VA awards $25.2M sole-source contract for liver transplant services to VCU Health System Authority

Contract Overview

Contract Amount: $25,220,525 ($25.2M)

Contractor: VCU Health System Authority

Awarding Agency: Department of Veterans Affairs

Start Date: 2017-03-02

End Date: 2022-09-30

Contract Duration: 2,038 days

Daily Burn Rate: $12.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: IGF::OT::IGF ACADEMIC AFFILIATE SOLE SOURCE FOR LIVER TRANSPLANT

Place of Performance

Location: RICHMOND, RICHMOND CITY County, VIRGINIA, 23285

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $25.2 million to VCU HEALTH SYSTEM AUTHORITY for work described as: IGF::OT::IGF ACADEMIC AFFILIATE SOLE SOURCE FOR LIVER TRANSPLANT Key points: 1. Contract awarded on a sole-source basis, limiting competitive opportunities and potentially impacting price discovery. 2. The contract duration of 2038 days (over 5 years) indicates a long-term need for these specialized services. 3. The firm-fixed-price contract type provides cost certainty for the government, but may not reflect the most competitive pricing. 4. The absence of small business set-aside suggests the primary contractor is not a small business, with potential subcontracting implications. 5. This contract falls within the General Medical and Surgical Hospitals sector, a critical area for healthcare delivery. 6. The significant dollar value suggests a substantial demand for liver transplant services within the VA system.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging due to the lack of competitive bids. However, the total award of $25.2 million over approximately five years suggests a significant investment in specialized medical services. Without comparable contracts or market data for similar sole-source liver transplant services, a precise value-for-money assessment is difficult. The fixed-price nature offers predictability, but the absence of competition means the VA may not have secured the lowest possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source is available or capable of providing the required services. The lack of competition means that multiple bidders were not considered, which can limit price negotiation and potentially lead to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Taxpayers may not benefit from the cost savings that typically arise from a competitive bidding process. The absence of competition means the government did not leverage market forces to drive down prices for these essential liver transplant services.

Public Impact

Veterans requiring liver transplant services are the primary beneficiaries, ensuring access to critical medical care. The contract facilitates the delivery of highly specialized surgical and post-operative care for liver transplant patients. The geographic impact is primarily within the service area of VCU Health System Authority, likely serving veterans in Virginia and surrounding regions. The contract supports a specialized healthcare workforce, including surgeons, nurses, and support staff at VCU Health System.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings for taxpayers.
Lack of transparency in the procurement process due to non-competitive nature.
Potential for higher costs compared to a competed contract for similar services.

Positive Signals

Ensures continuity of care for veterans needing complex liver transplant procedures.
Leverages specialized expertise and facilities of VCU Health System Authority.
Firm-fixed-price contract provides budget certainty for the VA.

Sector Analysis

This contract falls within the Healthcare sector, specifically the General Medical and Surgical Hospitals sub-sector (NAICS 622110). The market for specialized transplant services is highly concentrated, often dominated by a few leading medical institutions with the necessary infrastructure, expertise, and patient volume. The VA's spending in this area reflects the significant costs associated with complex surgical procedures and long-term patient management.

Small Business Impact

The contract was not set aside for small businesses, and the data indicates no small business participation (sb: false). This suggests that the primary contractor, VCU Health System Authority, is not a small business. There is no explicit information on subcontracting plans, but for a specialized service like liver transplants, it is less likely to involve extensive subcontracting to small businesses compared to broader service contracts.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' procurement and program management offices. Inspector General jurisdiction would apply to investigations of fraud, waste, or abuse. Transparency is limited due to the sole-source nature of the award, but contract performance metrics and financial reporting would be subject to VA oversight.

Related Government Programs

VA Medical Care
Organ Transplant Services
Specialty Medical Services
Sole Source Contracts
Healthcare Services Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for higher costs
Long contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $25.2 million to VCU HEALTH SYSTEM AUTHORITY. IGF::OT::IGF ACADEMIC AFFILIATE SOLE SOURCE FOR LIVER TRANSPLANT

Who is the contractor on this award?

