VA awards $37.4M occupational health exam service contract to CentraCare Health System in Minnesota

Contract Overview

Contract Amount: $37,372 ($37.4K)

Contractor: Centracare Health System

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-05-15

End Date: 2027-05-14

Contract Duration: 364 days

Daily Burn Rate: $103/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: OCCUPATIONAL HEALTH INJURY EXAM SERVICE - OY2

Place of Performance

Location: SAINT CLOUD, STEARNS County, MINNESOTA, 56303

State: Minnesota Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $37,371.8 to CENTRACARE HEALTH SYSTEM for work described as: OCCUPATIONAL HEALTH INJURY EXAM SERVICE - OY2 Key points: 1. Contract awarded on a firm-fixed-price basis, indicating predictable costs for the government. 2. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract, suggesting potential for future task orders. 3. The award was not competed, raising questions about potential cost savings and market competitiveness. 4. The duration of the contract is one year, with an option to extend, allowing for flexibility. 5. The North American Industry Classification System (NAICS) code 621111 points to offices of physicians, aligning with the service type. 6. The contract is for occupational health injury examination services, a critical component of employee well-being and safety.

Value Assessment

Rating: fair

Benchmarking the value of this specific occupational health injury exam service contract is challenging without comparable data for similar services provided to the VA or other federal agencies. The firm-fixed-price structure provides cost certainty, but the absence of competition makes it difficult to assess if the pricing represents optimal value for money. Further analysis would require understanding the scope of services, the number of exams anticipated, and the specific medical expertise required to determine if the $37.4 million award is competitive within the market for such specialized healthcare services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed among multiple vendors. This approach is typically used when a specific contractor possesses unique capabilities or when it is deemed not to be in the government's best interest to compete. The lack of competition limits the government's ability to leverage market forces to potentially drive down costs or encourage innovation from a wider pool of providers. It also means that the VA did not receive bids from other qualified entities.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of benefiting from competitive pricing that could arise from an open bidding process. This could potentially lead to higher overall costs for the services rendered compared to a competed contract.

Public Impact

Veterans receiving care through the VA healthcare system will benefit from occupational health injury examinations, contributing to their overall well-being and timely return to duty or civilian life. The services delivered are specialized medical examinations focused on occupational health and injury assessment. The geographic impact is primarily within Minnesota, where CentraCare Health System operates, serving the VA facilities in that region. The contract supports healthcare professionals and administrative staff within the VA system, ensuring they receive necessary occupational health services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs than a competed contract.
Sole-source awards can limit opportunities for other qualified providers to secure government contracts.
Dependence on a single provider for critical health services could pose a risk if the contractor faces operational issues.

Positive Signals

Firm-fixed-price contract provides cost certainty for the VA.
Award to an established health system (CentraCare) suggests a degree of reliability and existing infrastructure.
Contract duration allows for continuity of essential occupational health services.

Sector Analysis

The healthcare services sector, particularly within the federal government, involves significant spending on medical services, supplies, and personnel. Contracts for occupational health and specialized medical examinations are crucial for maintaining the health and readiness of federal employees and beneficiaries, such as veterans. The market for these services includes a range of providers, from large health systems to specialized clinics. The VA's spending in this area is substantial, reflecting its commitment to comprehensive healthcare for veterans. Benchmarking this contract's value against other VA or Department of Defense occupational health contracts would provide further insight into its market competitiveness.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. Furthermore, the award is not specifically designated for small businesses. This means that larger entities were eligible to bid, and there is no explicit requirement for subcontracting to small businesses within this award. The impact on the small business ecosystem is neutral, as there is no direct set-aside or subcontracting mandate associated with this specific contract.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of Veterans Affairs (VA). As a delivery order under a larger IDIQ, the terms and conditions of the base contract will govern. The VA's Office of Inspector General (OIG) would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract. Transparency is facilitated through contract award databases, though detailed performance metrics and specific service delivery oversight mechanisms are typically managed internally by the contracting agency.

