Department of Defense awards $318M contract for TRICARE support services to Pacific Medical Centers

Contract Overview

Contract Amount: $318,336,743 ($318.3M)

Contractor: Pacmed Clinics

Awarding Agency: Department of Defense

Start Date: 2003-06-01

End Date: 2008-05-31

Contract Duration: 1,826 days

Daily Burn Rate: $174.3K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: 200608!608601!9700!H94002!TRICARE SUPPORT OFFICE !H9400203C0024 !A!N! !N! !P00010!20051201!20060531!019202050!019202050!019202050!N!PACIFIC MEDICAL CENTER CLINIC !10416 5TH AVENUE NE !SEATTLE !WA!98144!63000!033!53!SEATTLE !KING !WASHINGTON!+000002000000!N!N!000000000000!B537!MEDICAL & HEALTH STUDIES !S1 !SERVICES !000 !NOT DISCERNABLE !621491!E! !3!B!S!C! ! !99990909!B! ! !A! !D!N!J!1!001!N!5A!C!N!Z! ! !N!F!N! ! ! ! ! !A!A!000!A!A!N! ! ! ! ! ! !0001! !

Place of Performance

Location: SEATTLE, KING County, WASHINGTON, 98144

State: Washington Government Spending

Plain-Language Summary

Department of Defense obligated $318.3 million to PACMED CLINICS for work described as: 200608!608601!9700!H94002!TRICARE SUPPORT OFFICE !H9400203C0024 !A!N! !N! !P00010!20051201!20060531!019202050!019202050!019202050!N!PACIFIC MEDICAL CENTER CLINIC !10416 5TH AVENUE NE !SEATTLE !WA!98144!63000!033!53!SEATTLE !KING… Key points: 1. Contract value of $318M over 5 years suggests a significant investment in healthcare support. 2. The contract was not available for competition, raising questions about potential cost efficiencies. 3. Performance period of 5 years indicates a long-term need for these services. 4. The contractor, Pacific Medical Centers, has a substantial contract value, implying a significant role in the TRICARE network. 5. The service falls under 'HMO Medical Centers', indicating a focus on managed care delivery. 6. The contract's duration and value may present risks if service delivery falters or costs escalate.

Value Assessment

Rating: fair

The contract value of $318M over approximately five years averages to about $63.6M annually. Without specific benchmarks for TRICARE support services or comparable contracts for HMO medical centers, it is difficult to definitively assess value for money. However, the scale of the award suggests a significant operational requirement. The fixed-price nature of the contract provides some cost certainty, but the lack of competitive bidding limits the ability to benchmark against market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'NOT AVAILABLE FOR COMPETITION'. This indicates that a competitive bidding process was not conducted, likely due to specific circumstances such as a sole provider or an urgent need. The lack of competition means that price discovery through market forces was bypassed, potentially leading to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive pressure to drive down prices. The government did not benefit from the potential cost savings that a competitive solicitation could have yielded.

Public Impact

Beneficiaries of the TRICARE program, including active duty military personnel, retirees, and their families, will receive healthcare support services. The services delivered are related to HMO medical centers, suggesting a focus on managed care and primary healthcare provision. The geographic impact is likely nationwide, as TRICARE serves military communities across the United States and potentially overseas. The contract supports the healthcare workforce within the TRICARE network, potentially involving medical professionals and administrative staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition could lead to inflated pricing and reduced innovation.
Performance monitoring is crucial to ensure service quality and cost-effectiveness in a sole-source award.
Dependence on a single contractor for critical healthcare services poses a risk if the contractor faces operational issues.

Positive Signals

The substantial contract value indicates a recognized need and a potentially established relationship with the contractor.
The fixed-price contract structure offers some predictability in government spending.
The long performance period suggests a stable provision of services to TRICARE beneficiaries.

Sector Analysis

This contract falls within the Healthcare sector, specifically focusing on managed care services for military beneficiaries under the TRICARE program. The market for healthcare services, particularly for government programs, is substantial. Comparable spending benchmarks would typically involve analyzing other large-scale managed care contracts awarded by government entities like the Department of Veterans Affairs or other health insurance providers. The size of this award ($318M) places it among significant healthcare service contracts.

Small Business Impact

There is no indication from the provided data that this contract included small business set-asides or subcontracting requirements. As a sole-source award, the focus was likely on meeting the specific requirements of the TRICARE program with the selected contractor, rather than on broad socioeconomic goals. This could mean limited opportunities for small businesses to participate directly or indirectly in this specific contract.

Oversight & Accountability

Oversight mechanisms for this contract would typically involve the TRICARE Management Activity and potentially the Department of Defense's Inspector General. Accountability measures would be tied to the contract's performance standards and deliverables. Transparency is often limited in sole-source awards, but contract modifications and performance reports are usually subject to internal review and potentially public disclosure depending on regulations.

