VA awards $196K for skilled nursing care, but competition and value remain unclear

Contract Overview

Contract Amount: $196,058 ($196.1K)

Contractor: Ridgecrest Community Healthcare, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-01-16

End Date: 2026-01-22

Contract Duration: 6 days

Daily Burn Rate: $32.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Healthcare

Official Description: EXPRESS REPORT: FY26 JAN 16-22 STATION 644

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85012

State: Arizona Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $196,058.18 to RIDGECREST COMMUNITY HEALTHCARE, LLC for work described as: EXPRESS REPORT: FY26 JAN 16-22 STATION 644 Key points: 1. Contract awarded via a non-competitive process, raising questions about price discovery. 2. Short contract duration (6 days) suggests a specific, immediate need. 3. Fixed Price with Economic Price Adjustment (FPEPA) contract type introduces potential cost volatility. 4. The contract's value is relatively small, indicating a localized or specialized service. 5. No small business set-aside was utilized, with no subcontracting plan mentioned. 6. The agency's justification for not competing this award needs further scrutiny.

Value Assessment

Rating: questionable

The contract value of $196,058.18 for a 6-day period appears high on a daily basis, though it's difficult to benchmark without understanding the specific services and patient needs. The FPEPA clause adds a layer of uncertainty to the final cost. Given the lack of competition, it's challenging to assess if this represents good value for money compared to potential market alternatives. The VA's internal benchmarks for similar short-term nursing care would be crucial for a definitive value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. The Department of Veterans Affairs likely cited specific circumstances or a unique capability of RIDGECREST COMMUNITY HEALTHCARE, LLC to justify the non-competitive award. Without a competitive process, it is impossible to know how many other qualified vendors could have provided these services or at what price points.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of competitive bidding. The VA should provide a strong justification for bypassing the competitive process to ensure responsible use of funds.

Public Impact

Veterans in Arizona requiring skilled nursing care are the primary beneficiaries of this contract. The contract delivers essential nursing care services, likely within a specific VA facility or designated area. The geographic impact is limited to Arizona, specifically where the services are rendered. The contract supports healthcare professionals and support staff employed by RIDGECREST COMMUNITY HEALTHCARE, LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits price transparency and potentially increases costs for taxpayers.
The FPEPA clause introduces risk of cost escalation beyond initial projections.
Short duration may indicate a reactive award rather than strategic planning.
Absence of small business considerations could limit broader economic participation.

Positive Signals

Award ensures continuity of care for a specific group of veterans.
The contract addresses a critical healthcare need within the VA system.
Fixed-price elements provide some cost predictability, despite the adjustment clause.

Sector Analysis

The healthcare sector, particularly skilled nursing facilities, is a significant area of federal spending, especially within the Department of Veterans Affairs. This contract falls under the NAICS code 623110 (Nursing Care Facilities). While the overall market for skilled nursing is substantial, this specific contract is a small component. Benchmarking would typically involve comparing per diem rates for similar services provided to other government agencies or within the private sector, adjusted for geographic location and service intensity.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements mentioned in the provided data. The absence of small business considerations in this sole-source award means that opportunities for small businesses to participate in this specific contract are limited. It does not necessarily reflect the VA's overall small business utilization but highlights a missed opportunity for small business engagement on this particular award.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting officers and program managers. Accountability measures would be tied to the performance standards outlined in the contract and the FPEPA terms. Transparency is limited due to the sole-source nature of the award; however, contract award data is publicly available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

VA Medical Care Contracts
Skilled Nursing Facility Services
Healthcare Services for Veterans
Federal Healthcare Procurement

Risk Flags

Sole-source award
High daily cost (potential)
Economic Price Adjustment clause

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $196,058.18 to RIDGECREST COMMUNITY HEALTHCARE, LLC. EXPRESS REPORT: FY26 JAN 16-22 STATION 644

Who is the contractor on this award?

The obligated recipient is RIDGECREST COMMUNITY HEALTHCARE, LLC.

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 $196,058.18.

What is the period of performance?

Start: 2026-01-16. End: 2026-01-22.

What is the specific justification provided by the VA for awarding this contract on a sole-source basis?

The provided data indicates the contract was 'NOT COMPETED' and awarded to RIDGECREST COMMUNITY HEALTHCARE, LLC. Federal Acquisition Regulation (FAR) Part 6 outlines the policies for contracting without full and open competition. Agencies must justify such awards, often citing reasons like urgency, unique capabilities, or lack of available sources. For this specific contract, the VA would need to document why competition was not feasible or practicable. This justification is critical for ensuring taxpayer funds are used efficiently and that the government explores competitive options whenever possible. Without access to the specific justification document (e.g., a Justification for Other Than Full and Open Competition - JOFOC), it's impossible to assess its validity.

How does the daily cost of this contract compare to industry benchmarks for skilled nursing facilities in Arizona?

The contract value is $196,058.18 over 6 days, equating to approximately $32,676.36 per day. This figure is exceptionally high for a daily rate for skilled nursing care. Standard per diem rates for skilled nursing facilities, even in high-cost areas, typically range from $300 to $1,000 per patient per day, depending on the level of care and services provided. The reported daily cost suggests this figure might represent a total contract value for a specific service package or a group of patients rather than a simple per diem rate, or it could indicate a significant anomaly. Further clarification on what this daily cost encompasses is necessary for a meaningful comparison.

What are the potential risks associated with the 'FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT' contract type in this scenario?

The 'FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT' (FPEPA) contract type aims to protect both the contractor and the government from significant fluctuations in costs due to economic factors, such as inflation. For this contract, it means the price can be adjusted based on pre-defined economic indicators. The primary risk for the government (and taxpayers) is that costs could increase beyond the initial fixed price if economic conditions worsen, potentially leading to higher overall spending than initially budgeted. While it provides some stability against unforeseen economic shifts, it introduces uncertainty regarding the final expenditure, especially over longer periods or in volatile economic climates. The specific economic indicators and adjustment formulas within the contract are crucial for quantifying this risk.

What is the track record of RIDGECREST COMMUNITY HEALTHCARE, LLC in performing federal contracts, particularly with the VA?

Information regarding the specific track record of RIDGECREST COMMUNITY HEALTHCARE, LLC in performing federal contracts, especially with the VA, is not detailed in the provided data snippet. A comprehensive assessment would require reviewing their past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any history of contract disputes, and the types and values of previous contracts they have held. Without this historical data, it is difficult to gauge their reliability, quality of service, and experience in meeting government requirements. This information is typically available through federal procurement databases and agency records.

Given the short duration, does this contract represent a recurring need for skilled nursing services by the VA?

The contract duration of only 6 days (January 16-22, 2026) suggests a very specific, short-term requirement rather than an ongoing, long-term need for skilled nursing services. This could indicate a temporary surge in demand, a gap in existing services that needs immediate coverage, or a transition period between providers. It is unlikely to represent a recurring need in this exact format. However, the VA may have other, longer-term contracts for skilled nursing care, or this short-term award could be part of a larger strategy to manage fluctuating capacity. Further analysis of the VA's overall procurement strategy for skilled nursing would be needed to determine the broader context.

Industry Classification

NAICS: Health Care and Social Assistance › Nursing Care Facilities (Skilled Nursing Facilities) › Nursing Care Facilities (Skilled Nursing Facilities)

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 16640 N 38TH ST, PHOENIX, AZ, 85032

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

Financial Breakdown

Contract Ceiling: $196,058

Exercised Options: $196,058

Current Obligation: $196,058

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C26226D0040

IDV Type: IDC

Timeline