VA awards $3.15M for urine testing supplies and services to Quest Diagnostics, highlighting a 5-year contract

Contract Overview

Contract Amount: $3,151,876 ($3.2M)

Contractor: Quest Diagnostics Incorporated

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-08-29

End Date: 2027-08-28

Contract Duration: 1,825 days

Daily Burn Rate: $1.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: URINE TESTING SUPPLIES AND SERVICES

Place of Performance

Location: COLUMBIA, RICHLAND County, SOUTH CAROLINA, 29209

State: South Carolina Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $3.2 million to QUEST DIAGNOSTICS INCORPORATED for work described as: URINE TESTING SUPPLIES AND SERVICES Key points: 1. Contract value of $3.15 million over five years suggests a moderate annual spend for essential laboratory services. 2. The award was made under full and open competition, indicating a potentially competitive bidding process. 3. The firm-fixed-price contract type helps manage cost certainty for the government. 4. The contract duration of 1825 days (5 years) provides stability for service delivery. 5. The primary service category, Medical Laboratories, is critical for diagnostic healthcare within the VA system.

Value Assessment

Rating: good

The contract value of $3.15 million over five years equates to an average annual spend of approximately $630,000. This figure appears reasonable for specialized laboratory services like urine testing, especially considering the scale of the Department of Veterans Affairs. Benchmarking against similar contracts for medical laboratory services would provide a more precise value-for-money assessment, but the amount does not immediately suggest overpricing.

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 presence of 3 bids indicates a degree of competition, which is generally favorable for price discovery and ensuring the government receives competitive pricing. The specific number of bidders is moderate, suggesting that while the market is not overly saturated, there was sufficient interest to foster a competitive environment.

Taxpayer Impact: Full and open competition generally benefits taxpayers by driving down prices through market forces. A competitive bidding process increases the likelihood that the government secures services at a fair market price, preventing potential overspending.

Public Impact

Veterans will benefit from timely and accurate diagnostic testing for various medical conditions. Essential laboratory services, specifically urine testing, will be provided to support healthcare treatment plans. The services are likely to be delivered across facilities within the South Carolina region, based on the contract's state code. The contract supports the healthcare workforce by ensuring access to necessary diagnostic tools for medical professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract renewals if competition diminishes.
Dependence on a single contractor for a critical service could pose supply chain risks.
Ensuring consistent quality of service across all VA facilities utilizing these supplies.

Positive Signals

Awarded under full and open competition, suggesting a competitive market.
Firm-fixed-price contract provides cost certainty for the duration.
Long-term contract (5 years) offers stability and predictability for service provision.

Sector Analysis

The healthcare sector, particularly diagnostic laboratory services, is a significant area of federal spending. The North American Industry Classification System (NAICS) code 621511 for Medical Laboratories indicates a specialized market. Federal agencies, especially the VA, rely heavily on such services to provide comprehensive care to beneficiaries. Spending in this sector is driven by the need for accurate diagnostics to inform treatment and manage patient health effectively.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The primary contractor, Quest Diagnostics Incorporated, is a large corporation. There is no explicit information regarding subcontracting opportunities for small businesses within this specific award. Future analysis could explore if the prime contractor has a broader small business subcontracting plan in place across its federal contracts.

Oversight & Accountability

The Department of Veterans Affairs is responsible for the oversight of this contract. As a delivery order under a larger contract vehicle, it likely adheres to the oversight mechanisms of the parent contract. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract's performance or billing.

Related Government Programs

VA Medical Supplies Contracts
Diagnostic Laboratory Services
Federal Healthcare Procurement
Medical Testing Services

Risk Flags

Potential for price escalation over the contract term.
Dependence on a single vendor for critical supplies.
Need for ongoing performance monitoring to ensure quality.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $3.2 million to QUEST DIAGNOSTICS INCORPORATED. URINE TESTING SUPPLIES AND SERVICES

Who is the contractor on this award?

The obligated recipient is QUEST DIAGNOSTICS INCORPORATED.

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 $3.2 million.

What is the period of performance?

Start: 2022-08-29. End: 2027-08-28.

What is the historical spending trend for urine testing supplies and services by the Department of Veterans Affairs?

Analyzing historical spending data for urine testing supplies and services by the VA is crucial for understanding long-term trends and identifying potential anomalies. While this specific award is for $3.15 million over five years, a deeper dive into past VA expenditures on similar services would reveal if this represents an increase, decrease, or stable level of investment. For instance, if previous annual spending averaged significantly higher or lower, it could indicate shifts in demand, changes in pricing, or the consolidation of contracts. Examining spending patterns over the last 5-10 years would provide valuable context for assessing the current contract's value and the VA's ongoing commitment to these diagnostic capabilities.

How does the per-unit cost of urine testing supplies under this contract compare to market rates or other federal agencies?

Benchmarking the per-unit cost of urine testing supplies is essential for evaluating value for money. Without specific unit cost data for this $3.15 million contract, a direct comparison is challenging. However, if such data were available, it could be compared against publicly available pricing from commercial laboratory providers or contracts awarded to other federal agencies for similar supplies. Significant deviations from market rates, whether higher or lower, would warrant further investigation. Higher costs might suggest inefficiencies or unique service requirements, while unusually low costs could raise questions about quality or long-term sustainability. This analysis helps ensure taxpayer funds are used efficiently.

What is Quest Diagnostics Incorporated's track record with the Department of Veterans Affairs and other federal agencies?

Quest Diagnostics Incorporated's track record with the VA and other federal agencies provides insight into their reliability and performance. Reviewing past contracts, including their value, duration, and performance ratings (if available), can indicate their ability to meet government requirements. A history of successful contract completions, positive performance reviews, and compliance with federal regulations suggests a lower risk profile. Conversely, a record of contract disputes, performance issues, or compliance problems would raise concerns about their suitability for this current award. Understanding their past interactions helps the VA make informed decisions about contractor selection and risk management.

What are the potential risks associated with a 5-year contract for essential medical supplies like urine testing kits?

A 5-year contract for essential medical supplies like urine testing kits carries several potential risks. Firstly, technology and testing methodologies can evolve rapidly; a long-term contract might lock the VA into outdated systems or supplies. Secondly, market prices for raw materials or finished goods can fluctuate significantly over five years, potentially leading to the government paying above market rates if prices decrease, or facing supply shortages if prices increase dramatically and the contractor struggles to fulfill the contract. Thirdly, the contractor's financial stability or operational capacity could change, impacting service continuity. Finally, a prolonged sole reliance on one vendor, even if initially competitively sourced, can reduce future competition and potentially lead to price increases upon renewal.

How does the geographic scope of this contract (South Carolina) align with the VA's service delivery needs?

The contract's designation for South Carolina (SN: SOUTH CAROLINA) indicates that the supplies and services are intended for VA facilities within that state. This geographic specificity is important for ensuring that the VA's healthcare providers in that region have reliable access to necessary diagnostic tools. Aligning contract scope with service delivery needs helps optimize logistics and potentially reduce transportation costs. If the VA has significant operations or a large veteran population in South Carolina requiring these services, this targeted approach is efficient. However, if demand for these services extends beyond South Carolina, additional contracts or a broader scope might be necessary to meet nationwide needs.

Industry Classification

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

Product/Service Code: QUALITY CONTROL, TEST, INSPECTION › QUALITY CONTROL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 500 PLAZA DR, SECAUCUS, NJ, 07094

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

Financial Breakdown

Contract Ceiling: $4,468,280

Exercised Options: $3,151,876

Current Obligation: $3,151,876

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: V797D70090

IDV Type: FSS

Timeline