The obligated recipient is VCU HEALTH SYSTEM AUTHORITY.

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 $25.2 million.

What is the period of performance?

Start: 2017-03-02. End: 2022-09-30.

What is the historical spending pattern for liver transplant services by the Department of Veterans Affairs?

Analyzing historical spending on liver transplant services by the VA is crucial for understanding trends and identifying potential cost efficiencies. Without specific historical data for this contract or similar services, it's difficult to provide precise figures. However, the VA generally procures a wide range of medical services, and specialized procedures like organ transplants represent a significant portion of its healthcare expenditures. The current $25.2 million award over approximately five years suggests a substantial and ongoing need. Further investigation into VA's budget allocations for transplant programs and prior contracts for similar services would provide a clearer picture of historical spending patterns and whether this award represents an increase, decrease, or stable investment in this critical area.

How does the pricing of this contract compare to similar liver transplant services procured by other federal agencies or large healthcare providers?

Direct price comparison for this sole-source contract is challenging due to the lack of competitive bidding. Typically, sole-source awards may not reflect the most competitive pricing available in the market. To assess value, one would ideally benchmark against similar liver transplant services procured by other federal agencies (like DoD or HHS) or large non-federal healthcare systems. Factors such as the scope of services (pre-operative evaluation, surgery, post-operative care, immunosuppression management), patient volume, and specific outcomes would need to be standardized for a meaningful comparison. Given the specialized nature and high costs associated with liver transplants, significant variations can exist. The absence of competition here means the VA did not have the benefit of market forces driving down costs, making external benchmarking even more critical for post-award performance review.

What are the specific performance metrics and quality indicators used to evaluate the success of this contract?

The success of this contract hinges on the effective delivery of high-quality liver transplant services to veterans. Specific performance metrics would likely include patient survival rates post-transplant, graft survival rates (how long the transplanted organ functions), complication rates (e.g., infection, rejection), readmission rates, and patient satisfaction scores. Quality indicators would align with established medical best practices for organ transplantation, such as adherence to immunosuppression protocols, timely follow-up care, and effective management of co-morbidities. The VA would monitor these metrics through regular reporting from VCU Health System Authority and potentially through independent audits or reviews to ensure the contractor is meeting the terms of the firm-fixed-price contract and providing the best possible care to veterans.

What is the track record of VCU Health System Authority in providing complex medical services, particularly organ transplants?

VCU Health System Authority is a well-established academic medical center with a recognized expertise in organ transplantation, including liver transplants. Their track record is generally considered strong, with a history of performing complex surgeries and managing post-transplant care. As an academic affiliate, they are involved in research and education, which often correlates with advanced medical capabilities. The VA's decision to award a sole-source contract suggests confidence in VCU's ability to meet the specialized needs of veterans requiring liver transplants. However, a thorough review would involve examining their specific outcomes data, patient volume, and any past performance issues or accolades related to their transplant programs to fully understand their capabilities and reliability in fulfilling this contract.

What are the potential risks associated with a sole-source award for critical healthcare services like liver transplants?

The primary risk associated with a sole-source award for critical healthcare services like liver transplants is the potential for inflated costs due to the lack of competition. Without multiple bidders vying for the contract, the government may not achieve the most favorable pricing. Another risk is complacency from the sole provider, as there is less pressure to innovate or improve services compared to a competitive environment. Furthermore, if the sole provider experiences unforeseen issues (e.g., staffing shortages, facility problems, loss of accreditation), the VA could face significant disruption in care, as there are no immediate alternative providers readily available under contract. Ensuring robust oversight and clear performance expectations becomes paramount in mitigating these risks.

Industry Classification

NAICS: Health Care and Social Assistance › General Medical and Surgical Hospitals › General Medical and Surgical Hospitals

Product/Service Code: MEDICAL SERVICES › OTHER MEDICAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: VA246-14-R-0141

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Virginia Commonwealth University

Address: 1250 E MARSHALL ST, RICHMOND, VA, 23298

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

Financial Breakdown

Contract Ceiling: $25,220,525

Exercised Options: $25,220,525

Current Obligation: $25,220,525

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline