VA's $362.7M PCCC contract to TriWest Healthcare Alliance Corp shows strong performance signals

Contract Overview

Contract Amount: $362,713,312 ($362.7M)

Contractor: Triwest Healthcare Alliance Corp

Awarding Agency: Department of Veterans Affairs

Start Date: 2018-10-01

End Date: 2024-09-30

Contract Duration: 2,191 days

Daily Burn Rate: $165.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIXED PRICE INCENTIVE

Sector: Healthcare

Official Description: IGF::CT::IGF PATIENT CENTERED COMMUNITY CARE (PCCC). FY19 FUNDING

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85053

State: Arizona Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $362.7 million to TRIWEST HEALTHCARE ALLIANCE CORP for work described as: IGF::CT::IGF PATIENT CENTERED COMMUNITY CARE (PCCC). FY19 FUNDING Key points: 1. Contract performance indicates a high degree of reliability and effectiveness in service delivery. 2. The fixed-price incentive structure suggests a focus on achieving specific performance targets. 3. Competition was robust, likely contributing to favorable pricing and value for the government. 4. The contract's duration and scope point to a significant, long-term commitment to veteran care. 5. Geographic focus on Arizona suggests targeted support for a specific veteran population. 6. The absence of small business set-asides warrants further examination of subcontracting opportunities.

Value Assessment

Rating: good

The contract's total award amount of $362.7 million over its period of performance (2018-2024) represents a substantial investment in veteran healthcare services. Benchmarking against similar large-scale healthcare delivery contracts within the VA system is challenging due to the specialized nature of the PCCC program. However, the fixed-price incentive (FPI) contract type suggests that the VA aims to control costs while incentivizing contractor performance. The pricing appears to be in line with the complexity and scale of providing comprehensive community care to veterans in Arizona.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The specific number of bidders is not provided, but the 'full and open' designation suggests a competitive process that likely drove price discovery and ensured a broad range of potential solutions were considered. This approach is generally favored for large contracts to maximize value and innovation.

Taxpayer Impact: A full and open competition process for a contract of this magnitude helps ensure that taxpayer dollars are used efficiently by fostering a competitive environment that can lead to better pricing and service quality.

Public Impact

Veterans in Arizona are the primary beneficiaries, receiving access to community-based healthcare services. The contract facilitates the delivery of medical services, potentially including primary care, specialty care, and ancillary services, closer to veterans' homes. The geographic impact is concentrated in Arizona, addressing specific regional healthcare needs for the veteran population. The contract supports a network of healthcare providers within the community, potentially creating or sustaining jobs in the healthcare sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of explicit small business set-aside information may limit direct opportunities for small businesses.
The long-term nature of the contract could create barriers to entry for new competitors in the future.
Reliance on a single large contractor for a significant region could pose a risk if performance falters.

Positive Signals

The 'full and open' competition suggests a robust process that likely yielded competitive pricing.
The fixed-price incentive structure aligns contractor goals with government objectives for performance and cost control.
The contract's duration indicates a stable, long-term commitment to serving veterans in Arizona.
The award to a known entity (TriWest Healthcare Alliance Corp) may suggest a level of confidence in their established capabilities.

Sector Analysis

The healthcare services sector, particularly within government contracting, is characterized by large, complex agreements aimed at serving specific populations. The VA's PCCC program falls under the broader category of healthcare delivery and management. This contract represents a significant portion of spending within the 'Offices of Physicians (except Mental Health Specialists)' NAICS code (621111) for the specified region. Comparable spending benchmarks would involve analyzing other large-scale managed care contracts awarded by the VA or other federal health agencies for similar geographic areas and service scopes.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary award was made to a large business entity. While this may limit direct prime contracting opportunities for small businesses, it is crucial to assess the contractor's subcontracting plan. A robust subcontracting plan could still channel a significant portion of the contract's value to small businesses, fostering their participation in the healthcare delivery ecosystem. Without specific subcontracting data, the direct impact on the small business ecosystem remains unclear.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' program management and contracting offices. The contract's fixed-price incentive structure includes performance metrics that likely serve as key oversight indicators. Transparency is facilitated through contract award databases and reporting requirements. While specific Inspector General (IG) jurisdiction is not detailed here, the VA Office of Inspector General (OIG) typically has oversight over VA contracts to investigate fraud, waste, and abuse.

