VA awards $8.4M for lab and radiology software, a sole-source contract with potential for cost savings

Contract Overview

Contract Amount: $8,392,500 ($8.4M)

Contractor: Clinisys, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-02-23

End Date: 2027-02-22

Contract Duration: 1,095 days

Daily Burn Rate: $7.7K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: VA ENTERPRISE WIDE LABORATORY AND RADIOLIGY RESULT LETTERS SOFTWARE SUBSCRIPTIONS AND IMPLEMENTATION

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85718

State: Arizona Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $8.4 million to CLINISYS, INC. for work described as: VA ENTERPRISE WIDE LABORATORY AND RADIOLIGY RESULT LETTERS SOFTWARE SUBSCRIPTIONS AND IMPLEMENTATION Key points: 1. The contract is a sole-source award, raising questions about price competitiveness. 2. The fixed-price contract structure limits the government's exposure to cost overruns. 3. The duration of the contract (3 years) suggests a need for stable software solutions. 4. The award is for software subscriptions and implementation, indicating a focus on operational support. 5. The vendor, CLINISYS, INC., is the sole provider, highlighting a potential lack of market alternatives. 6. The contract value is below the typical threshold for extensive public scrutiny, but warrants analysis.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging without competitive bids. The award of $8.4 million over three years for software subscriptions and implementation suggests a per-year cost of approximately $2.8 million. Without comparable contracts or market data for this specific software suite, it's difficult to definitively assess if this represents excellent value. However, sole-source awards often carry a premium due to the lack of competitive pressure, which could indicate a fair, but not necessarily optimal, price point.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of Veterans Affairs did not conduct a competitive bidding process. This typically occurs when a specific vendor or product is uniquely qualified or necessary, or when only one source is capable of meeting the requirement. The lack of competition means that price discovery through market forces was bypassed, potentially leading to higher costs than if multiple vendors had vied for the contract.

Taxpayer Impact: Taxpayers may be paying a premium for this software due to the absence of competition. Without a competitive process, there is less assurance that the government secured the lowest possible price for these essential laboratory and radiology software services.

Public Impact

Veterans will benefit from improved efficiency and accuracy in laboratory and radiology result processing. Healthcare providers within the VA system will have access to updated software for critical diagnostic services. The implementation of this software aims to streamline workflows for medical staff, potentially reducing turnaround times for test results. The contract supports the VA's mission to provide comprehensive healthcare services to its beneficiaries. The geographic impact is nationwide, as this is an enterprise-wide solution for the VA.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and may result in higher costs for taxpayers.
Lack of transparency in the procurement process due to non-competitive nature.
Potential for vendor lock-in given the specialized nature of the software.
Dependence on a single vendor for critical healthcare IT infrastructure.

Positive Signals

Contract addresses a critical need for laboratory and radiology software within the VA.
Firm fixed-price contract provides cost certainty for the government.
Long-term contract (3 years) suggests a stable and reliable solution for the agency.
Focus on implementation alongside subscription indicates a commitment to successful adoption.

Sector Analysis

The market for healthcare IT software, particularly for specialized areas like laboratory and radiology information systems, is robust but often characterized by niche providers. Companies like CLINISYS, INC. operate within this segment, offering solutions designed to integrate with existing healthcare workflows and electronic health records. The Department of Veterans Affairs represents a significant customer within this sector, with substantial spending on IT infrastructure to support its vast network of healthcare facilities. Comparable spending benchmarks are difficult to establish precisely without knowing the specific modules and features included, but enterprise-wide software solutions for large healthcare systems can range from millions to tens of millions of dollars annually.

Small Business Impact

This contract was not competed and there is no indication of small business set-asides or subcontracting requirements. As a sole-source award to CLINISYS, INC., it is unlikely to directly benefit small businesses through prime contracting opportunities. The impact on the broader small business ecosystem is minimal, as the focus is on a specific, established software provider rather than fostering competition among smaller vendors.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of Veterans Affairs contracting officers and program managers. Accountability measures are embedded within the firm fixed-price contract terms, which stipulate deliverables and payment schedules. Transparency is limited due to the sole-source nature of the award, as the justification for not competing is not publicly detailed. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected in the procurement or execution of this contract.

