VA awards $809M contract to TriWest Healthcare Alliance Corp for healthcare services in May FY24

Contract Overview

Contract Amount: $809,354,930 ($809.4M)

Contractor: Triwest Healthcare Alliance Corp

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-05-01

End Date: 2024-05-31

Contract Duration: 30 days

Daily Burn Rate: $27.0M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT: MAY FY24 R4 EXPRESS REPORT Q3

Place of Performance

Location: STAFFORD, STAFFORD County, VIRGINIA, 22554

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $809.4 million to TRIWEST HEALTHCARE ALLIANCE CORP for work described as: EXPRESS REPORT: MAY FY24 R4 EXPRESS REPORT Q3 Key points: 1. Contract value represents significant investment in healthcare delivery for veterans. 2. Full and open competition suggests a robust bidding process. 3. Fixed-price contract type may offer cost certainty but could limit flexibility. 4. Short duration of 30 days indicates a task order or short-term need. 5. Contract awarded to an incumbent provider, suggesting established performance. 6. Focus on direct health and medical insurance carriers highlights a specific service area.

Value Assessment

Rating: good

The contract value of $809 million for a 30-day period is substantial, indicating a high-demand service. Benchmarking against similar large-scale healthcare delivery contracts within the VA is necessary for a precise value assessment. However, the fixed-price nature suggests an expectation of predictable costs for the services rendered. The award to TriWest, a known entity in veteran healthcare, implies a degree of confidence in their ability to deliver.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. This approach generally fosters a competitive environment, potentially leading to better pricing and service offerings for the government. The number of bidders is not specified, but the open competition is a positive signal for price discovery and market responsiveness.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for the significant funds allocated to veteran healthcare services.

Public Impact

Veterans in the service area will benefit from continued access to direct health and medical insurance services. The contract supports the delivery of essential healthcare, potentially impacting the well-being of a large veteran population. Geographic impact is likely concentrated within the regions served by TriWest Healthcare Alliance Corp for the VA. Workforce implications may include the continued employment of healthcare professionals and administrative staff by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The high dollar value for a short period warrants scrutiny to ensure efficient use of funds.
Lack of detail on specific performance metrics makes it difficult to assess the quality of services delivered.
Potential for scope creep or unmanaged costs if the 30-day period is a precursor to a larger, ongoing need.

Positive Signals

Awarded under full and open competition, suggesting a fair and competitive process.
Contractor has prior experience with VA healthcare, indicating familiarity with requirements.
Fixed-price contract type provides a degree of cost certainty for this period.

Sector Analysis

This contract falls within the Healthcare sector, specifically focusing on direct health and medical insurance carriers. The market for federal healthcare services is substantial, with significant spending directed towards veteran care. This award to TriWest Healthcare Alliance Corp is consistent with the VA's strategy of leveraging established providers to meet the healthcare needs of its beneficiaries. Comparable spending benchmarks would involve analyzing other large-scale healthcare delivery contracts awarded by the VA and other federal health agencies.

Small Business Impact

Information regarding small business set-asides or subcontracting plans was not provided in the data. As this was a full and open competition, the primary focus was likely on securing the best overall value from all eligible offerors, rather than specifically targeting small businesses for this particular award. Further analysis would be needed to determine if any subcontracting opportunities exist for small businesses within the scope of this contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs contracting officers and program managers. Accountability measures are inherent in the fixed-price contract type, requiring the contractor to deliver specified services within the agreed-upon cost. Transparency is generally facilitated through contract award databases, though detailed performance reports may not always be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Veterans Affairs Medical Care Programs
TRICARE Program
Federal Employee Health Benefits Program
Community Care Network (CCN)

Risk Flags

High contract value for short duration
Lack of detailed performance metrics in summary data
Potential for cost overruns or underperformance in fixed-price contracts

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $809.4 million to TRIWEST HEALTHCARE ALLIANCE CORP. EXPRESS REPORT: MAY FY24 R4 EXPRESS REPORT Q3

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 $809.4 million.

