Department of Defense contract for medical services awarded to SVCMC, INC. for over $247 million

Contract Overview

Contract Amount: $247,363,398 ($247.4M)

Contractor: Svcmc, Inc.

Awarding Agency: Department of Defense

Start Date: 2004-02-01

End Date: 2008-05-31

Contract Duration: 1,581 days

Daily Burn Rate: $156.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: 200608!609601!9700!H94002!TRICARE SUPPORT OFFICE !H9400204C0016 !A!N! !N! !P00009!20051201!20060531!071050132!071050132!071050132!N!SAINT VINCENTS CATHOLIC MEDICA!130 W 12TH ST !NEW YORK !NY!10011!51000!061!36!NEW YORK !NEW YORK !NEW YORK !+000003700000!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: NEW YORK, NEW YORK County, NEW YORK, 10011

State: New York Government Spending

Plain-Language Summary

Department of Defense obligated $247.4 million to SVCMC, INC. for work described as: 200608!609601!9700!H94002!TRICARE SUPPORT OFFICE !H9400204C0016 !A!N! !N! !P00009!20051201!20060531!071050132!071050132!071050132!N!SAINT VINCENTS CATHOLIC MEDICA!130 W 12TH ST !NEW YORK !NY!10011!51000!061!36!NEW YORK !NEW … Key points: 1. Contract value exceeds $247 million, indicating a significant investment in medical support services. 2. Awarded on a 'not available for competition' basis, raising questions about the procurement process. 3. The contract duration of over 4 years suggests a long-term need for these services. 4. The primary service code (524114) points to direct health and medical insurance carriers. 5. The contractor, SVCMC, INC., is located in New York, potentially impacting local economic benefits. 6. The contract was awarded by the Tricare Management Activity, a key component of military healthcare.

Value Assessment

Rating: questionable

The contract value of over $247 million for medical services is substantial. Without comparable contract data or detailed cost breakdowns, it is difficult to definitively assess value for money. The 'not available for competition' status inherently limits the ability to benchmark pricing against market alternatives. Further analysis would be needed to determine if this represents a fair price for the services rendered over its multi-year duration.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed and was awarded on a sole-source basis, meaning only one vendor was considered. This approach bypasses the standard competitive bidding process, which typically leads to better pricing and innovation. The lack of competition means there was no opportunity to solicit offers from multiple qualified contractors, potentially resulting in higher costs for the government.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's ability to secure the best possible value.

Public Impact

Beneficiaries include military personnel and their families who rely on TRICARE for healthcare services. Services delivered likely encompass a range of medical support, potentially including direct patient care, claims processing, or health plan administration. The geographic impact is primarily centered around the contractor's location in New York, but the services likely support a broader military population. Workforce implications may include employment opportunities within SVCMC, INC. and its subcontractors in the healthcare sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpricing and reduced efficiency.
The substantial contract value warrants close scrutiny of performance and deliverables.
Limited transparency due to sole-source award makes independent value assessment challenging.

Positive Signals

The contract addresses a critical need for medical services within the Department of Defense's healthcare system.
A long contract duration suggests a stable and reliable provider is being utilized.
The contractor's specialization in medical services indicates relevant expertise.

Sector Analysis

This contract falls within the Healthcare sector, specifically related to health insurance carriers and medical services. The federal government is a major purchaser of healthcare services, particularly for military personnel and veterans. Spending in this area is consistently high, driven by the need to provide comprehensive medical coverage. Comparable benchmarks would involve analyzing other large TRICARE contracts or similar government health insurance programs.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. The sole-source nature of the award further suggests that small businesses were not actively solicited as part of this procurement. This contract does not appear to contribute to the government's small business contracting goals.

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 contract performance clauses and reporting requirements. Transparency is limited due to the sole-source award, making public scrutiny of the procurement process and pricing more difficult.

Related Government Programs

TRICARE Prime
Military Health System
Department of Veterans Affairs Healthcare
Federal Employee Health Benefits Program

Risk Flags

Sole-source award
Lack of competition
High contract value

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $247.4 million to SVCMC, INC.. 200608!609601!9700!H94002!TRICARE SUPPORT OFFICE !H9400204C0016 !A!N! !N! !P00009!20051201!20060531!071050132!071050132!071050132!N!SAINT VINCENTS CATHOLIC MEDICA!130 W 12TH ST !NEW YORK !NY!10011!51000!061!36!NEW YORK !NEW YORK !NEW YORK !+000003700000!N!N!000000000000!B537!MEDICAL&HEALTH STUDIES !S1 !SERVICES !000 !NOT DISCERNABLE !621491!E! !3!B!S!C! ! !99990

Who is the contractor on this award?

The obligated recipient is SVCMC, INC..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $247.4 million.

What is the period of performance?

Start: 2004-02-01. End: 2008-05-31.

What specific medical services were provided under this contract?

The provided data indicates the primary service code is 524114, which corresponds to 'Direct Health and Medical Insurance Carriers.' While the exact scope of services is not detailed in the provided snippet, this classification suggests that SVCMC, INC. was likely involved in administering health insurance benefits, processing medical claims, or providing direct medical services to TRICARE beneficiaries. The contract's substantial value implies a broad range of responsibilities within the TRICARE program, potentially encompassing network management, patient support, and healthcare coordination for a significant population.

What is the track record of SVCMC, INC. with federal contracts?

The provided data indicates that SVCMC, INC. was awarded this specific contract. However, it does not offer a comprehensive history of their federal contracting performance. To assess their track record, one would need to examine past awards, contract performance reviews, and any reported issues or successes with previous government engagements. Without this broader context, it's difficult to gauge their reliability and effectiveness as a federal contractor beyond this single award.

How does the pricing of this contract compare to similar medical service contracts?

Direct price comparison is challenging due to the 'not available for competition' status of this contract, which limits benchmarking against other bids. Furthermore, the specific services rendered are not fully detailed. To assess pricing, one would need to identify comparable TRICARE contracts or other large-scale government health insurance contracts awarded around the same period. Analyzing the per-beneficiary cost or the cost per service unit, if available, against industry standards and similar government procurements would be necessary to determine if the $247 million represents fair market value.

What are the potential risks associated with a sole-source award of this magnitude?

The primary risk associated with a sole-source award of this magnitude is the lack of competitive pressure, which can lead to inflated prices and reduced incentives for efficiency and innovation. Taxpayers may end up paying more than necessary for the services. Additionally, without a competitive process, there's a reduced opportunity to identify and engage potentially more capable or cost-effective providers. Oversight becomes even more critical to ensure the contractor delivers quality services at a reasonable cost, as there is no market validation through competition.

What is the historical spending pattern for similar medical support services by the Department of Defense?

The Department of Defense consistently spends billions of dollars annually on healthcare services through the TRICARE program to support active-duty military, retirees, and their families. Historical spending patterns show a continuous and significant investment in managing and delivering these services. Contracts for health insurance carriers, medical support, and direct patient care are recurring and often awarded for multi-year periods. Analyzing past TRICARE budgets and contract awards would reveal trends in overall spending, specific service categories, and the average contract values, providing context for the $247 million awarded to SVCMC, INC.

Industry Classification

NAICS: Finance and Insurance › Insurance Carriers › Direct Health and Medical Insurance Carriers

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: 130 W 12TH ST, NEW YORK, NY, 90

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

Contract Characteristics

Cost or Pricing Data: NO

Timeline