DHA to Save Pentagon $2.4B – But Consolidation Means Opportunity

by Rick Antonucci, Analyst

The Department of Defense (DOD) recently stated that the new Defense Health Agency (DHA) is slated to save the Pentagon about $2.4 billion over the next 6 years, NextGov reports. The DHA will be composed of the TRICARE Management Activity (TMA) and the Joint Task Force National Capital Region Medical Command, as well as several other military health offices. The organization, which will become active in October of this year, will be commanded by USAF Lt. Gen. Douglas Robb and will employ slightly over 1,000 people.

Under the DHA, support for TMA (the healthcare program for active duty and retired service members, as well as their families) would operate as a shared services model starting on October 1 with support for healthcare delivery across all three military branches, and will also serve as a channel through which healthcare service contracts can be procured. DOD expects to save around $787 million by centrally managing TMA. Some of that money will come from closing walk-in centers at 56 hospitals operated by the 3 service branches, which will be replaced by call centers and online tools. Another $672 million will be saved through central management of IT infrastructure, management, and other services.

All of this means that there will be opportunities in the new DHA. COTS vendors should look for the chance to provide support for the online tools mentioned above, as well as the opportunity to support the consolidation of IT services. There will also have to be a shift from targeting the individual service branches for certain healthcare related contracts towards courting the newly formed DHA when it becomes active in October. As has been stated ad nauseam in various media, savings is the byword of the federal contracting market space, so offering your government customers a clear value proposition and plan for how you intend to help them with their bottom line remains critical.