What is the period of performance?

Start: 2024-05-01. End: 2024-05-31.

What is the historical spending pattern of the VA with TriWest Healthcare Alliance Corp?

Historical spending data with TriWest Healthcare Alliance Corp by the Department of Veterans Affairs (VA) would reveal the extent of their long-standing relationship and the scale of services previously contracted. Analyzing past awards, including their values, durations, and the nature of services provided, can offer insights into the VA's reliance on TriWest for specific healthcare needs. For instance, if TriWest has consistently received large-value contracts over several years, it suggests a deep integration into the VA's healthcare delivery system. Conversely, a pattern of smaller, intermittent awards might indicate a more opportunistic or specialized role. Understanding this history is crucial for assessing the current $809 million award not as an isolated event, but as part of an ongoing partnership and for evaluating potential vendor lock-in or the effectiveness of competitive bidding over time.

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

A detailed comparison of per-unit costs for services rendered under this $809 million contract against similar VA contracts is essential for a robust value-for-money assessment. Without specific service line data (e.g., cost per patient visit, cost per procedure), a direct per-unit comparison is challenging. However, if data were available, benchmarks could be established by examining contracts for comparable healthcare services awarded to other providers within the VA's network, such as those under the Community Care Network (CCN) or other regional healthcare alliances. Factors like geographic location, complexity of care, and specific medical services offered significantly influence per-unit costs. A higher per-unit cost compared to benchmarks, even under a fixed-price contract, could indicate potential inefficiencies or a less competitive pricing structure, warranting further investigation into the specific services included and the market conditions.

What are the specific performance metrics and quality indicators associated with this contract?

The provided data does not detail the specific performance metrics or quality indicators tied to this $809 million contract. For a comprehensive assessment of program effectiveness and contractor performance, these metrics are critical. Typically, VA contracts include Service Level Agreements (SLAs) and Key Performance Indicators (KPIs) related to patient access times, quality of care, patient satisfaction, and administrative efficiency. The absence of this information in the summary data limits the ability to evaluate whether TriWest Healthcare Alliance Corp is meeting or exceeding expected standards. A thorough review would require access to the contract's Statement of Work (SOW) and any associated performance-based payment or award clauses that define success and incentivize high-quality service delivery for the veteran population.

What is the risk associated with a fixed-price contract of this magnitude and short duration?

A fixed-price contract of this magnitude ($809 million) carries inherent risks, particularly when coupled with a short duration (30 days). For the government, the primary risk is that the fixed price may not accurately reflect the actual cost of services, potentially leading to overpayment if costs are lower than anticipated or, conversely, underperformance if the contractor cuts corners to maintain profitability. For the contractor, the risk lies in underestimating costs, which could lead to financial losses. Given the short timeframe, this award might represent a bridge contract or a specific, high-volume task order. The risk of inadequate service delivery or unforeseen issues arising within such a compressed period, despite the fixed price, necessitates robust oversight to ensure quality and timely execution.

How does the competition level (full and open) typically influence pricing for VA healthcare contracts?

A 'full and open competition' for VA healthcare contracts generally exerts downward pressure on pricing. When multiple qualified vendors are allowed to bid, they are incentivized to offer competitive rates to secure the contract. This process allows the VA to solicit proposals from a wide range of potential providers, fostering a market where price, alongside quality and capability, becomes a key differentiator. The presence of robust competition can lead to more favorable terms and potentially lower costs for the government compared to sole-source or limited-source awards. For a contract of this scale, the full and open approach suggests the VA sought to maximize value and ensure that taxpayer dollars are used efficiently by leveraging the competitive dynamics of the healthcare market.

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: $809,354,930

Exercised Options: $809,354,930

Current Obligation: $809,354,930

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10G19D0038

IDV Type: IDC

Timeline