VA awards $166M for medical disability exams, with 7 bidders competing for services in Texas

Contract Overview

Contract Amount: $166,180,824 ($166.2M)

Contractor: Veterans Evaluation Services, Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-10-01

End Date: 2023-09-30

Contract Duration: 364 days

Daily Burn Rate: $456.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 7

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MEDICAL DISABILITY EXAMINATIONS (MDE) - THIS TASK ORDER IS SUBJECT TO THE AVAILABILITY OF FUNDS AS PRESCRIBED IN FAR 52.232-18 AVAILABILITY OF FUNDS.

Place of Performance

Location: HOUSTON, HARRIS County, TEXAS, 77008

State: Texas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $166.2 million to VETERANS EVALUATION SERVICES, INC for work described as: MEDICAL DISABILITY EXAMINATIONS (MDE) - THIS TASK ORDER IS SUBJECT TO THE AVAILABILITY OF FUNDS AS PRESCRIBED IN FAR 52.232-18 AVAILABILITY OF FUNDS. Key points: 1. The contract value represents a significant investment in assessing veterans' medical conditions. 2. Full and open competition suggests a potentially competitive pricing environment. 3. The duration of the contract is one year, indicating a need for ongoing services. 4. The primary service area is Texas, focusing on a specific geographic region. 5. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 6. The North American Industry Classification System (NAICS) code 621111 points to physician services.

Value Assessment

Rating: good

The contract value of $166 million for a one-year period for medical disability examinations appears substantial. Benchmarking against similar contracts for MDE services would be necessary for a precise value-for-money assessment. However, the presence of 7 bidders in a full and open competition suggests that the pricing is likely to be competitive, potentially driving down per-unit costs compared to less competitive solicitations. The firm fixed-price nature of the contract also provides cost certainty for the VA.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. Seven bidders participated in the competition, which is a healthy number and suggests a robust market for these services. A higher number of bidders generally leads to more competitive pricing and a wider range of innovative solutions, benefiting the government.

Taxpayer Impact: The strong competition for this contract is beneficial for taxpayers as it likely resulted in a more favorable price for the medical disability examinations. It also signals that the VA is leveraging the market effectively to secure these essential services.

Public Impact

Veterans in Texas will benefit from timely and accurate medical disability examinations. The services provided are crucial for determining eligibility for VA benefits. The contract supports healthcare professionals and administrative staff involved in the examination process. Geographic impact is concentrated in Texas, serving veterans within that state.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor to prioritize volume over quality given the fixed-price nature and large contract value.
Dependence on a single contractor for a critical function could pose a risk if performance issues arise.
Ensuring consistent quality of examinations across all providers under the contractor is a potential challenge.

Positive Signals

Full and open competition with multiple bidders suggests a strong market and potential for competitive pricing.
Firm Fixed Price contract structure provides cost certainty for the VA.
The contractor, Veterans Evaluation Services, Inc., is likely experienced in providing these types of services.

Sector Analysis

The healthcare services sector, specifically the sub-sector for medical evaluation and diagnostic services, is a critical component of the broader healthcare industry. This contract falls under the 'Offices of Physicians' NAICS code, indicating a focus on direct medical assessment. The market for such services is driven by demand from government agencies like the VA, as well as private insurers and employers. Spending in this area is substantial, reflecting the ongoing need for independent medical opinions for disability claims.

Small Business Impact

There is no indication from the provided data that this contract included a small business set-aside. The presence of 7 bidders in a full and open competition suggests that larger, established firms likely participated. Further analysis would be needed to determine if subcontracting opportunities exist for small businesses within the scope of this contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs contracting officers and program managers. Accountability measures are inherent in the firm fixed-price contract type, where the contractor is responsible for delivering services within the agreed-upon price. Transparency is generally facilitated through contract award databases and reporting requirements, although specific performance metrics and oversight reports may not always be publicly available.

Related Government Programs

Veterans Health Administration (VHA) Medical Services
Disability Benefits Questionnaire (DBQ) Processing
TRICARE Medical Evaluations

Risk Flags

Availability of Funds clause may pose a risk to uninterrupted service if appropriations are not secured.
Potential for performance degradation if contractor prioritizes volume over quality due to fixed-price nature.
Dependence on a single contractor for a critical function.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $166.2 million to VETERANS EVALUATION SERVICES, INC. MEDICAL DISABILITY EXAMINATIONS (MDE) - THIS TASK ORDER IS SUBJECT TO THE AVAILABILITY OF FUNDS AS PRESCRIBED IN FAR 52.232-18 AVAILABILITY OF FUNDS.

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 $166.2 million.

What is the period of performance?

Start: 2022-10-01. End: 2023-09-30.

What is the historical spending trend for Medical Disability Examinations (MDE) by the Department of Veterans Affairs?

Analyzing historical spending for MDE services by the VA is crucial for understanding trends and budgeting. While specific historical data for this exact contract is not provided, the VA consistently allocates significant funds towards MDEs to process disability claims. Factors influencing this spending include the number of veterans filing claims, changes in examination requirements, and the efficiency of the claims processing system. In recent years, there has been a push to reduce backlogs and improve the timeliness of these examinations, which may have led to increased contract awards or adjustments in contract values to meet demand. Comparing the current $166 million award to previous years' expenditures would reveal whether this represents an increase, decrease, or stable level of investment in MDE services.

How does the per-veteran cost of these medical disability examinations compare to industry benchmarks?

Determining the per-veteran cost requires dividing the total contract value by the estimated number of examinations to be performed. Without the projected number of examinations, a direct per-veteran cost calculation is not possible. However, the fact that this contract was awarded under full and open competition with seven bidders suggests that the VA likely received competitive pricing. Industry benchmarks for MDEs can vary significantly based on the complexity of the examination, the specialty of the physician required, and the geographic location. Generally, competitive solicitations tend to yield per-unit costs that are at or below market rates. A detailed analysis would involve obtaining the projected number of exams and comparing the resulting per-exam cost against publicly available data or industry reports for similar services.

What are the key performance indicators (KPIs) used to evaluate the performance of Veterans Evaluation Services, Inc. under this contract?

Key Performance Indicators (KPIs) for a contract of this nature typically focus on timeliness, quality, and accuracy of the medical disability examinations. Specific KPIs might include the average turnaround time from referral to examination completion, the percentage of examinations completed within a specified timeframe (e.g., 30 days), the accuracy rate of diagnoses and assessments, and the completeness of the examination reports submitted. Additionally, patient satisfaction scores, if collected, could be a KPI. The VA would monitor these KPIs closely to ensure the contractor is meeting contractual obligations and providing high-quality services essential for veterans' benefits claims. Non-compliance with these KPIs could lead to penalties or corrective actions.

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

Veterans Evaluation Services, Inc. (VES) has a significant track record of providing medical disability examination services to the Department of Veterans Affairs and other government entities. Publicly available information and contract databases often show VES as a major provider in this space. Their experience typically includes conducting a high volume of examinations across various medical specialties. Assessing their past performance would involve reviewing contract histories for on-time delivery, quality of service, adherence to budget, and any past performance issues or disputes. Generally, companies awarded large contracts like this one have demonstrated a capacity to handle such requirements, but a thorough review of their specific performance history with the VA is essential for a complete risk assessment.

Are there any potential risks associated with the 'Availability of Funds' clause in this contract?

The 'Availability of Funds' clause (FAR 52.232-18) indicates that the contract performance is contingent upon the availability of appropriated funds. This means that while the contract is awarded, the government's obligation to pay is limited to the extent of available funds. For a task order like this, it implies that funding might be allocated on a year-to-year basis or subject to budgetary constraints. The primary risk for the contractor is that funding could be reduced or terminated if appropriations are not made or are insufficient. For the VA, the risk is potential disruption of services if funding is not secured, although typically for essential services like MDEs, funding is prioritized. This clause is common for contracts that extend beyond a single fiscal year or are subject to annual appropriations.

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: 7

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: $166,180,824

Exercised Options: $166,180,824

Current Obligation: $166,180,824

Actual Outlays: $164,178,738

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10X19D0009

IDV Type: IDC

Timeline