Interior Department awards $117.8M sole-source contract for behavioral health services to Carelon Behavioral Health

Contract Overview

Contract Amount: $117,817,506 ($117.8M)

Contractor: Carelon Behavioral Health, Inc.

Awarding Agency: Department of the Interior

Start Date: 2011-08-11

End Date: 2013-02-10

Contract Duration: 549 days

Daily Burn Rate: $214.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MILITARY ONESOURCE INTERIM CONTRACT

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22209

State: Virginia Government Spending

Plain-Language Summary

Department of the Interior obligated $117.8 million to CARELON BEHAVIORAL HEALTH, INC. for work described as: MILITARY ONESOURCE INTERIM CONTRACT Key points: 1. Contract awarded on a sole-source basis, raising questions about potential cost savings from competition. 2. Duration of 549 days suggests a need for ongoing service provision. 3. Firm Fixed Price contract type offers cost certainty but may limit flexibility. 4. Awarded to a single vendor, Carelon Behavioral Health, Inc., indicating a lack of broader market engagement. 5. The contract falls under 'Other Individual and Family Services,' highlighting its focus on social support. 6. The 'VA' (Virginia) location suggests a specific geographic focus for service delivery.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable sole-source awards for similar behavioral health services. The fixed price nature provides some cost predictability. However, the absence of competition means there's no market-driven price discovery to assess if the $117.8 million represents optimal value for the services rendered. Further analysis would require understanding the specific scope of work and comparing it to industry standards for similar service delivery models.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required services, often due to unique capabilities or existing infrastructure. The lack of competition limits the government's ability to leverage market forces to achieve the best possible pricing and service terms.

Taxpayer Impact: Taxpayers may not be receiving the best value due to the absence of competitive bidding, which typically drives down costs and encourages innovation.

Public Impact

Beneficiaries include individuals and families requiring behavioral health services, likely within the Virginia region. Services delivered are focused on individual and family support, addressing mental health and well-being. The geographic impact is primarily concentrated in Virginia, where the services are being provided. Workforce implications may include the employment of behavioral health professionals by Carelon Behavioral Health, Inc. to fulfill the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure on pricing and service quality.
Lack of transparency in the justification for sole-source procurement.
Potential for cost overruns if the fixed price does not accurately reflect service needs over the contract duration.

Positive Signals

Firm Fixed Price contract provides budget certainty for the Department of the Interior.
Focus on critical behavioral health services addresses a significant societal need.
Award to an established entity (Carelon Behavioral Health) may ensure continuity of care.

Sector Analysis

The healthcare sector, particularly behavioral health services, is a significant area of federal spending. This contract falls within the 'Other Individual and Family Services' category, which encompasses a broad range of social and health support. The market for behavioral health services is diverse, with many providers ranging from large corporations to smaller non-profits. Federal contracts in this space often aim to ensure access to care for specific populations or within particular geographic regions.

Small Business Impact

This contract does not appear to have a small business set-aside. As a sole-source award to a single large entity, it is unlikely to involve significant subcontracting opportunities for small businesses unless explicitly mandated by the prime contractor. The absence of set-aside provisions means that small businesses were not specifically targeted for this procurement.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of the Interior's contracting and program management offices. Accountability measures would be defined in the contract's terms and conditions, including performance standards and reporting requirements. Transparency is limited due to the sole-source nature of the award; however, contract award data is publicly available through federal procurement databases.

Related Government Programs

Department of Veterans Affairs (VA) Behavioral Health Programs
Substance Abuse and Mental Health Services Administration (SAMHSA) Grants
Department of Defense (DoD) Mental Health Initiatives

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to lack of competition.
Scope definition and fixed-price risk requires careful monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Interior awarded $117.8 million to CARELON BEHAVIORAL HEALTH, INC.. MILITARY ONESOURCE INTERIM CONTRACT

Who is the contractor on this award?

The obligated recipient is CARELON BEHAVIORAL HEALTH, INC..

Which agency awarded this contract?

Awarding agency: Department of the Interior (Departmental Offices).

What is the total obligated amount?

The obligated amount is $117.8 million.

What is the period of performance?

Start: 2011-08-11. End: 2013-02-10.

What specific behavioral health services are covered under this $117.8 million contract?

The provided data indicates the contract falls under the 'Other Individual and Family Services' (NAICS code 624190) category. While the exact scope of services is not detailed in the summary data, this classification typically includes a wide range of support such as counseling, therapy, case management, and crisis intervention for individuals and families facing mental health challenges, substance use disorders, or other social-emotional difficulties. The specific services would be detailed in the contract's statement of work, outlining the precise interventions, treatment modalities, and support structures Carelon Behavioral Health, Inc. is obligated to provide to the beneficiaries.

What is the justification for awarding this contract on a sole-source basis?

The provided data simply states the contract was 'NOT COMPETED,' indicating a sole-source award. A formal justification for sole-source procurement is typically required by federal acquisition regulations. Common reasons include that only one responsible source is available or capable of providing the required services, or that a critical need exists and only one vendor can meet it within the required timeframe. Without access to the specific justification document (e.g., a Justification and Approval - J&A), the precise rationale remains unknown. This lack of competition raises concerns about whether the government obtained the best possible price and value.

How does the contract duration of 549 days compare to typical behavioral health service contracts?

A contract duration of 549 days (approximately 18 months) is a substantial period for service delivery. In the realm of behavioral health, contracts can vary widely in length depending on the nature of the services. Time-limited programs or specific project-based interventions might have shorter durations, while comprehensive, ongoing care management or support services often require longer-term commitments. An 18-month duration suggests the Department of the Interior anticipates a sustained need for these behavioral health services, potentially indicating a chronic or complex set of requirements that cannot be addressed through short-term solutions.

What is the significance of the 'VA' (Virginia) designation for this contract?

The 'VA' designation likely refers to the state of Virginia, indicating the primary geographic location where the services procured under this contract are to be delivered. Federal contracts often specify a geographic area to ensure services are provided to the intended population or within a manageable operational scope. For behavioral health services, this means that the beneficiaries of the contract, likely individuals and families residing in or accessing services within Virginia, will be the recipients of Carelon Behavioral Health, Inc.'s support. This also implies that the contractor must have the necessary infrastructure and licensed professionals to operate within Virginia.

What are the potential risks associated with a sole-source, firm-fixed-price contract for behavioral health services?

A sole-source, firm-fixed-price contract for behavioral health services presents several potential risks. Firstly, the sole-source nature means there was no competitive bidding, which can lead to higher prices than might be achieved through competition. The government may overpay if the fixed price was not rigorously benchmarked against market rates. Secondly, a firm-fixed-price contract, while offering cost certainty, can be problematic if the scope of work is not precisely defined or if unforeseen circumstances arise. If the contractor underestimates the effort required, they might cut corners on service quality to maintain profitability. Conversely, if the scope is too broad and the price is fixed, the government might be paying for services not fully utilized. The lack of competition also reduces the incentive for the contractor to innovate or improve service delivery beyond the contract's minimum requirements.

Industry Classification

NAICS: Health Care and Social Assistance › Individual and Family Services › Other Individual and Family Services

Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: IND11PS19088

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: FHC Health Systems, Inc. (UEI: 105752901)

Address: 240 CORPORATE BLVD, NORFOLK, VA, 03

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

Financial Breakdown

Contract Ceiling: $117,817,506

Exercised Options: $117,817,506

Current Obligation: $117,817,506

Contract Characteristics

Cost or Pricing Data: NO

Timeline