VA's $171.5M contract for medical disability exams in Region 2 awarded to Veterans Evaluation Services, Inc

Contract Overview

Contract Amount: $171,503,208 ($171.5M)

Contractor: Veterans Evaluation Services, Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-10-01

End Date: 2021-09-30

Contract Duration: 364 days

Daily Burn Rate: $471.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MEDICAL DISABILITY EXAMINATIONS (MDES) UNDER SECTION 504 OF THE VETERANS BENEFITS IMPROVEMENTS ACT OF 1996 (PUBLIC LAW 104 275 38 U.S.C. 5101), REGION 2 (SOUTHEAST)

Place of Performance

Location: HOUSTON, HARRIS County, TEXAS, 77008

State: Texas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $171.5 million to VETERANS EVALUATION SERVICES, INC for work described as: MEDICAL DISABILITY EXAMINATIONS (MDES) UNDER SECTION 504 OF THE VETERANS BENEFITS IMPROVEMENTS ACT OF 1996 (PUBLIC LAW 104 275 38 U.S.C. 5101), REGION 2 (SOUTHEAST) Key points: 1. Contract awarded to a single vendor for a significant duration, raising questions about sustained competition. 2. The contract's value suggests a substantial need for medical disability examinations within the specified region. 3. Fixed-price contract type aims to control costs, but performance monitoring is crucial for value realization. 4. The scope covers essential services for veterans, directly impacting their benefits and well-being. 5. Geographic focus on Region 2 (Southeast) indicates a concentrated demand for these services in that area. 6. The contract's duration of 364 days suggests a need for ongoing, consistent service delivery.

Value Assessment

Rating: fair

The contract value of $171.5 million for a one-year period represents a significant investment in medical disability examinations. Benchmarking this against similar contracts is challenging without more specific data on the volume and complexity of examinations performed. However, the fixed-price nature suggests an attempt to manage costs, but the overall value for money will depend on the quality and efficiency of the services delivered by Veterans Evaluation Services, Inc. The broad scope and single award for a year warrant scrutiny to ensure competitive pricing and optimal resource allocation.

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. However, the data provided does not specify the number of bidders that participated in the process. A single award for a large-value, one-year contract suggests that Veterans Evaluation Services, Inc. was selected as the most advantageous offer. The level of competition at the bid stage is critical to understanding if the pricing reflects market rates or if there were limited competitive pressures.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it encourages multiple vendors to offer competitive pricing. However, the ultimate benefit depends on the number of bids received and the evaluation criteria used. A robust competition should lead to a fair price, but without knowing the number of bidders, it's difficult to definitively assess the taxpayer advantage.

Public Impact

Veterans in Region 2 (Southeast) benefit from timely and accessible medical disability examinations, crucial for processing their benefit claims. The contract ensures the delivery of essential medical evaluation services, supporting the Department of Veterans Affairs' mandate. The geographic impact is concentrated in the Southeast region, addressing a specific demand for these services. The contract supports a workforce of medical professionals and administrative staff required to conduct these examinations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if competition is not re-established for future contract periods.
Reliance on a single vendor for a critical service could pose a risk if performance issues arise.
The large contract value may indicate a lack of smaller, specialized providers being able to compete.

Positive Signals

Awarded through full and open competition, suggesting a fair and transparent initial selection process.
Fixed-price contract type provides cost certainty for the government.
The contract addresses a critical need for veterans' disability evaluations, indicating a positive impact on service delivery.

Sector Analysis

The healthcare services sector, particularly within government contracting, often involves large, complex contracts for specialized medical services. The North American Industry Classification System (NAICS) code 621111, 'Offices of Physicians (except Mental Health Specialists),' falls within this broad category. Contracts for medical disability examinations are vital for agencies like the VA to assess eligibility for benefits. The market for these services can be competitive, with both large healthcare providers and specialized evaluation companies vying for these contracts. The benchmark for this contract's value would ideally be compared against similar large-scale VA or DoD contracts for medical evaluations, considering regional cost variations and service scope.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the scale and nature of the services required were likely better suited for larger, established firms capable of handling the volume and complexity. There is no explicit information on subcontracting plans, but for a contract of this magnitude, it is common for prime contractors to engage small businesses for specific support functions or specialized services, which could offer some opportunities for the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. The fixed-price nature of the contract implies that the VA is paying a set amount for the services, regardless of the exact number of examinations, though performance metrics and quality standards would be crucial for ensuring value. Accountability would be tied to meeting these performance standards and contractual obligations. Transparency would be enhanced through contract award notices and potentially through performance reports, though detailed public access to these might be limited. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Veterans Health Administration (VHA) Medical Services
VA Benefits Administration Claims Processing
TRICARE Medical Services
DoD Medical Evaluation Boards

Risk Flags

Single award for a large-value, one-year contract may limit future competition.
Performance metrics and quality assurance are critical for value realization on fixed-price contracts.
Lack of specific bidder numbers makes it difficult to fully assess competitive pressure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $171.5 million to VETERANS EVALUATION SERVICES, INC. MEDICAL DISABILITY EXAMINATIONS (MDES) UNDER SECTION 504 OF THE VETERANS BENEFITS IMPROVEMENTS ACT OF 1996 (PUBLIC LAW 104 275 38 U.S.C. 5101), REGION 2 (SOUTHEAST)

Who is the contractor on this award?

