD, 20850

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

Financial Breakdown

Contract Ceiling: $48,502,166

Exercised Options: $35,055,627

Current Obligation: $31,340,592

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C79119D0005

IDV Type: IDC

Timeline