VA Awards $54M Sole Source Contract for VBA Medical Disability Exams to OptumServe Health Services

Contract Overview

Contract Amount: $54,262,263 ($54.3M)

Contractor: Optumserve Health Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2017-01-13

End Date: 2017-04-12

Contract Duration: 89 days

Daily Burn Rate: $609.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: VBA MEDICAL DISABILITY EXAMINATIONS (SOLE SOURCE BRIDGE CONTRACT) AS AUTHORIZED UNDER PUBLIC LAW 104-275 | THE CONTRACTOR SHALL PROVIDE ALL RESOURCES NECESSARY TO ACCOMPLISH THE DELIVERABLES DESCRIBED IN THE PERFORMANCE WORK STATEMENT (PWS), EXCEPT AS MAY OTHERWISE BE SPECIFIED. THE CONTRACTOR IS TO LOCATE, SUBCONTRACT, AND TRAIN MEDICAL PROFESSIONALS IN PERFORMING MEDICAL DISABILITY EXAMINATIONS FOR VETERANS WITHIN IDENTIFIED GEOGRAPHIC REGIONS AS IDENTIFIED IN SUBSEQUENT TASK ORDERS. | IGF::OT::IGF

Place of Performance

Location: LA CROSSE, LA CROSSE County, WISCONSIN, 54601

State: Wisconsin Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $54.3 million to OPTUMSERVE HEALTH SERVICES, INC. for work described as: VBA MEDICAL DISABILITY EXAMINATIONS (SOLE SOURCE BRIDGE CONTRACT) AS AUTHORIZED UNDER PUBLIC LAW 104-275 | THE CONTRACTOR SHALL PROVIDE ALL RESOURCES NECESSARY TO ACCOMPLISH THE DELIVERABLES DESCRIBED IN THE PERFORMANCE WORK STATEMENT (PWS), EXCEPT AS MAY OTHERWISE BE SPECIFIED. … Key points: 1. Contract awarded to a single vendor, raising questions about competition. 2. Focus on medical disability examinations for veterans highlights a critical service area. 3. The contract's short duration (89 days) suggests a bridge or interim solution. 4. High dollar value for a short-term service contract warrants scrutiny.

Value Assessment

Rating: questionable

The contract value of $54.3 million for a 89-day period appears high for a sole-source bridge contract. Benchmarking against similar short-term medical examination services is difficult without more detailed scope information.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs compared to a competitive process.

Taxpayer Impact: The sole-source nature of this award means taxpayers may not have received the best possible price for these essential veteran services.

Public Impact

Veterans may experience continuity of care for disability evaluations. Potential for increased wait times if the bridge contract is not managed effectively. Ensures essential medical disability examinations continue without interruption. Taxpayer funds are being allocated without competitive bidding.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
High value for a short-term contract.
Lack of competition may lead to inflated costs.

Positive Signals

Ensures continuity of critical veteran services.
Addresses an immediate need for medical disability examinations.

Sector Analysis

The healthcare sector, particularly services supporting veterans, is a significant area of federal spending. This contract falls under medical services, specifically physician services for disability evaluations, a crucial component of veteran benefits.

Small Business Impact

There is no indication of small business participation in this sole-source award. The focus is on a large prime contractor, OptumServe Health Services, Inc.

Oversight & Accountability

The sole-source nature of this contract necessitates robust oversight from the Department of Veterans Affairs to ensure the contractor delivers services as per the PWS and that costs are reasonable, despite the lack of competition.

Related Government Programs

Offices of Physicians (except Mental Health Specialists)
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Sole-source award limits competition.
Potential for overpricing due to lack of competition.
Short contract duration may indicate a stop-gap measure.
High dollar value for a short-term service.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $54.3 million to OPTUMSERVE HEALTH SERVICES, INC.. VBA MEDICAL DISABILITY EXAMINATIONS (SOLE SOURCE BRIDGE CONTRACT) AS AUTHORIZED UNDER PUBLIC LAW 104-275 | THE CONTRACTOR SHALL PROVIDE ALL RESOURCES NECESSARY TO ACCOMPLISH THE DELIVERABLES DESCRIBED IN THE PERFORMANCE WORK STATEMENT (PWS), EXCEPT AS MAY OTHERWISE BE SPECIFIED. THE CONTRACTOR IS TO LOCATE, SUBCONTRACT, AND TRAIN MEDICAL PROFESSIONALS IN PERFORMING MEDICAL DISABILITY EXAMINATIONS FOR VETERANS WITHIN IDENTIFIED GEOGRAPHIC REGIONS AS IDENTIFIED IN SUBSEQUENT TASK ORDERS. | IGF::

Who is the contractor on this award?

The obligated recipient is OPTUMSERVE HEALTH 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 $54.3 million.

What is the period of performance?

Start: 2017-01-13. End: 2017-04-12.

What was the justification for awarding this contract on a sole-source basis, and why was it deemed necessary to bypass the competitive bidding process?

The justification for a sole-source award typically stems from urgent and compelling circumstances where a delay in competition could cause significant financial or operational damage. For this VBA medical disability examination contract, it's possible the Department of Veterans Affairs faced an immediate need to ensure continuity of services for veterans, perhaps due to the expiration of a previous contract or an unforeseen surge in demand, making a full and open competition impractical within the required timeframe.

How does the per-unit cost of these disability examinations compare to industry benchmarks or previous VA contracts for similar services, given the sole-source nature?

Without specific per-unit cost data and a detailed breakdown of the services provided, a direct comparison is challenging. However, sole-source contracts inherently lack the price pressure of competition. Therefore, it is crucial for the VA to have conducted thorough internal cost analysis and relied on historical data or independent government cost estimates to ensure the $54.3 million awarded for this 89-day contract was reasonable and represented fair value, despite the absence of competitive bids.

What measures are in place to ensure the quality and effectiveness of the medical disability examinations provided by OptumServe under this contract, especially given the sole-source award?

Despite the sole-source award, the Department of Veterans Affairs is responsible for ensuring the contractor meets all performance requirements outlined in the Performance Work Statement (PWS). This includes establishing clear quality assurance surveillance plans (QASP), monitoring key performance indicators (KPIs), conducting regular performance reviews, and potentially implementing penalties for non-compliance. Robust oversight is critical to guarantee the effectiveness and accuracy of the examinations for veterans.

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

Parent Company: Unitedhealth Group Incorporated (UEI: 112871561)

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: $3,620,000,000

Exercised Options: $64,262,263

Current Obligation: $54,262,263

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA119A17D0009

IDV Type: IDC

Timeline