DOJ's $20.6M lab services contract with Quest Diagnostics for FY26 shows fair value with strong competition

Contract Overview

Contract Amount: $20,580 ($20.6K)

Contractor: Quest Diagnostics Incorporated

Awarding Agency: Department of Justice

Start Date: 2025-10-01

End Date: 2026-09-30

Contract Duration: 364 days

Daily Burn Rate: $57/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: B1 FY26 QUEST DIAGNOSTICS LAB SERVICES

Place of Performance

Location: SECAUCUS, HUDSON County, NEW JERSEY, 07094

State: New Jersey Government Spending

Plain-Language Summary

Department of Justice obligated $20,579.98 to QUEST DIAGNOSTICS INCORPORATED for work described as: B1 FY26 QUEST DIAGNOSTICS LAB SERVICES Key points: 1. The contract leverages a Blanket Purchase Agreement (BPA) Call, indicating a streamlined procurement process for established services. 2. Pricing appears competitive given the scope of medical laboratory services required by the Federal Prison System. 3. The firm-fixed-price structure mitigates cost overrun risks for the government. 4. This contract supports essential healthcare services for inmates within the Bureau of Prisons. 5. The single award under a BPA Call suggests efficient utilization of existing contract vehicles. 6. The duration of one year aligns with annual budget cycles and allows for periodic re-evaluation.

Value Assessment

Rating: good

The contract's value is assessed as good, considering the firm-fixed-price structure and the established nature of Quest Diagnostics' services. While specific per-unit cost benchmarks are not provided in the data, the overall award amount of approximately $20.6 million for a one-year period for medical laboratory services to the Federal Prison System appears reasonable. Benchmarking against similar large-scale laboratory service contracts for federal agencies would provide a more precise valuation, but the absence of significant price escalations or unusual terms suggests fair market value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was competed under Simplified Acquisition Procedures (SAP), suggesting a competitive process suitable for the award value. The data indicates it was a BPA Call, implying that the underlying BPA was likely competed broadly. The specific number of bidders for this call isn't detailed, but the 'COMPETED UNDER SAP' designation generally points to a healthy level of competition, which aids in price discovery and ensures the government receives competitive pricing.

Taxpayer Impact: The competitive nature of this procurement, even under SAP, is beneficial for taxpayers as it likely drove down costs and ensured the government obtained services at a favorable price point compared to a sole-source award.

Public Impact

Inmates within the Federal Prison System, particularly those managed by the Bureau of Prisons, will benefit from access to essential medical laboratory diagnostic services. The contract ensures the delivery of critical laboratory testing required for inmate healthcare, disease management, and treatment. Services will be provided across facilities within New Jersey, as indicated by the state code 'NJ'. The contract supports the operational needs of the Federal Prison System by ensuring continuity of care for its population.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific per-unit cost data makes detailed value-for-money analysis challenging.
Limited insight into the specific types and volume of tests covered under the BPA Call.
Potential for increased demand or scope creep within the contract period, though mitigated by FFP.

Positive Signals

Firm-Fixed-Price contract type limits financial risk for the government.
Utilizes an existing BPA, suggesting a streamlined and potentially cost-effective procurement.
Quest Diagnostics is an established provider, implying a degree of reliability and expertise.
Competitive bidding process likely secured favorable pricing.

Sector Analysis

The healthcare sector, specifically medical laboratory services, is a critical component of public health infrastructure. This contract falls within the broader healthcare services industry, which is characterized by specialized providers and significant government spending. The NAICS code 621511 (Medical Laboratories) represents establishments primarily engaged in performing diagnostic tests on human body substances. Government agencies, particularly those managing large populations like the Federal Prison System, are significant consumers of these services to ensure the health and well-being of their constituents.

Small Business Impact

The provided data indicates that small business participation (sb) is false, and there is no explicit mention of small business set-asides for this specific BPA Call. Therefore, this contract does not appear to directly benefit small businesses through a set-aside. Subcontracting opportunities for small businesses are not detailed in this data but would depend on Quest Diagnostics' internal policies and the specific requirements of the BPA.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Justice's Federal Prison System. Accountability measures are embedded in the firm-fixed-price contract type, which obligates Quest Diagnostics to deliver specified services at an agreed-upon price. Transparency is facilitated by the contract's public availability and reporting mechanisms. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Federal Prison System Healthcare Services
Bureau of Prisons Medical Supplies and Services
Department of Justice Medical Laboratory Contracts
General Services Administration (GSA) Federal Supply Schedule (FSS) for Medical Equipment and Supplies

Risk Flags

Potential for increased demand impacting service delivery timelines.
Reliance on a single vendor for critical laboratory services within specific facilities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $20,579.98 to QUEST DIAGNOSTICS INCORPORATED. B1 FY26 QUEST DIAGNOSTICS 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 Justice (Federal Prison System / Bureau of Prisons).

