VA Awards $10M+ Cardiovascular Surgery Contract to University of Minnesota Physicians for 2 Years
Contract Overview
Contract Amount: $10,011,436 ($10.0M)
Contractor: University of Minnesota Physicians
Awarding Agency: Department of Veterans Affairs
Start Date: 2023-09-01
End Date: 2025-08-31
Contract Duration: 730 days
Daily Burn Rate: $13.7K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Healthcare
Official Description: CARDIOVASCULAR & THORACIC SURGERY SERVICE
Place of Performance
Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55417
Plain-Language Summary
Department of Veterans Affairs obligated $10.0 million to UNIVERSITY OF MINNESOTA PHYSICIANS for work described as: CARDIOVASCULAR & THORACIC SURGERY SERVICE Key points: 1. The contract is for specialized cardiovascular and thoracic surgery services. 2. The University of Minnesota Physicians is the sole awardee. 3. The contract value is over $10 million with a fixed-price economic adjustment. 4. The award is for a 2-year period, ending August 2025.
Value Assessment
Rating: good
The contract value of $10,011,435.51 for two years suggests a significant but potentially reasonable cost for specialized medical services. Benchmarking against similar complex surgical service contracts would be necessary for a definitive assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded sole-source, meaning competition was not sought. This approach limits price discovery and may result in higher costs compared to a competitive process.
Taxpayer Impact: The lack of competition raises concerns about maximizing taxpayer value, though specialized services may sometimes necessitate sole-source awards.
Public Impact
Veterans in Minnesota will receive specialized cardiovascular and thoracic surgical care. The contract supports a major academic medical institution's services. Potential for higher costs due to sole-source award impacts taxpayer funds.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award limits competition and price discovery.
- Economic price adjustment introduces potential for cost increases.
Positive Signals
- Ensures access to specialized medical services for veterans.
- Supports a key healthcare provider in the region.
Sector Analysis
This contract falls under the 'Colleges, Universities, and Professional Schools' sector, specifically for medical services. Spending in this area is critical for healthcare delivery but requires careful oversight to ensure value.
Small Business Impact
The contract was awarded to the University of Minnesota Physicians, a large academic institution, and does not appear to involve small business participation.
Oversight & Accountability
The sole-source nature of this award warrants scrutiny to ensure the VA adequately justified the lack of competition and negotiated the best possible price.
Related Government Programs
- Colleges, Universities, and Professional Schools
- Department of Veterans Affairs Contracting
- Department of Veterans Affairs Programs
Risk Flags
- Lack of competition may lead to inflated prices.
- Economic price adjustment clause poses a risk of cost escalation.
- Sole-source award requires strong justification and oversight.
- Potential for contractor to leverage unique position for favorable terms.
Tags
colleges-universities-and-professional-s, department-of-veterans-affairs, mn, definitive-contract, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Veterans Affairs awarded $10.0 million to UNIVERSITY OF MINNESOTA PHYSICIANS. CARDIOVASCULAR & THORACIC SURGERY SERVICE
Who is the contractor on this award?
The obligated recipient is UNIVERSITY OF MINNESOTA PHYSICIANS.
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 $10.0 million.
What is the period of performance?
Start: 2023-09-01. End: 2025-08-31.
What is the justification for the sole-source award of this significant contract?
The justification for a sole-source award typically centers on the unique capabilities, specialized expertise, or critical need that only a specific entity can fulfill. For complex medical services like cardiovascular and thoracic surgery, the VA might argue that the University of Minnesota Physicians possesses unique facilities, highly specialized surgeons, or established patient care protocols essential for veteran health outcomes, making competition impractical or detrimental to care continuity.
How will the economic price adjustment clause be monitored to control costs?
The VA should implement robust monitoring of the economic price adjustment (EPA) clause by establishing clear indices for price changes and setting regular review periods. This involves tracking relevant market indicators (e.g., medical inflation, labor costs) and comparing them against the contract's EPA formula. Proactive engagement with the contractor to understand cost drivers and negotiate adjustments within defined limits is crucial to mitigate potential cost overruns and protect taxpayer funds.
What is the expected impact of this contract on veteran access to timely cardiovascular care?
This contract is expected to ensure continued and potentially improved access to specialized cardiovascular and thoracic surgery for veterans served by the VA in Minnesota. By securing services from a major academic medical center, the VA aims to provide timely, high-quality care, reducing wait times and ensuring veterans receive necessary treatments without undue delay, thereby supporting positive health outcomes.
Industry Classification
NAICS: Educational Services › Colleges, Universities, and Professional Schools › Colleges, Universities, and Professional Schools
Product/Service Code: MEDICAL SERVICES › MEDICAL, DENTAL, AND SURGICAL SVCS
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: 36C26322R0027
Offers Received: 1
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Address: 720 WASHINGTON AVE SE, MINNEAPOLIS, MN, 55414
Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $18,730,954
Exercised Options: $10,011,436
Current Obligation: $10,011,436
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2023-09-01
Current End Date: 2025-08-31
Potential End Date: 2028-08-31 00:00:00
Last Modified: 2026-01-15
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