VA awards $11.5M contract for vascular surgeon services and training to Indiana University Health Care Associates

Contract Overview

Contract Amount: $11,585,227 ($11.6M)

Contractor: Indiana University Health Care Associates, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2017-11-01

End Date: 2026-10-31

Contract Duration: 3,286 days

Daily Burn Rate: $3.5K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Healthcare

Official Description: IGF::CT::IGF - 2.0 FTE VASCULAR SURGEON PHYSICIAN SERVICES TO INCLUDE A RESIDENCY AND SUPERVISORY TRAINING PROGRAM WITH THE ACADEMIC AFFILIATE - BASE YEAR SERVICES

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46202

State: Indiana Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $11.6 million to INDIANA UNIVERSITY HEALTH CARE ASSOCIATES, INC. for work described as: IGF::CT::IGF - 2.0 FTE VASCULAR SURGEON PHYSICIAN SERVICES TO INCLUDE A RESIDENCY AND SUPERVISORY TRAINING PROGRAM WITH THE ACADEMIC AFFILIATE - BASE YEAR SERVICES Key points: 1. Contract focuses on specialized physician services and a residency/supervisory training program. 2. The contract duration spans nearly 9 years, indicating a long-term need for these services. 3. Fixed-price contract with economic price adjustment suggests potential for cost increases over time. 4. The award was not competed, raising questions about potential cost savings through competition. 5. The specific nature of the services (vascular surgery and training) points to a niche requirement. 6. Geographic focus is Indiana, serving veterans in that region.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without comparable data for specialized physician services combined with academic training programs. The fixed-price structure with economic price adjustment offers some cost certainty but allows for inflation adjustments. The absence of competition makes it difficult to assess if the pricing reflects market rates or if a competitive process could have yielded better value for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not open to competition from other potential providers. This approach is typically used when a specific contractor possesses unique capabilities or when circumstances prevent a competitive solicitation. The lack of competition means that the government did not benefit from the price discovery and potential cost reductions that a competitive bidding process could have offered.

Taxpayer Impact: Taxpayers may have paid a higher price than necessary due to the absence of competitive bidding. Without comparing offers, it's difficult to ascertain if the awarded price represents the best value achievable.

Public Impact

Veterans in Indiana requiring specialized vascular surgery services will benefit from this contract. The contract supports the training and development of future vascular surgeons through a residency program. The geographic impact is primarily within Indiana, serving the veteran population in that state. The contract supports academic medical institutions and their role in healthcare education and service delivery.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Economic price adjustment clause introduces potential for cost escalation over the contract's long duration.
Sole-source award limits transparency and oversight compared to a competed contract.

Positive Signals

Ensures specialized medical services for veterans in a specific geographic area.
Supports a critical training program for medical professionals, contributing to the healthcare workforce.
Long contract duration provides stability for service delivery and training continuity.

Sector Analysis

This contract falls within the Healthcare sector, specifically focusing on specialized physician services and medical education. The market for such services is often characterized by highly specialized providers and academic institutions. Benchmarking against general healthcare contracts is difficult; however, contracts for physician services can range significantly in cost depending on specialty, location, and scope of work. The inclusion of a training program adds a unique dimension not typically found in standard service contracts.

Small Business Impact

The provided data does not indicate any small business set-aside or subcontracting requirements for this contract. As a sole-source award to a large academic health system, it is unlikely to have significant direct subcontracting opportunities for small businesses, unless specific needs arise that are outsourced.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs (VA). The VA has established mechanisms for contract management and performance monitoring. However, the sole-source nature of the award and the long duration may warrant specific attention to ensure continued value and adherence to the training program's objectives. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

VA Physician Services Contracts
Medical Training and Residency Programs
Vascular Surgery Services
Academic Medical Center Partnerships

Risk Flags

Sole-source award lacks competitive pricing.
Long contract duration with EPA increases cost uncertainty.
Need for clear performance metrics for training program.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $11.6 million to INDIANA UNIVERSITY HEALTH CARE ASSOCIATES, INC.. IGF::CT::IGF - 2.0 FTE VASCULAR SURGEON PHYSICIAN SERVICES TO INCLUDE A RESIDENCY AND SUPERVISORY TRAINING PROGRAM WITH THE ACADEMIC AFFILIATE - BASE YEAR SERVICES

Who is the contractor on this award?

