Justification and Approval – R– Actuarial Services
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Notice Type: Justification and Approval
Posted Date:
Office Address:
Subject: R-- Actuarial Services
Classification Code: R - Professional, administrative, and management support services
Contact: Clifford SnipeContract Specialist (540) 479-8450 x248 mailto:[email protected] [Contract Specialist] FAR 6.302-1
Description:
VA Strategic Acquisition Center
VA Strategic Acquisition Center
LIMITED SOURCE JUSTIFICATION
1. Contracting Activity:
Suite 400
2. Description of Action: The proposed action is for an award of a new
3. Description of the Supplies or Services: The office of the
The EHCPM has been developed with the contracted support of
The function of the Milliman Health Cost Guidelines-"- benchmarking tools in the EHCPM is to project Veteran enrollees' total health care needs. Veteran enrollees have many other options for health care coverage (private insurance,
The 2013 EHCPM has been under development since June of 2012 and will support the
2015 VA Health Care Budget. The enrollment, utilization, and expenditure projections from the 2013 EHCPM must be delivered to the
2013 EHCPM is required to support the budget process for fiscal year 2015 and ad hoc
follow up requests possibly continuing after
ADUSH/PP requests a limited source procurement of actuarial and modeling services from
The estimated total value of this procurement including the option period is
4. Authority: The acquisition is conducted under the authority of the GSA MOBIS Schedule 874-1. The authority permitting this limited source action is Federal Acquisition Regulation (FAR) Part 8.405-6 (a)(1)(i)(B) Only one source is capable of providing the supplies or services required at the level of quality required because the supplies or services are unique or highly specialized.
5. Rationale for Authority:
63102-2126, GSA contract number GS-10F-0224K, is the only company with the technical expertise to perform the required services. The 2013 EHCPM was developed and designed to use proprietary health care utilization benchmarking tools from the Milliman Health Cost Guidelines-"- as the starting point for modeling VA health care services for the 2015 VA Medical Care Budget. Further, all analyses supporting the 2013 EHCPM are aligned with the Milliman Health Cost Guidelines-"- health care service
utilization categories.
2013 EHCPM because of the proprietary Milliman Health Cost Guidelines-"- used to create the 2013 EHCPM. There is no other company that could meet the deadlines of the VA to complete the EHCPM by
While VA owns the EHCPM and its software, VA cannot acquire rights to the Milliman Health Cost Guidelines-"- benchmarking tools for its own use. The EHCPM, as currently designed, cannot be used to produce projection scenarios without the proprietary benchmarking tools from the Milliman Health Cost Guidelines-"- . Although
the Milliman Health Cost Guidelines-"- may be leased, its leasing policy is premised on
a number of principles, one of which is that non-
Market research, which is detailed in Section 8, has not identified any other actuarial firms with the customized health care utilization benchmarking tools that could be quickly and seamlessly integrated into 2013 EHCPM. A new contractor without access
to the proprietary benchmarking tools from the Milliman Health Cost Guidelines-"- would
have to (1) fundamentally restructure the EHCPM to integrate alternative health care utilization benchmarks or (2) develop a new model to estimate the health care that enrollees receive outside of VA without a benchmarking tool.
Based on the technical complexity of the EHCPM, VA's technical experts estimate that a new contractor would need a minimum of 10 months of development time to produce
a new EHCPM. The EHCPM has evolved over time into a very complex health actuarial
model in order to account for all of the known drivers of Veteran demand for VA health care. Projections are developed at a very detailed level: 13 enrollment priorities (1a,
1b, 2, 3, 4, 5, 6, 7a, c, 8a, b, c, d); two genders, 14 five-year age bands, and 501 geographic areas. In addition, projections are developed separately for enrollees who used VA prior to Eligibility Reform and for the Operation Enduring Freedom, Operation Iraqi Freedom, and Operation New Dawn Veteran population. Further, the EHCPM is supported by in-depth analyses of Veteran enrollment rate; enrollee mortality; morbidity; geographic migration; transition among enrollment priorities; reliance on VA versus
other health care providers; and the impact of drive time, unemployment rates, income, initiatives, policies, regulations, and legislation on demand for VA health care. As an example of the complexity of the EHCPM, over 150,000 reliance factors that vary by demographic and geographic detail are used each of the 20 projection years, and these factors vary by projection year.
Further, the EHCPM must produce projections for 20 years to support strategic and capital planning in VA. Most health actuarial models project out three years or less. Also, stakeholders require that the EHCPM separately quantify the impact on enrollment, utilization, and expenditures of all of the key drivers of demand for VA health care. Furthermore stakeholders require that the EHCPM can produce scenarios assuming any or all of those drivers change over the 20-year projection period. As a result, all the drivers of VA health care demand must be analyzed and input into the EHCPM separately. Therefore, based on the technical complexity of the EHCPM, a new contractor cannot begin work on
6. Efforts to Obtain Competition: VA conducted market research; however, market research did not identify any other actuarial firms with comparable health care benchmarking tools that could be quickly and seamlessly integrated into the 2013
EHCPM.
7. Actions to
2014 EHCPM.
8. Market Research: The VHA ADUSH/PP is continuously monitoring the current market for actuarial services, specifically health care related actuarial services. VA technical experts conducted specific market research from November 8 through 28,
2012 to identify actuarial and modeling services capable of meeting the needs of VA relative to the 2013 EHCPM. VA technical experts utilized GSA search engines to gather information on potential actuarial services companies and compared them to those found on the website for the
Based on the market research, VA technical experts and contracting personnel reviewed the capability of the following actuarial contractors: United Health Actuarial Service,
1, 2013.
9. Other Facts: The VA Contracting Officer that awarded the MOBIS Schedule has already determined that the prices are fair and reasonable. The Ordering Contracting Officer will seek additional price discounts and conduct a price analysis using historical pricing data.
10. Technical and Requirements Certification: I certify that the supporting data under my cognizance, which are included in this justification, are accurate and complete to the best of my knowledge and belief.
_________//Signed//_________________ Date: ____12/3/2012_____________
Technical Representative
_________//Signed//_________________ Date: ___12/3/2012_______
Technical Representative
11. Determination of Best Value: I hereby determine that the proposed contract action will represent the best value to the Government. VA has already determined that the prices on the FSS contract are fair and reasonable. Further price analysis will be conducted and subsequent negotiations held as necessary. Additionally, price discounts will be sought.
_________//Signed//_________________ Date: ___12/3/2012_______
Contracting Officer
12. Procuring Contracting Officer Certification: I certify that this justification is accurate and complete to the best of my knowledge and belief.
_________//Signed//_________________ Date: ___12/3/2012______
Contracting Officer
13. Legal Sufficiency Certification: I have reviewed this justification and find it adequate to support a limited source award and deem it legally sufficient.
_________//Signed//_________________ Date: ___12/3/2012_______
Legal Counsel
_________//Signed//_________________ ___12/17/2012___
Executive Director,
Link/URL: https://www.fbo.gov/notices/b5126c718ec7e94037a6384540ed86b8
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