VA awards $81.4M to OptumServe for physician services, highlighting a significant investment in healthcare delivery

Contract Overview

Contract Amount: $81,450,302 ($81.5M)

Contractor: Optumserve Health Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2017-09-26

End Date: 2019-11-25

Contract Duration: 790 days

Daily Burn Rate: $103.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: LHI, DISTRICT 1 (NORTH ATLANTIC) TASK ORDER AWARD | 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 $81.5 million to OPTUMSERVE HEALTH SERVICES, INC. for work described as: LHI, DISTRICT 1 (NORTH ATLANTIC) TASK ORDER AWARD | IGF::OT::IGF Key points: 1. Contract value of over $81 million indicates a substantial commitment to healthcare services. 2. Full and open competition suggests a robust market for these services. 3. The contract duration of 790 days points to a medium-term service requirement. 4. Fixed-price contract type may offer cost certainty but could limit flexibility. 5. Awarded by the Department of Veterans Affairs, this contract directly impacts veteran healthcare. 6. The NAICS code 621111 points to a focus on physician services. 7. The contract was awarded as a delivery order, suggesting it's part of a larger framework.

Value Assessment

Rating: good

The contract value of $81.4 million for physician services appears to be within a reasonable range for a multi-year federal healthcare contract of this scope. Benchmarking against similar contracts for physician staffing and support services within the VA or other agencies would provide a more precise value-for-money assessment. The firm fixed-price structure suggests an effort to control costs, but the ultimate value depends on the quality and efficiency of services delivered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This suggests a competitive marketplace for the required physician services. The number of bidders is not specified, but the open competition generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages a wider range of offers, driving down prices and increasing the likelihood of securing high-quality services at a competitive rate.

Public Impact

Veterans will benefit from the provision of physician services, potentially improving access to care and health outcomes. The services delivered are likely to include a range of medical consultations, diagnoses, and treatment plans. The geographic impact is focused on areas served by the Department of Veterans Affairs, primarily within the North Atlantic region (District 1). Workforce implications include the potential for employment of physicians and support staff through OptumServe Health Services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for service gaps if contractor performance falters.
Reliance on a single contractor for critical services could pose a risk.
Ensuring consistent quality of care across all services provided.

Positive Signals

Awarded through full and open competition, suggesting a competitive process.
Firm fixed-price contract type can provide cost predictability.
The Department of Veterans Affairs is a major healthcare provider with established oversight.

Sector Analysis

This contract falls within the Healthcare sector, specifically focusing on physician services. The market for federal healthcare services is substantial, with agencies like the VA consistently seeking to procure medical expertise to support their patient populations. Comparable spending benchmarks would involve analyzing other large-scale physician staffing contracts awarded by federal health agencies, considering factors like specialty, duration, and geographic coverage.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The primary contractor, OptumServe Health Services, Inc., is likely a large business, and any subcontracting would be at their discretion or as part of their overall business strategy.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs, which is responsible for managing and monitoring the performance of OptumServe Health Services, Inc. Accountability measures are typically embedded within the contract terms, including performance standards and reporting requirements. Transparency is facilitated through contract award databases, though specific performance metrics may not always be publicly disclosed.

Related Government Programs

Department of Veterans Affairs Medical Services Contracts
Federal Physician Staffing Contracts
Healthcare Services for Federal Agencies
Delivery Orders under Indefinite Delivery Contracts

Risk Flags

Potential for contractor performance issues.
Ensuring consistent quality of care.
Reliance on external staffing for critical services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $81.5 million to OPTUMSERVE HEALTH SERVICES, INC.. LHI, DISTRICT 1 (NORTH ATLANTIC) TASK ORDER AWARD | IGF::OT::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 $81.5 million.

What is the period of performance?

Start: 2017-09-26. End: 2019-11-25.

What is the track record of OptumServe Health Services, Inc. with the Department of Veterans Affairs and other federal agencies?

OptumServe Health Services, Inc. has a significant history of contracting with the Department of Veterans Affairs and other federal entities. They are known for providing a wide range of health services, including staffing, telehealth, and administrative support. Analyzing their past performance on similar contracts, including any documented issues, awards, or contract modifications, would provide insight into their reliability and capability. Their extensive experience suggests a strong understanding of federal procurement processes and healthcare delivery requirements. Further investigation into specific past performance evaluations and any disputes or corrective actions would offer a more comprehensive picture of their track record.

How does the awarded amount of $81.4 million compare to similar physician service contracts within the VA or other federal healthcare providers?

The $81.4 million award for physician services over a period of approximately two years (790 days) represents a substantial investment. To benchmark this value, one would compare it to other large-scale contracts for physician staffing and support services awarded by the VA or agencies like the Department of Defense or Health and Human Services. Factors such as the types of physicians (e.g., primary care, specialists), the volume of services, and the geographic locations are crucial for a fair comparison. Without specific details on the scope of services and the number of personnel involved, it's challenging to definitively state if this represents a premium or a discount. However, given the scale and duration, it aligns with significant federal healthcare procurements.

What are the primary risks associated with this contract, and how are they being mitigated?

Key risks associated with this contract include potential service disruptions, quality of care issues, and contractor performance deficiencies. Mitigation strategies typically involve robust performance monitoring by the VA, clearly defined service level agreements (SLAs), and contingency plans outlined in the contract. The firm fixed-price nature of the contract aims to mitigate cost overruns for the government, but it could incentivize the contractor to cut corners if not properly overseen. Ensuring adequate staffing levels and qualifications of the physicians provided by OptumServe is also critical. The VA's established oversight mechanisms and the potential for contract termination or penalties for non-performance serve as further risk mitigation tools.

What is the expected effectiveness of the services provided under this contract in improving veteran healthcare access or outcomes?

The effectiveness of the services provided under this contract is directly tied to OptumServe's ability to supply qualified physicians and deliver high-quality care that meets the VA's standards. If the contract successfully fills gaps in physician availability or provides specialized expertise, it can significantly improve veteran access to timely medical services, potentially leading to better health outcomes and increased patient satisfaction. The contract's success will depend on factors such as the contractor's responsiveness, the integration of their services with existing VA healthcare systems, and the overall patient experience. Regular performance reviews and patient feedback mechanisms will be crucial in assessing and ensuring the effectiveness of these services.

How has federal spending on physician services, particularly within the VA, trended over the past five years?

Federal spending on physician services, including within the VA, has generally trended upwards over the past five years, driven by increasing healthcare demands, an aging veteran population, and efforts to address physician shortages. The VA, in particular, has faced challenges in recruiting and retaining medical staff, leading to increased reliance on contract physicians. This trend is reflected in the consistent awarding of large-scale contracts for physician staffing and support services. Analyzing historical spending data for the VA's medical services budget and specific contract categories for physician services would reveal the magnitude and growth rate of this spending, providing context for the $81.4 million award.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

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: $6,798,550,302

Exercised Options: $83,450,302

Current Obligation: $81,450,302

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA119A16D0072

IDV Type: IDC

Timeline