The obligated recipient is INDIANA UNIVERSITY HEALTH CARE ASSOCIATES, 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 $11.6 million.

What is the period of performance?

Start: 2017-11-01. End: 2026-10-31.

What is the historical spending pattern for vascular surgeon physician services at this VA facility or within this region?

Analyzing historical spending for similar vascular surgeon physician services at this VA facility or within the Indiana region would provide crucial context for the current $11.5 million award. Without this data, it's difficult to determine if this contract represents an increase, decrease, or stable level of investment in these specialized services. Understanding past expenditures can help identify trends, potential cost efficiencies, or areas where spending has escalated. It also helps in assessing whether the current contract's scope and duration align with historical needs or represent a significant shift in service provision or training focus.

How does the cost per Full-Time Equivalent (FTE) physician compare to market rates for vascular surgeons, considering the training component?

Determining the cost per FTE physician requires dividing the total contract value by the estimated number of FTEs dedicated to direct patient care, excluding administrative or purely training roles. This figure should then be benchmarked against average salaries and overhead costs for vascular surgeons in academic settings, factoring in the added complexity and cost associated with running a residency and supervisory training program. If the contract is sole-source, a robust internal analysis by the VA is necessary to ensure the rate is reasonable compared to external market data, as competitive pressures are absent. The training component, while valuable, adds significant overhead and potentially impacts the direct patient care FTE count, making a direct comparison challenging.

What are the specific performance metrics and quality indicators used to evaluate the success of the residency and supervisory training program?

The success of the residency and supervisory training program, a key component of this contract, should be measured by specific, quantifiable performance metrics and quality indicators. These could include resident graduation rates, board certification pass rates, placement of graduates into practice or further fellowship programs, patient outcomes for procedures performed by residents under supervision, and faculty-to-resident ratios. The VA should have established criteria to assess the program's effectiveness in producing competent vascular surgeons and ensuring high-quality patient care. Regular reviews of these metrics are essential for accountability and to ensure the training program meets its objectives and contributes positively to the healthcare system.

What is the justification for awarding this contract on a sole-source basis, particularly given the long duration?

The justification for a sole-source award typically rests on the contractor possessing unique qualifications, capabilities, or assets essential for the required service, or specific circumstances that preclude full and open competition. For a contract involving specialized physician services and a training program, the justification might stem from Indiana University Health Care Associates' established infrastructure, specialized faculty, existing patient base for training, and accreditation for the residency program. The long duration (nearly 9 years) suggests a strategic decision to ensure continuity of care and training. However, without a competitive process, it remains crucial for the VA to have thoroughly documented why no other entity could meet these specific needs effectively and efficiently.

What is the potential impact of the economic price adjustment (EPA) clause on the total contract cost over its nearly 9-year term?

The Economic Price Adjustment (EPA) clause allows for modifications to the contract price based on fluctuations in specific economic factors, such as labor costs, material costs, or inflation indices. Over a contract term of nearly 9 years, this clause can significantly impact the total cost. If inflation rates are high or specific cost drivers for medical services and personnel increase substantially, the total amount paid could exceed the initial base year estimate. The VA's procurement team should have established clear indices and caps for the EPA to mitigate excessive cost increases and ensure the adjustment remains tied to demonstrable economic changes rather than arbitrary escalations.

Industry Classification

NAICS: Educational Services › Colleges, Universities, and Professional Schools › Colleges, Universities, and Professional Schools

Product/Service Code: MEDICAL SERVICES › MEDICAL, DENTAL, AND SURGICAL SVCS

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: VA251-16-R-0211

Offers Received: 1

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 340 W 10TH ST STE 5100, INDIANAPOLIS, IN, 46202

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

Financial Breakdown

Contract Ceiling: $20,054,865

Exercised Options: $11,585,227

Current Obligation: $11,585,227

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline