VA's $68.5M Medical Disability Exam contract with QTC Medical Services Inc. awarded under full and open competition

Contract Overview

Contract Amount: $68,499,399 ($68.5M)

Contractor: QTC Medical Services Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2017-01-09

End Date: 2017-09-30

Contract Duration: 264 days

Daily Burn Rate: $259.5K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MEDICAL DISABILITY EXAMINATIONS (MDES) UNDER SECTION 504 OF THE VETERANS BENEFITS IMPROVEMENTS ACT OF 1996 (PUBLIC LAW 104 275; 38 U.S.C. 5101), DISTRICT 6 (NATIONAL MISSION); THE PURPOSE OF THIS MODIFICATION IS TO CHANGE THE ASSIGNED ADMINISTRATIVE CONTRACTING OFFICER. IGF::OT::IGF

Place of Performance

Location: DIAMOND BAR, LOS ANGELES County, CALIFORNIA, 91765

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $68.5 million to QTC MEDICAL SERVICES INC for work described as: MEDICAL DISABILITY EXAMINATIONS (MDES) UNDER SECTION 504 OF THE VETERANS BENEFITS IMPROVEMENTS ACT OF 1996 (PUBLIC LAW 104 275; 38 U.S.C. 5101), DISTRICT 6 (NATIONAL MISSION); THE PURPOSE OF THIS MODIFICATION IS TO CHANGE THE ASSIGNED ADMINISTRATIVE CONTRACTING OFFICER. IGF::OT::… Key points: 1. Contract awarded for medical disability examinations, supporting veterans' benefits. 2. QTC Medical Services Inc. is the primary contractor for this significant VA initiative. 3. The contract was secured through a full and open competition process. 4. The contract duration spans 264 days, indicating a focused service period. 5. The firm fixed-price structure suggests predictable costs for the VA. 6. This contract falls under the 'Offices of Physicians' industry classification.

Value Assessment

Rating: good

The contract's value of $68.5 million for a 264-day period for medical disability examinations appears reasonable given the scope of services required by the VA. Benchmarking against similar large-scale contracts for veteran health services suggests that this pricing is competitive. The firm fixed-price nature of the contract provides cost certainty for the government, mitigating risks associated with cost overruns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through a full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The specific number of bidders is not provided, but the open competition suggests a robust market for these services. This process is designed to foster price discovery and ensure the government receives competitive offers.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that aims to secure the best value for the significant expenditure on veteran disability examinations.

Public Impact

Veterans requiring medical disability examinations to support their benefit claims are the primary beneficiaries. The contract facilitates the delivery of essential medical assessment services. Services are likely concentrated in areas where QTC Medical Services Inc. has operational capacity, potentially with a national reach given the contract's description. The contract supports a workforce of medical professionals and administrative staff involved in conducting and processing these examinations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor to prioritize high-volume, less complex cases over more critical or complex ones if not managed closely.
Ensuring consistent quality of examinations across all contracted providers is crucial.
Dependence on a single contractor for a large volume of critical veteran services carries inherent risk.

Positive Signals

Awarded through full and open competition, suggesting a competitive market and potentially good value.
Firm fixed-price contract provides cost certainty for the government.
Contract addresses a critical need for veterans' disability claims processing.

Sector Analysis

This contract operates within the healthcare services sector, specifically focusing on medical evaluations for disability claims. The market for such services is substantial, driven by government mandates and the need for objective assessments. Comparable spending benchmarks would involve analyzing other large federal contracts for medical examination services, particularly those administered by the VA or Department of Defense, to gauge cost-effectiveness and contractor performance.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. It is also not specified whether QTC Medical Services Inc. has subcontracting plans that would involve small businesses. Further investigation would be needed to determine the extent of small business participation, if any, in fulfilling this contract.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs' contracting officers and program managers. Accountability measures are embedded in the contract terms, including performance standards and payment schedules. Transparency is generally facilitated through contract award databases, though specific performance metrics and detailed oversight reports may not always be publicly accessible. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Veterans Health Administration (VHA) Services
Disability Benefits Questionnaire (DBQ) Processing
TRICARE Medical Services Contracts
Federal Occupational Health Services

Risk Flags

Contract Value
Contract Duration
Contract Type
Competition Level

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $68.5 million to QTC MEDICAL SERVICES INC. MEDICAL DISABILITY EXAMINATIONS (MDES) UNDER SECTION 504 OF THE VETERANS BENEFITS IMPROVEMENTS ACT OF 1996 (PUBLIC LAW 104 275; 38 U.S.C. 5101), DISTRICT 6 (NATIONAL MISSION); THE PURPOSE OF THIS MODIFICATION IS TO CHANGE THE ASSIGNED ADMINISTRATIVE CONTRACTING OFFICER. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is QTC MEDICAL SERVICES INC.

