CFTC's $5.6M Dental Benefits Contract with MetLife Faces Scrutiny Over Value and Competition
Contract Overview
Contract Amount: $5,663,739 ($5.7M)
Contractor: Metropolitan Life Insurance CO
Awarding Agency: Commodity Futures Trading Commission
Start Date: 2020-09-10
End Date: 2026-02-09
Contract Duration: 1,978 days
Daily Burn Rate: $2.9K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Healthcare
Official Description: DENTAL BENEFITS
Place of Performance
Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20581
Plain-Language Summary
Commodity Futures Trading Commission obligated $5.7 million to METROPOLITAN LIFE INSURANCE CO for work described as: DENTAL BENEFITS Key points: 1. The contract's value of $5.6 million over its term appears reasonable for dental benefits administration. 2. Full and open competition was utilized, suggesting a competitive pricing process. 3. Potential risks include the fixed-price nature with economic price adjustments, which could lead to cost overruns. 4. The sector is healthcare services, specifically insurance carriers, which is a mature market.
Value Assessment
Rating: good
The contract value of $5.6 million over approximately 5.5 years, averaging around $1 million annually, seems competitive for administering dental benefits for a federal agency. Benchmarking against similar government contracts for health insurance administration would provide a more precise assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This method generally promotes price discovery and ensures the government receives competitive pricing.
Taxpayer Impact: The use of full and open competition is expected to yield fair pricing, maximizing taxpayer value for the dental benefits provided.
Public Impact
Federal employees and their dependents will receive dental insurance coverage. The contract ensures the continuity of essential health benefits for a specific agency. Taxpayers benefit from a competitive bidding process designed to secure cost-effective services.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustments could increase costs beyond initial projections.
- Contract duration is long (over 5 years), potentially limiting future cost savings through renegotiation.
Positive Signals
- Awarded through full and open competition.
- Covers essential dental benefits for federal employees.
Sector Analysis
This contract falls within the healthcare services sector, specifically focusing on insurance carriers providing dental benefits. Spending benchmarks for similar federal contracts indicate that costs can vary widely based on the number of covered individuals and the scope of benefits.
Small Business Impact
There is no specific indication that small businesses were involved in this contract, either as prime contractors or subcontractors. Further analysis would be needed to determine the extent of small business participation.
Oversight & Accountability
The Commodity Futures Trading Commission (CFTC) is responsible for overseeing this contract. Standard government oversight mechanisms, including performance reviews and financial audits, should be in place to ensure contractor compliance and value.
Related Government Programs
- Direct Health and Medical Insurance Carriers
- Commodity Futures Trading Commission Contracting
- Commodity Futures Trading Commission Programs
Risk Flags
- Potential for cost increases due to economic price adjustments.
- Long contract duration may limit opportunities for cost savings.
- Lack of detail on small business participation.
- Need for detailed comparison of benefits and costs against benchmarks.
Tags
direct-health-and-medical-insurance-carr, commodity-futures-trading-commission, dc, definitive-contract, 1m-plus
Frequently Asked Questions
What is this federal contract paying for?
Commodity Futures Trading Commission awarded $5.7 million to METROPOLITAN LIFE INSURANCE CO. DENTAL BENEFITS
Who is the contractor on this award?
The obligated recipient is METROPOLITAN LIFE INSURANCE CO.
Which agency awarded this contract?
Awarding agency: Commodity Futures Trading Commission (Commodity Futures Trading Commission).
What is the total obligated amount?
The obligated amount is $5.7 million.
What is the period of performance?
Start: 2020-09-10. End: 2026-02-09.
What is the specific scope of dental services covered by this contract, and how does it compare to industry standards for similar benefit plans?
The provided data does not detail the specific scope of dental services. A comprehensive analysis would require reviewing the contract's statement of work to understand covered procedures, deductibles, co-pays, and annual maximums. Comparing these to typical offerings from private insurers and other federal contracts is crucial for assessing value and ensuring adequate coverage for beneficiaries.
What are the potential cost implications of the 'economic price adjustment' clause, and how frequently has MetLife utilized such adjustments in past government contracts?
Economic price adjustments (EPAs) allow for contract price changes based on fluctuations in economic factors like inflation. The risk is that these adjustments could significantly increase the contract's total cost beyond the initial fixed price. Understanding MetLife's historical use of EPAs and the specific triggers within this contract is vital for assessing potential taxpayer impact and cost predictability.
How does the per-member-per-month (PMPM) cost of this dental benefit compare to other federal agencies or private sector benchmarks, considering the level of coverage provided?
Without the PMPM cost data and detailed coverage specifics, a direct comparison is difficult. However, the total contract value of $5.6 million over nearly six years suggests an average annual cost of approximately $1 million. To assess effectiveness, this figure needs to be divided by the number of covered individuals to derive a PMPM rate and then benchmarked against similar government and private sector plans.
Industry Classification
NAICS: Finance and Insurance › Insurance Carriers › Direct Health and Medical Insurance Carriers
Product/Service Code: MEDICAL SERVICES › MEDICAL, DENTAL, AND SURGICAL SVCS
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: 9523ZY20R0001
Offers Received: 3
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Address: 501 US HWY 22, BRIDGEWATER, NJ, 08807
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $6,369,490
Exercised Options: $5,806,710
Current Obligation: $5,663,739
Actual Outlays: $4,953,698
Contract Characteristics
Commercial Item: PRODUCTS OR SERVICES PURSUANT TO FAR 12.102(F)
Cost or Pricing Data: NO
Timeline
Start Date: 2020-09-10
Current End Date: 2026-02-09
Potential End Date: 2026-06-30 00:00:00
Last Modified: 2026-02-09
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