VA awards $777M contract to TriWest Healthcare Alliance for direct health and medical insurance carriers

Contract Overview

Contract Amount: $776,889,606 ($776.9M)

Contractor: Triwest Healthcare Alliance Corp

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-08-01

End Date: 2024-08-31

Contract Duration: 30 days

Daily Burn Rate: $25.9M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT AUGUST 2024

Place of Performance

Location: FREDERICKSBURG, SPOTSYLVANIA County, VIRGINIA, 22408

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $776.9 million to TRIWEST HEALTHCARE ALLIANCE CORP for work described as: EXPRESS REPORT AUGUST 2024 Key points: 1. Significant contract value of $777 million highlights major federal investment in healthcare services. 2. Competition method is 'FULL AND OPEN COMPETITION', suggesting a robust market for these services. 3. Risk appears moderate given the established carrier sector, but performance monitoring is crucial. 4. The sector is healthcare, specifically direct health and medical insurance, a critical area for veterans. 5. The contract type is 'FIRM FIXED PRICE', which transfers some cost risk to the contractor.

Value Assessment

Rating: good

The contract value of $777 million is substantial. Benchmarking against similar large-scale health insurance contracts would be necessary to fully assess pricing, but the firm fixed-price structure suggests a defined cost expectation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The use of 'FULL AND OPEN COMPETITION' indicates that multiple vendors were likely considered, promoting price discovery and potentially leading to more competitive pricing. This method is generally preferred for maximizing value.

Taxpayer Impact: A competitive bidding process for a contract of this magnitude aims to ensure taxpayer funds are used efficiently, securing necessary services at a reasonable cost.

Public Impact

Veterans will receive direct health and medical insurance services, impacting their access to care. The contract's duration and scope will influence the stability and availability of these services. The award to TriWest Healthcare Alliance Corp suggests a focus on established providers in the healthcare insurance market.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if not managed tightly.
Reliance on a single awardee for a large service area.
Ensuring continuity of care for beneficiaries.

Positive Signals

Full and open competition utilized.
Firm fixed-price contract type.
Clear sector focus on veteran healthcare.

Sector Analysis

This contract falls within the healthcare sector, specifically focusing on direct health and medical insurance carriers. Spending in this area is consistently high due to the essential nature of healthcare services, particularly for government programs like the VA.

Small Business Impact

The data does not indicate specific provisions or set-asides for small businesses in this contract. Further analysis would be needed to determine if small businesses had opportunities to participate as subcontractors or prime contractors.

Oversight & Accountability

Oversight will be critical to ensure TriWest Healthcare Alliance Corp meets performance standards and delivers quality services as per the contract terms. The Department of Veterans Affairs is responsible for monitoring contract execution and beneficiary satisfaction.

Related Government Programs

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

Risk Flags

Contract value is substantial, requiring diligent oversight.
Potential for vendor lock-in if competition is not sustained in future procurements.
Ensuring equitable access to care across all geographic areas served.
Monitoring for any potential conflicts of interest.
Assessing the impact of firm fixed-price on contractor flexibility for unforeseen healthcare needs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $776.9 million to TRIWEST HEALTHCARE ALLIANCE CORP. EXPRESS REPORT AUGUST 2024

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 $776.9 million.

What is the period of performance?

Start: 2024-08-01. End: 2024-08-31.

What is the historical performance of TriWest Healthcare Alliance Corp with the VA or similar contracts?

Historical performance data for TriWest Healthcare Alliance Corp would be crucial for assessing their capability to manage a contract of this size and scope. Past performance reviews, on-time delivery rates, and quality of service metrics would provide insights into their reliability and effectiveness in delivering healthcare insurance services to beneficiaries.

How does the awarded price compare to market benchmarks for similar health insurance carrier services?

A detailed price analysis against industry benchmarks for direct health and medical insurance carriers is essential. Comparing the firm fixed price to the average cost per beneficiary or per service provided by comparable organizations would reveal if the VA secured a competitive rate and achieved good value for taxpayer money.

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

Understanding the specific KPIs and SLAs is vital for evaluating the effectiveness of this contract. These metrics would define success, such as beneficiary access to care, claims processing times, and patient satisfaction scores. Robust monitoring of these indicators by the VA ensures accountability and service quality.

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: $776,889,606

Exercised Options: $776,889,606

Current Obligation: $776,889,606

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10G19D0038

IDV Type: IDC

Timeline