DoD's Active Duty Dental Program contract awarded to United Concordia for $87.85M, highlighting insurance carrier services

Contract Overview

Contract Amount: $87,850,266 ($87.9M)

Contractor: United Concordia Companies, Inc.

Awarding Agency: Department of Defense

Start Date: 2017-07-10

End Date: 2018-07-31

Contract Duration: 386 days

Daily Burn Rate: $227.6K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: IGF::OT::IGF ACTIVE DUTY DENTAL PROGRAM

Place of Performance

Location: HARRISBURG, DAUPHIN County, PENNSYLVANIA, 17110

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $87.9 million to UNITED CONCORDIA COMPANIES, INC. for work described as: IGF::OT::IGF ACTIVE DUTY DENTAL PROGRAM Key points: 1. Contract value represents a significant investment in dental insurance for active duty personnel. 2. The award was made under full and open competition, suggesting a competitive bidding process. 3. Fixed-price contract type aims to control costs and provide predictable spending. 4. The duration of the contract (386 days) indicates a medium-term service provision. 5. This contract falls within the broader category of health and medical insurance carriers. 6. The geographic focus appears to be Pennsylvania, based on the state code provided.

Value Assessment

Rating: good

The contract value of approximately $87.85 million for dental insurance services appears reasonable for a program supporting active duty military personnel. Benchmarking against similar large-scale dental insurance contracts for government entities would provide a more precise value-for-money assessment. The firm fixed-price structure suggests cost predictability for the government, which is a positive indicator. However, without detailed service utilization data and comparison to other carriers' bids for equivalent coverage, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. This suggests a robust bidding environment where multiple insurance carriers likely vied for the contract. The level of competition is generally positive for price discovery and potentially leads to more favorable terms for the government. The specific number of bidders is not provided, which would offer further insight into the intensity of the competition.

Taxpayer Impact: A competitive bidding process for essential services like dental care for active duty personnel helps ensure taxpayer dollars are used efficiently and that the government secures the best possible rates.

Public Impact

Active duty military personnel and their families directly benefit from the dental insurance coverage provided. The services delivered include access to dental care, potentially covering routine check-ups, preventative care, and necessary treatments. The geographic impact is likely nationwide for active duty personnel, though the state code 'PA' might indicate the contractor's primary location or a specific regional focus. Workforce implications are minimal in terms of direct government employment but support the readiness and morale of the military workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if not clearly defined in the contract terms.
Ensuring consistent quality of care across all network providers is a common challenge in insurance contracts.
Dependence on a single contractor for a critical service like dental care carries inherent risk.

Positive Signals

Awarded through full and open competition, indicating a competitive market.
Firm fixed-price contract type provides cost certainty.
The contract addresses a vital need for active duty military personnel, contributing to readiness and well-being.

Sector Analysis

The healthcare sector, specifically health and medical insurance carriers, is a critical component of government services. This contract falls under the sub-sector of dental insurance providers. The market for government health insurance contracts is substantial, with significant spending allocated annually to ensure the well-being of military personnel and other federal beneficiaries. Comparable spending benchmarks would involve analyzing other large-scale dental insurance contracts awarded by the Department of Defense or other federal agencies to similar types of carriers.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large-scale insurance contract, it is likely that the prime contractor, United Concordia Companies, Inc., is a large business. There is no explicit information on subcontracting plans for small businesses within this award notice. The impact on the small business ecosystem would depend on whether United Concordia engages small dental practices or other small businesses as subcontractors for service delivery.

Oversight & Accountability

Oversight for this contract would typically be managed by the Defense Health Agency (DHA), a component of the Department of Defense. Accountability measures would be embedded in the contract's performance standards and service level agreements. Transparency is generally facilitated through contract award databases like FPDS-NG. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

TRICARE Dental Program
Federal Employees Health Benefits Program (FEHBP)
Department of Veterans Affairs (VA) Dental Services

Risk Flags

Contract duration is relatively short (386 days), potentially indicating a bridge contract or a re-competition cycle.
Lack of specific detail on the number of bidders limits a full assessment of competition intensity.
Geographic focus indicated by 'PA' might require clarification if the program is intended for nationwide coverage.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $87.9 million to UNITED CONCORDIA COMPANIES, INC.. IGF::OT::IGF ACTIVE DUTY DENTAL PROGRAM

Who is the contractor on this award?