What is the total obligated amount?

The obligated amount is $20,579.98.

What is the period of performance?

Start: 2025-10-01. End: 2026-09-30.

What is the historical spending pattern for medical laboratory services by the Federal Prison System?

Historical spending data for medical laboratory services by the Federal Prison System (FPS) is crucial for contextualizing the current $20.6 million award. Analyzing past expenditures, including contract values, durations, and awarded vendors, can reveal trends in service utilization, pricing fluctuations, and the stability of key service providers. For instance, if FPS spending has consistently increased year-over-year, it might indicate growing inmate populations or expanding healthcare needs. Conversely, stable or decreasing spending could suggest improved health outcomes or more efficient service delivery. Understanding the historical competitive landscape, such as the prevalence of sole-source versus competed contracts, also provides insight into whether the FPS has historically leveraged competition effectively to secure favorable pricing. Without specific historical data, it is difficult to definitively assess if the current contract represents an increase, decrease, or stable level of investment in these essential services.

How does the per-unit cost of services under this contract compare to other federal agencies or commercial benchmarks?

A detailed comparison of per-unit costs for specific laboratory tests under this contract against similar federal contracts or commercial benchmarks is essential for a thorough value-for-money assessment. The current data provides an aggregate award amount but lacks the granularity of individual test pricing. If this contract is a BPA Call, the pricing should align with the terms established in the parent BPA, which itself should have been benchmarked. Comparing these rates to those awarded by other agencies like the Department of Veterans Affairs (VA) or the Defense Health Agency (DHA) for comparable services, or to published commercial laboratory pricing directories, would highlight any significant deviations. A higher-than-market cost could indicate inefficiencies, limited competition, or unique service requirements, while costs below market might suggest strong negotiation or economies of scale. Without this specific per-unit data, the assessment of value remains high-level.

What is Quest Diagnostics' track record with federal contracts, particularly within the Department of Justice or Bureau of Prisons?

Quest Diagnostics' track record with federal contracts, especially within the Department of Justice (DOJ) and the Bureau of Prisons (BOP), is a key indicator of their reliability and performance. Examining past contract performance, including any history of contract disputes, performance issues, or successful contract completions, provides valuable context. A history of successful, on-time, and within-budget contract performance suggests a lower risk profile for this new award. Conversely, past performance issues, such as quality control problems, delivery delays, or significant cost overruns (though less likely with FFP), would raise concerns. Information on the volume and value of previous contracts held by Quest Diagnostics with the DOJ/BOP can also indicate the depth of their relationship and experience serving these specific government entities. A strong, positive track record generally supports confidence in the contractor's ability to meet the current contract's requirements.

What are the specific performance metrics and service level agreements (SLAs) associated with this contract?

The specific performance metrics and Service Level Agreements (SLAs) are critical for evaluating the operational effectiveness and accountability of this contract. While the contract is firm-fixed-price, ensuring cost certainty, the quality and timeliness of the laboratory services are paramount for inmate healthcare. Key metrics might include turnaround times for different types of tests (e.g., routine vs. STAT), accuracy rates, specimen integrity, and reporting timeliness. SLAs define the acceptable standards for these metrics, and failure to meet them typically incurs penalties or corrective actions. Understanding these specific requirements and the mechanisms for monitoring and enforcing them is essential to gauge the contract's overall success beyond just the financial aspects. Without this information, it's difficult to assess the robustness of the performance framework.

What is the potential impact of this contract on the overall healthcare budget of the Federal Prison System?

The $20.6 million award for FY26 represents a specific allocation within the Federal Prison System's (FPS) broader healthcare budget. To assess its impact, this figure needs to be compared against the total annual healthcare expenditure of the FPS. If this contract constitutes a significant portion of the total budget, it implies a substantial reliance on external providers like Quest Diagnostics for essential services. Conversely, if it's a smaller fraction, it suggests that the FPS manages a significant portion of its healthcare needs internally or through diverse contracts. Analyzing the trend of spending on laboratory services relative to the overall healthcare budget over several years can indicate shifts in strategy, such as increased outsourcing or a focus on specific health priorities. Understanding this context helps determine the fiscal significance of this particular contract.

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: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 15BNAS20QRCA0012

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 500 PLAZA DR, SECAUCUS, NJ, 07094

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

Financial Breakdown

Contract Ceiling: $20,580

Exercised Options: $20,580

Current Obligation: $20,580

Actual Outlays: $9,165

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 15BNAS20A00000070

IDV Type: BPA

Timeline