The obligated recipient is VETERANS EVALUATION SERVICES, 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 $171.5 million.

What is the period of performance?

Start: 2020-10-01. End: 2021-09-30.

What is the historical spending pattern for Medical Disability Examinations (MDES) in Region 2 by the VA?

Analyzing historical spending for MDES in Region 2 requires access to VA's historical contract data. Without specific historical figures for this region and contract type, it's difficult to establish a precise trend. However, the VA's overall budget for veteran healthcare and benefits has generally increased over the years, driven by growing veteran populations and expanding healthcare services. Contracts for disability examinations are a critical component of this spending. If this $171.5 million contract represents a significant increase or decrease compared to previous years' spending in Region 2, it could indicate shifts in demand, policy changes, or market dynamics. Further investigation into prior contract awards for similar services in this region would be necessary to identify specific spending patterns and budget allocations over time.

How does the per-examination cost under this contract compare to industry benchmarks or other VA contracts?

Determining the per-examination cost requires knowing the total number of examinations performed under the $171.5 million contract over its 364-day duration. This information is not provided in the initial data. If, for example, 100,000 examinations were conducted, the average cost per exam would be approximately $1,715. This figure would then need to be compared against industry benchmarks for similar medical disability evaluations, which can vary widely based on the complexity of the examination (e.g., orthopedic vs. neurological), geographic location, and specific requirements. Benchmarking against other VA contracts for MDES, especially those awarded through full and open competition in different regions, would also provide valuable context for assessing whether this contract represents good value for money.

What is the track record of Veterans Evaluation Services, Inc. in performing similar government contracts?

Veterans Evaluation Services, Inc. (VES) has a significant track record in providing medical disability evaluations, particularly for the Department of Veterans Affairs. They are known to be a major contractor in this space, often handling large volumes of examinations. Assessing their specific performance on this $171.5 million contract would require reviewing performance metrics, quality reports, and any past performance evaluations associated with this award. Generally, VES has been a prominent player, suggesting they possess the infrastructure and expertise to manage such contracts. However, like any large contractor, past performance can vary, and a detailed review of their history, including any past issues or commendations on similar VA contracts, would be necessary for a comprehensive assessment.

What are the potential risks associated with a single vendor holding this large contract for an extended period?

A primary risk associated with a single vendor holding a large contract for an extended period is the potential for reduced competitive pressure, which could lead to price increases in future renewals or a decline in service quality if the vendor becomes complacent. There's also a risk of vendor lock-in, making it difficult and costly for the government to switch providers if performance issues arise or if a more innovative solution emerges. Furthermore, if the vendor faces financial difficulties, operational disruptions, or significant staffing shortages, it could severely impact the continuity of critical services like medical disability examinations, potentially delaying veterans' benefits. Robust contract management, performance monitoring, and contingency planning are essential to mitigate these risks.

How does the geographic focus on Region 2 (Southeast) impact the contract's execution and cost-effectiveness?

Focusing the contract on Region 2 (Southeast) allows for a more targeted and potentially efficient delivery of medical disability examinations, concentrating resources where the demand is highest. This geographic specificity can reduce logistical complexities and travel costs associated with serving a dispersed veteran population. However, it also means that veterans outside this region would not be directly served by this specific contract, requiring separate arrangements. The cost-effectiveness is influenced by the concentration of healthcare providers and the prevailing labor costs in the Southeast. If this region has a high density of qualified medical professionals and competitive pricing structures, it could contribute to the overall value of the contract. Conversely, if the region experiences shortages or higher operational costs, it could impact the per-examination price.

Industry Classification

NAICS: Health Care and Social Assistance › Offices of Physicians › Offices of Physicians (except Mental Health Specialists)

Product/Service Code: MEDICAL SERVICES › NURSING, NURSING HOME, EVAL/SCREEN

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2707 NORTH LOOP W # 1000, HOUSTON, TX, 77008

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

Financial Breakdown

Contract Ceiling: $171,503,208

Exercised Options: $171,503,208

Current Obligation: $171,503,208

Actual Outlays: $154,108,091

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10X19D0006

IDV Type: IDC

Timeline