DOE's $4.27M Workers' Compensation TPA Contract Awarded to Penser North America, Inc
Contract Overview
Contract Amount: $4,271,086 ($4.3M)
Contractor: Penser North America, Inc.
Awarding Agency: Department of Energy
Start Date: 2019-07-31
End Date: 2024-09-30
Contract Duration: 1,888 days
Daily Burn Rate: $2.3K/day
Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: DOE-RL WORKERS' COMPENSATION THIRD PARTY ADMINISTRATOR CONTRACT
Place of Performance
Location: RICHLAND, BENTON County, WASHINGTON, 99354
Plain-Language Summary
Department of Energy obligated $4.3 million to PENSER NORTH AMERICA, INC. for work described as: DOE-RL WORKERS' COMPENSATION THIRD PARTY ADMINISTRATOR CONTRACT Key points: 1. Contract value appears reasonable for a multi-year third-party administration service. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract is a definitive contract with a firm fixed price, indicating predictable costs. 4. Performance is in Washington state, aligning with the agency's operational footprint. 5. The service category, Pharmacy Benefit Management and Other Third Party Administration, is specialized. 6. The contractor, Penser North America, Inc., is a new entity in federal contracting for this service.
Value Assessment
Rating: good
The contract value of $4.27 million over approximately 5 years for workers' compensation third-party administration services seems within a reasonable range for the scope of work. Benchmarking against similar TPA contracts is challenging without more specific service details, but the firm fixed-price structure suggests cost predictability. The absence of extensive contract history for this specific service with this contractor warrants further monitoring of performance and value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This indicates that while the competition was intended to be broad, specific sources may have been excluded for defined reasons. The presence of only one offeror, despite the competitive nature, raises questions about the effectiveness of the solicitation in attracting multiple bids. This could be due to the specialized nature of the services or market conditions.
Taxpayer Impact: The limited number of offers, even under a competitive solicitation, may mean taxpayers did not benefit from the lowest possible price that a wider range of bidders might have offered.
Public Impact
Employees of the Department of Energy (DOE) requiring workers' compensation services will benefit from this contract. The contract provides essential third-party administration services for workers' compensation claims, including pharmacy benefit management. The geographic impact is primarily within Washington state, where the contract is being performed. The contract supports administrative and claims processing roles, potentially impacting the workforce within the TPA sector.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Limited competition with only one offeror could lead to higher costs for taxpayers.
- Lack of extensive federal contracting history for Penser North America, Inc. in this specific service area presents a potential performance risk.
- The 'Exclusion of Sources' clause in the competition type requires scrutiny to ensure it was justified and did not unduly limit competition.
Positive Signals
- The contract utilizes a firm fixed-price structure, providing cost certainty for the government.
- The use of 'Full and Open Competition' indicates an intent to leverage market forces for the best value.
- The contract duration of over 5 years allows for stability in service delivery for DOE employees.
Sector Analysis
The federal spending on third-party administration (TPA) services, particularly for specialized areas like workers' compensation and pharmacy benefit management, is a significant component of government operational costs. This contract fits within the broader administrative and support services sector for government agencies. Comparable spending benchmarks are difficult to establish without detailed service level agreements and claim volumes, but the overall market for TPA services is substantial, with numerous private sector providers.
Small Business Impact
This contract does not appear to have a small business set-aside. There is no indication of specific subcontracting requirements for small businesses within the provided data. The impact on the small business ecosystem is likely minimal unless Penser North America, Inc. engages small businesses as subcontractors, which is not specified.
Oversight & Accountability
Oversight for this contract would typically fall under the Department of Energy's contracting officer and program managers. Accountability measures are inherent in the firm fixed-price contract type, which ties payment to performance. Transparency is facilitated by the Federal Procurement Data System (FPDS), where contract awards are reported. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.
Related Government Programs
- Department of Labor Workers' Compensation Programs
- Federal Employee Compensation Act (FECA) Administration
- Government Employee Health Insurance (FEHBP) Administration
- Office of Personnel Management (OPM) Benefits Administration
Risk Flags
- Limited competition
- Potential performance risk due to contractor's federal experience
- Justification for exclusion of sources needs review
Tags
doe, workers-compensation, third-party-administration, penser-north-america-inc, firm-fixed-price, definitive-contract, full-and-open-competition, pharmacy-benefit-management, washington, administrative-services
Frequently Asked Questions
What is this federal contract paying for?
