VA awards $196K for Nursing Care Facilities in Arizona, highlighting potential cost risks

Contract Overview

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

Contractor: Ridgecrest Community Healthcare, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-01-23

End Date: 2026-01-31

Contract Duration: 8 days

Daily Burn Rate: $24.5K/day

Competition Type: NOT COMPETED

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Healthcare

Official Description: EXPRESS REPORT: FY26 JAN 23-31 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 23-31 STATION 644 Key points: 1. Contract awarded to a single entity, raising questions about competition. 2. Fixed Price with Economic Price Adjustment (FPEPA) contract type introduces inflation risk. 3. Short duration (8 days) suggests a specific, potentially urgent need. 4. High benchmarked cost per day ($24.5K) warrants scrutiny.

Value Assessment

Rating: questionable

The daily rate of approximately $24,507 is significantly higher than typical skilled nursing facility costs. This high per-diem rate, especially for a short duration, suggests potential overpricing or a highly specialized service requirement.

Cost Per Unit: $24,507

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award. This limits price discovery and may lead to higher costs for taxpayers as competitive pressures are absent.

Taxpayer Impact: The lack of competition and potentially high per-diem rate could result in inefficient use of taxpayer funds.

Public Impact

Veterans in Arizona may experience service disruptions if this sole-source provider is unable to meet demand or if pricing escalates unexpectedly. The high cost could set a precedent for future contracts in the region, impacting overall VA healthcare budgets. Transparency in the justification for the sole-source award and the economic price adjustment is crucial for public trust.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
High per-unit cost
FPEPA contract type
Short contract duration

Positive Signals

Addresses a specific need for nursing care
Located in Arizona, serving local veterans

Sector Analysis

The healthcare sector, particularly skilled nursing facilities, often involves complex service delivery and can be subject to significant cost fluctuations. Benchmarks vary widely based on service intensity and location.

Small Business Impact

No indication of small business involvement in this sole-source award. Future opportunities should explore avenues for small business participation where feasible.

Oversight & Accountability

The sole-source nature of this award necessitates robust oversight from the VA to ensure the necessity of the approach and the reasonableness of costs, especially given the FPEPA clause.

Related Government Programs

Nursing Care Facilities (Skilled Nursing Facilities)
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Sole-source award limits competition and price discovery.
High per-diem cost benchmark suggests potential overpricing.
Economic Price Adjustment clause introduces inflation risk.
Short contract duration may indicate a lack of long-term planning or an urgent, potentially inefficiently addressed need.

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 23-31 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: 2026-01-23. End: 2026-01-31.

What is the justification for awarding this contract on a sole-source basis, and were alternative providers considered?

The justification for a sole-source award is critical for understanding why competition was bypassed. Without competitive bidding, it's difficult to ascertain if the government received the best possible price and value. The VA should provide documentation detailing the specific circumstances necessitating this approach, such as unique capabilities or urgent needs, and evidence that alternatives were explored or deemed unsuitable.

How will the economic price adjustment clause be managed to mitigate potential cost overruns and protect taxpayer funds?

The economic price adjustment (EPA) clause in a Fixed Price contract allows for price changes based on specific economic factors, often inflation. To protect taxpayer funds, the VA must closely monitor the triggers and limits of the EPA. Clear, objective criteria for adjustments and regular reviews are essential to prevent unwarranted cost increases and ensure the final price remains reasonable relative to market conditions.

Is the high per-diem cost justified by the specific level of care or specialized services provided to veterans?

The benchmarked per-diem cost of $24,507 is exceptionally high and requires thorough justification. The VA must ensure this rate reflects the actual, necessary costs associated with the specific level of skilled nursing care or any specialized medical services required by the veterans served. A detailed breakdown of services and cost components is needed to validate this rate against industry standards for comparable care.

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