VA's Community Care Network Region 1 contract awarded to Optum Public Sector Solutions for $28.3M

Contract Overview

Contract Amount: $28,253,613 ($28.3M)

Contractor: Optum Public Sector Solutions, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-10-01

End Date: 2021-09-30

Contract Duration: 364 days

Daily Burn Rate: $77.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: COMMUNITY CARE NETWORK- REGION 1- EXERCISE OPTION YEAR 2

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $28.3 million to OPTUM PUBLIC SECTOR SOLUTIONS, INC. for work described as: COMMUNITY CARE NETWORK- REGION 1- EXERCISE OPTION YEAR 2 Key points: 1. Contract value represents a significant investment in healthcare delivery for veterans. 2. Full and open competition suggests a potentially competitive bidding process. 3. Fixed-price contract type may offer cost certainty but could limit flexibility. 4. Performance period of one year indicates a focused scope of services. 5. The contract falls within the Direct Health and Medical Insurance Carriers sector. 6. Awarded by the Department of Veterans Affairs, aligning with its mission to serve veterans.

Value Assessment

Rating: good

The contract value of $28.3 million for one year of service appears reasonable for a large-scale healthcare network. Benchmarking against similar regional community care contracts would provide a more precise value-for-money assessment. The fixed-price nature suggests that the contractor bears the risk of cost overruns, which is generally favorable for the government. However, without detailed service breakdowns and performance metrics, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit a bid. The number of bidders is not specified, but this method generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The VA's commitment to full and open competition suggests a desire to leverage the broadest possible market.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of receiving competitive pricing and innovative solutions, ultimately maximizing the value of federal dollars spent on veteran healthcare.

Public Impact

Veterans in Region 1 will benefit from expanded access to healthcare services through community providers. The contract supports the delivery of direct health and medical insurance services. Geographic impact is focused on Region 1, serving veterans within that designated area. The contract likely supports a network of healthcare providers and administrative staff, implying workforce implications in the healthcare sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if not managed tightly due to the nature of healthcare delivery.
Ensuring consistent quality of care across a network of community providers can be challenging.
Dependence on a single large contractor for a critical service area requires robust oversight.

Positive Signals

Awarded through full and open competition, suggesting a competitive process.
Fixed-price contract type can provide cost predictability.
The contract directly supports the VA's mission to provide healthcare to veterans.

Sector Analysis

This contract operates within the healthcare services sector, specifically focusing on medical insurance carriers and direct healthcare provision. The market for government healthcare contracts is substantial, with agencies like the VA consistently seeking to augment their direct care capabilities through community partnerships. Comparable spending benchmarks would involve analyzing other regional community care contracts awarded by the VA or other federal health agencies to assess pricing and scope.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As a large contract awarded to a major entity, it is possible that subcontracting opportunities may exist for small businesses within the healthcare service delivery network. However, without explicit subcontracting plans or goals, the direct impact on the small business ecosystem remains unclear.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs contracting officers and program managers. Accountability measures would be embedded in the contract's performance standards and deliverables. Transparency is generally facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

VA Community Care Programs
TRICARE
Medicare
Medicaid

Risk Flags

Potential for cost overruns if scope is not well-defined.
Ensuring consistent quality of care across a distributed network.
Dependence on a single contractor for a critical service area.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $28.3 million to OPTUM PUBLIC SECTOR SOLUTIONS, INC.. COMMUNITY CARE NETWORK- REGION 1- EXERCISE OPTION YEAR 2

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 $28.3 million.

What is the period of performance?

Start: 2020-10-01. End: 2021-09-30.

What is the historical spending pattern for the Community Care Network in Region 1?

The provided data reflects a single award for Option Year 2, totaling $28,253,612.60 for a 364-day period. To understand the historical spending pattern, one would need to examine previous option years or base contract periods for this specific Region 1 contract, as well as potentially compare it to spending on similar contracts in other VA regions. Without this broader context, it's difficult to ascertain trends or significant deviations in spending for this particular service area over time.

How does the per-unit cost of services under this contract compare to market rates or similar VA contracts?

The provided data does not include specific per-unit cost breakdowns for services rendered under this contract. The total award amount of $28.3 million is for the entire contract period and scope, which likely encompasses a wide range of medical services. To perform a per-unit cost comparison, detailed service line items, quantities, and their associated pricing would be required. Benchmarking against other VA community care contracts or established Medicare/Medicaid reimbursement rates for similar services would be necessary for a meaningful comparison.

What is Optum Public Sector Solutions' track record with the Department of Veterans Affairs and similar healthcare contracts?

Optum Public Sector Solutions, a subsidiary of UnitedHealth Group, has a significant history of contracting with federal agencies, including the Department of Veterans Affairs. They are known to manage large-scale health IT solutions and healthcare services. Their track record with the VA likely includes managing various aspects of healthcare delivery, claims processing, and network management. A deeper dive into their past performance evaluations, contract history, and any reported issues or successes with the VA would provide a more comprehensive understanding of their capabilities and reliability for this specific Community Care Network contract.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) for this contract. Typically, VA contracts for healthcare services would include detailed metrics related to appointment wait times, patient satisfaction, network adequacy, quality of care standards, and administrative efficiency. These KPIs and SLAs are crucial for monitoring the contractor's performance and ensuring that veterans receive timely and high-quality care. Without access to the contract's statement of work or performance requirements, a thorough assessment of these critical elements is not possible.

What is the potential risk associated with the fixed-price contract type for this healthcare service delivery?

A fixed-price contract type, while offering cost certainty to the government, can introduce risks if the scope of services is not precisely defined or if unforeseen circumstances arise in healthcare delivery. For a community care network, this could mean that if the volume of services or complexity of cases exceeds initial projections, the contractor might face financial strain, potentially impacting service quality or leading to requests for contract modifications. Conversely, if the volume is lower than anticipated, the government might be paying for capacity not fully utilized. Effective risk mitigation relies on a well-defined scope, robust monitoring, and clear procedures for handling variances.

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: $79,359,745

Exercised Options: $79,359,745

Current Obligation: $28,253,613

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C79119D0004

IDV Type: IDC

Timeline