Related Government Programs

VA Electronic Health Record (EHR) Modernization
VA Laboratory Information System (LIS) Contracts
VA Radiology Information System (RIS) Contracts
Healthcare IT Software Subscriptions
Medical Imaging Software Procurement

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for higher costs
Vendor lock-in risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $8.4 million to CLINISYS, INC.. VA ENTERPRISE WIDE LABORATORY AND RADIOLIGY RESULT LETTERS SOFTWARE SUBSCRIPTIONS AND IMPLEMENTATION

Who is the contractor on this award?

The obligated recipient is CLINISYS, INC..

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $8.4 million.

What is the period of performance?

Start: 2024-02-23. End: 2027-02-22.

What is the specific justification for awarding this contract on a sole-source basis to CLINISYS, INC.?

The provided data indicates the contract was 'NOT COMPETED' and awarded as 'SOLE SOURCE'. While the specific justification is not detailed in the provided data, common reasons for sole-source awards include proprietary software, unique capabilities not available from other vendors, urgent and compelling needs where competition is not feasible, or if only one responsible source exists. For CLINISYS, INC., this likely relates to their specific laboratory and radiology software being uniquely suited to the VA's existing infrastructure or requiring specialized integration that only they can provide. A full justification would typically be documented by the agency and may be available through Freedom of Information Act (FOIA) requests or agency procurement portals.

How does the annual cost of this contract compare to similar enterprise-wide laboratory and radiology software solutions in the federal government or large healthcare systems?

The annual cost for this contract is approximately $2.8 million ($8.4 million / 3 years). Benchmarking this figure is challenging without knowing the exact scope of services, number of users, and specific modules included in the CLINISYS, INC. offering. However, enterprise-wide solutions for large healthcare systems can vary significantly. Some federal agencies or large private hospital networks might spend upwards of $5-10 million annually for comprehensive EHR, LIS, and RIS systems, while smaller deployments or specific departmental solutions could be in the hundreds of thousands. Given this is a sole-source award, it's plausible the price is at the higher end of a comparable range due to lack of competitive pressure. Further analysis would require detailed feature comparisons and vendor pricing from competitive procurements.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this software subscription and implementation contract?

The provided data does not specify the Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. Typically, for software subscriptions and implementation, SLAs would focus on system uptime, response times for technical support, data accuracy and integrity, security compliance, and timely delivery of implementation milestones. KPIs might include metrics related to user adoption rates, reduction in manual processing errors, or improvements in turnaround times for diagnostic results. These details are usually outlined in the contract's statement of work (SOW) or performance work statement (PWS) and are crucial for the VA to monitor the vendor's performance and ensure the software delivers the intended benefits.

What is CLINISYS, INC.'s track record with the Department of Veterans Affairs or other federal agencies for similar software solutions?

CLINISYS, INC. has a history of providing laboratory and radiology information systems. While the provided data does not detail their specific track record with the VA, it is common for agencies to award sole-source contracts to incumbent vendors or those with established solutions that integrate well with existing systems. A deeper dive into federal procurement databases (like SAM.gov or FPDS) would reveal past contracts awarded to CLINISYS, INC. by the VA or other agencies, including contract values, performance history, and any reported issues. This information is vital for assessing the contractor's reliability and past performance in delivering similar services.

What is the potential risk associated with relying on a single vendor (CLINISYS, INC.) for critical laboratory and radiology software across the entire VA enterprise?

The primary risk associated with relying on a single vendor for critical enterprise-wide software is vendor lock-in and a lack of leverage in future negotiations. If CLINISYS, INC. is the sole provider of this specific, integrated solution, the VA may face significant challenges and costs if they decide to switch vendors in the future. This includes potential data migration issues, retraining staff, and reconfiguring IT infrastructure. Furthermore, a sole-source arrangement can reduce the incentive for the vendor to innovate or offer competitive pricing over time, as the government has limited alternatives. Dependence on one vendor also increases vulnerability to service disruptions if the vendor experiences financial difficulties or operational issues.

Industry Classification

NAICS: Information › Software Publishers › Software Publishers

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › IT AND TELECOM - DATA CENTER

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 36C10A24Q0007

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3300 E SUNRISE DR, TUCSON, AZ, 85718

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $38,865,000

Exercised Options: $8,392,500

Current Obligation: $8,392,500

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline