DoD awards $10.9M contract for health plan options in Ohio, impacting 5972 beneficiaries

Contract Overview

Contract Amount: $10,899,178 ($10.9M)

Contractor: Caresource Military & Veterans CO.

Awarding Agency: Department of Defense

Start Date: 2025-01-01

End Date: 2029-12-31

Contract Duration: 1,825 days

Daily Burn Rate: $6.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE REDETERMINATION

Sector: Healthcare

Official Description: THE SCOPE OF THE CPD IS TO DEVELOP REQUIREMENTS AND AWARD CONTRACTS WITH ONE OR MORE LOCAL, REGIONAL, OR NATIONAL HEALTH PLANS IN DESIGNATED GEOGRAPHIC AREAS OF THE COUNTRY THAT PROVIDE BENEFICIARIES WITH ENROLLMENT OPTIONS IN ADDITION TO THE T-5.

Place of Performance

Location: DAYTON, MONTGOMERY County, OHIO, 45402

State: Ohio Government Spending

Plain-Language Summary

Department of Defense obligated $10.9 million to CARESOURCE MILITARY & VETERANS CO. for work described as: THE SCOPE OF THE CPD IS TO DEVELOP REQUIREMENTS AND AWARD CONTRACTS WITH ONE OR MORE LOCAL, REGIONAL, OR NATIONAL HEALTH PLANS IN DESIGNATED GEOGRAPHIC AREAS OF THE COUNTRY THAT PROVIDE BENEFICIARIES WITH ENROLLMENT OPTIONS IN ADDITION TO THE T-5. Key points: 1. Contract aims to provide beneficiaries with enrollment options beyond standard T-5. 2. Competition was full and open, suggesting a potentially competitive pricing environment. 3. The contract duration of 5 years (1825 days) indicates a long-term service need. 4. Fixed Price Redetermination contract type allows for price adjustments based on actual costs. 5. The award is for health insurance carriers, a critical component of healthcare delivery. 6. Geographic focus on Ohio (OH) targets a specific regional beneficiary population.

Value Assessment

Rating: fair

The contract value of $10.9 million over five years averages to approximately $2.18 million annually. Benchmarking this against similar contracts for health plan administration is challenging without more specific service details. However, the fixed price redetermination structure suggests an effort to control costs while allowing for flexibility. The number of beneficiaries (5972) provides some context for the per-beneficiary cost, which appears reasonable if the scope of services is comprehensive.

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 offers. This approach typically fosters a competitive environment, potentially leading to better pricing and service offerings for the government. The number of bidders is not specified, but the open competition suggests multiple entities likely vied for this contract.

Taxpayer Impact: Full and open competition generally benefits taxpayers by promoting a marketplace where providers compete on price and quality, aiming to secure the contract. This can lead to more cost-effective solutions and a wider array of choices for the government.

Public Impact

Beneficiaries in designated geographic areas of Ohio will gain additional enrollment options in health plans. The contract supports the Department of Defense's commitment to providing healthcare services to military families and veterans. Local and regional health plans in Ohio are positioned to benefit from potential partnerships and contract awards. The initiative aims to enhance the healthcare experience and access for approximately 5972 individuals. This contract contributes to the broader healthcare insurance sector by facilitating new service offerings.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Fixed Price Redetermination contract type may lead to cost overruns if not closely monitored.
Lack of specific performance metrics in the provided data makes assessing value for money difficult.
Geographic limitation to Ohio may not fully address the needs of beneficiaries in other regions.

Positive Signals

Full and open competition suggests a robust bidding process, potentially yielding competitive pricing.
The contract duration of five years provides stability for service delivery and beneficiary access.
Awarding to a health insurance carrier directly addresses the need for enrollment options.

Sector Analysis

This contract falls within the Healthcare sector, specifically focusing on health insurance and managed care. The North American Industry Classification System (NAICS) code 524114 represents Direct Health and Medical Insurance Carriers. The market for health insurance is substantial, with government contracts playing a significant role in providing coverage for specific populations like military personnel and veterans. Comparable spending benchmarks would involve analyzing other DoD or VA contracts for similar health plan administration services.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. Therefore, the direct impact on small businesses is likely limited unless they are subcontractors to the prime awardee. Further analysis would be needed to determine subcontracting plans and their potential benefits to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Defense's Defense Health Agency (DHA). Accountability measures would be defined within the contract's terms and conditions, including performance standards and reporting requirements. Transparency is facilitated by the contract award notice, but detailed operational oversight mechanisms are not specified in the provided data.

Related Government Programs

TRICARE
Veterans Health Administration (VHA) Contracts
Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)
Health Insurance Marketplace Plans

Risk Flags

Contract Type Risk (Fixed Price Redetermination)
Performance Monitoring Complexity
Beneficiary Satisfaction Measurement

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $10.9 million to CARESOURCE MILITARY & VETERANS CO.. THE SCOPE OF THE CPD IS TO DEVELOP REQUIREMENTS AND AWARD CONTRACTS WITH ONE OR MORE LOCAL, REGIONAL, OR NATIONAL HEALTH PLANS IN DESIGNATED GEOGRAPHIC AREAS OF THE COUNTRY THAT PROVIDE BENEFICIARIES WITH ENROLLMENT OPTIONS IN ADDITION TO THE T-5.

Who is the contractor on this award?

The obligated recipient is CARESOURCE MILITARY & VETERANS CO..

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $10.9 million.

What is the period of performance?

Start: 2025-01-01. End: 2029-12-31.

What is the specific scope of services expected from the health plans under this contract?

The provided data indicates the scope is to 'develop requirements and award contracts with one or more local, regional, or national health plans in designated geographic areas of the country that provide beneficiaries with enrollment options in addition to the T-5.' This suggests the contract is for establishing and managing access to alternative health insurance plans for beneficiaries, likely focusing on network adequacy, enrollment processes, and potentially care coordination. The exact services will be detailed in the contract's Statement of Work (SOW), which is not publicly available in this data snippet. Understanding the specific benefits, provider networks, and administrative functions required will be crucial for a full assessment of value.

How does the average annual cost per beneficiary compare to similar DoD or VA healthcare contracts?

The total contract value is $10.9 million for an estimated 5972 beneficiaries over 5 years. This equates to an average annual cost of approximately $2.18 million / 5972 beneficiaries = ~$385 per beneficiary per year. This figure needs careful interpretation as it likely covers administrative costs, network development, and potentially some level of risk-sharing, rather than direct healthcare provision costs. Comparing this to other DoD (e.g., TRICARE) or VA contracts requires detailed knowledge of the specific services included in each contract. Generally, per-beneficiary costs in government healthcare programs can vary widely based on age, health status, geographic location, and the scope of covered benefits. Without a direct comparison of service scope and benefit packages, this figure serves as a preliminary indicator.

What are the key performance indicators (KPIs) that will be used to evaluate the contractor's performance?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. However, for a contract involving health plan administration and beneficiary enrollment options, typical KPIs would likely include metrics related to enrollment timeliness, beneficiary satisfaction, network accessibility (e.g., provider-to-beneficiary ratios), claims processing efficiency, grievance resolution rates, and compliance with regulatory requirements. The effectiveness of the 'enrollment options in addition to the T-5' will also be a critical measure. The Defense Health Agency (DHA) would establish these KPIs in the contract's Statement of Work (SOW) to ensure the contractor meets the program's objectives and provides adequate value.

What is the historical spending pattern for similar health plan administration contracts by the Department of Defense?

Historical spending on similar health plan administration contracts by the Department of Defense, particularly those related to TRICARE and other beneficiary support programs, represents a significant portion of the DoD's healthcare budget. While specific figures for contracts identical to this one are not provided, the DoD consistently allocates billions of dollars annually to manage healthcare services for its population. This includes contracts for managed care support, pharmacy benefits, dental services, and specialized health programs. Analyzing past solicitations and awards for health plan administration within the DHA or related entities would reveal trends in contract values, durations, and competition levels, providing context for the $10.9 million award.

What are the potential risks associated with a Fixed Price Redetermination contract type in this context?

A Fixed Price Redetermination (FPR) contract type carries inherent risks for both the government and the contractor. For the government, the primary risk is that the final negotiated price could be higher than initially anticipated if the contractor's costs exceed projections, especially if oversight is insufficient. The 'redetermination' aspect means the price is set initially but can be adjusted upwards or downwards based on actual costs incurred and audited. This requires robust government auditing and cost monitoring capabilities to ensure the final price is fair and reasonable. For the contractor, the risk lies in underestimating costs, which could lead to reduced profit margins if the redetermined price is not sufficiently higher than their actual expenses. Effective cost accounting and transparent reporting are crucial for managing this risk.

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: HT940223R0001

Offers Received: 1

Pricing Type: FIXED PRICE REDETERMINATION (A)

Evaluated Preference: NONE

Contractor Details

Address: 230 N MAIN ST, DAYTON, OH, 45402

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

Financial Breakdown

Contract Ceiling: $59,276,133

Exercised Options: $13,117,023

Current Obligation: $10,899,178

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline