VA awards $770.7M contract to TriWest Healthcare Alliance Corp for health insurance carrier services

Contract Overview

Contract Amount: $770,738,874 ($770.7M)

Contractor: Triwest Healthcare Alliance Corp

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-03-01

End Date: 2025-03-01

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT: MARCH 2025

Place of Performance

Location: FREDERICKSBURG, SPOTSYLVANIA County, VIRGINIA, 22408

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $770.7 million to TRIWEST HEALTHCARE ALLIANCE CORP for work described as: EXPRESS REPORT: MARCH 2025 Key points: 1. Contract value represents significant investment in healthcare delivery for veterans. 2. Full and open competition suggests a potentially competitive bidding process. 3. Fixed-price contract type may offer cost certainty but could limit flexibility. 4. Contract duration is not specified, raising questions about long-term planning. 5. Focus on direct health and medical insurance carriers indicates a specific service niche. 6. Geographic focus on Virginia highlights regional healthcare needs.

Value Assessment

Rating: good

The contract value of $770.7 million is substantial, indicating a significant need for these services. Benchmarking against similar contracts for health insurance carriers within the Department of Veterans Affairs (VA) is crucial to assess value for money. Without specific performance metrics or comparable contract data, a definitive value assessment is challenging. However, the firm fixed-price structure suggests an attempt to control costs, which is a positive indicator.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, implying that all responsible sources were permitted to submit offers. This method typically fosters a competitive environment, potentially leading to better pricing and service offerings. The number of bidders is not specified, which is a key factor in determining the true level of competition and its impact on price discovery.

Taxpayer Impact: Full and open competition generally benefits taxpayers by encouraging multiple vendors to bid, driving down costs and improving the quality of services received.

Public Impact

Veterans in Virginia will benefit from access to direct health and medical insurance services. The contract supports the VA's mission to provide comprehensive healthcare to its beneficiaries. This award is likely to impact the healthcare workforce in Virginia, potentially creating or sustaining jobs. The services delivered are critical for ensuring veterans receive timely and appropriate medical care.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specified contract duration could lead to uncertainty in long-term service provision.
The absence of detailed performance metrics makes it difficult to assess the contractor's track record and future performance.
Limited information on the number of bidders in the full and open competition makes it hard to gauge the extent of price discovery.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
Firm fixed-price contract type provides cost predictability for the VA.
The significant contract value indicates a commitment to addressing veteran healthcare needs.

Sector Analysis

The healthcare insurance industry is a large and complex sector. This contract falls within the Health Care and Social Assistance sector, specifically focusing on health insurance carriers. The VA's reliance on such contracts highlights the growing trend of government agencies outsourcing specialized services to private entities to manage large populations and complex benefits. Comparable spending benchmarks would involve analyzing other large-scale health insurance contracts awarded by federal agencies or large private insurers.

Small Business Impact

Information regarding small business set-asides or subcontracting plans is not provided in the data. Without this information, it is difficult to assess the impact on the small business ecosystem. Typically, large contracts like this may include provisions for small business participation, but this cannot be confirmed here.

Oversight & Accountability

Oversight mechanisms for this contract are not detailed in the provided data. Standard VA oversight procedures would likely apply, including contract performance monitoring and financial reviews. Transparency would depend on the VA's reporting practices for such awards. Inspector General jurisdiction would cover potential fraud, waste, and abuse related to the contract.

Related Government Programs

Department of Veterans Affairs Healthcare Services
Federal Health Insurance Contracts
Medical Insurance Carrier Services
Veteran Health Administration Programs

Risk Flags

Contract Duration Not Specified
Lack of Detailed Performance Metrics
Limited Information on Bidder Count

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $770.7 million to TRIWEST HEALTHCARE ALLIANCE CORP. EXPRESS REPORT: MARCH 2025

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 $770.7 million.

What is the period of performance?

Start: 2025-03-01. End: 2025-03-01.

