DoD's $4.18B Johns Hopkins Healthcare Contract: Long-Term, Non-Competitive, and High Value
Contract Overview
Contract Amount: $4,179,844,458 ($4.2B)
Contractor: THE Johns Hopkins Medical Services Corporation
Awarding Agency: Department of Defense
Start Date: 2013-10-01
End Date: 2023-09-30
Contract Duration: 3,651 days
Daily Burn Rate: $1.1M/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: COMPREHENSIVE HEALTHCARE SERVICES
Place of Performance
Location: BALTIMORE, BALTIMORE CITY County, MARYLAND, 21211
State: Maryland Government Spending
Plain-Language Summary
Department of Defense obligated $4.18 billion to THE JOHNS HOPKINS MEDICAL SERVICES CORPORATION for work described as: COMPREHENSIVE HEALTHCARE SERVICES Key points: 1. Significant long-term commitment (10 years) for comprehensive healthcare services. 2. Sole-source award raises questions about competition and potential price discovery. 3. High contract value suggests substantial taxpayer investment in healthcare delivery. 4. Focus on a single provider may limit innovation and market responsiveness.
Value Assessment
Rating: questionable
The contract's value of over $4.18 billion over 10 years is substantial. Without competitive bidding, it's difficult to assess if this represents fair market value compared to similar comprehensive healthcare service contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded sole-source, meaning no other vendors were considered. This significantly limits price discovery and may lead to higher costs than if competition were present.
Taxpayer Impact: The lack of competition on a contract of this magnitude represents a potential risk for taxpayers, as it may not secure the best possible value for the services rendered.
Public Impact
Ensures continuity of care for military personnel and their families. Potential for high costs due to lack of competitive pressure. Limited opportunities for other healthcare providers to serve the DoD. Long-term nature locks in a specific provider for a decade.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Long contract duration
- High total value
- Lack of small business participation
Positive Signals
- Ensures consistent healthcare delivery
- Established provider relationship
Sector Analysis
This contract falls within the healthcare sector, specifically focusing on direct healthcare services and insurance carriers. Healthcare spending by the DoD is a significant portion of its budget, often involving long-term commitments for specialized services.
Small Business Impact
The data indicates no specific small business set-aside or participation. This sole-source contract, awarded to a large, established institution, likely offers minimal direct opportunities for small businesses in this specific award.
Oversight & Accountability
The sole-source nature of this large contract warrants close oversight to ensure the Defense Health Agency is receiving fair value and that the services meet all performance requirements. Accountability for cost and quality is crucial.
Related Government Programs
- Direct Health and Medical Insurance Carriers
- Department of Defense Contracting
- Defense Health Agency Programs
Risk Flags
- Sole-source award limits competition.
- Long contract duration (10 years) may reduce flexibility.
- High total contract value ($4.18B) represents significant financial commitment.
- Lack of small business participation noted.
- No specific performance metrics or benchmarks provided in summary data.
Tags
direct-health-and-medical-insurance-carr, department-of-defense, md, definitive-contract, billion-dollar
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $4.18 billion to THE JOHNS HOPKINS MEDICAL SERVICES CORPORATION. COMPREHENSIVE HEALTHCARE SERVICES
Who is the contractor on this award?
The obligated recipient is THE JOHNS HOPKINS MEDICAL SERVICES CORPORATION.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Health Agency).
What is the total obligated amount?
The obligated amount is $4.18 billion.
What is the period of performance?
Start: 2013-10-01. End: 2023-09-30.
What is the justification for the sole-source award, and what steps were taken to ensure fair pricing without competition?
The justification for a sole-source award typically involves unique capabilities or circumstances where only one vendor can meet the requirement. For this contract, the specific rationale is not provided. Without competitive bidding, the agency must rely on robust negotiation, market research, and cost analysis to ensure fair pricing. Regular performance reviews and cost audits are essential to monitor value.
What are the risks associated with a 10-year sole-source contract for comprehensive healthcare services?
The primary risks include potential cost overruns due to the absence of competitive pressure, reduced incentive for innovation from the provider, and the inability to adapt to evolving healthcare technologies or market conditions. There's also a risk that the government becomes locked into a suboptimal arrangement if the provider's performance or pricing becomes unfavorable over time.
How does this contract contribute to the overall effectiveness and efficiency of the Defense Health Agency's operations?
A long-term, sole-source contract can provide stability and continuity of care, which is crucial for military readiness and personnel well-being. However, its effectiveness is contingent on the provider's performance and the negotiated terms. Without competition, measuring efficiency against potential alternatives is challenging, making robust performance metrics and oversight critical to ensuring effectiveness.
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
Parent Company: THE Johns Hopkins Health System Corporation
Address: 3100 WYMAN PARK DR, BALTIMORE, MD, 21211
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: $4,179,844,458
Exercised Options: $4,179,844,458
Current Obligation: $4,179,844,458
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2013-10-01
Current End Date: 2023-09-30
Potential End Date: 2023-09-30 00:00:00
Last Modified: 2025-08-27
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