Treasury's $15.9M dental insurance contract with CGLIC awarded via full and open competition

Contract Overview

Contract Amount: $15,913,657 ($15.9M)

Contractor: Connecticut General Life Insurance Company

Awarding Agency: Department of the Treasury

Start Date: 2004-12-28

End Date: 2009-12-31

Contract Duration: 1,829 days

Daily Burn Rate: $8.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 5

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: DENTAL INSURANCE BENEFITS FOR OCC EMPLOYEES

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20219

State: District of Columbia Government Spending

Plain-Language Summary

Department of the Treasury obligated $15.9 million to CONNECTICUT GENERAL LIFE INSURANCE COMPANY for work described as: DENTAL INSURANCE BENEFITS FOR OCC EMPLOYEES Key points: 1. Contract awarded to a single, established provider for dental insurance benefits. 2. Pricing appears to be a key factor in the award, with economic price adjustments included. 3. The duration of the contract suggests a long-term commitment to this benefit. 4. The contract falls under the 'Direct Health and Medical Insurance Carriers' NAICS code. 5. Awarded by the Office of the Comptroller of the Currency, a bureau within Treasury. 6. The contract was awarded as a fixed-price with economic price adjustment type.

Value Assessment

Rating: good

Benchmarking the value of this specific dental insurance contract is challenging without detailed benefit comparisons and enrollment data. However, the award to a large, established insurer like Connecticut General Life Insurance Company suggests a competitive bid process likely considered price and service offerings. The inclusion of economic price adjustments indicates an effort to manage cost fluctuations over the contract's term, which is a common practice for long-duration service contracts.

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 suggests a robust bidding process where multiple insurers likely vied for the contract. The presence of five bidders (no=5) further supports the notion of a competitive landscape, which generally leads to better price discovery and value for the government.

Taxpayer Impact: A competitive award process for essential employee benefits like dental insurance helps ensure taxpayer dollars are used efficiently by driving down costs through market forces.

Public Impact

Federal employees and their dependents within the District of Columbia benefit from dental insurance coverage. The services delivered are direct health and medical insurance, specifically dental care. The geographic impact is concentrated in the District of Columbia, where the contract was administered. This contract supports the federal workforce by providing a key employee benefit, contributing to recruitment and retention.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Awarded through full and open competition, indicating a fair and transparent process.
Contract duration of nearly 5 years suggests a stable and reliable benefit for employees.
The use of fixed-price with economic price adjustment is a standard and reasonable pricing mechanism for long-term insurance contracts.

Sector Analysis

This contract falls within the broader insurance sector, specifically focusing on health and medical insurance carriers. The NAICS code 524114, 'Direct Health and Medical Insurance Carriers,' encompasses companies that underwrite and issue insurance policies for health and medical services. Federal spending in this area typically supports employee benefits and healthcare services for various agencies. Comparable spending benchmarks would involve analyzing other federal contracts for employee health insurance or similar benefit programs across different agencies and geographic locations.

Small Business Impact

There is no indication that this contract included specific small business set-asides. The award to a large, established insurance carrier suggests that the primary focus was on securing comprehensive coverage and competitive pricing from experienced providers. Subcontracting opportunities for small businesses are not explicitly detailed but could potentially exist within the administrative or specialized service components of the primary contractor.

Oversight & Accountability

Oversight for this contract would typically reside with the contracting officer and the Office of the Comptroller of the Currency (OCC) within the Department of the Treasury. Standard contract administration, performance monitoring, and invoice review processes would be in place. Transparency is generally maintained through contract award databases, though detailed operational performance metrics may not be publicly disclosed.

Related Government Programs

Federal Employee Health Benefits Program
Federal Employee Dental and Vision Insurance Program (FEDVIP)
Department of the Treasury Employee Benefits Contracts
Health Insurance Carriers for Federal Employees

Risk Flags

Potential for cost overruns due to economic price adjustments if market rates increase significantly.
Risk of employee dissatisfaction if the provider network or service quality declines over the contract term.
Dependence on a single provider for a critical employee benefit.

Frequently Asked Questions

What is this federal contract paying for?

Department of the Treasury awarded $15.9 million to CONNECTICUT GENERAL LIFE INSURANCE COMPANY. DENTAL INSURANCE BENEFITS FOR OCC EMPLOYEES

Who is the contractor on this award?

The obligated recipient is CONNECTICUT GENERAL LIFE INSURANCE COMPANY.

Which agency awarded this contract?

Awarding agency: Department of the Treasury (Office of the Comptroller of the Currency).

What is the total obligated amount?

The obligated amount is $15.9 million.

What is the period of performance?

Start: 2004-12-28. End: 2009-12-31.

What was the specific value proposition offered by Connecticut General Life Insurance Company that led to this award?

While the specific details of CGLIC's value proposition are not publicly available in this data snippet, the award under full and open competition suggests their bid met or exceeded the government's requirements at a competitive price. Factors likely included the comprehensiveness of their dental plan offerings, the extent of their provider network in the DC area, their administrative capabilities, and their proposed pricing structure, including the economic price adjustment mechanism. The fact that they were selected from five bidders indicates their proposal was deemed the most advantageous to the government, considering both technical merit and cost.

How does the pricing of this contract compare to similar dental insurance contracts for federal employees?

Direct comparison of pricing for this specific contract is difficult without access to detailed benefit structures and enrollment numbers for other comparable contracts. However, the contract's total value of approximately $15.9 million over nearly five years suggests an average annual cost of roughly $3.2 million. This figure would need to be divided by the number of covered individuals to derive a per-member-per-month cost, which is the standard metric for benchmarking. The inclusion of economic price adjustments indicates that the government anticipated potential cost increases over the contract term, a common feature in long-term service agreements to account for inflation and market fluctuations.

What are the primary risks associated with a long-term dental insurance contract like this?

Key risks include potential increases in healthcare utilization and costs that outpace the economic price adjustments, leading to higher-than-anticipated spending. Another risk is the potential for the chosen provider's network to become less competitive or convenient for employees over time. Service delivery issues, such as claims processing delays or inadequate customer support, could also arise. Furthermore, if the contract terms are not sufficiently flexible, the government might be locked into a plan that becomes less suitable for evolving employee needs or technological advancements in dental care.

What is the historical spending pattern for dental insurance benefits by the Office of the Comptroller of the Currency?

This data point represents a single contract award from December 2004 to December 2009. To understand historical spending patterns, one would need to examine prior and subsequent contracts for dental insurance or similar benefits awarded by the OCC or the broader Department of the Treasury. Analyzing the duration, value, and number of bidders on previous contracts would reveal trends in procurement strategies, provider choices, and overall expenditure on employee dental benefits over time.

What is the track record of Connecticut General Life Insurance Company as a federal contractor?

Connecticut General Life Insurance Company (CGLIC), now part of Cigna, has a long history of providing insurance services. As a federal contractor, their track record would be reflected in past performance evaluations for similar contracts, any documented disputes or contract terminations, and their overall compliance with federal procurement regulations. Accessing CGLIC's contract history within federal databases like SAM.gov or FPDS would provide specific details on their performance, including awards, task orders, and any reported issues.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 5

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: Cigna Corporation (UEI: 029053964)

Address: 900 COTTAGE GROVE RD, BLOOMFIELD, CT, 01

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

Financial Breakdown

Contract Ceiling: $16,783,601

Exercised Options: $15,913,657

Current Obligation: $15,913,657

Contract Characteristics

Multi-Year Contract: Yes

Timeline