DOJ's $85.8M contract for prisoner healthcare services awarded to Heritage Health Solutions, Inc

Contract Overview

Contract Amount: $85,831,431 ($85.8M)

Contractor: Heritage Health Solutions, Inc.

Awarding Agency: Department of Justice

Start Date: 2019-10-01

End Date: 2020-09-30

Contract Duration: 365 days

Daily Burn Rate: $235.2K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: CONTRACTOR SHALL PROVIDE A NATIONWIDE HEALTH CARE DELIVERY SYSTEM THAT WILL CONTINUE TO PROVIDE HEALTH CARE SERVICES FOR PRISONERS HELD IN USMS CUSTODY.

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22203

State: Virginia Government Spending

Plain-Language Summary

Department of Justice obligated $85.8 million to HERITAGE HEALTH SOLUTIONS, INC. for work described as: CONTRACTOR SHALL PROVIDE A NATIONWIDE HEALTH CARE DELIVERY SYSTEM THAT WILL CONTINUE TO PROVIDE HEALTH CARE SERVICES FOR PRISONERS HELD IN USMS CUSTODY. Key points: 1. The contract aims to ensure continued healthcare services for individuals in USMS custody. 2. The award was made under full and open competition, suggesting a robust bidding process. 3. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 4. The duration of the contract is one year, indicating a short-term service provision. 5. The geographic scope is nationwide, covering all USMS facilities. 6. The service category falls under Direct Health and Medical Insurance Carriers.

Value Assessment

Rating: fair

Benchmarking the value of this contract requires more detailed cost breakdowns and comparisons to similar nationwide prisoner healthcare contracts. The provided data does not allow for a precise assessment of whether the $85.8 million represents excellent value for money. However, the firm-fixed-price structure is generally favorable for the government as it caps potential cost overruns. Further analysis would involve comparing per-diem healthcare costs to national averages for correctional facilities and assessing the scope of services included against industry standards.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that multiple vendors were likely invited to bid. The specific number of bidders is not provided, but this method generally fosters price discovery and encourages competitive pricing. The government's ability to solicit bids from all qualified sources suggests a healthy market for these services, potentially leading to a more favorable price for taxpayers.

Taxpayer Impact: Full and open competition typically results in better pricing for taxpayers by ensuring that the government receives offers from all capable providers, driving down costs through market forces.

Public Impact

Prisoners in USMS custody nationwide benefit from continuous access to necessary healthcare services. The contract ensures the provision of direct health and medical insurance carrier services. The geographic impact is nationwide, covering all facilities managed by the U.S. Marshals Service. The contract supports the operational mission of the U.S. Marshals Service by addressing a critical inmate welfare requirement.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if the definition of 'healthcare services' is not precisely defined.
Risk of service quality variations across different geographic locations despite nationwide coverage.
Dependence on a single contractor for a critical service could lead to leverage issues.
Ensuring adequate medical staffing and quality of care across all facilities requires diligent oversight.

Positive Signals

Firm-fixed-price contract structure limits the government's exposure to cost overruns.
Nationwide scope simplifies management for a dispersed agency like the USMS.
Full and open competition suggests a competitive market and potentially fair pricing.
The contractor, Heritage Health Solutions, Inc., is likely experienced in providing such services.

Sector Analysis

The healthcare services sector, particularly within the correctional system, is a significant market. Contracts for prisoner healthcare are essential for government agencies managing detention facilities. This specific contract falls under the 'Direct Health and Medical Insurance Carriers' category, which encompasses a broad range of medical services, including primary care, specialty care, and potentially mental health services. Benchmarking would involve comparing the per-prisoner, per-day cost against similar contracts awarded by other federal, state, or local correctional agencies.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (sb: false) and the contractor is not a small business (ss: false). Therefore, there are no direct subcontracting implications for small businesses arising from a small business set-aside. However, the prime contractor may engage small businesses as subcontractors, but this is not mandated by the contract terms as presented.

Oversight & Accountability

Oversight for this contract would primarily fall under the U.S. Marshals Service (USMS) contracting officers and program managers. Accountability measures would be defined in the contract's performance work statement (PWS), outlining service level agreements and quality standards. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would typically extend to investigating fraud, waste, and abuse related to the contract.

Related Government Programs

Federal Prison System Healthcare Contracts
Bureau of Prisons Medical Services
State Department Medical Services for Detainees
Immigration and Customs Enforcement Detention Health Services

Risk Flags

Potential for inconsistent service quality across diverse locations.
Risk of inadequate medical staffing levels.
Challenges in managing inmates with complex health needs (chronic, mental health).
Ensuring compliance with all relevant healthcare regulations and standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $85.8 million to HERITAGE HEALTH SOLUTIONS, INC.. CONTRACTOR SHALL PROVIDE A NATIONWIDE HEALTH CARE DELIVERY SYSTEM THAT WILL CONTINUE TO PROVIDE HEALTH CARE SERVICES FOR PRISONERS HELD IN USMS CUSTODY.

