VA Awards $51.7M for EDI P2E Services to Change Healthcare Operations, LLC, With a 2026 End Date

Contract Overview

Contract Amount: $51,753,565 ($51.8M)

Contractor: Change Healthcare Operations, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-07-01

End Date: 2026-11-30

Contract Duration: 882 days

Daily Burn Rate: $58.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: EDI P2E SERVICES

Place of Performance

Location: NASHVILLE, DAVIDSON County, TENNESSEE, 37219

State: Tennessee Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $51.8 million to CHANGE HEALTHCARE OPERATIONS, LLC for work described as: EDI P2E SERVICES Key points: 1. The contract value of $51.7M over approximately 2.5 years suggests a significant investment in critical IT infrastructure. 2. The 'Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services' NAICS code indicates a focus on essential digital services. 3. The firm fixed-price contract type offers cost certainty for the government, but may limit flexibility if requirements evolve. 4. The contract was awarded under full and open competition, implying a robust bidding process. 5. The duration of 882 days (approx. 2.5 years) is typical for IT service contracts of this nature. 6. The award amount of $51.7M falls within a moderate range for large-scale IT service procurements. 7. The absence of small business set-aside flags suggests this was not specifically targeted for smaller enterprises.

Value Assessment

Rating: good

The contract value of $51.7M for EDI P2E Services appears reasonable given the scope of IT infrastructure and data processing services typically required by a large agency like the VA. Benchmarking against similar large-scale IT service contracts awarded by federal agencies for data processing and hosting services would provide a more precise value-for-money assessment. The firm fixed-price structure helps control costs, but the overall value is contingent on the successful delivery of services and meeting performance metrics.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This competitive process is generally expected to drive down prices and ensure the government receives the best value. The specific number of bidders is not provided, but the 'full and open' designation suggests a healthy level of interest and a robust marketplace for these services.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it fosters a competitive environment, leading to potentially lower prices and higher quality services. It ensures that taxpayer funds are used efficiently by leveraging market forces to obtain the best possible outcome.

Public Impact

Veterans will benefit from improved efficiency and reliability in accessing healthcare services through enhanced electronic data interchange (EDI) capabilities. The contract supports the Department of Veterans Affairs' mission to provide comprehensive healthcare and benefits to veterans. The services delivered are crucial for the seamless exchange of healthcare information, impacting patient care coordination and administrative processes. The primary geographic impact is national, supporting VA facilities and operations across the United States. The contract likely supports a workforce of IT professionals, data specialists, and administrative staff within the contractor organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the services are highly specialized and difficult to transition.
Dependence on a single contractor for critical data processing could pose a risk if performance issues arise.
Ensuring data security and privacy compliance for sensitive veteran health information is paramount.

Positive Signals

The use of firm fixed-price contract type provides cost predictability for the VA.
Awarding under full and open competition suggests a competitive market and potential for good value.
The contract duration allows for stable service delivery and potential for long-term performance improvements.

Sector Analysis

This contract falls within the IT services sector, specifically focusing on computing infrastructure, data processing, and web hosting. The market for these services is large and highly competitive, with numerous providers ranging from large cloud service providers to specialized IT firms. The VA's spending in this area is consistent with the broader federal government's trend towards modernizing IT systems and leveraging cloud-based solutions to improve efficiency and service delivery.

Small Business Impact

The contract was not awarded as a small business set-aside, nor does it explicitly mention subcontracting goals for small businesses. This suggests that the primary award went to a large business. While this contract may not directly benefit small businesses through a set-aside, large prime contractors are often required to have small business subcontracting plans, which could create opportunities for smaller firms to participate in the supply chain.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs' contracting officers and program managers. Performance will be monitored against the terms and conditions of the firm fixed-price contract, including service level agreements and delivery schedules. Transparency is generally maintained through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Veterans Health Administration IT Services
Federal Cloud Computing Strategy
Electronic Health Records Modernization
Data Center Consolidation Initiative
IT Infrastructure Modernization Programs

Risk Flags

Potential for vendor lock-in
Cybersecurity risks associated with sensitive data
Dependence on contractor performance
Contract scope creep if not managed tightly

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $51.8 million to CHANGE HEALTHCARE OPERATIONS, LLC. EDI P2E SERVICES

Who is the contractor on this award?

