DoD's $16.5M Physician Services Contract with American Hospital Services Group LLC Raises Questions
Contract Overview
Contract Amount: $16,521,201 ($16.5M)
Contractor: American Hospital Services Group LLC
Awarding Agency: Department of Defense
Start Date: 2008-04-15
End Date: 2012-04-14
Contract Duration: 1,460 days
Daily Burn Rate: $11.3K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Healthcare
Official Description: TBI/PH SOUTHWEST REQS - BASE YR
Place of Performance
Location: DAYTON, GREENE County, OHIO, 45433
State: Ohio Government Spending
Plain-Language Summary
Department of Defense obligated $16.5 million to AMERICAN HOSPITAL SERVICES GROUP LLC for work described as: TBI/PH SOUTHWEST REQS - BASE YR Key points: 1. Contract awarded to American Hospital Services Group LLC for physician services. 2. Significant spending of $16.5M over 4 years. 3. Full and open competition was utilized. 4. Potential concerns regarding the fixed-price with economic price adjustment structure.
Value Assessment
Rating: fair
The contract's fixed-price with economic price adjustment (FPEPA) structure can lead to cost overruns if not carefully managed. Benchmarking against similar physician service contracts is difficult without more detailed cost breakdowns.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, suggesting a competitive bidding process. However, the FPEPA clause may limit the effectiveness of price discovery by allowing for adjustments.
Taxpayer Impact: Taxpayer funds are used for physician services. The economic price adjustment clause could potentially increase the final cost beyond initial projections, impacting overall value.
Public Impact
Ensures access to essential physician and mental health specialist services for military personnel. The contract duration of 4 years provides stability in service provision. Economic price adjustments could lead to higher costs for taxpayers if inflation is significant.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Economic price adjustment clause
- Lack of detailed cost breakdown for benchmarking
Positive Signals
- Full and open competition
- Stable 4-year contract duration
Sector Analysis
This contract falls within the healthcare sector, specifically physician and mental health services. Spending benchmarks for similar government contracts for physician services vary widely based on location, specialty, and scope of services.
Small Business Impact
The data does not indicate whether small businesses were involved as subcontractors or prime contractors. Further analysis would be needed to determine small business participation.
Oversight & Accountability
Oversight would focus on the justification and monitoring of economic price adjustments to ensure they are reasonable and tied to legitimate cost increases, preventing potential contractor overcharges.
Related Government Programs
- Offices of Physicians, Mental Health Specialists
- Department of Defense Contracting
- Department of the Air Force Programs
Risk Flags
- Potential for cost overruns due to economic price adjustments.
- Lack of transparency in specific service details and cost breakdowns.
- Limited insight into the competitive intensity and final price negotiation.
- No clear indication of small business participation.
Tags
offices-of-physicians-mental-health-spec, department-of-defense, oh, do, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $16.5 million to AMERICAN HOSPITAL SERVICES GROUP LLC. TBI/PH SOUTHWEST REQS - BASE YR
Who is the contractor on this award?
The obligated recipient is AMERICAN HOSPITAL SERVICES GROUP LLC.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Air Force).
What is the total obligated amount?
The obligated amount is $16.5 million.
What is the period of performance?
Start: 2008-04-15. End: 2012-04-14.
What specific physician and mental health services are covered under this contract, and how do they align with the needs of the TBI/PH SOUTHWEST population?
The contract specifies services under NAICS code 621112 (Offices of Physicians). While the exact services aren't detailed, this typically includes general and specialized medical services. The 'TBI/PH SOUTHWEST REQS' in the description suggests a focus on services related to Traumatic Brain Injury and Post-Hospitalization care in the Southwest region, implying a need for neurological, psychiatric, and rehabilitative specialists.
How were the economic price adjustments calculated, and what mechanisms were in place to ensure they reflected actual cost increases rather than contractor profit?
The contract's 'FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT' (FPEPA) type suggests that price changes are tied to an index or specific cost drivers. The effectiveness of oversight lies in the agency's ability to scrutinize these adjustments, requiring documentation of increased costs (e.g., labor, supplies) and ensuring the adjustments do not exceed legitimate increases, thereby protecting taxpayer funds from unwarranted price hikes.
What was the competitive landscape for these physician services, and did the full and open competition result in the best possible pricing for the government?
While 'full and open competition' indicates multiple bidders were allowed, the ultimate success in achieving the best price depends on the number and quality of bids received, the evaluation criteria, and the negotiation process. The FPEPA clause, however, introduces a variable element that can mitigate initial price advantages. A thorough review of the bid evaluation and negotiation records would be necessary to confirm optimal pricing.
Industry Classification
NAICS: Health Care and Social Assistance › Offices of Physicians › Offices of Physicians, Mental Health Specialists
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Solicitation ID: FA701205R0010
Offers Received: 4
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Parent Company: THE Chenega Corporation (UEI: 622692994)
Address: 415 EAGLEVIEW BLVD STE 108, EXTON, PA, 06
Business Categories: Alaskan Native Corporation Owned Firm, Category Business, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Small Business, Small Disadvantaged Business, Special Designations, Subchapter S Corporation
Financial Breakdown
Contract Ceiling: $21,997,829
Exercised Options: $16,521,201
Current Obligation: $16,521,201
Contract Characteristics
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: FA701406D0001
IDV Type: IDC
Timeline
Start Date: 2008-04-15
Current End Date: 2012-04-14
Potential End Date: 2013-04-14 00:00:00
Last Modified: 2012-09-05
More Contracts from American Hospital Services Group LLC
- Rccc:125189 — $105.3M (Department of Defense)
View all American Hospital Services Group LLC federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)