VA awards $200M+ outpatient care contract to Valor Healthcare Inc. for services in Virginia

Contract Overview

Contract Amount: $20,091,125 ($20.1M)

Contractor: Valor Healthcare Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2011-05-31

End Date: 2016-11-30

Contract Duration: 2,010 days

Daily Burn Rate: $10.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: DANVILLE CBOC

Place of Performance

Location: SALEM, ROANOKE County, VIRGINIA, 24153

State: Virginia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $20.1 million to VALOR HEALTHCARE INC for work described as: DANVILLE CBOC Key points: 1. Contract value exceeds $200 million over its period of performance. 2. Services are categorized under 'All Other Outpatient Care Centers'. 3. The contract was awarded through full and open competition. 4. Valor Healthcare Inc. is the sole contractor for this definitive contract. 5. The contract spans over five years, from May 2011 to November 2016. 6. The contract type is Firm Fixed Price, indicating predictable costs. 7. The contract was awarded by the Department of Veterans Affairs. 8. The primary place of performance is Virginia.

Value Assessment

Rating: fair

The contract value of over $200 million for outpatient care services over five years suggests a significant investment by the VA. Benchmarking this against similar contracts for community-based outpatient clinics (CBOCs) would be necessary to fully assess value for money. The firm fixed-price structure provides cost certainty, but the absence of detailed performance metrics or cost breakdowns in the provided data makes a precise value assessment challenging. Without specific per-unit cost data or comparisons to other providers, it's difficult to definitively state if this represents excellent or questionable value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. The data shows four bids were received, suggesting a reasonable level of competition for this significant contract. A higher number of bidders might typically lead to more competitive pricing, but the 'fair' assessment of value suggests that while competition existed, it may not have driven prices to the absolute lowest possible point.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which aims to secure services at the best possible price. The presence of multiple bidders increases the likelihood of a fair market price being established, preventing potential overspending.

Public Impact

Veterans in Virginia will benefit from access to outpatient care services. The contract supports the delivery of 'All Other Outpatient Care' services. The primary geographic impact is within the state of Virginia. The contract likely supports healthcare professionals and administrative staff within Valor Healthcare Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics makes it difficult to assess service quality.
Absence of specific per-unit cost data hinders precise value-for-money analysis.
Limited information on the contractor's track record with similar large-scale VA contracts.

Positive Signals

Awarded through full and open competition, indicating a fair bidding process.
Firm Fixed Price contract type provides cost certainty for the government.
Contract duration of over five years allows for stable service provision.
The contract is managed by the Department of Veterans Affairs, a primary agency for veteran services.

Sector Analysis

This contract falls within the Healthcare sector, specifically outpatient care services. The market for healthcare services, particularly for government contracts with agencies like the VA, is substantial. This contract represents a significant portion of spending within the 'All Other Outpatient Care Centers' category for the VA in Virginia. Comparable spending benchmarks would involve looking at other VA CBOC contracts or similar large-scale outpatient service agreements with other federal agencies.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside requirement. The focus was on full and open competition, which may or may not have involved small businesses as prime contractors or subcontractors.

Oversight & Accountability

The Department of Veterans Affairs (VA) is responsible for the oversight of this contract. As a definitive contract awarded through full and open competition, it is subject to standard federal procurement regulations and oversight mechanisms. Transparency is generally maintained through contract award databases like FPDS. Specific accountability measures would be detailed within the contract itself, including performance standards and remedies for non-compliance. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Department of Veterans Affairs Community-Based Outpatient Clinics (CBOCs)
VA Medical Services Contracts
Federal Healthcare Procurement
Outpatient Care Services Contracts

Risk Flags

Potential for vendor lock-in due to large contract size and duration.
Risk of service disruption if contractor faces operational or financial difficulties.
Limited flexibility to adopt new healthcare technologies or models mid-contract.
Need for robust performance monitoring to ensure quality despite fixed-price structure.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $20.1 million to VALOR HEALTHCARE INC. DANVILLE CBOC

Who is the contractor on this award?

The obligated recipient is VALOR HEALTHCARE 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 $20.1 million.

What is the period of performance?

Start: 2011-05-31. End: 2016-11-30.

What is the historical spending pattern for outpatient care services by the VA in Virginia?

Historical spending data for VA outpatient care in Virginia is extensive and varies year by year based on demand, specific clinic needs, and contract awards. Prior to this $200M+ contract, the VA likely awarded numerous smaller contracts and operated its own facilities to provide outpatient services. Analyzing past VA budget allocations and contract awards for similar services in Virginia would reveal trends in demand and the government's approach to service delivery, whether through in-house provision or contracted services. This specific contract represents a significant, consolidated award for a defined period, suggesting a strategic decision to outsource a substantial portion of care delivery to a single entity.

How does the per-unit cost of services under this contract compare to other VA outpatient contracts?

The provided data does not include specific per-unit cost breakdowns for the services rendered under this contract (e.g., cost per patient visit, cost per procedure). Therefore, a direct comparison to other VA outpatient contracts on a per-unit basis is not possible with the given information. To perform such a comparison, one would need access to the detailed pricing structure within the contract and comparable data from other VA facilities or contracts for similar services. Benchmarking would typically involve analyzing average costs for specific services across different regions and contract types to identify potential outliers or cost efficiencies.

What is Valor Healthcare Inc.'s track record with the Department of Veterans Affairs prior to this award?

Valor Healthcare Inc. has a history of contracting with the Department of Veterans Affairs. Information available through federal procurement databases often details past awards, contract performance ratings (if publicly accessible), and the types of services provided. A thorough review would involve examining previous contracts awarded to Valor Healthcare Inc. by the VA, including their duration, value, and the specific healthcare services delivered. Understanding their performance on prior VA contracts, including any reported issues or successes, would provide crucial context for assessing their capability and reliability in managing this significant $200M+ award.

What specific types of outpatient care are included under the 'All Other Outpatient Care Centers' NAICS code?

The NAICS code 621498, 'All Other Outpatient Care Centers,' is a broad category that encompasses establishments primarily engaged in providing outpatient health services, except for those specifically classified under other NAICS codes like physician offices, dentists' offices, or kidney dialysis centers. This can include a wide range of services such as diagnostic imaging centers, physical therapy clinics, mental health outpatient clinics, substance abuse treatment centers, and general medical outpatient facilities that do not fit into more specialized categories. For this specific VA contract, the services would be tailored to veteran healthcare needs, potentially covering primary care, specialty consultations, diagnostic services, and therapeutic treatments.

What are the potential risks associated with a single definitive contract of this magnitude for outpatient care?

A significant risk associated with a large, single definitive contract like this is vendor lock-in and a potential decrease in competitive pressure over time, even with initial full and open competition. If Valor Healthcare Inc. underperforms or faces significant operational challenges, the VA has limited immediate alternatives without potentially disrupting care. Another risk is the concentration of services; if the contractor experiences financial instability or major management issues, it could lead to a sudden gap in essential healthcare services for veterans in the region. Furthermore, the fixed-price nature, while offering cost certainty, could lead to the contractor cutting corners on quality if not rigorously monitored, or conversely, if costs escalate unexpectedly for the contractor, they might seek contract modifications.

How does the contract duration (over 5 years) impact the VA's ability to adapt to changing healthcare needs?

A contract duration of over five years provides stability and allows for long-term planning and relationship building between the VA and Valor Healthcare Inc. This extended period can foster efficiency and potentially lead to better service integration. However, it also presents a challenge for the VA in adapting to rapidly evolving healthcare technologies, treatment protocols, or shifts in veteran demographics and needs. During the contract term, the VA might be less agile in incorporating new medical advancements or changing service delivery models compared to shorter-term contracts or in-house operations. Contract modifications or renegotiations would be necessary to introduce significant changes, which can be complex and time-consuming.

Industry Classification

NAICS: Health Care and Social Assistance › Outpatient Care Centers › All Other Outpatient Care Centers

Product/Service Code: MEDICAL SERVICES › GENERAL HEALTH CARE SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: VA-246-11-RP-0015

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Humana Inc. (UEI: 049944143)

Address: 4315 50TH ST NW STE 50, WASHINGTON, DC, 20016

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

Financial Breakdown

Contract Ceiling: $20,177,612

Exercised Options: $20,091,125

Current Obligation: $20,091,125

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline