VA awards $120M for medical disability exams, with QTC Medical Services Inc. as contractor

Contract Overview

Contract Amount: $144,637,728 ($144.6M)

Contractor: QTC Medical Services Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2012-12-31

End Date: 2013-12-13

Contract Duration: 347 days

Daily Burn Rate: $416.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 11

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MEDICAL DISABILITY EXAMINATIONS UNDER PL 104-275 | TASK ORDER THAT ORDERS AND FUNDS SERVICES UNDER OPTION PERIOD #2 OF THE CONTRACT # VA798-11-D-0003 (QTC, CONTRACTOR) IN THE AMOUNT OF $120,000,000. IGF::OT::IGF

Place of Performance

Location: DIAMOND BAR, LOS ANGELES County, CALIFORNIA, 91765, UNITED STATES OF AMERICA

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $144.6 million to QTC MEDICAL SERVICES INC for work described as: MEDICAL DISABILITY EXAMINATIONS UNDER PL 104-275 | TASK ORDER THAT ORDERS AND FUNDS SERVICES UNDER OPTION PERIOD #2 OF THE CONTRACT # VA798-11-D-0003 (QTC, CONTRACTOR) IN THE AMOUNT OF $120,000,000. IGF::OT::IGF Key points: 1. Contract awarded to QTC Medical Services Inc. for medical disability examinations. 2. Task order funds option period 2 of an existing contract. 3. The contract is for services valued at $120,000,000. 4. Services are categorized under 'Offices of Physicians (except Mental Health Specialists)'. 5. The contract was awarded under full and open competition. 6. The contract duration is 347 days. 7. The award was made by the Department of Veterans Affairs. 8. The contract type is Firm Fixed Price.

Value Assessment

Rating: good

The awarded amount of $120,000,000 for medical disability examinations appears to be within a reasonable range for a large-scale federal contract of this nature. Benchmarking against similar contracts for medical examination services would provide a more precise value assessment. The firm fixed-price structure suggests that the contractor bears the risk of cost overruns, which can be beneficial for the government. However, without detailed service delivery metrics or comparisons to private sector pricing for equivalent services, a definitive value-for-money judgment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of 11 bidders suggests a competitive marketplace for these services. A robust competition level generally leads to better price discovery and potentially more favorable terms for the government. The specific number of bids received (11) implies that the solicitation was widely known and attracted significant interest from qualified providers.

Taxpayer Impact: The full and open competition process is taxpayer-favorable as it encourages multiple companies to bid, driving down prices and ensuring the government receives the best possible value for its investment in medical disability examinations.

Public Impact

Veterans requiring medical disability examinations will benefit from these services. The contract supports the delivery of essential healthcare assessment services. Services are likely to be delivered across various locations within California, as indicated by the 'CALIFORNIA' state code. The contract supports employment within the medical services sector, including physicians and administrative staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if the definition of 'medical disability examinations' is not strictly adhered to.
Ensuring consistent quality of examinations across all contracted providers is crucial.
Monitoring contractor performance to ensure timely completion of examinations and reporting.

Positive Signals

Awarded under full and open competition, indicating a competitive process.
Firm Fixed Price contract type helps manage costs and provides budget certainty.
Existing contract with an established contractor (QTC Medical Services Inc.) may indicate a track record of performance.

Sector Analysis

The healthcare services sector, particularly the sub-sector of medical examination services, is a significant area of federal spending. This contract fits within the broader category of healthcare support services for government agencies, specifically the Department of Veterans Affairs. The market for these services is competitive, with several established providers vying for government contracts. Comparable spending benchmarks would involve analyzing other large contracts for similar medical evaluation services awarded by the VA or other federal health agencies.

Small Business Impact

The provided data indicates that small business participation (sb) is false and there is no indication of a small business set-aside (ss). This suggests that the contract was not specifically targeted towards small businesses. While QTC Medical Services Inc. may engage small businesses as subcontractors, the primary award was not set aside. Further analysis would be needed to determine the extent of small business subcontracting and its impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs contracting officers and program managers. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver services within the agreed-upon price. Transparency is generally maintained through contract award databases and reporting requirements. The Inspector General's office for the VA would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Veterans Health Administration Services
Medical Examination Services
Disability Evaluation Services
Department of Veterans Affairs Contracts
Healthcare Services Contracts

Risk Flags

Potential for quality variations in examinations.
Dependence on contractor's operational stability.
Ensuring timely completion of all required examinations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $144.6 million to QTC MEDICAL SERVICES INC. MEDICAL DISABILITY EXAMINATIONS UNDER PL 104-275 | TASK ORDER THAT ORDERS AND FUNDS SERVICES UNDER OPTION PERIOD #2 OF THE CONTRACT # VA798-11-D-0003 (QTC, CONTRACTOR) IN THE AMOUNT OF $120,000,000. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is QTC MEDICAL 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 $144.6 million.

What is the period of performance?

Start: 2012-12-31. End: 2013-12-13.

