VA awards $2.87M mobile PET scan contract to Insight Health Corp, raising value-for-money questions

Contract Overview

Contract Amount: $2,865,009 ($2.9M)

Contractor: Insight Health Corp

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-04-12

End Date: 2027-04-11

Contract Duration: 1,460 days

Daily Burn Rate: $2.0K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MOBILE PET SCAN

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55416

State: Minnesota Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.9 million to INSIGHT HEALTH CORP for work described as: MOBILE PET SCAN Key points: 1. The contract's value-for-money is questionable given the lack of competition and the absence of detailed performance metrics. 2. Competition dynamics are limited, with the contract being a sole-source award, potentially impacting price discovery. 3. Risk indicators include the sole-source nature and the long duration without clear performance benchmarks. 4. Performance context is minimal, with no specific details on expected outcomes or quality standards for the mobile PET scans. 5. Sector positioning places this contract within the healthcare services sector, specifically diagnostic imaging. 6. The award to a single provider without competitive bidding warrants further scrutiny regarding cost-effectiveness.

Value Assessment

Rating: questionable

The contract value of $2.87 million over four years for mobile PET scan services lacks sufficient detail for a robust value-for-money assessment. Without comparison to similar contracts or market benchmarks for mobile PET services, it is difficult to ascertain if the pricing is competitive. The absence of specific performance metrics or quality indicators makes it challenging to evaluate the effectiveness and efficiency of the services provided.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source purchase order, meaning it was not competed. The Department of Veterans Affairs did not solicit bids from multiple vendors. This limited competition raises concerns about whether the VA obtained the best possible price and service for these essential diagnostic imaging services. The lack of a competitive process prevents a clear understanding of the market's pricing structure for such specialized mobile healthcare.

Taxpayer Impact: For taxpayers, a sole-source award means there is a higher risk of overpayment and a missed opportunity to leverage competition to drive down costs and improve service quality.

Public Impact

Veterans in Minnesota will benefit from access to mobile PET scan services, improving diagnostic capabilities. The services delivered include crucial diagnostic imaging, aiding in the early detection and management of various medical conditions. The geographic impact is focused on Minnesota, ensuring local access for eligible veterans. Workforce implications are minimal, as the contract is for services rather than direct employment generation by the VA.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding may lead to inflated costs.
Absence of defined performance standards makes oversight difficult.
Long contract duration without clear milestones could reduce vendor accountability.
Sole-source nature limits opportunities for small businesses to compete.

Positive Signals

Provides essential diagnostic services to veterans.
Ensures access to specialized medical technology in a specific region.
Contract is for a fixed price, offering some budget predictability.

Sector Analysis

This contract falls within the healthcare services sector, specifically diagnostic imaging. The market for mobile diagnostic imaging, including PET scans, is specialized and often involves significant capital investment in equipment and trained personnel. While specific market size data for mobile PET services in Minnesota is not readily available, the broader diagnostic imaging market is substantial. This contract represents a specific instance of the VA procuring such specialized services to meet veteran healthcare needs.

Small Business Impact

This contract does not appear to include a small business set-aside. As a sole-source award, it bypasses the typical competitive processes where small businesses might have opportunities to bid or subcontract. There is no explicit mention of subcontracting requirements for small businesses within the provided data, suggesting limited direct impact on the small business ecosystem for this specific procurement.

Oversight & Accountability

Oversight mechanisms for this contract are not detailed in the provided data. As a sole-source purchase order, the primary accountability rests on the contracting officer's justification for the non-competitive award. Transparency is limited due to the lack of public competition. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected, but specific oversight activities related to performance or cost are not evident.

Related Government Programs

Veterans Health Administration Medical Services
Diagnostic Imaging Services
Mobile Healthcare Units
Medical Equipment Procurement

Risk Flags

Sole-source award lacks transparency and competitive pricing.
Absence of defined performance metrics hinders accountability.
Potential for higher costs due to lack of competition.
Limited information available on contractor's past performance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.9 million to INSIGHT HEALTH CORP. MOBILE PET SCAN

Who is the contractor on this award?

The obligated recipient is INSIGHT HEALTH CORP.

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 $2.9 million.

What is the period of performance?

Start: 2023-04-12. End: 2027-04-11.

What is the justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded as a 'NOT COMPETED UNDER SAP' (Simplified Acquisition Procedures) and is a sole-source purchase order. Typically, sole-source awards are justified when only one responsible source is available or capable of providing the required service. This could be due to unique capabilities, proprietary technology, or specific circumstances where competition is not feasible or not in the government's best interest. However, without a formal justification document (e.g., a Justification and Approval - J&A), the specific reasons for this sole-source award remain unclear. This lack of transparency is a concern, as it prevents an independent assessment of whether competition was truly impossible or if it was simply not pursued.

How does the contract price compare to market rates for similar mobile PET scan services?

The provided data does not include specific pricing details beyond the total contract value of $2.87 million over four years. To compare this to market rates, one would need to analyze the scope of services, frequency of use, types of scans, and geographic coverage. Benchmarking would involve researching similar contracts awarded by other federal agencies or commercial entities for mobile PET scan services, considering factors like cost per scan, daily rental rates for the mobile unit, and technician fees. Without this granular data and comparative analysis, it is impossible to definitively state whether the $2.87 million represents a fair and reasonable price. The sole-source nature further complicates this assessment, as competitive bidding often drives prices down.

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

The provided data does not specify any Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. This is a significant gap, as KPIs and SLAs are crucial for measuring the contractor's performance, ensuring service quality, and holding the vendor accountable. For a mobile PET scan service, relevant KPIs might include scan turnaround time, image quality standards, equipment uptime, patient scheduling efficiency, and compliance with safety protocols. The absence of such metrics makes it difficult for the Department of Veterans Affairs to objectively assess whether Insight Health Corp is delivering the expected value and meeting the needs of the veterans.

What is the historical spending pattern for mobile PET scan services by the Department of Veterans Affairs?

The provided data focuses solely on this specific contract awarded in April 2023. It does not offer insights into the Department of Veterans Affairs' historical spending on mobile PET scan services. To understand historical patterns, one would need to analyze procurement data over several previous fiscal years, identifying previous contracts for similar services, the vendors involved, contract values, and competition levels. This analysis would reveal whether this $2.87 million award represents an increase or decrease in spending, whether the VA has previously relied on sole-source providers, and how spending has evolved over time to meet veteran healthcare demands.

What is the track record of Insight Health Corp in performing similar government contracts?

The provided data identifies Insight Health Corp as the contractor but does not offer information on their track record, particularly concerning government contracts. To assess their track record, one would need to examine past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), other federal contract awards to Insight Health Corp, and any reported issues or successes. A positive track record with previous government engagements, especially within the healthcare sector, would provide some assurance regarding their capability to fulfill this contract. Conversely, a history of poor performance or unresolved issues would raise significant concerns about the suitability of this sole-source award.

Industry Classification

NAICS: Health Care and Social Assistance › Medical and Diagnostic Laboratories › Diagnostic Imaging Centers

Product/Service Code: MEDICAL SERVICES › MEDICAL, DENTAL, AND SURGICAL SVCS

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 36C24123Q0424

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5775 WAYZATA BLVD STE 400, MINNEAPOLIS, MN, 55416

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

Financial Breakdown

Contract Ceiling: $4,667,271

Exercised Options: $4,667,271

Current Obligation: $2,865,009

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline