DoD Awards $787M Firm Fixed Price Contract to CHRISTUS HEALTH for HMO Medical Centers
Contract Overview
Contract Amount: $787,360,603 ($787.4M)
Contractor: Christus Health
Awarding Agency: Department of Defense
Start Date: 2008-10-01
End Date: 2013-09-30
Contract Duration: 1,825 days
Daily Burn Rate: $431.4K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: AWARD OF CONTRACT
Place of Performance
Location: HOUSTON, HARRIS County, TEXAS, 77092
State: Texas Government Spending
Plain-Language Summary
Department of Defense obligated $787.4 million to CHRISTUS HEALTH for work described as: AWARD OF CONTRACT Key points: 1. Significant contract value of $787.36 million awarded to CHRISTUS HEALTH. 2. Contract is for HMO Medical Centers, indicating a focus on healthcare services. 3. The contract was not available for competition, raising questions about price discovery. 4. This award represents a substantial investment in healthcare infrastructure or services by the Defense Health Agency.
Value Assessment
Rating: questionable
The contract type is Firm Fixed Price, which can offer cost certainty. However, without competitive bidding, it's difficult to assess if the price is optimal or reflects market value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
The contract was awarded as sole-source, meaning it was not subject to full and open competition. This limits price discovery and potentially leads to higher costs for taxpayers.
Taxpayer Impact: The lack of competition for a contract of this magnitude could result in a less favorable price for taxpayers compared to a competitive award.
Public Impact
Military personnel and their families will receive medical services through HMO Medical Centers. The large contract value suggests a significant impact on the healthcare provider market in Texas. Taxpayers are funding a substantial healthcare service contract, highlighting the importance of efficient spending.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Potential for overpricing due to sole-source award
Positive Signals
- Firm Fixed Price contract type can provide cost certainty
- Long-term award (5 years) suggests a stable need for services
Sector Analysis
This contract falls within the healthcare sector, specifically for medical centers. Benchmarking spending in this area is complex due to the variety of services and geographic locations, but $787M over 5 years is a substantial commitment.
Small Business Impact
The data indicates that small business participation was not a factor in this award (ss: false, sb: false). Further analysis would be needed to determine if subcontracting opportunities were explored.
Oversight & Accountability
The sole-source nature of this award warrants close oversight by the Defense Health Agency to ensure the services provided are necessary and the pricing remains fair throughout the contract duration.
Related Government Programs
- HMO Medical Centers
- Department of Defense Contracting
- Defense Health Agency Programs
Risk Flags
- Lack of competitive bidding
- Potential for inflated pricing
- Limited transparency in price justification
- No small business participation noted
Tags
hmo-medical-centers, department-of-defense, tx, dca, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $787.4 million to CHRISTUS HEALTH. AWARD OF CONTRACT
Who is the contractor on this award?
The obligated recipient is CHRISTUS HEALTH.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Health Agency).
What is the total obligated amount?
The obligated amount is $787.4 million.
What is the period of performance?
Start: 2008-10-01. End: 2013-09-30.
What specific medical services are covered under this HMO Medical Center contract, and how do they align with the needs of the covered population?
The contract specifies 'HMO Medical Centers,' implying a broad range of primary and potentially specialized medical services typically found in a Health Maintenance Organization. Detailed service scope is crucial for assessing value and ensuring alignment with the healthcare needs of DoD beneficiaries, including preventive care, diagnostics, and treatment plans.
What justification was provided for awarding this contract on a sole-source basis, and were alternative competitive strategies considered?
Sole-source awards require strong justification, often citing unique capabilities or urgent needs. Understanding the rationale behind 'NOT AVAILABLE FOR COMPETITION' is vital. Agencies must demonstrate that competition was impractical or impossible, and that all reasonable efforts to foster competition were exhausted to ensure taxpayer value.
How will the Defense Health Agency ensure cost-effectiveness and quality of care throughout the 5-year duration of this large sole-source contract?
Effective oversight mechanisms, including performance monitoring, regular reviews of service delivery, and potentially independent cost analyses, are critical. The DHA should establish clear performance metrics and quality standards to hold CHRISTUS HEALTH accountable and ensure the services meet the required standards and represent good value for the funds expended.
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
Solicitation ID: H9400207R0006
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 2600 NORTH LOOP W, HOUSTON, TX, 90
Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $790,583,823
Exercised Options: $787,610,603
Current Obligation: $787,360,603
Contract Characteristics
Cost or Pricing Data: NO
Timeline
Start Date: 2008-10-01
Current End Date: 2013-09-30
Potential End Date: 2013-09-30 00:00:00
Last Modified: 2014-02-06
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