HHS Spends $15.1M on Laboratory Services with Quest Diagnostics Over 5 Years

Contract Overview

Contract Amount: $15,101,150 ($15.1M)

Contractor: Quest Diagnostics

Awarding Agency: Department of Health and Human Services

Start Date: 2005-04-28

End Date: 2010-10-24

Contract Duration: 2,005 days

Daily Burn Rate: $7.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 20

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: LABORATORY SERVICES

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20857, UNITED STATES OF AMERICA

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $15.1 million to QUEST DIAGNOSTICS for work described as: LABORATORY SERVICES Key points: 1. Significant contract value of $15.1 million for laboratory services. 2. Quest Diagnostics is the sole contractor, raising questions about competition. 3. Potential risk of inflated costs due to lack of competitive bidding. 4. The healthcare sector sees substantial spending on diagnostic services.

Value Assessment

Rating: fair

The contract value of $15.1 million over five years averages $3.02 million annually. Benchmarking against similar large-scale laboratory service contracts is difficult without specific service details, but the lack of competition suggests potential for higher pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which theoretically allows for the best price discovery. However, the data indicates only one awardee, Quest Diagnostics, suggesting that either only one bid was received or other bids were non-competitive.

Taxpayer Impact: Taxpayer funds are utilized for these essential laboratory services. The effectiveness of competition in driving down costs is a key factor in taxpayer impact.

Public Impact

Ensures access to critical laboratory testing for federal employees and potentially beneficiaries. Supports public health initiatives through diagnostic capabilities. Potential for cost savings if competition was more robust. Reliability of service delivery is crucial for healthcare operations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of multiple bids despite full and open competition.
Sole awardee may indicate limited market interest or barriers to entry.
Contract duration of 5 years limits opportunities for re-competition.

Positive Signals

Contract awarded under full and open competition.
Firm fixed price contract provides cost certainty.
Services are essential for healthcare operations.

Sector Analysis

The healthcare sector, particularly laboratory services, represents a significant portion of federal spending. Benchmarks for similar contracts are highly variable based on scope, volume, and specific tests offered.

Small Business Impact

The data does not indicate any specific set-asides for small businesses. Large contracts for specialized services like laboratory diagnostics are often dominated by major industry players.

Oversight & Accountability

Oversight would focus on service quality, adherence to contract terms, and ensuring the pricing remains competitive throughout the contract lifecycle, especially given the single awardee.

Related Government Programs

Medical Laboratories
Department of Health and Human Services Contracting
Office of the Assistant Secretary for Administration Programs

Risk Flags

Limited competition despite 'full and open' designation.
Potential for price creep due to sole awardee.
Lack of transparency in the bidding process outcomes.
Contract duration may stifle future competitive opportunities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $15.1 million to QUEST DIAGNOSTICS. LABORATORY SERVICES

Who is the contractor on this award?

The obligated recipient is QUEST DIAGNOSTICS.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of the Assistant Secretary for Administration).

What is the total obligated amount?

The obligated amount is $15.1 million.

What is the period of performance?

Start: 2005-04-28. End: 2010-10-24.

What was the competitive landscape during the bidding process?

While advertised as full and open competition, only one award was made to Quest Diagnostics. This suggests either a lack of sufficient bidders or that only one proposal met the stringent requirements. Further investigation into the bidding process and reasons for limited participation would clarify the true level of competition achieved.

Are the per-unit costs competitive compared to market rates?

Without specific service details and volume, a direct per-unit cost comparison is challenging. However, the absence of multiple competitive bids raises concerns that the pricing may not reflect the lowest achievable rates. Benchmarking against other government contracts or private sector agreements for similar services is recommended.

What is the long-term value proposition of this contract?

The contract provides essential laboratory services, ensuring operational continuity for the agency. The long-term value depends on the quality of services rendered and whether the pricing remains reasonable over the contract's duration, especially considering the limited competition.

Industry Classification

NAICS: Health Care and Social Assistance › Medical and Diagnostic Laboratories › Medical Laboratories

Product/Service Code: MEDICAL SERVICES › LABORATORY TESTING SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 20

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1201 SOUTH COLLEGEVILLE ROAD, COLLEGEVILLE, PA, 19426

Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $25,172,729

Exercised Options: $15,101,150

Current Obligation: $15,101,150

Contract Characteristics

Multi-Year Contract: Yes

Timeline