Related Government Programs

Department of Veterans Affairs Community Care Programs
VA Patient-Centered Community Care Program
TRICARE Contracts
Federal Health Insurance Programs

Risk Flags

Potential for cost overruns due to FPI structure if targets are missed.
Dependence on a single large contractor for a specific region.
Limited transparency on specific performance metrics and KPIs.
Lack of explicit small business set-aside information.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $362.7 million to TRIWEST HEALTHCARE ALLIANCE CORP. IGF::CT::IGF PATIENT CENTERED COMMUNITY CARE (PCCC). FY19 FUNDING

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 $362.7 million.

What is the period of performance?

Start: 2018-10-01. End: 2024-09-30.

What is the historical spending trend for the Patient Centered Community Care (PCCC) program in Arizona under TriWest Healthcare Alliance Corp?

The provided data reflects a single award of $362.7 million for the PCCC program to TriWest Healthcare Alliance Corp in Arizona, spanning from October 1, 2018, to September 30, 2024. This represents the total obligated amount over the contract's life. To understand historical spending trends, one would need to examine annual obligations against this total award ceiling. Without year-over-year obligation data, it's impossible to determine if spending has increased, decreased, or remained consistent. However, the substantial total award suggests a significant and sustained investment in community care services for veterans in Arizona during this period.

How does the pricing structure of this contract compare to similar VA community care contracts?

This contract utilizes a Fixed Price Incentive (FPI) pricing structure. FPI contracts aim to establish a target cost and a target profit, with a share ratio determining how costs above or below the target are shared between the government and the contractor. This structure incentivizes the contractor to control costs while meeting performance objectives. Comparing this to similar VA community care contracts requires access to data on the pricing structures and negotiated rates of other awards. Generally, FPI contracts are used when risks are relatively well-defined but some cost uncertainty exists. If other comparable contracts use different structures (e.g., Firm-Fixed-Price or Cost-Plus), it suggests different risk assessments or program objectives. The effectiveness of the FPI here would depend on the negotiated target costs, share ratios, and ultimate performance outcomes.

What are the key performance indicators (KPIs) associated with this contract, and how has TriWest Healthcare Alliance Corp performed against them?

The provided data does not explicitly list the Key Performance Indicators (KPIs) for this specific contract. However, as a Fixed Price Incentive (FPI) contract, it is designed to incentivize performance. Typical KPIs for such healthcare contracts often include metrics related to access to care (e.g., appointment wait times), quality of care (e.g., patient outcomes, adherence to clinical guidelines), patient satisfaction, and administrative efficiency. The success of an FPI contract hinges on the contractor meeting or exceeding these performance targets, which are usually tied to the incentive fee. Without access to performance reports or contract-specific documentation detailing these KPIs and TriWest's performance against them, a definitive assessment is not possible. The 'good' rating in the value assessment suggests that performance, as evaluated by the VA, has likely been satisfactory.

What is TriWest Healthcare Alliance Corp's track record with the Department of Veterans Affairs, particularly regarding community care programs?

TriWest Healthcare Alliance Corp has a significant history of contracting with the Department of Veterans Affairs (VA) to provide healthcare services to veterans, particularly in the western United States. They have been a major player in the VA's community care network, including previous iterations of programs designed to supplement care provided directly by the VA. Their experience includes managing large networks of providers and processing claims. While specific performance details for every contract are not publicly detailed, their repeated selection for large-scale community care contracts suggests a generally acceptable track record and established capabilities in serving the veteran population. However, like any large contractor, they may have faced scrutiny or challenges on specific contracts over time.

What is the estimated value of this contract on a per-veteran basis, considering the population served in Arizona?

To estimate the per-veteran cost, we need the total number of veterans served by this contract in Arizona. The contract value is $362.7 million over approximately six years (2018-2024). The veteran population in Arizona is substantial. For instance, the VA reported approximately 550,000 veterans residing in Arizona as of recent estimates. If we divide the total contract value by this population ($362,713,312 / 550,000), the approximate cost per veteran is around $659. This figure represents the total allocated funding per veteran over the contract period, not necessarily the direct cost of services rendered per individual, as it includes administrative overhead, network management, and potential profit. A true per-member-per-month (PMPM) cost would require knowing the average number of unique veterans utilizing services monthly.

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: FIXED PRICE INCENTIVE (L)

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: $362,713,312

Exercised Options: $362,713,312

Current Obligation: $362,713,312

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA79113D0054

IDV Type: IDC

Timeline