VA awards $840M contract to TriWest Healthcare Alliance Corp for medical insurance carriers

Contract Overview

Contract Amount: $839,685,688 ($839.7M)

Contractor: Triwest Healthcare Alliance Corp

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-04-01

End Date: 2025-04-30

Contract Duration: 29 days

Daily Burn Rate: $29.0M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT: APRIL 2025

Place of Performance

Location: FREDERICKSBURG, SPOTSYLVANIA County, VIRGINIA, 22408

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $839.7 million to TRIWEST HEALTHCARE ALLIANCE CORP for work described as: EXPRESS REPORT: APRIL 2025 Key points: 1. Contract value represents significant investment in healthcare services. 2. Full and open competition suggests a potentially competitive bidding process. 3. Fixed-price contract type may offer cost certainty for the government. 4. Short duration of 29 days indicates a specific, time-bound need. 5. Contractor has a substantial existing presence within the VA system. 6. Focus on direct health and medical insurance carriers highlights a key service area.

Value Assessment

Rating: good

The contract value of approximately $840 million for a 29-day period is substantial, suggesting a high volume of services or a critical need. Benchmarking this against similar, shorter-term contracts is challenging due to the limited duration. However, the firm-fixed-price nature of the award provides a degree of cost predictability. The price per day is exceptionally high, indicating this is likely a bridge contract or covers a very specific, high-demand period.

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 a bid. While the number of bidders is not specified, this method generally fosters a competitive environment, which can lead to better pricing and terms for the government. The agency's decision to use this procurement approach suggests confidence in the market's ability to meet the requirement.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it maximizes the potential for cost savings through a robust bidding process.

Public Impact

Veterans will benefit from continued access to direct health and medical insurance services. The contract ensures the continuity of essential healthcare coverage for beneficiaries. Services are likely delivered across Virginia, the stated state of the award. The contract supports the healthcare workforce involved in delivering these insurance services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The extremely high value for a short duration raises questions about the necessity and potential for cost efficiencies.
Lack of specific details on the services rendered within this short timeframe makes a thorough value assessment difficult.

Positive Signals

Awarded under full and open competition, suggesting a competitive process.
Firm-fixed-price contract type offers cost certainty.
Contractor is an established entity within the VA system, implying familiarity with requirements.

Sector Analysis

The healthcare insurance sector is a significant component of federal spending, particularly within the Department of Veterans Affairs. This contract falls under the Medical and Surgical Supplies and Equipment subsector, specifically focusing on health and medical insurance carriers. The market for these services is large and competitive, with numerous established providers. This award to TriWest Healthcare Alliance Corp, a known entity in this space, aligns with typical government procurement strategies for large-scale healthcare support.

Small Business Impact

Information regarding small business set-asides or subcontracting plans was not provided for this award. Given the large contract value and the nature of the services, it is possible that subcontracting opportunities may exist for specialized services, but this cannot be confirmed without further data. The absence of explicit small business considerations in the provided data warrants further investigation.

Oversight & Accountability

The Department of Veterans Affairs is responsible for the oversight of this contract. As a firm-fixed-price award, the primary accountability lies in ensuring the contractor delivers the contracted services as specified. Transparency would be enhanced by public disclosure of the specific services and performance metrics associated with this significant award. Inspector General oversight would apply if any performance or financial irregularities were identified.

Related Government Programs

VA Community Care Network
TRICARE contracts
Medicare/Medicaid administration contracts

Risk Flags

High value for short duration
Lack of specific service details

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $839.7 million to TRIWEST HEALTHCARE ALLIANCE CORP. EXPRESS REPORT: APRIL 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 $839.7 million.

What is the period of performance?

Start: 2025-04-01. End: 2025-04-30.

What specific services are covered under this $840 million delivery order for TriWest Healthcare Alliance Corp?

The provided data indicates the contract is for 'Direct Health and Medical Insurance Carriers' (NAICS 524114). However, the specific services rendered within the 29-day period of this delivery order are not detailed. Given the substantial value and short duration, it is highly probable that this represents a bridge contract to ensure continuity of care while a longer-term solution is finalized, or it covers a period of exceptionally high demand for specific insurance-related administrative functions or direct care network access for veterans. Further details from the contract award documents would be necessary to ascertain the precise scope of services.

How does the value of this contract compare to similar short-term healthcare contracts awarded by the VA?

Comparing this $840 million delivery order, which spans only 29 days, to similar short-term healthcare contracts is difficult without more specific data on contract scope and duration. The per-day cost is exceptionally high, suggesting this is not a routine operational contract but likely addresses a critical, time-sensitive need. Standard short-term contracts for administrative services or specific medical supplies typically fall within much lower value ranges. This high value for a brief period may indicate a significant transition, an emergency procurement, or a contract covering a very high-demand, specialized service area for veterans during that specific month.

What is TriWest Healthcare Alliance Corp's track record with the Department of Veterans Affairs?

TriWest Healthcare Alliance Corp has a significant track record with the Department of Veterans Affairs, particularly in managing healthcare services for veterans in specific regions. They have been a key player in the VA's Community Care Network (CCN) program, responsible for connecting veterans with healthcare providers in the community when services are not available directly through VA facilities. Their history includes managing large-scale networks and ensuring access to care, though like many large contractors, they have also faced scrutiny regarding network adequacy and administrative processes in the past. This award suggests continued reliance on their established capabilities.

What are the potential risks associated with a firm-fixed-price contract of this magnitude and short duration?

A primary risk with a firm-fixed-price contract of this magnitude and short duration is the potential for the contractor to incur losses if unforeseen circumstances significantly increase costs, which could lead to disputes or performance issues. Conversely, if the government overestimates the need or scope, taxpayers could bear a higher cost than necessary. For a short-duration contract, the risk of inadequate performance or service disruption is heightened if the contractor is not fully prepared or if the scope is underestimated. The high value for a short period also raises questions about the efficiency and necessity of such a large expenditure over a limited timeframe, potentially indicating a lack of thorough planning or an urgent, unplanned requirement.

How does this contract fit into the broader landscape of VA healthcare spending and delivery?

This contract represents a significant, albeit short-term, investment within the VA's overall healthcare spending. The VA relies heavily on both in-house provision of care and community-based networks to serve veterans. Contracts like this, particularly those for insurance carriers or network management, are crucial for bridging gaps in VA facility capacity or providing specialized services. The substantial award suggests a critical function is being outsourced or supported through this mechanism, highlighting the VA's strategy of leveraging external partners to meet the complex healthcare needs of the veteran population across various geographic areas.

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: $839,685,688

Exercised Options: $839,685,688

Current Obligation: $839,685,688

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10G19D0038

IDV Type: IDC

Timeline