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 $68.5 million.

What is the period of performance?

Start: 2017-01-09. End: 2017-09-30.

What is the historical spending pattern for Medical Disability Examinations (MDES) by the Department of Veterans Affairs?

The Department of Veterans Affairs (VA) has historically allocated significant funding towards medical disability examinations to process veterans' claims. Spending in this area can fluctuate based on legislative changes, increases in veteran populations, and shifts in examination protocols. For instance, the VA's budget for compensation and pension services, which includes disability examinations, has seen consistent growth over the years. Analyzing annual reports and budget justifications from the VA can reveal trends in contract spending for MDES, identifying periods of increased or decreased investment. This specific contract, valued at approximately $68.5 million, represents a substantial portion of the VA's expenditure for these services during its performance period (2017). Understanding the broader historical context of VA's MDES spending helps in assessing whether this contract's value is in line with long-term trends or represents a significant deviation.

How does QTC Medical Services Inc.'s performance on this contract compare to other large federal healthcare service providers?

Assessing QTC Medical Services Inc.'s performance on this specific $68.5 million contract requires access to performance evaluations, quality metrics, and potentially past performance reviews. Without direct access to these internal VA documents, a comparative analysis is challenging. However, general industry reputation and performance on other VA contracts can offer insights. QTC Medical Services is a known provider in this space, often competing for and winning large contracts. Comparisons would ideally involve metrics such as timeliness of examinations, accuracy of reports, veteran satisfaction scores, and adherence to contractual requirements. Benchmarking against other large federal healthcare contractors like OptumServe or Leidos, who also provide similar services, would involve examining their track records on comparable contracts, looking for patterns in contract awards, performance ratings, and any instances of disputes or corrective actions. A comprehensive comparison would necessitate a detailed review of available performance data for all relevant contractors.

What are the key risk indicators associated with a large, firm-fixed-price contract for medical disability examinations?

A key risk indicator for a large, firm-fixed-price contract like this $68.5 million VA medical disability examination contract is the potential for the contractor to cut corners to maintain profitability, especially if the fixed price proves to be too low or if operational costs increase unexpectedly. This could manifest as reduced quality of examinations, rushed assessments, or inadequate documentation. Another risk is contractor performance variability; if QTC Medical Services Inc. experiences staffing shortages or operational inefficiencies, it could lead to delays in processing claims, impacting veterans. Furthermore, the concentration of a significant portion of these critical services with one provider increases the risk of disruption should the contractor face financial instability, legal challenges, or major operational failures. Robust government oversight, clear performance standards, and contingency planning are crucial to mitigate these risks.

What is the typical duration and value range for similar VA contracts for medical disability examinations?

The typical duration and value range for VA contracts for medical disability examinations can vary significantly based on the scope, geographic coverage, and specific services required. Contracts can range from task orders for individual examinations to large, multi-year Indefinite Delivery/Indefinite Quantity (IDIQ) contracts covering nationwide services. The $68.5 million value for this 264-day contract (approximately 8.7 months) suggests a substantial regional or specialized service delivery. Longer-term, broader contracts might extend for several years and be valued in the hundreds of millions or even billions of dollars. For instance, the VA has previously awarded large IDIQ contracts for medical examination services that could potentially reach over $1 billion over their lifespan. This specific contract appears to be a significant, but perhaps not the largest, single award for a defined period, likely focusing on a specific region or set of requirements within the broader MDES program.

How does the 'Offices of Physicians (except Mental Health Specialists)' NAICS code impact the interpretation of this contract's services?

The North American Industry Classification System (NAICS) code 621111, 'Offices of Physicians (except Mental Health Specialists),' indicates that the primary services procured under this contract involve medical examinations conducted by physicians. This classification suggests that the contract focuses on the diagnostic and evaluative aspects of healthcare, rather than treatment or specialized mental health services. For the VA's Medical Disability Examinations (MDES) program, this means the contract likely covers physical examinations, review of medical records, and the generation of reports to assess a veteran's condition and its impact on their ability to work, which is crucial for determining disability benefits. The exclusion of mental health specialists means that separate contracts or provisions might be in place for psychiatric or psychological evaluations, ensuring that specific expertise is sourced appropriately for different aspects of a veteran's claim.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leidos Holdings, Inc. (UEI: 611641312)

Address: 21700 COPLEY DR STE 200, DIAMOND BAR, CA, 91765

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

Financial Breakdown

Contract Ceiling: $68,499,399

Exercised Options: $68,499,399

Current Obligation: $68,499,399

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA119A16D0038

IDV Type: IDC

Timeline