VA awards $426M contract to Optum for direct health and medical insurance carriers in FY24 Q1

Contract Overview

Contract Amount: $426,339,572 ($426.3M)

Contractor: Optum Public Sector Solutions, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-12-01

End Date: 2023-12-31

Contract Duration: 30 days

Daily Burn Rate: $14.2M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT: FY24 1ST QTR DEC R1

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $426.3 million to OPTUM PUBLIC SECTOR SOLUTIONS, INC. for work described as: EXPRESS REPORT: FY24 1ST QTR DEC R1 Key points: 1. The contract value is substantial at over $426 million for a single quarter. 2. Optum Public Sector Solutions, Inc. is the sole awardee. 3. The contract falls under Direct Health and Medical Insurance Carriers (NAICS 524114). 4. This award represents a significant portion of the VA's spending in this category for the quarter.

Value Assessment

Rating: good

The contract is a delivery order under a larger agreement, making direct price comparisons difficult. However, the fixed-price nature suggests a defined scope and cost structure.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating a competitive bidding process. This method is generally expected to yield fair market prices.

Taxpayer Impact: Taxpayer funds are being used for healthcare services, with competition aiming for cost-effectiveness.

Public Impact

Ensures continued access to essential health and medical insurance services for veterans. Supports the Department of Veterans Affairs' mission to provide comprehensive care. The large contract value highlights the significant investment in veteran healthcare.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if this delivery order leads to future sole-source extensions.
Lack of specific performance metrics in the provided data makes it hard to assess value for money.

Positive Signals

Awarded under full and open competition.
Firm fixed-price contract type provides cost certainty.

Sector Analysis

This contract falls within the healthcare services sector, specifically focusing on insurance carriers. Spending in this area is critical for government healthcare providers like the VA.

Small Business Impact

The provided data does not indicate any specific set-asides for small businesses in this particular delivery order. Further analysis of the parent contract would be needed.

Oversight & Accountability

The award was made by the Department of Veterans Affairs, which has established oversight mechanisms for its contracts. The competitive nature of the award suggests initial accountability.

Related Government Programs

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

Risk Flags

Lack of detailed performance metrics.
Limited visibility into the parent contract's total value and duration.
Potential for future sole-source awards if not managed carefully.
Dependence on a single vendor for a critical service area.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $426.3 million to OPTUM PUBLIC SECTOR SOLUTIONS, INC.. EXPRESS REPORT: FY24 1ST QTR DEC R1

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 $426.3 million.

What is the period of performance?

Start: 2023-12-01. End: 2023-12-31.

What is the projected value of the parent contract from which this delivery order was issued?

The provided data only details a single delivery order for FY24 Q1. To fully assess the long-term value and potential impact, information on the overarching contract, including its total value, duration, and any previously awarded delivery orders, would be necessary. This context is crucial for understanding the VA's sustained commitment and investment in these services.

Are there specific performance metrics or KPIs tied to this delivery order to ensure optimal service delivery and value for money?

The current data does not specify performance metrics or Key Performance Indicators (KPIs) associated with this delivery order. While the firm fixed-price structure offers cost certainty, the absence of defined performance standards makes it challenging to objectively evaluate the quality and effectiveness of the services provided by Optum Public Sector Solutions, Inc. for the VA.

How does the pricing of this delivery order compare to similar contracts awarded by other federal agencies for comparable health and medical insurance carrier services?

Benchmarking this specific delivery order's pricing against similar contracts is difficult without access to a broader dataset of comparable federal procurements. While awarded under full and open competition, the unique scope and specific requirements of the VA's needs may lead to variations. A comprehensive market analysis of other agency contracts for similar services would be required for a robust comparison.

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: 3237 AIRPORT RD, LA CROSSE, WI, 54603

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

Financial Breakdown

Contract Ceiling: $426,339,572

Exercised Options: $426,339,572

Current Obligation: $426,339,572

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C79119D0004

IDV Type: IDC

Timeline