VA awards $392.7M for medical disability exams, with QTC Medical Services Inc. as the primary contractor

Contract Overview

Contract Amount: $392,676,748 ($392.7M)

Contractor: QTC Medical Services Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-01-01

End Date: 2026-12-31

Contract Duration: 364 days

Daily Burn Rate: $1.1M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: FY26 FUNDING MEDICAL DISABILITY EXAMINATIONS

Place of Performance

Location: SAN ANTONIO, BEXAR County, TEXAS, 78229

State: Texas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $392.7 million to QTC MEDICAL SERVICES INC for work described as: FY26 FUNDING MEDICAL DISABILITY EXAMINATIONS Key points: 1. Contract value represents a significant investment in supporting veterans' healthcare needs. 2. The award is a delivery order under a larger contract, suggesting potential for future task orders. 3. The firm-fixed-price structure aims to provide cost certainty for the government. 4. Competition was full and open, indicating a broad market solicitation. 5. The contract duration is one year, aligning with annual budgeting cycles. 6. The North American Industry Classification System (NAICS) code 621111 points to physician services, specifically excluding mental health specialists.

Value Assessment

Rating: good

The contract value of $392.7 million for medical disability examinations is substantial. Benchmarking against similar contracts for these services is challenging without specific details on the scope and volume of examinations. However, the firm-fixed-price nature of the award suggests an attempt to control costs. The award to QTC Medical Services Inc. indicates a reliance on established providers in this specialized field. Further analysis would require comparing the per-examination cost or the overall contract value against the number of veterans served and the complexity of the examinations.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The data indicates there were 4 bids received. A competitive process with multiple bidders generally supports price discovery and can lead to more favorable pricing for the government. The fact that four bids were submitted suggests a healthy level of interest and capability within the market for providing these essential services.

Taxpayer Impact: Full and open competition with four bidders is beneficial for taxpayers as it increases the likelihood of receiving competitive pricing and ensures that the contract is awarded to the most capable and cost-effective provider.

Public Impact

Veterans requiring medical disability examinations will benefit from timely and efficient service delivery. The contract supports the Department of Veterans Affairs' mission to provide comprehensive healthcare services to former service members. Services are likely to be delivered across various locations within Texas, as indicated by the 'TX' and 'TEXAS' codes. This contract supports employment within the healthcare sector, particularly for physicians and administrative staff involved in conducting and processing examinations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor to leverage existing infrastructure and personnel, possibly limiting opportunities for new entrants.
Dependence on a single contractor for a critical service could pose risks if performance issues arise.
The large contract value may indicate a significant portion of the market is captured by a few large players.

Positive Signals

Awarded through full and open competition, suggesting a robust selection process.
Firm-fixed-price contract type provides cost predictability for the VA.
The contractor, QTC Medical Services Inc., is likely an established provider with experience in this domain.
The contract duration of one year allows for annual review and potential re-competition.

Sector Analysis

The healthcare services sector, specifically the provision of medical examinations, 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 medical disability examinations is substantial, driven by the needs of government agencies like the VA and private insurance companies. Spending in this area is influenced by veteran populations, disability claim volumes, and regulatory requirements. Comparable spending benchmarks would typically involve analyzing the cost per examination across different providers and contract types.

Small Business Impact

The provided data indicates that small business participation (sb) is false, and there is no explicit small business set-aside (ss) noted for this contract. This suggests that the contract was not specifically targeted towards small businesses. While QTC Medical Services Inc. may utilize small businesses as subcontractors, the primary award is not a set-aside. The absence of a small business set-aside means that opportunities for small businesses to directly compete for this large contract are limited, though they may still participate indirectly through subcontracting.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of Veterans Affairs, which is the contracting agency. Accountability measures are typically embedded within the contract terms, including performance standards, delivery schedules, and payment terms. Transparency is facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected in the execution or award of this contract.

