Justice Department's $287M contract for inmate healthcare services awarded to Heritage Health Solutions, LP

Contract Overview

Contract Amount: $286,948,401 ($286.9M)

Contractor: Heritage Health Solutions, LP

Awarding Agency: Department of Justice

Start Date: 2007-08-31

End Date: 2017-09-30

Contract Duration: 3,683 days

Daily Burn Rate: $77.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: INTEGRATED HEALTH CARE SYSTEM TO AUGMENT THE SERVICES PROVIDED THROUGH THE STATE AND LOCAL DETENTION FACILITIES.

Place of Performance

Location: ARLINGTON, ARLINGTON County, VIRGINIA, 22203

State: Virginia Government Spending

Plain-Language Summary

Department of Justice obligated $286.9 million to HERITAGE HEALTH SOLUTIONS, LP for work described as: INTEGRATED HEALTH CARE SYSTEM TO AUGMENT THE SERVICES PROVIDED THROUGH THE STATE AND LOCAL DETENTION FACILITIES. Key points: 1. The contract's value of $286.9 million over its lifespan suggests a significant investment in correctional healthcare. 2. Awarded through full and open competition, this contract indicates a market where multiple vendors could potentially bid. 3. The long duration of the contract (over 10 years) may present risks related to evolving healthcare needs and cost containment. 4. The firm-fixed-price structure aims to provide cost certainty for the government, but could limit flexibility. 5. The contract's focus on augmenting services within state and local detention facilities highlights a critical public health need. 6. The absence of small business set-aside flags suggests the primary award was not specifically targeted for small business participation.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific service details and comparable contract data. However, a $287 million expenditure over a decade for healthcare services within detention facilities indicates a substantial commitment. The firm-fixed-price nature suggests an attempt to control costs, but the long duration could lead to inefficiencies if market conditions or service requirements change significantly. Further analysis would require comparing per-patient costs or service-level benchmarks against similar correctional healthcare contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that the U.S. Marshals Service sought bids from all responsible sources. The presence of four bidders indicates a competitive environment, which generally benefits price discovery and potentially leads to more favorable pricing for the government. However, the specific number of bids received does not inherently guarantee the best possible value without further analysis of the proposals submitted.

Taxpayer Impact: Full and open competition generally leads to better price discovery for taxpayers by encouraging multiple vendors to offer their best terms. This approach helps ensure that the government is not overpaying for essential services.

Public Impact

Inmates within state and local detention facilities managed by the U.S. Marshals Service benefit from augmented healthcare services. The contract delivers essential medical and health insurance carrier services, addressing critical public health needs within correctional settings. The geographic impact is tied to the locations of state and local detention facilities utilized by the U.S. Marshals Service nationwide. The contract supports a healthcare workforce, including medical professionals and administrative staff, involved in delivering these services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration (over 10 years) increases risk of cost escalation and potential for outdated service models.
Firm-fixed-price contracts can sometimes lead to reduced flexibility in adapting to changing healthcare needs or technologies.
Dependence on a single contractor for a decade could create challenges if performance issues arise or if the contractor's financial stability is compromised.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process and potential for competitive pricing.
The firm-fixed-price contract structure provides budget certainty for the U.S. Marshals Service.
The contract addresses a critical need for healthcare services within the detention system, contributing to public health and safety.

Sector Analysis

This contract falls within the Healthcare sector, specifically focusing on correctional healthcare services. The market for correctional healthcare is substantial, driven by the need to provide medical services to incarcerated individuals, a responsibility mandated by law. This contract represents a significant portion of spending within this niche, aiming to ensure continuity and quality of care within federal detention facilities. Comparable spending benchmarks would involve analyzing other large-scale contracts for inmate healthcare provision across federal, state, and local correctional systems.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). This suggests that the primary contract was awarded based on the capabilities and pricing of larger firms. While there's no direct information on subcontracting, large prime contracts often include provisions for small business participation. The absence of a specific set-aside means that small businesses would have had to compete directly or seek subcontracting opportunities with the prime contractor, Heritage Health Solutions, LP.

Oversight & Accountability

Oversight for this contract would primarily reside with the U.S. Marshals Service, the contracting agency. As a definitive contract, it likely includes performance standards, reporting requirements, and payment milestones that are monitored by the agency. Transparency is facilitated through contract award databases like FPDS. Accountability measures would be embedded in the contract terms, allowing for remedies in case of non-performance. Inspector General jurisdiction would typically extend to investigating fraud, waste, and abuse related to federal contracts.

Related Government Programs

Federal Bureau of Prisons Healthcare Services
Department of Veterans Affairs Medical Services
State Department Consular Medical Services
Immigration and Customs Enforcement Detention Health Services

Risk Flags

Long contract duration may lead to cost inefficiencies over time.
Firm-fixed-price structure could limit adaptability to evolving healthcare needs.
Potential for contractor performance issues over a decade-long engagement.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $286.9 million to HERITAGE HEALTH SOLUTIONS, LP. INTEGRATED HEALTH CARE SYSTEM TO AUGMENT THE SERVICES PROVIDED THROUGH THE STATE AND LOCAL DETENTION FACILITIES.

Who is the contractor on this award?

The obligated recipient is HERITAGE HEALTH SOLUTIONS, LP.

Which agency awarded this contract?

Awarding agency: Department of Justice (U.S. Marshals Service).

What is the total obligated amount?

The obligated amount is $286.9 million.

What is the period of performance?

Start: 2007-08-31. End: 2017-09-30.

What is the historical spending pattern for integrated health care systems within U.S. Marshals Service detention facilities prior to this contract?

Analyzing historical spending patterns for integrated health care systems within U.S. Marshals Service (USMS) detention facilities prior to this $287 million contract requires access to detailed historical contract data. Generally, the USMS has contracted for inmate healthcare services for many years, often through various mechanisms including indefinite-delivery/indefinite-quantity (IDIQ) contracts or specific service agreements. Spending levels would have fluctuated based on inmate populations, the scope of services required, and the competitive landscape at the time. Prior to 2007 (contract start date), spending might have been distributed across multiple smaller contracts or different providers. The significant value of this definitive contract suggests a consolidation or expansion of services under a single, long-term agreement, potentially indicating a strategic shift in how the USMS manages healthcare for detainees in non-federal facilities.

How does the per-inmate healthcare cost under this contract compare to national averages for correctional facilities?

To compare the per-inmate healthcare cost under this contract to national averages, we first need to estimate the average daily inmate population served by the U.S. Marshals Service (USMS) during the contract period (2007-2017) and then divide the total contract value by the total inmate-days. The contract value is approximately $286.9 million. The average daily population for USMS detainees in state and local facilities can vary significantly but has historically ranged from around 30,000 to over 60,000. If we assume an average population of 45,000 inmates over the 10-year period, the annual cost would be roughly $28.7 million, or about $638 per inmate per year ($1.75 per day). National averages for correctional healthcare can range widely, from $5 to $15 per inmate per day, depending on the facility type, location, and services provided. Therefore, a daily cost of $1.75 appears exceptionally low compared to typical benchmarks, suggesting either a highly efficient service delivery model, a very basic level of care, or that the contract value represents only a portion of the total healthcare expenditure for these facilities.

What are the specific performance metrics and quality indicators used to evaluate Heritage Health Solutions, LP's service delivery?

Specific performance metrics and quality indicators for this contract are not detailed in the provided summary data. However, typical performance metrics for correctional healthcare contracts include measures related to access to care (e.g., appointment wait times), quality of care (e.g., chronic disease management outcomes, medication error rates), patient satisfaction, and compliance with health standards (e.g., ACA, NCCHC). The contract likely includes a Performance Work Statement (PWS) outlining these requirements and associated evaluation criteria. The firm-fixed-price nature suggests that the contractor is responsible for meeting these standards within the agreed-upon price. The U.S. Marshals Service would be responsible for monitoring these metrics through regular reviews, audits, and potentially site visits to ensure compliance and satisfactory service delivery.

What is the track record of Heritage Health Solutions, LP with other government contracts, particularly in healthcare?

Heritage Health Solutions, LP has a significant track record with government contracts, particularly within the healthcare sector. Prior to and during the period of this $287 million contract with the U.S. Marshals Service, the company has been involved in providing healthcare services to various government entities, including other correctional facilities and potentially military installations. Information available from contract databases often shows extensive award histories for companies like Heritage Health Solutions, indicating experience in managing large-scale healthcare operations. Their performance on these contracts would be assessed based on factors like adherence to contract terms, quality of services, cost management, and responsiveness to agency needs. A review of their contract history would reveal the breadth of their experience and their success in meeting the complex demands of government healthcare provision.

What are the potential risks associated with a sole-source or limited competition award for correctional healthcare services?

This contract was awarded under 'full and open competition,' not sole-source or limited competition. Therefore, the risks typically associated with those types of awards are not directly applicable here. Sole-source or limited competition awards can pose risks such as higher costs due to lack of competitive pressure, potential for reduced innovation, and a perception of unfairness or lack of transparency. When competition is limited, the government may not receive the best possible pricing or the most innovative solutions available in the market. However, in this specific case, the competition was open, which mitigates these particular risks. The risks that do exist are more related to the long-term nature of the contract and the complexities of managing healthcare in a correctional environment, regardless of the procurement method.

Industry Classification

NAICS: Finance and Insurance › Insurance Carriers › Direct Health and Medical Insurance Carriers

Product/Service Code: RESEARCH AND DEVELOPMENT › N – Health R&D Services

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2604 LONG PRAIRIE RD STE 300, FLOWER MOUND, TX, 75022

Business Categories: Category Business, Service Disabled Veteran Owned Business, Small Business, Veteran Owned Business, Woman Owned Business

Financial Breakdown

Contract Ceiling: $295,859,965

Exercised Options: $295,859,965

Current Obligation: $286,948,401

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Timeline