What is the historical spending pattern for similar health insurance carrier contracts awarded by the VA?

Analyzing historical spending patterns for similar health insurance carrier contracts awarded by the Department of Veterans Affairs (VA) is essential for understanding the context of this $770.7 million award. While specific historical data is not provided here, the VA has historically awarded significant contracts to manage healthcare services for veterans, often through various mechanisms including direct care and partnerships with private insurers. Trends may show an increase in outsourcing to manage growing veteran populations or specific healthcare needs. Comparing the current award amount to previous contracts of similar scope and duration can reveal whether this represents an increase, decrease, or stable level of investment in these services. It's also important to consider if the scope of services has changed over time, which could justify variations in contract value. A deeper dive would involve examining contract databases for the past 5-10 years to identify trends in award values, contractor types, and service areas within the health insurance carrier domain.

How does the pricing structure of this contract compare to industry benchmarks for similar services?

The provided data indicates a 'FIRM FIXED PRICE' contract type, which aims to establish a set price for the defined scope of work. To compare this pricing to industry benchmarks, one would need to analyze the specific services included in the contract and research prevailing market rates for those services. This would involve looking at what other federal agencies or large private healthcare organizations pay for comparable health insurance carrier services, considering factors like the number of covered individuals, the breadth of services (e.g., medical, dental, vision), and administrative overhead. Without a detailed breakdown of the services and associated costs within the $770.7 million award, a precise benchmark comparison is difficult. However, the fact that it was awarded under full and open competition suggests that the pricing was likely scrutinized against competing offers, potentially aligning it with market expectations.

What are the key performance indicators (KPIs) for this contract, and how will contractor performance be measured?

The provided data does not specify the key performance indicators (KPIs) or the methods for measuring contractor performance for this contract. Typically, for health insurance carrier contracts, KPIs would focus on aspects such as claims processing timeliness, accuracy rates, member satisfaction scores, network adequacy (availability of providers), and adherence to service level agreements. The Department of Veterans Affairs (VA) would likely have a robust performance management plan in place, outlining how TriWest Healthcare Alliance Corp's adherence to these KPIs will be monitored and evaluated. Contract performance reviews, regular reporting, and potentially site visits would be part of the oversight process. The absence of this information in the summary data highlights a need for further inquiry into the contract's statement of work and performance requirements.

What is the track record of TriWest Healthcare Alliance Corp with the Department of Veterans Affairs and other federal agencies?

TriWest Healthcare Alliance Corp has a significant track record with the Department of Veterans Affairs (VA), particularly in managing healthcare services for veterans in specific regions. They have previously been awarded large contracts to serve as a third-party administrator or healthcare provider network for TRICARE, the healthcare program for uniformed service members, retirees, and their families, and also for the VA's Patient-Centered Community Care (PC3) program. Their experience with managing large networks, processing claims, and coordinating care for government beneficiaries is extensive. Evaluating their past performance with the VA and other federal agencies would involve reviewing past contract performance reports, any documented issues or successes, and their overall reputation for reliability, efficiency, and quality of service delivery in similar large-scale government contracts.

What are the potential risks associated with this contract, and what mitigation strategies are in place?

Potential risks associated with this $770.7 million contract include service delivery disruptions, cost overruns (though mitigated by fixed-price), data security breaches, and challenges in managing a large veteran population's healthcare needs. Given TriWest's experience, some risks might be well-understood. Mitigation strategies would typically involve strong contract oversight by the VA, clear performance standards, contingency planning by the contractor, and robust cybersecurity measures. The firm fixed-price nature helps mitigate financial risk for the government, but could shift risk to the contractor if costs escalate unexpectedly. Ensuring adequate provider networks and timely access to care for veterans are also critical risk areas that require continuous monitoring and proactive management by both the VA and TriWest.

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: $770,738,874

Exercised Options: $770,738,874

Current Obligation: $770,738,874

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10G19D0038

IDV Type: IDC

Timeline