Related Government Programs

VA Medical Services Contracts
Federal Occupational Health Services
Healthcare Provider Agreements
Physician Services Contracts
Veterans Health Administration Services

Risk Flags

Sole-source award
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $37,371.8 to CENTRACARE HEALTH SYSTEM. OCCUPATIONAL HEALTH INJURY EXAM SERVICE - OY2

Who is the contractor on this award?

The obligated recipient is CENTRACARE HEALTH SYSTEM.

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 $37,371.8.

What is the period of performance?

Start: 2026-05-15. End: 2027-05-14.

What is the track record of CentraCare Health System in providing similar occupational health services to the federal government?

Information regarding CentraCare Health System's specific track record in providing occupational health injury examination services to the federal government is not detailed in the provided data. However, CentraCare is a large integrated health system in Minnesota, suggesting it has the capacity and experience to manage complex healthcare contracts. To fully assess their track record for federal contracts, a review of their past performance on similar government awards, including any performance evaluations or past performance questionnaires, would be necessary. This would help determine their reliability, quality of service, and adherence to federal contracting standards in similar engagements.

How does the $37.4 million contract value compare to similar occupational health services contracts awarded by the VA or other federal agencies?

Direct comparison of the $37.4 million contract value for occupational health injury examination services is difficult without access to a comprehensive database of similar, recently awarded federal contracts. The value is influenced by factors such as the geographic scope, the volume of services required, the specific medical specialties involved, and the duration of the contract. Given this is a one-year base period with potential for extension, the annual value would be approximately $37.4 million if fully utilized. Benchmarking against contracts for physician services or specialized medical evaluations within the VA or other agencies would be the next step to assess if this represents a fair market price.

What are the primary risks associated with awarding this contract on a sole-source basis?

The primary risks associated with awarding this contract on a sole-source basis include the potential for inflated pricing due to the lack of competitive pressure, reduced incentive for the contractor to innovate or improve efficiency, and limited opportunities for other qualified providers to enter the federal market. Taxpayers may bear a higher cost for these services than if the contract had been competed. Additionally, there's a risk of vendor lock-in, where the government becomes dependent on a single provider, potentially limiting future flexibility in sourcing these critical health services. This also bypasses the standard vetting process that competition provides.

What is the expected effectiveness of these occupational health services in supporting the VA's mission?

The effectiveness of these occupational health services is expected to be high in supporting the VA's mission by ensuring the health and readiness of its workforce, including medical personnel and potentially veterans undergoing specific programs. Prompt and accurate occupational health injury examinations can lead to faster recovery times, reduced long-term disability, and a safer working environment. This contributes to the overall operational efficiency of the VA healthcare system and helps maintain the well-being of employees who are critical to delivering care to veterans. The services are integral to a comprehensive employee health program.

What are the historical spending patterns for occupational health services by the Department of Veterans Affairs?

Historical spending patterns for occupational health services by the Department of Veterans Affairs (VA) are not detailed in the provided data. However, the VA, as a large federal healthcare provider, consistently spends significant amounts on employee health, safety, and readiness programs. This includes services like occupational health examinations, injury management, and preventative care. Analyzing historical VA spending on NAICS code 621111 (Offices of Physicians) or specific contract vehicles for medical services would provide a clearer picture of trends, typical contract values, and the prevalence of competed versus sole-source awards in this category.

What specific performance metrics or oversight mechanisms are in place to ensure the quality and timeliness of services provided by CentraCare Health System?

The provided data does not specify the exact performance metrics or oversight mechanisms for this contract. However, standard federal contracting practice dictates that such contracts include performance standards, quality assurance surveillance plans (QASPs), and delivery schedules. The VA contracting officer and contract specialists would be responsible for monitoring CentraCare's performance against these requirements. The contract likely includes clauses for service level agreements, reporting requirements, and potential remedies for non-performance. The VA's Office of Inspector General also provides an overarching layer of oversight.

Industry Classification

NAICS: Health Care and Social Assistance › Offices of Physicians › Offices of Physicians (except Mental Health Specialists)

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1406 6TH AVE N, SAINT CLOUD, MN, 56303

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: $37,372

Exercised Options: $37,372

Current Obligation: $37,372

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C26324D0049

IDV Type: IDC

Timeline