The Department of Defence is looking for a shortlist of tenderers to possibly replace Bupa as its health services provider.
The multibillion-dollar contract to supply health services to the Australian Defence Force is up for renewal, with the Department of Defence releasing a Request for Proposal.
Bupa Health Services is the incumbent provider, awarded the $3.4 billion contract (replacing Medibank) on 14 January 2019 for an initial period of six years, with options to extend to a maximum of 10 years and an estimated cost of $6 billion.
However, it seems Defence is keen to test the waters early, with the new contract due to start on 1 July 2027 for a period of five years (30 June 2032) with a possible five-year extension.
The successful contractor will be required to start transition of the services from the incumbent provider on 1 January 2027, and complete all transition activities and be able to fully provide the services by 30 June 2027.
According to the RFP documents, the successful contractor will deliver the following clinical streams nationally across preventive and screening, scheduled and unscheduled care:
- Primary health services;
- Allied health services;
- Mental health services;
- Dental services;
- Medical imaging and radiology services;
- On-base pharmacy services;
- Physiotherapy and exercise physiology services (including clinical rehabilitation);
- In-patient care services;
- Occupational rehabilitation services;
- Specialised services (including off-base in-patient care); and,
- A nationally accessible medical advice, triage and referral service, and all-hours support line.
As of June 2022, approximately 1283 health professional and support staff were providing services on-base, responsible for providing the delivery of healthcare to approximately 60,000 permanent members and 25,000 part-time members of the ADF.
ADF members are provided healthcare through a network of Defence-owned facilities in Australia and overseas, and supplemented by virtual, public and private infrastructure “depending on the type of care required”, said the RFP documents.
“While this network will continue to be vital to the provision of healthcare to the ADF, this procurement is seeking an integrated operating and delivery model that enhances organisational capability outcomes.”
In addition, the health services provided to eligible ADF personnel are expected “at a minimum” to be equivalent to those provided to the civilian population through Medicare, the PBS, PHNs and state and territory health departments.
However, “the health services provided to eligible personnel are invariably greater in scope than publicly available health services because of the higher requirement to maintain fitness for duty in the military context”.
ADF personnel can also access telephone-based triage and health advice, 24 hours a day, seven days a week. This service is staffed by registered health professionals who can access ADF personnel health records in real time.
The Commonwealth seeks to implement a service delivery model that:
- integrates on-base and off-base health care into a coordinated system;
- standardises clinical pathways across all settings;
- enables continuity of care across locations and providers;
- reduces the requirement for manual clinical approvals for services; and
- transitions from an input-based service delivery model (e.g. fill of on-base workforce plan) to one focused on access and readiness outcomes.
A May 2023 Australian National Audit Office audit of Defence’s management of the delivery of health services to the ADF found the department had been only “partly effective” in achieving “efficient and effective delivery of the contracted services”.
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In particular, Defence’s contract management demonstrated shortcomings in ensuring the implementation of all contracted requirements.
“Defence has not managed the contract to ensure that: all plans required under the contract have been put in place; contract change proposals are made in accordance with processes established in the contract; all reports prepared by the contractor meet the minimum contracted requirements; invoices are complete; and contract payments are only made on the basis of complete invoices,” said the ANAO at the time.
“Weaknesses identified in Defence’s control framework for payments have not been fully resolved, reducing Defence’s ability to provide assurance on the proper use of public resources for which it is responsible.”
The ANAO made four recommendations, all of which were agreed to by the DoD:
- the DoD ensure that all record-keeping requirements are complied with in its management of the ADF health services contract;
- the DoD develop and implement an assessment and authorisation framework, supported by appropriate governance and assurance arrangements, to oversee the handling of contract change proposals under the ADF health services contract;
- the DoD ensure that accreditation processes for ICT systems that manage sensitive, including personally identifiable, information are completed in a timely manner, and that risks are identified and effectively monitored to ensure information is being managed appropriately; and,
- the DoD implement the benefits management plan for the ADF health services contract and establish appropriate governance arrangements to monitor and report on benefits realisation.
An industry briefing will be held at Ngunnawal R1 Theatrette in Canberra, starting at 2pm on Thursday 14 August.
Proposals must be lodged by 4pm ACT on Friday 10 October, and shortlisted respondents will be notified in December 2025, with the Department of Defence expected to release a Request for Tender to selected tenderers in the first quarter of 2026.
Read the RFP notice here.
Read the full documentation here.
A separate procurement activity is currently underway to procure pathology services for the Department of Defence.