DoD Awards $304M Contract for Managed Health Care Services to SVCMC, Inc
Contract Overview
Contract Amount: $304,304,300 ($304.3M)
Contractor: Svcmc, Inc.
Awarding Agency: Department of Defense
Start Date: 2023-10-01
End Date: 2026-09-30
Contract Duration: 1,095 days
Daily Burn Rate: $277.9K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: MANAGED HEALTH CARE PLAN SERVICES FROM A DESIGNATED PROVIDER
Place of Performance
Location: NEW YORK, NEW YORK County, NEW YORK, 10001
State: New York Government Spending
Plain-Language Summary
Department of Defense obligated $304.3 million to SVCMC, INC. for work described as: MANAGED HEALTH CARE PLAN SERVICES FROM A DESIGNATED PROVIDER Key points: 1. Significant contract value of $304.3 million for health care services. 2. Limited competition due to designation as a sole-source provider. 3. Potential risk associated with a single provider for essential health services. 4. Spending falls within the Healthcare sector, specifically direct health insurance carriers.
Value Assessment
Rating: fair
The contract value of $304.3 million for managed health care services appears substantial. Benchmarking against similar contracts for health insurance carriers is difficult without more specific service details and comparable contract data. The 'NOT AVAILABLE FOR COMPETITION' status suggests pricing may not have been optimized through competitive bidding.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning it was not open to competitive bidding. This limits price discovery and potentially leads to higher costs for taxpayers as the provider did not face market pressure to offer the lowest price.
Taxpayer Impact: The sole-source nature of this award means taxpayers may not be receiving the best possible value, as competition was intentionally excluded.
Public Impact
Ensures continued managed health care services for military personnel and their families. Potential for service disruptions if the sole provider faces operational issues. Impacts the healthcare landscape for beneficiaries in the New York region.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price negotiation.
- Lack of transparency in pricing due to no-bid status.
- Potential for vendor lock-in and reduced flexibility.
Positive Signals
- Ensures continuity of essential healthcare services.
- Contract awarded to a designated provider, potentially meeting specific needs.
Sector Analysis
This contract falls under the Healthcare sector, specifically for direct health and medical insurance carriers. The spending of $304.3 million is significant for this category, especially given the sole-source nature of the award, which bypasses typical competitive benchmarks.
Small Business Impact
The data indicates this contract was not awarded to small businesses (ss: false, sb: false). There is no indication of subcontracting opportunities for small businesses within this award.
Oversight & Accountability
Oversight of this sole-source contract is crucial to ensure the Defense Health Agency is receiving quality services at a reasonable price, despite the lack of competition. Regular performance reviews and cost audits would be essential.
Related Government Programs
- Direct Health and Medical Insurance Carriers
- Department of Defense Contracting
- Defense Health Agency Programs
Risk Flags
- Sole-source award limits competitive pricing.
- Lack of transparency in the justification for sole-source.
- Potential for higher costs due to absence of competition.
- No small business participation indicated.
Tags
direct-health-and-medical-insurance-carr, department-of-defense, ny, definitive-contract, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $304.3 million to SVCMC, INC.. MANAGED HEALTH CARE PLAN SERVICES FROM A DESIGNATED PROVIDER
Who is the contractor on this award?
The obligated recipient is SVCMC, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Health Agency).
What is the total obligated amount?
The obligated amount is $304.3 million.
What is the period of performance?
Start: 2023-10-01. End: 2026-09-30.
What specific criteria led to SVCMC, Inc. being designated as the sole-source provider for these managed health care services?
The specific criteria for designating SVCMC, Inc. as a sole-source provider are not detailed in the provided data. Typically, sole-source justifications involve unique capabilities, urgent needs, or situations where only one responsible source can fulfill the requirement. Further investigation into the contract's justification documentation would be necessary to understand the rationale.
What are the potential risks associated with awarding a large healthcare contract on a sole-source basis, and how are they being mitigated?
The primary risks of sole-source awards include inflated pricing, lack of innovation, and potential service quality issues due to absent competition. Mitigation strategies could involve rigorous performance monitoring, clear service level agreements, and periodic reviews to ensure the provider is meeting all contractual obligations and that the pricing remains fair over the contract's duration.
How does the $304.3 million expenditure compare to the agency's budget for similar managed health care services, and is it considered an effective use of funds?
Without comparative data on the Defense Health Agency's budget for similar services or benchmarks for managed health care contracts, it's difficult to definitively assess effectiveness. However, the sole-source nature raises concerns about potential overspending compared to a competitive procurement. A thorough cost-benefit analysis and comparison with market rates would be needed.
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
Solicitation ID: HT940223R0002
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 530 7TH AVE FL 10, NEW YORK, NY, 10018
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: $1,635,683,832
Exercised Options: $401,038,850
Current Obligation: $304,304,300
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2023-10-01
Current End Date: 2026-09-30
Potential End Date: 2033-09-30 00:00:00
Last Modified: 2025-12-10
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