Related Government Programs

TRICARE Prime
TRICARE Standard
Department of Defense Healthcare Programs
Managed Care Support Contracts
HMO Services

Risk Flags

Sole-source award bypasses competitive pricing.
Potential for higher costs due to lack of competition.
Limited transparency in contract negotiation and pricing.
Risk of contractor performance issues without competitive alternatives.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $318.3 million to PACMED CLINICS. 200608!608601!9700!H94002!TRICARE SUPPORT OFFICE !H9400203C0024 !A!N! !N! !P00010!20051201!20060531!019202050!019202050!019202050!N!PACIFIC MEDICAL CENTER CLINIC !10416 5TH AVENUE NE !SEATTLE !WA!98144!63000!033!53!SEATTLE !KING !WASHINGTON!+000002000000!N!N!000000000000!B537!MEDICAL & HEALTH STUDIES !S1 !SERVICES !000 !NOT DISCERNABLE !621491!E! !3!B!S!C! ! !999

Who is the contractor on this award?

The obligated recipient is PACMED CLINICS.

Which agency awarded this contract?

Awarding agency: Department of Defense (Tricare Management Activity).

What is the total obligated amount?

The obligated amount is $318.3 million.

What is the period of performance?

Start: 2003-06-01. End: 2008-05-31.

What is the historical spending pattern for TRICARE support services with Pacific Medical Centers or similar contractors?

The provided data indicates a single contract award of $318,336,742.78 to Pacific Medical Center Clinic (PACMED CLINICS) from June 1, 2003, to May 31, 2008. This represents a significant, five-year commitment. Without access to historical contract databases or specific program spending reports, it's challenging to establish a broader spending pattern. However, this award suggests that PACMED CLINICS was a key provider for TRICARE support services during this period. To understand a longer-term pattern, one would need to examine contract awards to this entity and its competitors over a more extended timeframe, looking for trends in contract values, durations, and the competitive landscape for TRICARE support.

How does the awarded amount of $318M compare to the typical cost of similar TRICARE support contracts?

The $318M award for TRICARE support services over five years, averaging approximately $63.6M annually, is substantial. However, directly comparing it to 'typical' costs is difficult without specific benchmarks for TRICARE managed care support contracts. TRICARE contracts can vary significantly based on the scope of services, geographic region, and the specific benefits package offered. Historically, TRICARE has been managed through large regional contracts. The value of these contracts has evolved over time with changes in healthcare costs and program scope. To provide a precise comparison, one would need to analyze the specific services rendered under this contract and benchmark them against other TRICARE contracts awarded during the same period or against current contracts for similar scope and scale, considering inflation and market dynamics.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The provided data does not explicitly detail the Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. However, for a contract of this nature—providing HMO medical center services under TRICARE—typical KPIs would likely include metrics related to access to care (e.g., appointment wait times), quality of care (e.g., adherence to clinical guidelines, patient outcomes), beneficiary satisfaction, and administrative efficiency (e.g., claims processing timeliness, accuracy). SLAs would define the minimum acceptable performance levels for these KPIs, with potential penalties for non-compliance. The contract's fixed-price nature suggests that the government is paying a set amount for the delivery of these services, making adherence to defined performance standards crucial for ensuring value.

What is the track record of Pacific Medical Centers in managing large federal healthcare contracts?

The data shows Pacific Medical Center Clinic (PACMED CLINICS) received a significant $318M contract from the Department of Defense for TRICARE support services spanning from 2003 to 2008. This indicates a substantial engagement with a large federal healthcare program. While this specific award demonstrates their capacity to handle a large-scale contract, a comprehensive assessment of their track record would require examining their performance on this and other contracts, including any documented issues, successes, or contract modifications. Information on their performance history, client satisfaction, and any past disputes or awards would provide a fuller picture of their capabilities in managing federal healthcare contracts.

What are the potential risks associated with a sole-source award for critical healthcare services like TRICARE support?

A sole-source award for critical healthcare services like TRICARE support presents several potential risks. Firstly, the lack of competition can lead to higher costs for the government, as there is no market pressure to ensure the most competitive pricing. Secondly, it can stifle innovation, as the contractor may have less incentive to improve services or adopt new technologies if they are guaranteed the contract. Thirdly, there's a risk of vendor lock-in, making it difficult and costly to switch providers if performance issues arise or needs change. Finally, the government has less leverage in negotiating terms and conditions when there are no alternative sources. For critical services, this dependence also raises concerns about continuity of care if the sole provider experiences significant operational disruptions.

Industry Classification

NAICS: Health Care and Social Assistance › Outpatient Care Centers › HMO Medical Centers

Product/Service Code: MEDICAL SERVICES › GENERAL HEALTH CARE SERVICES

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 10416 5TH AVENUE NE, SEATTLE, WA, 07

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline