Department of Labor awards $49.2M contract to Conduent for insurance processing, facing limited competition

Contract Overview

Contract Amount: $49,241,110 ($49.2M)

Contractor: Conduent Federal Solutions LLC

Awarding Agency: Department of Labor

Start Date: 2016-09-30

End Date: 2019-09-29

Contract Duration: 1,094 days

Daily Burn Rate: $45.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: IGF::CL::IGF OWCP CENTRAL BILL PROCESSING

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20210

State: District of Columbia Government Spending

Plain-Language Summary

Department of Labor obligated $49.2 million to CONDUENT FEDERAL SOLUTIONS LLC for work described as: IGF::CL::IGF OWCP CENTRAL BILL PROCESSING Key points: 1. Contract value of $49.2M over three years. 2. Sole provider for 'All Other Insurance Related Activities'. 3. Risk of price escalation due to lack of competition. 4. Sector: Healthcare/Insurance administrative services.

Value Assessment

Rating: fair

The contract value of $49.2M for three years suggests a significant investment. Without competitive benchmarks, it's difficult to assess if this pricing is optimal compared to similar insurance-related administrative services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there is no market pressure to reduce prices.

Taxpayer Impact: The lack of competition may result in higher costs for taxpayers than if the contract had been competitively bid.

Public Impact

Workers' compensation claims processing impacts injured workers. Efficiency of processing affects benefit delivery timelines. Data security and privacy are critical for sensitive claimant information.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for price creep
Sole-source award

Positive Signals

Established provider for essential service
Fixed-price contract type can limit cost overruns

Sector Analysis

This contract falls within the administrative services sector for healthcare and insurance. Spending in this area is often driven by regulatory requirements and the need for specialized processing capabilities.

Small Business Impact

The contract was awarded to Conduent Federal Solutions LLC, a large business. There is no indication of small business participation in this sole-source award.

Oversight & Accountability

Oversight is crucial for sole-source contracts to ensure fair pricing and performance. The Department of Labor's Office of the Assistant Secretary for Administration and Management is responsible for this contract.

Related Government Programs

All Other Insurance Related Activities
Department of Labor Contracting
Office of the Assistant Secretary for Administration and Management Programs

Risk Flags

Sole-source award limits competition.
Potential for inflated pricing due to lack of market pressure.
Dependence on a single contractor for critical functions.
Risk of performance degradation without competitive incentives.

Frequently Asked Questions

What is this federal contract paying for?

Department of Labor awarded $49.2 million to CONDUENT FEDERAL SOLUTIONS LLC. IGF::CL::IGF OWCP CENTRAL BILL PROCESSING

Who is the contractor on this award?

The obligated recipient is CONDUENT FEDERAL SOLUTIONS LLC.

Which agency awarded this contract?

Awarding agency: Department of Labor (Office of the Assistant Secretary for Administration and Management).

What is the total obligated amount?

The obligated amount is $49.2 million.

What is the period of performance?

Start: 2016-09-30. End: 2019-09-29.

What is the historical performance of Conduent Federal Solutions LLC in processing insurance-related claims for the Department of Labor?

Historical performance data is essential to understand Conduent's track record with the Department of Labor. Evaluating past performance, including on-time processing rates, accuracy, and any past issues or disputes, can provide insights into their reliability and efficiency for this critical function. This information helps assess the risk associated with continuing this sole-source relationship.

What steps has the Department of Labor taken to ensure fair pricing in the absence of competition for this contract?

Given the sole-source nature of this contract, the Department of Labor should have conducted thorough price analysis, potentially including independent government cost estimates or benchmarking against similar services if available. Verifying the reasonableness of Conduent's proposed costs and profit margins is critical to ensure taxpayer funds are used efficiently and that the pricing reflects fair market value.

How does the efficiency of this contract impact the overall effectiveness of the OWCP's claims processing system?

The effectiveness of this contract is directly tied to the efficiency of the OWCP's claims processing. Delays or errors in billing and processing can negatively impact injured workers by delaying benefits and increasing administrative burdens. Monitoring key performance indicators related to processing times, accuracy, and claimant satisfaction is vital to ensure the contract contributes positively to the program's overall effectiveness.

Industry Classification

NAICS: Finance and Insurance › Agencies, Brokerages, and Other Insurance Related Activities › All Other Insurance Related Activities

Product/Service Code: MEDICAL SERVICES › CERTIFIED MEDICAL SUPPORT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 16-OWCP-DAO-NAT-0159

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8260 WILLOW OAK CORPORATE DR, FAIRFAX, VA, 22031

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $96,685,842

Exercised Options: $96,685,842

Current Obligation: $49,241,110

Actual Outlays: $52,141,403

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline