VA awards $716.6M contract to TriWest Healthcare for direct health and medical insurance carriers in October FY24

Contract Overview

Contract Amount: $716,603,859 ($716.6M)

Contractor: Triwest Healthcare Alliance Corp

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-10-01

End Date: 2023-10-31

Contract Duration: 30 days

Daily Burn Rate: $23.9M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT: JANUARY FY24 R4 EXPRESS REPORT Q2

Place of Performance

Location: FREDERICKSBURG, SPOTSYLVANIA County, VIRGINIA, 22408

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $716.6 million to TRIWEST HEALTHCARE ALLIANCE CORP for work described as: EXPRESS REPORT: JANUARY FY24 R4 EXPRESS REPORT Q2 Key points: 1. Contract value of $716.6M for a 30-day period indicates significant operational scale. 2. Full and open competition suggests a robust market with multiple potential bidders. 3. The firm fixed-price contract type aims to control costs and transfer risk to the contractor. 4. This award falls within the healthcare sector, specifically direct health and medical insurance.

Value Assessment

Rating: good

The contract value of $716.6M for a 30-day period is substantial. Benchmarking against similar direct health and medical insurance contracts would be necessary to fully assess pricing, but the firm fixed-price structure provides cost certainty.

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 were eligible to bid. This method typically fosters competitive pricing and ensures the government receives the best value.

Taxpayer Impact: The competitive nature of the award is expected to yield fair pricing, ultimately benefiting taxpayers by ensuring efficient use of funds for essential healthcare services.

Public Impact

Ensures continued access to direct health and medical insurance services for beneficiaries. Supports the operational capacity of the Department of Veterans Affairs in delivering healthcare. Impacts a large number of veterans relying on these insurance carrier services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Short duration (30 days) may indicate a bridge contract or a specific, time-limited need.
High dollar value for a short period warrants scrutiny of the scope and necessity.

Positive Signals

Awarded under full and open competition, suggesting market responsiveness.
Firm fixed-price contract type offers cost predictability.

Sector Analysis

This contract is within the healthcare sector, specifically focusing on direct health and medical insurance carriers. Spending in this area is critical for government healthcare providers like the VA, and benchmarks would typically relate to per-member-per-month costs or capitation rates.

Small Business Impact

The data does not indicate whether small businesses were involved in this specific award. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight will be crucial to ensure the contractor meets performance requirements and that the substantial funds are utilized effectively and appropriately, especially given the short contract duration.

Related Government Programs

Direct Health and Medical Insurance Carriers
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

High contract value for a short duration.
Potential for a bridge contract requiring further long-term planning.
Need for detailed performance monitoring.
Dependence on a single contractor for critical services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $716.6 million to TRIWEST HEALTHCARE ALLIANCE CORP. EXPRESS REPORT: JANUARY FY24 R4 EXPRESS REPORT Q2

Who is the contractor on this award?

The obligated recipient is TRIWEST HEALTHCARE ALLIANCE CORP.

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 $716.6 million.

What is the period of performance?

Start: 2023-10-01. End: 2023-10-31.

What is the specific service being procured under this contract and how does it align with the VA's long-term healthcare strategy?

This contract is for direct health and medical insurance carriers, likely to cover immediate healthcare needs for veterans. Understanding the specific services provided and their integration into the VA's broader healthcare delivery system is key to assessing its strategic value and ensuring it complements existing VA facilities and programs rather than duplicating efforts.

Given the high value and short duration, what is the risk of cost overruns or inadequate service delivery?

The risk of cost overruns is mitigated by the firm fixed-price structure. However, the high value for a 30-day period suggests a potentially critical or emergency need. Inadequate service delivery is a risk if the contractor lacks sufficient capacity or fails to meet performance standards, necessitating close monitoring and clear performance metrics.

How effective is the full and open competition process in ensuring the best value for these critical healthcare services?

Full and open competition is generally effective in driving value by allowing multiple qualified vendors to bid, fostering price reductions and innovation. For critical healthcare services, this process ensures the VA can select a provider that not only offers competitive pricing but also meets stringent quality and performance requirements, ultimately benefiting veteran care.

Industry Classification

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

Product/Service Code: SOCIAL SERVICES › SOCIAL 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

Address: 15810 N 28TH AVE, PHOENIX, AZ, 85053

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

Financial Breakdown

Contract Ceiling: $716,603,859

Exercised Options: $716,603,859

Current Obligation: $716,603,859

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10G19D0038

IDV Type: IDC

Timeline