What is the historical spending pattern for medical disability examinations by the Department of Veterans Affairs?

The Department of Veterans Affairs (VA) has a long-standing and significant expenditure on medical disability examinations to assess veterans' eligibility for benefits. Historically, this spending has been substantial, often running into hundreds of millions of dollars annually. The VA relies heavily on contracted services to meet the high demand for these examinations, especially given the large veteran population. Spending patterns can fluctuate based on legislative changes affecting eligibility criteria, increases in the veteran population, and the VA's capacity to conduct these exams in-house. The trend has generally been towards increased reliance on external contractors to supplement internal capabilities, leading to large, multi-year contracts similar to the one awarded to QTC Medical Services Inc. Analyzing historical data reveals a consistent need for these services and a corresponding budget allocation to address it.

How does the per-unit cost of these medical disability examinations compare to market rates or similar government contracts?

Determining the precise per-unit cost for these medical disability examinations requires access to detailed pricing structures within the contract and a clear definition of what constitutes a 'unit' (e.g., a specific type of examination). Without this granular data, a direct comparison to market rates or similar government contracts is challenging. However, the VA aims to achieve competitive pricing through its procurement processes, including full and open competition. If the 11 bids received were competitive, it suggests that the pricing offered by QTC Medical Services Inc. is likely aligned with industry standards for such services. Benchmarking against other VA contracts for similar examination types, or even against private sector providers offering independent medical examinations, would be necessary for a thorough assessment. Factors like the complexity of the examinations, the required turnaround time, and geographic coverage also influence per-unit costs.

What is QTC Medical Services Inc.'s track record with the Department of Veterans Affairs and other federal agencies?

QTC Medical Services Inc. has a significant track record of providing medical examination services to the Department of Veterans Affairs. They have been a major contractor for the VA for many years, handling a substantial volume of disability examinations. Their history with the VA includes managing large-scale contracts, often involving complex logistical operations to serve veterans across wide geographic areas. Beyond the VA, QTC has also provided similar services to other federal agencies, such as the Social Security Administration and the Department of Defense. Their long-standing presence and the renewal of contracts suggest a generally satisfactory performance history, although like any large contractor, they may have faced scrutiny or performance reviews on specific task orders or periods. Accessing performance evaluation reports (e.g., Contractor Performance Assessment Reporting System - CPARS) would provide a more detailed insight into their past performance.

What are the key performance indicators (KPIs) used to measure the effectiveness of these medical disability examination services?

The effectiveness of medical disability examination services is typically measured through several key performance indicators (KPIs). These often include timeliness of appointments and report generation, accuracy and completeness of examination reports, veteran satisfaction with the examination process, and adherence to clinical standards. For the VA, ensuring that examinations are conducted promptly and that reports are comprehensive and objective is crucial for timely benefit determinations. KPIs might also track the number of examinations completed within specified timeframes, the rate of requests for additional information or clarification on reports, and the number of appeals related to examination findings. Contractor performance is often evaluated against these metrics, and they form the basis for contract renewals or modifications. The VA's Office of Disability and Medical Assessment (DMA) would likely oversee the establishment and monitoring of these KPIs.

What is the potential risk associated with relying on a single contractor for a significant portion of medical disability examinations?

While this specific task order is part of a larger contract and QTC Medical Services Inc. is one of several providers the VA uses, there are inherent risks associated with significant reliance on any single contractor for critical services like medical disability examinations. These risks include potential disruptions to service delivery if the contractor experiences financial difficulties, labor disputes, or major operational failures. Over-reliance can also reduce the government's leverage in price negotiations and potentially lead to complacency in performance. Furthermore, if the contractor fails to adapt to changing requirements or technological advancements, it could impact the quality and efficiency of the examinations. The VA mitigates these risks by maintaining multiple contracts, conducting thorough performance monitoring, and having contingency plans in place.

How does the firm-fixed-price contract type influence the risk and cost for the government in this contract?

The firm-fixed-price (FFP) contract type is generally considered advantageous for the government when the scope of work is well-defined and risks are understood. In this scenario, QTC Medical Services Inc. assumes the primary risk of cost overruns. This means that the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. This structure provides the government with budget certainty and predictability, as the total cost is fixed. For the VA, this reduces the financial risk associated with fluctuating labor costs, material expenses, or unforeseen operational challenges that the contractor might encounter. However, if the initial price was not set competitively or if the scope was underestimated, the contractor might seek to minimize costs by cutting corners, potentially impacting quality. Therefore, robust oversight and performance monitoring remain essential even with an FFP contract.

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: 11

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Lockheed Martin Corp (UEI: 834951691)

Address: 21700 COPLEY DR STE 200, DIAMOND BAR, CA, 91765

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

Financial Breakdown

Contract Ceiling: $144,637,728

Exercised Options: $144,637,728

Current Obligation: $144,637,728

Contract Characteristics

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA79811D0003

IDV Type: IDC

Timeline