VA Spends $43.8M on Medical Lab Services with Quest Diagnostics, Raising Value Concerns
Contract Overview
Contract Amount: $43,761,159 ($43.8M)
Contractor: Quest Diagnostics Incorporated
Awarding Agency: Department of Veterans Affairs
Start Date: 2016-07-01
End Date: 2021-06-30
Contract Duration: 1,825 days
Daily Burn Rate: $24.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 3
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: IGF::OT::IGF MEDICAL LAB SERVICES
Place of Performance
Location: AUGUSTA, RICHMOND County, GEORGIA, 30904
State: Georgia Government Spending
Plain-Language Summary
Department of Veterans Affairs obligated $43.8 million to QUEST DIAGNOSTICS INCORPORATED for work described as: IGF::OT::IGF MEDICAL LAB SERVICES Key points: 1. Significant contract value of $43.8M over five years. 2. Sole provider Quest Diagnostics raises competition concerns. 3. Potential for overpayment given lack of competitive bidding. 4. Medical Laboratories sector analysis needed for benchmarks.
Value Assessment
Rating: questionable
The contract value of $43.8M for medical lab services over five years appears high without clear competitive benchmarks. The lack of disclosed per-unit costs makes direct comparison difficult, suggesting potential for overpricing.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
Although listed as 'FULL AND OPEN COMPETITION', the data indicates a single awardee, Quest Diagnostics. This suggests that while the opportunity was open, only one entity was awarded the contract, potentially limiting price discovery.
Taxpayer Impact: The lack of robust competition may lead to taxpayers paying more than necessary for essential medical laboratory services.
Public Impact
Veterans may face service continuity risks if the sole provider faces issues. The high spending could divert funds from other critical VA healthcare needs. Transparency in pricing and service delivery is crucial for public trust.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competitive pricing data
- Potential for sole-source dependency
- High contract value without clear justification
Positive Signals
- Consistent service delivery over contract period
- Established provider with existing infrastructure
Sector Analysis
The Department of Veterans Affairs' spending on medical laboratories falls within the broader healthcare sector. Benchmarking this $43.8M contract against similar government or private sector agreements for diagnostic services is essential to assess value for money.
Small Business Impact
The contract data does not indicate any specific provisions or awards to small businesses. Further analysis is needed to determine if small businesses were excluded or had opportunities to participate in this contract.
Oversight & Accountability
Oversight is needed to ensure the VA is receiving fair market value for these services, especially given the significant expenditure and the apparent lack of direct competition driving down costs.
Related Government Programs
- Medical Laboratories
- Department of Veterans Affairs Contracting
- Department of Veterans Affairs Programs
Risk Flags
- High contract value
- Lack of detailed cost breakdown
- Potential for limited competition despite designation
- Absence of quality/performance metrics
Tags
medical-laboratories, department-of-veterans-affairs, ga, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Veterans Affairs awarded $43.8 million to QUEST DIAGNOSTICS INCORPORATED. IGF::OT::IGF MEDICAL LAB SERVICES
Who is the contractor on this award?
The obligated recipient is QUEST DIAGNOSTICS INCORPORATED.
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 $43.8 million.
What is the period of performance?
Start: 2016-07-01. End: 2021-06-30.
What is the average per-unit cost for the specific lab tests provided under this contract, and how does it compare to Medicare or other federal pricing schedules?
Detailed per-unit cost data is not provided in the summary. A thorough analysis would require accessing the contract's detailed CLINs (Contract Line Items) and comparing these unit prices against established benchmarks like Medicare's Clinical Laboratory Fee Schedule or pricing from other federal agencies procuring similar services. This comparison is critical for assessing if the $43.8M spend represents fair market value.
What factors led to only one awardee (Quest Diagnostics) being selected despite the 'Full and Open Competition' designation?
The designation 'Full and Open Competition' indicates the solicitation was broadly advertised. However, the selection of a single awardee suggests that either Quest Diagnostics was the only responsive and responsible bidder, or its proposal was significantly superior in technical merit or price. Understanding the specific evaluation criteria and the number of proposals received is key to assessing if the competition was truly effective in driving the best value.
How does the quality of service and turnaround time from Quest Diagnostics compare to potential alternative providers, and has this been formally assessed?
The provided data does not include metrics on service quality or turnaround times. A comprehensive effectiveness assessment would require reviewing performance reports, patient satisfaction surveys, and any quality assurance reviews conducted by the VA. Without this data, it's difficult to definitively state if the current provider is the most effective option, even if the price were competitive.
Industry Classification
NAICS: Health Care and Social Assistance › Medical and Diagnostic Laboratories › Medical Laboratories
Product/Service Code: MEDICAL SERVICES › LABORATORY TESTING SERVICES
Competition & Pricing
Extent Competed: FULL AND OPEN COMPETITION
Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY
Offers Received: 3
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 3 GIRALDA FARMS, MADISON, NJ, 07940
Business Categories: Category Business, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $96,100,291
Exercised Options: $43,761,159
Current Obligation: $43,761,159
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: V797P7105A
IDV Type: FSS
Timeline
Start Date: 2016-07-01
Current End Date: 2021-06-30
Potential End Date: 2021-06-30 00:00:00
Last Modified: 2023-05-10
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