Related Government Programs

Veterans Health Administration Medical Services
Disability Evaluation System
TRICARE Medical Examinations
Federal Employee Health Benefits Program Medical Exams

Risk Flags

Potential for service disruption if contractor performance degrades.
Reliance on a single primary awardee for a critical service.
Limited visibility into subcontractor performance without specific reporting requirements.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $392.7 million to QTC MEDICAL SERVICES INC. FY26 FUNDING MEDICAL DISABILITY EXAMINATIONS

Who is the contractor on this award?

The obligated recipient is QTC MEDICAL 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 $392.7 million.

What is the period of performance?

Start: 2026-01-01. End: 2026-12-31.

What is the historical spending trend for medical disability examinations by the Department of Veterans Affairs?

Analyzing historical spending for medical disability examinations by the VA requires access to multi-year contract data. Typically, such spending can fluctuate based on veteran population growth, changes in disability criteria, and the efficiency of the examination process. A consistent upward trend might indicate increasing demand or inflation, while a decrease could suggest improved efficiency or shifts in policy. Without specific historical data for this contract or category, it's difficult to provide precise figures. However, the VA's overall budget for healthcare services has generally seen increases over the years to meet the growing needs of the veteran population.

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

Determining the per-examination cost requires knowing the total number of examinations to be performed under this $392.7 million contract. If, for example, 1 million examinations are anticipated, the cost per exam would be approximately $392.70. Comparing this to industry benchmarks or previous VA contracts would involve accessing detailed pricing data from similar solicitations and awards. Factors influencing per-examination cost include the type and complexity of the examination, the geographic location of service delivery, and the contractor's overhead. A firm-fixed-price contract aims to standardize this cost, but variations can still exist across different contract vehicles.

What are the key performance indicators (KPIs) that QTC Medical Services Inc. must meet under this contract?

Key Performance Indicators (KPIs) for medical disability examinations typically focus on timeliness, accuracy, and completeness of reports. For the VA, critical KPIs often include the average turnaround time from appointment scheduling to report submission, the percentage of reports completed accurately and without deficiencies, and adherence to specific examination protocols. Patient satisfaction scores may also be a factor. Failure to meet these KPIs can result in penalties, reduced payment, or even contract termination. The specific KPIs and their weighting would be detailed in the contract's Performance Work Statement (PWS).

What is the track record of QTC Medical Services Inc. in fulfilling similar government contracts?

QTC Medical Services Inc. has a significant track record of providing medical examination services to the Department of Veterans Affairs and other government agencies. They are a well-established entity in this space, often handling large volumes of disability evaluations. Past performance reviews and contract histories available through federal procurement databases would provide detailed insights into their reliability, quality of service, and adherence to contract terms on previous engagements. Generally, their continued awards suggest a satisfactory performance history, though specific contract performance can vary.

What are the potential risks associated with relying on a single primary contractor for such a large volume of medical disability exams?

The primary risks associated with relying on a single contractor for a large volume of medical disability exams include service disruptions due to contractor performance issues (e.g., staffing shortages, quality control failures), potential for price increases in future contract renewals if competition diminishes, and a reduced ability for the government to adapt quickly to changing needs or introduce new service providers. If QTC Medical Services Inc. experiences significant operational challenges, it could lead to backlogs in examinations, impacting veterans' access to benefits and care. The government mitigates this through performance monitoring and contract clauses.

How does the geographic scope of this contract (Texas) align with the distribution of veterans requiring these services?

The designation 'TX' and 'TEXAS' indicates that services under this delivery order are primarily intended for or will be delivered within Texas. This geographic focus suggests that the Department of Veterans Affairs has identified a significant need for medical disability examinations among veterans residing in Texas. The distribution of veterans requiring these services is often correlated with population density and the presence of VA facilities. Awarding contracts with specific geographic scopes allows the VA to tailor service delivery to the needs of veterans in particular regions, ensuring more localized and accessible support.

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: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leidos Holdings, Inc.

Address: 4400 NW LOOP 410, SAN ANTONIO, TX, 78229

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

Financial Breakdown

Contract Ceiling: $392,676,748

Exercised Options: $392,676,748

Current Obligation: $392,676,748

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10X25D0003

IDV Type: IDC

Timeline