Department of Energy awarded $4.3 million to PENSER NORTH AMERICA, INC.. DOE-RL WORKERS' COMPENSATION THIRD PARTY ADMINISTRATOR CONTRACT
Who is the contractor on this award?
The obligated recipient is PENSER NORTH AMERICA, INC..
Which agency awarded this contract?
Awarding agency: Department of Energy (Department of Energy).
What is the total obligated amount?
The obligated amount is $4.3 million.
What is the period of performance?
Start: 2019-07-31. End: 2024-09-30.
What is the track record of Penser North America, Inc. in providing workers' compensation third-party administration services to federal agencies?
Based on the provided data, Penser North America, Inc. appears to be a relatively new entrant or has limited publicly documented federal contracting history specifically for workers' compensation third-party administration services. The contract award is a definitive contract, suggesting it might be one of their initial significant federal engagements in this specialized area. Further investigation into their corporate history, prior state or commercial contracts, and any performance reviews would be necessary to fully assess their track record and suitability for this federal role. The limited history necessitates close monitoring of performance and adherence to contract terms by the Department of Energy.
How does the pricing of this contract compare to similar federal workers' compensation TPA contracts?
Direct comparison of pricing for this $4.27 million contract is challenging without access to detailed service level agreements, claim volumes, and specific benefit structures. Federal TPA contracts can vary significantly based on the scope of services (e.g., claims management, medical bill review, pharmacy benefit management, case management) and the population served. The firm fixed-price nature of this contract provides cost certainty for the Department of Energy. However, the fact that it was awarded under 'Full and Open Competition After Exclusion of Sources' with only one offeror suggests that a broader competitive landscape might have yielded different pricing. Benchmarking against contracts with similar contract types (definitive, firm fixed-price) and service categories (workers' compensation TPA) from agencies like the Department of Labor or other large federal entities would be the next step in a comprehensive value assessment.
What are the primary risks associated with this contract award?
The primary risks associated with this contract include potential performance issues due to Penser North America, Inc.'s potentially limited federal contracting experience in this specific niche, as indicated by the data. The limited competition, with only one offeror despite a 'Full and Open Competition' solicitation, raises concerns about price discovery and the possibility of paying a premium. There's also a risk related to the 'Exclusion of Sources' aspect of the competition, which needs to be understood to ensure it was justified and did not unnecessarily restrict the bidder pool. Finally, ensuring consistent and high-quality service delivery over the contract's duration, especially concerning sensitive areas like pharmacy benefit management and claims processing, is an ongoing risk that requires diligent oversight.
How effective is the competition strategy employed for this contract in ensuring value for taxpayers?
The competition strategy employed, 'Full and Open Competition After Exclusion of Sources,' aims for broad participation but includes specific exclusions. While this can be legitimate for specialized requirements, the outcome of only one offeror is a significant concern for taxpayer value. Ideally, robust competition drives down prices and encourages innovation. With a single bidder, the government loses the leverage of multiple competing proposals to negotiate the best possible terms and pricing. This situation suggests that either the market for this specialized service is very small, or the solicitation's requirements and exclusions may have inadvertently deterred potential bidders. Consequently, the value realized by taxpayers may be suboptimal compared to a scenario with multiple competitive bids.
What is the historical spending pattern for workers' compensation TPA services by the Department of Energy?
The provided data does not include historical spending patterns for workers' compensation TPA services by the Department of Energy. This specific contract, awarded in July 2019 with an end date in September 2024, represents a portion of the agency's spending in this category. To understand historical patterns, one would need to analyze prior contracts for similar services, including their values, durations, and awarded contractors. This would involve searching federal procurement databases for previous TPA contracts managed by the DOE or its sub-agencies. Without this historical context, it's difficult to assess if the current $4.27 million award represents an increase, decrease, or stable level of spending for these services over time.
Industry Classification
NAICS: Finance and Insurance › Agencies, Brokerages, and Other Insurance Related Activities › Pharmacy Benefit Management and Other Third Party Administration of Insurance and Pension Funds
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: 89303919REM000007
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 700 SLEATER KINNEY RD SE, LACEY, WA, 98503
Business Categories: Category Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $4,586,180
Exercised Options: $4,586,180
Current Obligation: $4,271,086
Actual Outlays: $3,470,233
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2019-07-31
Current End Date: 2024-09-30
Potential End Date: 2024-09-30 00:00:00
Last Modified: 2026-03-05
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