VA's $1.35B PCCC/CHOICE contract to TriWest Healthcare Alliance Corp for physician services in FY18

Contract Overview

Contract Amount: $1,354,578,203 ($1.4B)

Contractor: Triwest Healthcare Alliance Corp

Awarding Agency: Department of Veterans Affairs

Start Date: 2018-09-30

End Date: 2018-09-30

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT: PCCC/CHOICE EXPRESS REPORT FY18

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85053

State: Arizona Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $1.35 billion to TRIWEST HEALTHCARE ALLIANCE CORP for work described as: EXPRESS REPORT: PCCC/CHOICE EXPRESS REPORT FY18 Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract's value of over $1.35 billion indicates a significant investment in healthcare services. 3. Focus on physician services (NAICS 621111) highlights a critical area of healthcare delivery. 4. The single delivery order suggests a specific, defined scope of work for the period. 5. Awarded to TriWest Healthcare Alliance Corp, a known entity in government healthcare contracting. 6. The contract's duration appears to be for FY18, indicating a specific performance window.

Value Assessment

Rating: good

Benchmarking the value of this $1.35 billion contract requires detailed analysis of the specific services rendered and the period of performance. However, given the scale and the nature of healthcare services, the price appears substantial. Comparisons to similar large-scale healthcare delivery contracts within the VA or other federal agencies would be necessary to fully assess value for money. The firm fixed-price structure suggests that the contractor bears the risk of cost overruns, which can be a positive indicator for the government if the price was set competitively.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The specific number of bidders is not provided in the data, but the designation suggests a robust competitive environment. A competitive process generally leads to better price discovery and potentially more favorable terms for the government, as multiple vendors vie for the contract.

Taxpayer Impact: Taxpayers benefit from a full and open competition as it is designed to ensure the government receives the best value by leveraging market forces to drive down costs and improve service quality.

Public Impact

Veterans are the primary beneficiaries, receiving physician services through the VA's healthcare network. The contract supports the delivery of essential medical services, contributing to the health and well-being of veterans. Geographic impact is focused on Arizona (ST: AZ, SN: ARIZONA), where TriWest Healthcare Alliance Corp operates. Workforce implications include the employment of physicians and support staff by TriWest to fulfill the contract requirements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if the single delivery order was not precisely defined.
Dependence on a single contractor for a large volume of services could pose a risk if performance falters.
The large contract value may indicate a significant portion of the VA's physician service budget allocated to this single award.

Positive Signals

Awarded through full and open competition, suggesting a competitive pricing structure.
Firm fixed-price contract type shifts cost risk to the contractor.
The contract addresses a critical need for physician services within the VA system.

Sector Analysis

The healthcare sector, particularly government-funded healthcare services, is a massive and complex market. This contract falls within the 'Offices of Physicians (except Mental Health Specialists)' category (NAICS 621111), representing a core component of healthcare delivery. Spending in this area is driven by demand for medical expertise and patient care. Comparable spending benchmarks would involve analyzing other large VA contracts for physician services or similar medical support contracts awarded by agencies like the Department of Defense.

Small Business Impact

The provided data indicates that small business set-aside (ss) and subcontracting (sb) were not applicable or were false for this contract. This suggests that the primary award was not specifically targeted towards small businesses, and there is no explicit indication of subcontracting requirements for small businesses within this data. Consequently, the direct impact on the small business ecosystem from this specific contract award appears limited, though indirect effects through the prime contractor's supply chain are possible but not detailed here.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs. Accountability measures are typically embedded within the contract terms, including performance standards, reporting requirements, and payment schedules. Transparency is generally facilitated through contract databases like FPDS-NG, where award details are publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected or reported.

Related Government Programs

VA Choice Program
VA Community Care Network
Medicare Physician Services
TRICARE Physician Services

Risk Flags

Large contract value
Single delivery order
Potential for service disruption if contractor performance fails

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $1.35 billion to TRIWEST HEALTHCARE ALLIANCE CORP. EXPRESS REPORT: PCCC/CHOICE EXPRESS REPORT FY18

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 $1.35 billion.

What is the period of performance?

Start: 2018-09-30. End: 2018-09-30.

What was the specific scope of services covered by this $1.35 billion delivery order?

The provided data indicates the contract was for 'Offices of Physicians (except Mental Health Specialists)' (NAICS 621111) and was awarded to TriWest Healthcare Alliance Corp by the Department of Veterans Affairs. However, the EXPRESS REPORT does not detail the specific services rendered under this single delivery order. Typically, such contracts would cover a range of physician services, potentially including primary care, specialty consultations, diagnostic services, or other medical support functions necessary to supplement the VA's internal healthcare capabilities. A more detailed contract statement of work would be required to ascertain the precise scope.

How does the $1.35 billion contract value compare to historical VA spending on physician services?

Comparing this $1.35 billion contract value to historical VA spending on physician services requires access to historical budget data and contract awards. The provided data is for a single contract in FY18. To establish a benchmark, one would need to aggregate VA spending on NAICS code 621111 (Offices of Physicians) across multiple fiscal years and compare the proportion this single contract represents. Given its substantial value, it likely represents a significant portion of the VA's external physician service procurement for that fiscal year, potentially indicating a strategic decision to outsource a large volume of care or a specific program's funding.

What is TriWest Healthcare Alliance Corp's track record with the VA and other federal agencies?

TriWest Healthcare Alliance Corp has a significant history of contracting with the Department of Veterans Affairs, particularly in managing healthcare services for veterans in specific regions. They have been involved in programs like the VA Choice Program and have managed large networks of providers. Their experience often involves administering healthcare benefits, processing claims, and ensuring access to care for eligible beneficiaries. A comprehensive review would involve examining their performance history, any past disputes or contract modifications, and their overall success in meeting government performance metrics across various contracts.

What are the potential risks associated with a single, large delivery order for physician services?

A single, large delivery order for physician services carries several potential risks. Firstly, there's the risk of vendor performance issues; if TriWest Healthcare Alliance Corp underperforms, it could significantly disrupt healthcare access for veterans covered by this order. Secondly, the large value concentrated in one order might limit flexibility if needs change rapidly. Thirdly, if the scope was not precisely defined, there's a risk of scope creep, leading to costs exceeding initial projections, although the firm fixed-price nature mitigates this for the government. Finally, over-reliance on a single vendor for a critical service can create dependency, making it difficult to switch providers if necessary.

How does the firm fixed-price contract type benefit the VA in this scenario?

The firm fixed-price (FFP) contract type is generally advantageous for the government when the scope of work is well-defined and the risks of cost overruns are manageable. In this case, with a $1.35 billion contract for physician services, the FFP structure means that TriWest Healthcare Alliance Corp is obligated to complete the work for the agreed-upon price, regardless of their actual costs. This shifts the financial risk of cost overruns from the VA (and thus taxpayers) to the contractor. It also provides budget certainty for the VA, as the total cost is known upfront, simplifying financial planning and management.

Industry Classification

NAICS: Health Care and Social Assistance › Offices of Physicians › Offices of Physicians (except Mental Health Specialists)

Product/Service Code: MEDICAL SERVICES › OTHER MEDICAL 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: 16010 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: $1,354,578,203

Exercised Options: $1,354,578,203

Current Obligation: $1,354,578,203

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA79113D0054

IDV Type: IDC

Timeline