VA Awards $556M to Optum for Health Insurance Services in September 2024

Contract Overview

Contract Amount: $555,951,242 ($556.0M)

Contractor: Optum Public Sector Solutions, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-09-01

End Date: 2024-09-30

Contract Duration: 29 days

Daily Burn Rate: $19.2M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT: R2 FY24 Q4 SEPTEMBER

Place of Performance

Location: FREDERICKSBURG, SPOTSYLVANIA County, VIRGINIA, 22408

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $556.0 million to OPTUM PUBLIC SECTOR SOLUTIONS, INC. for work described as: EXPRESS REPORT: R2 FY24 Q4 SEPTEMBER Key points: 1. Significant contract value of $556 million awarded. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract is for Direct Health and Medical Insurance Carriers, a critical sector. 4. Potential for taxpayer savings due to competitive bidding.

Value Assessment

Rating: good

The contract value of $555,951,242.28 for a single month's delivery order appears high, but without specific service details or benchmarks for this type of insurance carrier service, a definitive assessment is difficult. Further analysis of the scope of services is needed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which typically fosters price discovery and can lead to more favorable pricing for the government. The use of a delivery order suggests a specific need within a broader contract vehicle.

Taxpayer Impact: The competitive nature of the award is a positive indicator for taxpayer value, as it likely resulted in a negotiated price that reflects market conditions.

Public Impact

Veterans will receive health insurance services facilitated by this contract. The Department of Veterans Affairs aims to streamline healthcare access for beneficiaries. This award impacts the healthcare insurance sector by channeling significant funds to one provider.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High monthly award value requires scrutiny of service delivery and cost-effectiveness.
Short duration (29 days) of the delivery order may indicate a bridge or specific, time-bound need.

Positive Signals

Awarded under full and open competition.
Supports critical healthcare services for veterans.

Sector Analysis

This contract falls within the Direct Health and Medical Insurance Carriers sector, a vital component of the healthcare industry. Spending in this area is substantial government-wide, supporting various health programs and services.

Small Business Impact

The provided data does not indicate any specific set-asides for small businesses. Further investigation would be needed to determine if small businesses were involved as subcontractors or if opportunities were missed.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Standard procurement regulations and oversight mechanisms should be in place to ensure performance and financial accountability.

Related Government Programs

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

Risk Flags

High value for a short-duration delivery order.
Lack of detail on specific services provided.
No indication of small business participation.
Potential for cost overruns if not closely managed.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $556.0 million to OPTUM PUBLIC SECTOR SOLUTIONS, INC.. EXPRESS REPORT: R2 FY24 Q4 SEPTEMBER

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 $556.0 million.

What is the period of performance?

Start: 2024-09-01. End: 2024-09-30.

What specific health insurance services are covered under this $556 million delivery order, and how do they align with VA's mission?

The delivery order is for Direct Health and Medical Insurance Carriers. While the specific services aren't detailed, it likely pertains to providing or administering health insurance benefits to eligible veterans. This aligns with the VA's mission to provide comprehensive healthcare services, potentially covering areas where VA facilities may be insufficient or to offer veterans more choice in their healthcare providers.

Given the full and open competition, what was the range of bids received, and how does the awarded price compare to the government's estimate?

Information on the range of bids and the government's estimate is not provided in the data. However, the use of full and open competition suggests that multiple vendors participated, and the awarded price was likely negotiated to be competitive. A review of the procurement file would be necessary to ascertain the bid landscape and validate the price against estimates.

What is the justification for a $556 million delivery order lasting only 29 days, and what is the long-term strategy for these services?

A delivery order of this magnitude for such a short duration (29 days) is unusual and warrants further investigation. It could represent a critical, time-sensitive need, a bridge contract to a larger, upcoming award, or a consolidation of services. Understanding the specific operational context and the VA's long-term procurement strategy for these insurance carrier services is essential.

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: $555,951,242

Exercised Options: $555,951,242

Current Obligation: $555,951,242

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C79119D0005

IDV Type: IDC

Timeline