The obligated recipient is CHANGE HEALTHCARE OPERATIONS, LLC.

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 $51.8 million.

What is the period of performance?

Start: 2024-07-01. End: 2026-11-30.

What is the track record of CHANGE HEALTHCARE OPERATIONS, LLC with the Department of Veterans Affairs and other federal agencies?

CHANGE HEALTHCARE OPERATIONS, LLC has a history of contracts with various federal agencies, including the Department of Veterans Affairs. Analyzing their past performance on similar IT service contracts, particularly those involving data processing and electronic data interchange, is crucial. This includes reviewing past performance evaluations, any documented issues or disputes, and their overall success in meeting contract requirements. A strong track record with the VA suggests a higher likelihood of successful performance on this new contract, while a history of issues might indicate potential risks that need careful management.

How does the awarded amount of $51.7M compare to similar EDI P2E services contracts awarded by the VA or other agencies?

The $51.7M award for EDI P2E Services needs to be benchmarked against comparable contracts to assess value for money. This involves identifying contracts with similar scope, duration, and service requirements (e.g., data processing, IT infrastructure, electronic data interchange) awarded by the VA or other federal agencies. Factors such as the number of users supported, the volume of data processed, and the complexity of the integration would influence cost. If this contract's per-unit cost or overall value is significantly higher than comparable contracts, it may warrant further investigation into the pricing structure and service components.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks for this contract include potential performance failures by the contractor, cybersecurity vulnerabilities impacting sensitive veteran data, and the possibility of cost overruns if the firm fixed-price structure proves inadequate for unforeseen complexities. Mitigation strategies typically involve robust performance monitoring, clearly defined service level agreements (SLAs), regular security audits, and contingency planning. The VA's oversight mechanisms, including contract management reviews and potential penalties for non-performance, are critical for managing these risks. The contractor's own risk management plan and cybersecurity protocols are also vital.

How effective is the 'full and open competition' process in ensuring the VA receives optimal value for these IT services?

Full and open competition is designed to maximize value by encouraging a wide range of qualified vendors to submit bids, thereby fostering price competition and innovation. For IT services like EDI P2E, this process allows the VA to solicit proposals that meet specific technical requirements while also competing on price. The effectiveness hinges on the clarity of the solicitation, the fairness of the evaluation criteria, and the actual number and quality of bids received. If the competition was robust, it strongly suggests that the awarded price reflects market rates and that the chosen vendor offers the best overall value proposition.

What is the historical spending pattern of the VA for EDI P2E services or similar IT infrastructure contracts?

Analyzing the VA's historical spending on EDI P2E services and related IT infrastructure provides context for the current $51.7M award. This includes examining the total amount spent over previous fiscal years, the number and value of contracts awarded in this category, and the primary contractors involved. Understanding historical trends can reveal patterns of increasing or decreasing investment, identify potential areas of cost escalation, and highlight the VA's long-term strategy for managing its IT infrastructure. Significant deviations from historical spending levels might require justification.

What are the implications of the firm fixed-price contract type for service flexibility and potential cost adjustments?

A firm fixed-price (FFP) contract type provides the greatest cost certainty for the government, as the price is set and generally not subject to adjustment unless specific contract clauses allow for it (e.g., equitable adjustments for changes). For the VA, this means a predictable expenditure of $51.7M for the defined scope of services. However, FFP contracts can limit flexibility if the VA's requirements change significantly during the contract period. If modifications are needed, they would typically be handled through contract modifications, which can be a complex process. The contractor bears the risk of cost overruns, incentivizing efficient performance.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL 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

Parent Company: Travelport Worldwide Limited

Address: 424 CHURCH ST STE 1400, NASHVILLE, TN, 37219

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $85,938,646

Exercised Options: $51,753,565

Current Obligation: $51,753,565

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10G23D0017

IDV Type: IDC

Timeline