DoD Spends $26.9M on Medical Exams, Sole-Sourced to OptumServe Health Services
Contract Overview
Contract Amount: $26,911,159 ($26.9M)
Contractor: Optumserve Health Services, Inc.
Awarding Agency: Department of Defense
Start Date: 2021-03-01
End Date: 2022-02-28
Contract Duration: 364 days
Daily Burn Rate: $73.9K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: MEDICAL/DENTAL ASSESSMENT SERVICES - EXAMS AND PERIODIC HEALTH ASSESSMENTS INCLUDING VISION WITH CORRECTIVE PROCEDURES.
Place of Performance
Location: LA CROSSE, LA CROSSE County, WISCONSIN, 54601
Plain-Language Summary
Department of Defense obligated $26.9 million to OPTUMSERVE HEALTH SERVICES, INC. for work described as: MEDICAL/DENTAL ASSESSMENT SERVICES - EXAMS AND PERIODIC HEALTH ASSESSMENTS INCLUDING VISION WITH CORRECTIVE PROCEDURES. Key points: 1. Significant contract value of $26.9 million for essential medical and dental assessments. 2. Sole-source award raises questions about competition and potential price discovery. 3. Risk of overpayment due to lack of competitive bidding. 4. Healthcare sector spending, specifically within physician services.
Value Assessment
Rating: questionable
The contract value of $26.9 million for physician services is substantial. Without competitive bidding, it's difficult to benchmark against similar contracts to determine if the pricing is optimal.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was awarded on a sole-source basis, meaning there was no competition. This significantly limits price discovery and may lead to higher costs for taxpayers.
Taxpayer Impact: The lack of competition for this $26.9 million contract could result in taxpayers paying more than necessary for medical and dental assessment services.
Public Impact
Ensures service members receive necessary medical and dental evaluations. Potential for higher costs due to sole-source award impacts taxpayer funds. OptumServe Health Services is the sole provider, limiting patient choice if applicable.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for overpricing
Positive Signals
- Provides critical health services to military personnel
- Contract duration aligns with service needs
Sector Analysis
This contract falls within the Healthcare sector, specifically for physician services. Benchmarking physician service contracts can be complex due to varying scopes of work and geographic locations.
Small Business Impact
There is no indication that small businesses were involved in this sole-source award, suggesting a missed opportunity for small business participation.
Oversight & Accountability
The sole-source nature of this award warrants further oversight to ensure the government received fair value and that the justification for not competing was sound.
Related Government Programs
- Offices of Physicians (except Mental Health Specialists)
- Department of Defense Contracting
- Defense Health Agency Programs
Risk Flags
- Sole-source award lacks competition
- Potential for inflated pricing
- Limited transparency in price negotiation
- Missed opportunity for small business engagement
Tags
offices-of-physicians-except-mental-heal, department-of-defense, wi, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $26.9 million to OPTUMSERVE HEALTH SERVICES, INC.. MEDICAL/DENTAL ASSESSMENT SERVICES - EXAMS AND PERIODIC HEALTH ASSESSMENTS INCLUDING VISION WITH CORRECTIVE PROCEDURES.
Who is the contractor on this award?
The obligated recipient is OPTUMSERVE HEALTH SERVICES, INC..
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Health Agency).
What is the total obligated amount?
The obligated amount is $26.9 million.
What is the period of performance?
Start: 2021-03-01. End: 2022-02-28.
What was the justification for awarding this contract on a sole-source basis?
The justification for a sole-source award typically involves circumstances where only one responsible source can provide the required supplies or services. This could be due to unique capabilities, urgent needs, or specific government requirements that only one contractor can meet. A thorough review of the contracting officer's justification is necessary to validate this.
What is the estimated cost savings if this contract had been competed?
Estimating cost savings from a sole-source award is challenging without a competitive baseline. However, studies often show that competitive bidding can yield savings ranging from 10% to 30% or more compared to sole-source contracts. For this $26.9 million contract, potential savings could be in the millions.
How does the quality of services provided by OptumServe compare to potential competitors?
Assessing the quality comparison is difficult without a competitive process. Performance metrics and past performance reviews would be key indicators. If the government has consistently received high-quality services, it might partially justify the sole-source decision, but it doesn't negate the potential for better pricing through competition.
Industry Classification
NAICS: Health Care and Social Assistance › Offices of Physicians › Offices of Physicians (except Mental Health Specialists)
Product/Service Code: MEDICAL SERVICES › OTHER MEDICAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: HT001118R0053
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Unitedhealth Group Incorporated
Address: 328 FRONT ST S, LA CROSSE, WI, 54601
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $26,911,159
Exercised Options: $26,911,159
Current Obligation: $26,911,159
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: HT001119D0002
IDV Type: IDC
Timeline
Start Date: 2021-03-01
Current End Date: 2022-02-28
Potential End Date: 2022-02-28 00:00:00
Last Modified: 2024-09-04
More Contracts from Optumserve Health Services, Inc.
- FY26 Funding Medical Disability Examinations — $714.1M (Department of Veterans Affairs)
- FY24 Funding Task Order — $596.1M (Department of Veterans Affairs)
- Medical Disability Examinations (mdes) Under Section 504 of the Veterans Benefits Improvements ACT of 1996 (public LAW 104 275 38 U.S.C. 5101), Region 2 (southeast) - Option Year 4 Task Order — $365.3M (Department of Veterans Affairs)
- FY26 Funding Medical Disability Examinations — $362.2M (Department of Veterans Affairs)
- FY26 Funding Medical Disability Examinations — $356.6M (Department of Veterans Affairs)
View all Optumserve Health Services, Inc. federal contracts →
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)