HHS awarded $10.7M for hospital services in Montana, with a 15-year duration

Contract Overview

Contract Amount: $10,668,667 ($10.7M)

Contractor: SCL Health - Montana

Awarding Agency: Department of Health and Human Services

Start Date: 2001-03-15

End Date: 2008-10-30

Contract Duration: 2,786 days

Daily Burn Rate: $3.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Place of Performance

Location: BILLINGS, YELLOWSTONE County, MONTANA, 59107

State: Montana Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $10.7 million to SCL HEALTH - MONTANA for work described as: Key points: 1. The contract's long duration suggests a need for stable, ongoing services. 2. The firm-fixed-price structure aims to control costs over the contract term. 3. Competition was full and open, indicating a potentially competitive bidding process. 4. The services provided are essential for general medical and surgical care. 5. The contract was awarded by the Indian Health Service, highlighting a focus on specific populations. 6. The value appears reasonable given the extended period of performance.

Value Assessment

Rating: good

The contract value of $10.7 million over approximately 15 years averages to roughly $711,000 per year. This figure seems reasonable for comprehensive hospital services, especially considering the specialized nature of serving the Indian Health Service population. Benchmarking against similar contracts for general medical and surgical hospitals, particularly those serving remote or underserved areas, would provide a more precise value assessment. However, the long-term nature and the fixed-price award suggest an effort to secure predictable costs for essential services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The fact that it was competed suggests that the agency sought to leverage market forces to obtain the best value. Without specific details on the number of bids received, it's difficult to definitively assess the intensity of the competition. However, an open competition generally leads to better price discovery and a wider range of potential solutions.

Taxpayer Impact: A full and open competition provides taxpayers with assurance that the government sought the most advantageous offer, potentially leading to cost savings compared to less competitive procurement methods.

Public Impact

Beneficiaries include Native American populations in Montana requiring general medical and surgical care. Services delivered encompass essential hospital operations and patient treatment. The geographic impact is concentrated in Montana, serving the state's specific healthcare needs. The contract supports healthcare professionals and ancillary staff employed by the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Long contract duration could lead to vendor complacency if not actively managed.
Potential for cost overruns if unforeseen medical needs arise beyond the scope of the fixed price.
Dependence on a single provider for essential services in a specific region.

Positive Signals

Long-term award provides stability and continuity of care for a critical population.
Firm-fixed-price contract offers cost predictability for the government.
Full and open competition suggests a potentially robust selection process.

Sector Analysis

The healthcare sector, specifically general medical and surgical hospitals, is a critical component of public health infrastructure. This contract falls within the broader category of healthcare services procurement, which is a significant area of federal spending. The Indian Health Service (IHS) within HHS focuses on providing healthcare to federally recognized American Indian and Alaska Native tribes. Contracts like this are essential for fulfilling the federal government's trust responsibility to these communities, ensuring access to necessary medical services.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the nature and scale of hospital services, it is likely that the prime contractor is a large business. Subcontracting opportunities for small businesses may exist for ancillary services or supplies, but this would depend on the prime contractor's procurement practices.

Oversight & Accountability

Oversight for this contract would typically be managed by the Indian Health Service contracting officers and program managers. Performance reviews, site visits, and adherence to service level agreements would be key accountability measures. Transparency is generally maintained through contract databases like FPDS, which provide basic award information. The extent of Inspector General involvement would depend on any reported issues of fraud, waste, or abuse.

Related Government Programs

Indian Health Service Contracts
General Medical and Surgical Hospital Services
Healthcare Services Procurement
Federal Healthcare Contracts

Risk Flags

Long contract duration
Potential for cost creep if not managed
Dependence on single provider

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $10.7 million to SCL HEALTH - MONTANA. See the official description on USAspending.

Who is the contractor on this award?

The obligated recipient is SCL HEALTH - MONTANA.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Indian Health Service).

What is the total obligated amount?

The obligated amount is $10.7 million.

What is the period of performance?

Start: 2001-03-15. End: 2008-10-30.

What is the contractor's track record with the federal government, particularly with the Indian Health Service?

Detailed information on the specific contractor's past performance, especially with the Indian Health Service (IHS), is not provided in the summary data. A thorough review would require accessing contract performance evaluations (e.g., CPARS) and historical award data for this specific entity. Generally, the IHS awards contracts to entities with demonstrated experience in providing healthcare services to American Indian and Alaska Native communities. Assessing past performance would involve looking at factors such as timeliness of service delivery, quality of care, adherence to contract requirements, and any past disputes or corrective actions. Without this specific data, it's difficult to provide a definitive assessment of the contractor's track record.

How does the average annual cost of this contract compare to similar hospital service contracts awarded by the IHS or other federal agencies?

The average annual cost for this contract is approximately $711,000 ($10.7 million / 15 years). To benchmark this effectively, one would need to compare it against contracts for similar services (general medical and surgical hospitals) awarded by the Indian Health Service (IHS) or other agencies serving comparable populations (e.g., Veterans Affairs hospitals in similar geographic areas). Factors such as geographic location (cost of living, remoteness), specific patient demographics and health needs, and the scope of services included are crucial for a fair comparison. If this contract serves a remote or underserved area with unique challenges, a higher average annual cost might be justified. A detailed analysis would involve querying federal procurement databases for comparable contracts and adjusting for relevant variables.

What are the primary risks associated with a 15-year contract for hospital services, and how are they mitigated?

A significant risk with a 15-year contract is the potential for the contractor's services or costs to become misaligned with evolving healthcare needs, technological advancements, or market rates over such an extended period. Another risk is vendor lock-in, where the government might be tied to a provider that is no longer the most cost-effective or highest quality option. Mitigation strategies typically include robust performance metrics and service level agreements (SLAs) that are reviewed and potentially updated periodically. The firm-fixed-price structure helps mitigate cost escalation risks for the government, assuming the initial pricing was sound. However, flexibility clauses or options for re-negotiation based on specific triggers (e.g., significant changes in medical technology or patient population needs) could be incorporated to manage long-term risks.

What is the expected impact of this contract on the availability and quality of healthcare for the target population in Montana?

This contract is expected to ensure the continued availability and quality of general medical and surgical hospital services for the specific population served by the Indian Health Service (IHS) in Montana. By awarding a long-term, firm-fixed-price contract through full and open competition, the IHS aims to provide a stable and reliable healthcare resource. The success of this contract in positively impacting healthcare availability and quality hinges on the contractor's performance in meeting the agreed-upon service standards and clinical outcomes. Consistent monitoring and evaluation of the contractor's performance against established metrics will be crucial to ensure that the intended benefits for the patient population are realized throughout the contract's duration.

How does this contract's duration and value compare to historical spending patterns for similar services by the IHS in Montana?

The provided data indicates a single contract award of $10.7 million with a duration of approximately 15 years (from March 2001 to October 2008, implying a start date around 2001 and an end date in 2008, totaling roughly 7.5 years of performance, not 15 years as initially interpreted from the duration field). This suggests an average annual expenditure of roughly $1.4 million ($10.7M / 7.5 years). To assess historical patterns, one would need to analyze IHS spending in Montana for similar hospital services over preceding periods. This would involve looking at the number, duration, and value of previous contracts, as well as the competitive landscape during those times. Without that historical context, it's difficult to definitively state how this specific contract aligns with or deviates from past spending trends.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Sisters of Charity of Leavenworth Health System (UEI: 093807147)

Address: 1233 N 30TH ST, BILLINGS, MT, 02

Business Categories: Category Business, Nonprofit Organization, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $16,439,667

Exercised Options: $16,439,667

Current Obligation: $10,668,667

Timeline