The obligated recipient is UNITED CONCORDIA COMPANIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Health Agency).

What is the total obligated amount?

The obligated amount is $87.9 million.

What is the period of performance?

Start: 2017-07-10. End: 2018-07-31.

What is the track record of United Concordia Companies, Inc. in managing large federal health insurance contracts?

United Concordia Companies, Inc. has a significant history of managing federal dental insurance programs. They have been a long-standing provider for various military dental programs, including TRICARE Dental. Their experience suggests a familiarity with the specific requirements and challenges of serving uniformed service members and their families. Analyzing past performance reviews, contract modifications, and any disputes or penalties associated with their previous federal contracts would provide a more comprehensive understanding of their track record. This includes assessing their ability to meet performance metrics, manage costs, and ensure beneficiary satisfaction across different programs and contract durations.

How does the per-member-per-month (PMPM) cost of this contract compare to similar government dental insurance contracts?

Determining the exact PMPM cost requires knowing the number of covered individuals (active duty personnel and potentially their dependents) and the contract's total value over its period. The provided data gives a total award amount of $87.85 million for a duration of 386 days. If we assume this covers approximately X number of individuals, we could calculate a PMPM. However, without the precise number of beneficiaries, a direct PMPM comparison is not feasible. Generally, government dental contracts aim for competitive PMPM rates, often benchmarked against large commercial group dental plans and other federal contracts like the Federal Employees Dental and Vision Insurance Program (FEDVIP) or other TRICARE dental components. Variations in coverage levels, network breadth, and administrative overhead contribute to differences in PMPM rates across contracts.

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

While specific KPIs and SLAs are not detailed in the provided summary data, typical performance indicators for a dental insurance contract of this nature would include metrics related to network adequacy (e.g., number and geographic distribution of participating dentists), claims processing timeliness (e.g., average time to adjudicate and pay claims), beneficiary access to care (e.g., wait times for appointments), customer service responsiveness (e.g., call center wait times, resolution rates), and member satisfaction surveys. Service Level Agreements would quantify acceptable performance thresholds for these KPIs, often with associated financial penalties for non-compliance or incentives for exceeding targets. The Defense Health Agency would monitor these to ensure the contractor meets its obligations.

What is the historical spending trend for the Active Duty Dental Program?

The provided data reflects a single contract award of $87.85 million for the Active Duty Dental Program from July 2017 to July 2018. To understand historical spending trends, one would need to examine contract awards for this program over multiple preceding years. This would involve querying databases like the Federal Procurement Data System (FPDS) for all contracts related to 'Active Duty Dental Program' or similar identifiers awarded to United Concordia Companies, Inc. and potentially other contractors. Analyzing these historical awards would reveal patterns in contract values, durations, competition levels, and the incumbent contractor(s), indicating whether spending has increased, decreased, or remained relatively stable over time.

What are the potential risks associated with the firm fixed-price contract type for this dental insurance program?

While a firm fixed-price (FFP) contract is generally favored for cost control, it can introduce risks for the contractor if costs escalate unexpectedly due to factors like unforeseen utilization increases, changes in healthcare regulations, or higher-than-anticipated administrative expenses. For the government, the primary risk with FFP is that the contractor may have less incentive to control costs beyond the agreed price, potentially leading to less efficient operations if not rigorously monitored. Additionally, if the scope of services needs to change significantly, contract modifications can become complex and costly. Ensuring the initial price adequately reflects anticipated costs and risks is crucial for the success of an FFP contract in a dynamic sector like healthcare insurance.

Industry Classification

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

Product/Service Code: MEDICAL SERVICES › MEDICAL, DENTAL, AND SURGICAL SVCS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: HT940213R0002

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Highmark Inc (UEI: 067096644)

Address: 4401 DEER PATH RD, HARRISBURG, PA, 17110

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $87,850,266

Exercised Options: $87,850,266

Current Obligation: $87,850,266

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: HT940214D0001

IDV Type: IDC

Timeline