Who is the contractor on this award?

The obligated recipient is HERITAGE HEALTH SOLUTIONS, INC..

Which agency awarded this contract?

Awarding agency: Department of Justice (U.S. Marshals Service).

What is the total obligated amount?

The obligated amount is $85.8 million.

What is the period of performance?

Start: 2019-10-01. End: 2020-09-30.

What is the historical spending pattern for prisoner healthcare services by the U.S. Marshals Service?

Analyzing historical spending for prisoner healthcare by the U.S. Marshals Service (USMS) is crucial for understanding trends and identifying potential cost efficiencies or escalations. While this specific contract represents $85.8 million for the 2019-2020 period, a comprehensive review would involve examining contract awards over the past 5-10 years. This would reveal whether the USMS has consistently used a single provider, the number of competitive solicitations, and the average annual spending. For instance, if previous contracts were significantly lower or higher, it would warrant an investigation into the reasons, such as changes in inmate population, scope of services, or market conditions. Understanding these patterns helps in forecasting future needs and budgeting more accurately, and in assessing whether current spending aligns with historical norms or represents a significant deviation.

How does the per-unit cost of healthcare services under this contract compare to similar contracts for federal prisoners?

To assess the value for money, a comparison of the per-unit cost of healthcare services under this $85.8 million contract to similar contracts for federal prisoners is essential. The 'per-unit cost' could be defined as a per-diem rate per inmate or a cost per specific medical service. Without detailed service delivery data and inmate population figures for the contract period, a precise per-diem calculation is difficult. However, if the contract covers approximately 30,000 inmates (a rough estimate based on average daily population figures for USMS), the average annual cost per inmate would be around $2,860. This figure needs to be benchmarked against per-diem costs in other federal correctional facilities (e.g., Bureau of Prisons) and state/local jails. Variations in scope of services, geographic location, and the prevalence of chronic conditions among the inmate population can significantly influence these costs, making direct comparisons challenging but necessary for a thorough value assessment.

What is the track record of Heritage Health Solutions, Inc. in providing correctional healthcare services?

Heritage Health Solutions, Inc. has a notable history of providing healthcare services within correctional facilities. Their experience includes contracts with various federal, state, and local agencies. A review of their past performance would involve examining contract compliance, patient outcomes, any significant quality issues or disputes, and their ability to manage large-scale, nationwide operations. For instance, assessing their performance on previous USMS contracts or similar large correctional healthcare contracts would provide insight into their operational capabilities, cost management, and adherence to service level agreements. Positive performance indicators would include consistent compliance with regulations, positive feedback from oversight bodies, and efficient service delivery. Conversely, any history of significant penalties, lawsuits, or contract terminations would raise concerns about their reliability and suitability for this critical function.

What are the primary risks associated with this contract, and how are they being mitigated?

Several risks are associated with this nationwide prisoner healthcare contract. A primary risk is ensuring consistent quality of care across diverse geographic locations and varying facility types under the USMS umbrella. Inadequate medical staffing, potential for outbreaks of infectious diseases within detention centers, and the management of inmates with complex chronic conditions or mental health issues are significant concerns. Furthermore, the firm-fixed-price nature, while beneficial for cost control, could incentivize the contractor to minimize services if not rigorously monitored. Mitigation strategies likely include robust performance monitoring by the USMS, clearly defined service level agreements (SLAs) in the contract, regular site visits and audits, and established protocols for handling medical emergencies and patient grievances. The contractor's own quality assurance programs and credentialing processes also play a role in risk mitigation.

How does the scope of services provided by Heritage Health Solutions, Inc. align with the needs of the U.S. Marshals Service inmate population?

The scope of services under this contract is designed to address the healthcare needs of individuals in U.S. Marshals Service (USMS) custody. This typically includes a broad range of medical services, from primary and preventive care to emergency medical treatment, dental care, and mental health services. The USMS inmate population is diverse, often including individuals with pre-existing conditions, substance abuse issues, and varying levels of access to healthcare prior to detention. Therefore, the contract must encompass comprehensive services to manage acute illnesses, chronic diseases, and urgent medical situations effectively. Alignment is assessed by comparing the contract's Performance Work Statement (PWS) against the known health profiles of the USMS population and industry best practices for correctional healthcare. Ensuring the scope adequately covers medical, dental, and mental health needs is critical for inmate welfare and operational continuity.

Industry Classification

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

Product/Service Code: MEDICAL SERVICES › OTHER MEDICAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 300 PARKER SQ STE 210, FLOWER MOUND, TX, 75028

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $186,197,277

Exercised Options: $88,595,583

Current Obligation: $85,831,431

Actual Outlays: $85,831,431

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: DJM17A35V0040

IDV Type: IDC

Timeline