DoD's $13.1B T3 Managed Care Contract Awarded to UnitedHealth Military & Veterans Services for West Region
Contract Overview
Contract Amount: $13,145,560,374 ($13.1B)
Contractor: Unitedhealth Military & Veterans Services, LLC
Awarding Agency: Department of Defense
Start Date: 2012-03-20
End Date: 2019-02-15
Contract Duration: 2,523 days
Daily Burn Rate: $5.2M/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 2
Pricing Type: COST PLUS FIXED FEE
Sector: Healthcare
Official Description: T3 MANAGED CARE SUPPORT CONTRACT FOR WEST REGION
Place of Performance
Location: HOPKINS, HENNEPIN County, MINNESOTA, 55343
Plain-Language Summary
Department of Defense obligated $13.15 billion to UNITEDHEALTH MILITARY & VETERANS SERVICES, LLC for work described as: T3 MANAGED CARE SUPPORT CONTRACT FOR WEST REGION Key points: 1. Contract awarded through full and open competition, suggesting a robust market. 2. Significant duration of 2523 days (approx. 7 years) indicates long-term service needs. 3. Cost Plus Fixed Fee (CPFF) contract type may incentivize cost control but requires careful oversight. 4. Awarded to a single contractor, UnitedHealth Military & Veterans Services, LLC. 5. The contract falls under NAICS code 524114 (Direct Health and Medical Insurance Carriers). 6. The contract's value represents a substantial investment in military healthcare support services. 7. The contract was awarded in 2012 and completed in 2019, providing historical performance data.
Value Assessment
Rating: fair
Benchmarking the value of this $13.1 billion contract is challenging without specific performance metrics and detailed cost breakdowns. However, the sheer scale suggests significant operational requirements. The CPFF structure necessitates close monitoring to ensure costs remain reasonable and the fixed fee aligns with contractor performance. Comparing this to other large-scale managed care contracts within the DoD or other federal agencies would provide a clearer picture of value for money, but such data is not readily available in this summary.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The fact that it resulted in a definitive contract awarded to a single entity suggests that UnitedHealth Military & Veterans Services, LLC was selected as the best value provider after a competitive evaluation process. The number of bidders is not specified, but the competition type implies a healthy market for these services.
Taxpayer Impact: Full and open competition generally benefits taxpayers by fostering a competitive environment that can lead to more favorable pricing and innovative solutions, ensuring the government receives the best possible value for its investment.
Public Impact
Beneficiaries include military personnel and their families in the West Region who receive managed care support services. Services delivered encompass the administration and management of healthcare services for a significant population. Geographic impact is focused on the West Region of the United States, serving a defined military population. Workforce implications include employment opportunities within UnitedHealth Military & Veterans Services and potentially its subcontractors.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Cost Plus Fixed Fee contracts can lead to cost overruns if not managed diligently.
- The long contract duration may present challenges in adapting to evolving healthcare needs and technologies.
- Dependence on a single contractor for a large region could pose risks if performance issues arise.
Positive Signals
- Awarded through full and open competition, suggesting a competitive process that likely yielded a strong offer.
- The contract was awarded to a specialized entity (UnitedHealth Military & Veterans Services), implying relevant expertise.
- The large contract value indicates a significant and sustained need for these critical healthcare support services.
Sector Analysis
This contract falls within the healthcare insurance and managed care sector, specifically serving the unique needs of the military and veteran population. The market for government healthcare contracts is substantial, with significant spending allocated to ensuring the well-being of service members and their families. Comparable spending benchmarks would involve analyzing other large-scale managed care contracts awarded by the Defense Health Agency or other federal health entities, which often run into billions of dollars due to the scale of operations and beneficiary base.
Small Business Impact
Information regarding small business set-asides or subcontracting plans is not provided in the summary data. For a contract of this magnitude, it is common for large prime contractors to engage small businesses for specialized services, but the extent of such engagement would require further investigation into the contract's specific terms and performance reports.
Oversight & Accountability
Oversight for this contract would typically be managed by the Defense Health Agency (DHA), with potential involvement from the Department of Defense Inspector General. Accountability measures would be tied to the contract's performance metrics and the CPFF structure, requiring regular reporting and audits. Transparency would be facilitated through contract award databases and potentially public reports on program performance, though detailed operational data may be sensitive.
Related Government Programs
- TRICARE Prime
- Defense Health Agency Contracts
- Military Health System
- Managed Care Support Contracts
Risk Flags
- Cost Plus Fixed Fee contract type requires diligent oversight to prevent cost escalation.
- Long contract duration may pose challenges in adapting to evolving healthcare needs.
- Dependence on a single large contractor for critical services carries inherent risk.
