VA awards $1.37B for direct health/medical insurance carriers in Q3 FY24

Contract Overview

Contract Amount: $1,365,317,619 ($1.4B)

Contractor: Optum Public Sector Solutions, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-04-01

End Date: 2024-04-30

Contract Duration: 29 days

Daily Burn Rate: $47.1M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT: R3 FY 24 3RD QTR APRIL

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20850

State: Maryland Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $1.37 billion to OPTUM PUBLIC SECTOR SOLUTIONS, INC. for work described as: EXPRESS REPORT: R3 FY 24 3RD QTR APRIL Key points: 1. Significant contract value highlights substantial VA reliance on external insurance carriers. 2. Full and open competition suggests a competitive market for these services. 3. Risk appears moderate given the established nature of health insurance contracting. 4. The IT sector is indirectly impacted through data management and system integration needs.

Value Assessment

Rating: good

The contract value of $1.37 billion for a single month is substantial. Benchmarking against similar large-scale health 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 had the opportunity to bid. This method generally promotes competitive pricing and ensures the government receives best value.

Taxpayer Impact: The firm fixed-price contract provides predictable costs for taxpayers, although the overall expenditure is high due to the scope of services.

Public Impact

Veterans will continue to receive direct health and medical insurance services. The contract supports a critical function within the Department of Veterans Affairs. This award signifies continued investment in healthcare solutions for veterans.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High monthly expenditure requires ongoing monitoring.
Dependence on a single awardee for a month's services.

Positive Signals

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

Sector Analysis

This contract falls under Direct Health and Medical Insurance Carriers, a sector crucial for government healthcare provision. Spending benchmarks for this category are typically high due to the nature of healthcare services and insurance administration.

Small Business Impact

The data does not indicate specific participation or set-asides for small businesses in this particular award. Larger contracts in this sector often involve prime contractors who may then subcontract.

Oversight & Accountability

The award was made by the Department of Veterans Affairs, suggesting internal oversight processes are in place. Further oversight would involve monitoring contract performance and adherence to terms.

Related Government Programs

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

Risk Flags

High dollar value
Potential for scope creep
Dependence on external insurance carriers
Need for robust performance monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $1.37 billion to OPTUM PUBLIC SECTOR SOLUTIONS, INC.. EXPRESS REPORT: R3 FY 24 3RD QTR APRIL

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 $1.37 billion.

What is the period of performance?

Start: 2024-04-01. End: 2024-04-30.

What is the projected annual spend based on this monthly award, and how does it compare to previous years?

Extrapolating from the $1.37 billion monthly award suggests an annual spend of approximately $16.44 billion. This figure needs to be compared against historical VA spending on similar services to determine if it represents an increase, decrease, or stable trend, providing insight into evolving healthcare needs and program costs.

What specific health and medical insurance services are covered under this delivery order, and are there any performance metrics tied to them?

The data identifies the NAICS code as 'Direct Health and Medical Insurance Carriers' but lacks specifics on the exact services. Understanding the scope (e.g., specific medical treatments, prescription drugs, administrative services) and associated performance metrics is crucial for assessing the value and effectiveness of the contract.

How does the pricing structure of this firm fixed-price contract ensure cost-effectiveness for the government over the long term?

A firm fixed-price contract locks in the price, protecting the government from cost overruns. However, its long-term cost-effectiveness depends on the initial negotiation and whether the price accurately reflects market rates and anticipated service volumes. Continuous monitoring and potential future renegotiations are key.

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: $1,365,317,619

Exercised Options: $1,365,317,619

Current Obligation: $1,365,317,619

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C79119D0006

IDV Type: IDC

Timeline