Tags
defense, healthcare, managed-care, definitive-contract, large-contract, full-and-open-competition, cost-plus-fixed-fee, defense-health-agency, united-states, west-region, insurance-carriers
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $13.15 billion to UNITEDHEALTH MILITARY & VETERANS SERVICES, LLC. T3 MANAGED CARE SUPPORT CONTRACT FOR WEST REGION
Who is the contractor on this award?
The obligated recipient is UNITEDHEALTH MILITARY & VETERANS SERVICES, LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Health Agency).
What is the total obligated amount?
The obligated amount is $13.15 billion.
What is the period of performance?
Start: 2012-03-20. End: 2019-02-15.
What was the specific performance history of UnitedHealth Military & Veterans Services, LLC on this contract?
Detailed performance history for this specific contract is not available in the provided data. However, as a Cost Plus Fixed Fee contract awarded under full and open competition, performance would have been evaluated against defined requirements and milestones. UnitedHealth Military & Veterans Services, LLC, as a major healthcare provider, has a broad track record. For this contract, the agency would have monitored service delivery, beneficiary satisfaction, and adherence to cost controls. Any significant performance issues or successes would typically be documented in contract close-out reports or agency performance reviews, which are not publicly detailed here. The contract's completion without immediate red flags suggests a generally acceptable level of performance, but specific metrics are needed for a full assessment.
How does the $13.1 billion total contract value compare to similar managed care contracts for military populations?
The $13.1 billion total contract value for the T3 Managed Care Support Contract is substantial and aligns with the scale of major federal healthcare contracts. For context, the TRICARE program, which provides health benefits for U.S. military personnel and their families, has historically involved multi-billion dollar contracts for managed care support. For instance, previous TRICARE contracts for regional support have also been in the billions over their multi-year durations. While direct comparisons require matching contract scope, duration, and beneficiary population, this $13.1 billion figure is indicative of the significant investment required to manage healthcare services for a large segment of the military community. It reflects the complexity and breadth of services involved in ensuring healthcare access and quality for service members and their families.
What were the primary risk indicators associated with this contract, and how were they managed?
Primary risk indicators for a contract of this magnitude and type (CPFF) would include potential cost overruns, contractor performance deficiencies, and challenges in service delivery to a large beneficiary population. The CPFF structure itself carries a risk of escalating costs if not tightly managed, as the contractor is reimbursed for all allowable costs plus a fixed fee. To manage these risks, the Defense Health Agency would have implemented robust oversight mechanisms, including regular audits, performance reviews, and strict adherence to contract terms. The competitive award process likely mitigated some risks by selecting a contractor deemed capable and offering competitive terms. The long duration also presented risks related to adapting to changing healthcare needs, which would require proactive contract management and potential modifications.
How effective was this contract in delivering managed care services to the West Region's military population?
Assessing the effectiveness of this contract requires detailed performance data that is not provided. However, the contract's completion and award through full and open competition suggest it met the Defense Health Agency's requirements at the time. Effectiveness would be measured by metrics such as access to care, quality of services, beneficiary satisfaction, and cost efficiency within the managed care framework. Given the scale and duration, it's likely that the contract provided essential managed care support, but specific data on key performance indicators (KPIs) would be necessary for a definitive judgment on its effectiveness. The transition to subsequent contracts would also imply a need for updated or improved service models.
What were the historical spending patterns for managed care support in the West Region prior to and following this contract?
Historical spending patterns for managed care support in the West Region prior to and following this $13.1 billion contract are not detailed in the provided data. This contract, awarded in 2012 and ending in 2019, represented a significant portion of the Defense Health Agency's spending on healthcare services for that region during that period. To understand historical patterns, one would need to examine prior contracts for similar services, their values, and durations, as well as subsequent contracts awarded after 2019. Such an analysis would reveal trends in healthcare costs, service delivery models, and the overall budget allocated to managed care support for military beneficiaries in the West Region over time.
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: FULL AND OPEN COMPETITION
Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE
Solicitation ID: H9400207R0007
Offers Received: 2
Pricing Type: COST PLUS FIXED FEE (U)
Evaluated Preference: NONE
Contractor Details
Parent Company: Unitedhealth Group Incorporated
Address: 9701 DATA PARK, MINNETONKA, MN, 55343
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $13,533,054,595
Exercised Options: $13,533,054,595
Current Obligation: $13,145,560,374
Subaward Activity
Number of Subawards: 24
Total Subaward Amount: $559,784,503
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Timeline
Start Date: 2012-03-20
Current End Date: 2019-02-15
Potential End Date: 2025-12-18 00:00:00
Last Modified: 2025-12-31
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