DOJ's $2.1M Medical Services Contract with Mayo Clinic Awarded Without Competition

Contract Overview

Contract Amount: $2,121,826 ($2.1M)

Contractor: Mayo Clinic

Awarding Agency: Department of Justice

Start Date: 2025-10-01

End Date: 2026-01-17

Contract Duration: 108 days

Daily Burn Rate: $19.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: FY26 B2 MAYO LD - COMP MEDICAL OCT 25 MISSION CRITICAL

Place of Performance

Location: ROCHESTER, OLMSTED County, MINNESOTA, 55905

State: Minnesota Government Spending

Plain-Language Summary

Department of Justice obligated $2.1 million to MAYO CLINIC for work described as: FY26 B2 MAYO LD - COMP MEDICAL OCT 25 MISSION CRITICAL Key points: 1. Contract awarded to a single, well-established provider, raising questions about competitive pricing. 2. Limited competition suggests potential for higher costs compared to a more open bidding process. 3. The mission-critical nature of medical services may justify a sole-source award in certain circumstances. 4. Performance period is short, indicating a potential need for re-competition or contract modification. 5. The contract falls within the General Medical and Surgical Hospitals sector, a critical area for federal operations. 6. No small business set-aside was utilized, impacting opportunities for smaller healthcare providers.

Value Assessment

Rating: fair

The contract's value of approximately $2.1 million for a 3-month period is difficult to benchmark without more detailed service descriptions. Given the award to a highly reputable provider like Mayo Clinic, pricing is likely to be at a premium. However, the mission-critical nature of medical services, especially within a federal correctional system, may necessitate engaging top-tier providers, potentially justifying the cost. Further analysis would require comparing specific service line items and utilization rates against similar contracts for federal facilities.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Mayo Clinic, was solicited. The justification for a sole-source award typically involves circumstances where only one responsible source is available or capable of meeting the government's needs. Without a competitive bidding process, it is challenging to ascertain if other qualified providers could have offered comparable services at a different price point. This approach limits the government's ability to leverage market competition for cost savings.

Taxpayer Impact: The lack of competition means taxpayers may not benefit from the most cost-effective pricing that a competitive bidding process could have yielded. The government did not explore options that might have secured similar medical services at a lower overall cost.

Public Impact

Inmates within the Federal Prison System will benefit from essential medical services. The contract ensures the provision of general medical and surgical care. Services are geographically focused on the location of the federal facility in Minnesota. The contract supports the operational continuity of the Bureau of Prisons by ensuring healthcare access for its population.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential cost savings for taxpayers.
Lack of competition may indicate a missed opportunity to engage smaller, specialized healthcare providers.
The short duration of the contract raises questions about long-term strategic sourcing for medical services.

Positive Signals

Award to a highly reputable and experienced healthcare provider (Mayo Clinic) suggests a high likelihood of quality service delivery.
The contract addresses a mission-critical need for medical services within a federal correctional facility.
The fixed-price contract type provides cost certainty for the government.

Sector Analysis

The healthcare sector, particularly within government and institutional settings, is a significant area of federal spending. Contracts for medical services are essential for maintaining the health and well-being of various populations, including federal inmates. The General Medical and Surgical Hospitals category (NAICS 622110) represents a substantial portion of healthcare expenditures. This contract fits within the broader landscape of federal healthcare procurement, which often involves complex service delivery requirements and stringent quality standards. Benchmarking this contract's value would ideally involve comparing it to other sole-source or competitively awarded contracts for similar medical services provided to federal correctional facilities or other government agencies.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. Consequently, this award does not directly contribute to opportunities for small businesses in the healthcare sector for this specific procurement. The focus was on securing services from a large, established provider, potentially overlooking avenues for small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Justice's Bureau of Prisons. As a purchase order, it is subject to standard procurement regulations and oversight mechanisms. Accountability would be managed through contract performance monitoring and adherence to the firm fixed-price terms. Transparency is limited due to the sole-source nature of the award, but the contract details should be available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Bureau of Prisons Medical Services
Department of Justice Healthcare Contracts
Sole-Source Medical Procurements
General Medical and Surgical Hospital Services

Risk Flags

Sole-source award lacks competitive justification.
Potential for overpayment due to lack of price competition.
Limited transparency regarding specific services and utilization.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $2.1 million to MAYO CLINIC. FY26 B2 MAYO LD - COMP MEDICAL OCT 25 MISSION CRITICAL

Who is the contractor on this award?

The obligated recipient is MAYO CLINIC.

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 $2.1 million.

What is the period of performance?

Start: 2025-10-01. End: 2026-01-17.

What is the historical spending pattern for medical services at this specific federal facility or within the Bureau of Prisons?

Analyzing historical spending for medical services at this facility or across the Bureau of Prisons is crucial for context. Without specific historical data for this location, we can infer that federal correctional facilities require continuous medical support. Past contracts might reveal trends in service providers, cost fluctuations, and the prevalence of sole-source versus competitive awards. If historical data shows a pattern of sole-source awards to Mayo Clinic or similar large providers, it might indicate a long-standing relationship or perceived necessity. Conversely, a history of competitive bidding would make this sole-source award more notable. Understanding past expenditures helps in assessing whether the current $2.1 million award represents an increase, decrease, or stable cost for similar service levels over time.

How does the per-patient cost of care under this contract compare to other federal correctional facilities or similar healthcare providers?

Determining the per-patient cost requires knowing the number of individuals served and the specific services rendered. Given this is a 3-month contract for general medical and surgical services, a direct per-patient cost comparison is challenging without utilization data. However, if the average daily population of the facility is known, an approximate per-patient per-day cost could be estimated. This estimate could then be benchmarked against per-patient costs at other Bureau of Prisons facilities or even civilian hospitals providing similar services. Sole-source contracts, especially with premium providers like Mayo Clinic, often result in higher per-patient costs compared to competitively bid contracts where price is a significant factor. Without specific utilization metrics, this comparison remains speculative but highlights a key area for potential cost scrutiny.

What specific services are included in this $2.1 million contract, and what is the expected utilization?

The provided data indicates the contract is for 'General Medical and Surgical Hospitals' (NAICS 622110) and is mission-critical. However, the specific breakdown of services (e.g., primary care, specialist consultations, emergency services, surgical procedures, diagnostic imaging, pharmacy) and their expected utilization rates are not detailed. This lack of specificity makes a thorough value assessment difficult. For a $2.1 million expenditure over approximately three months, the government would expect comprehensive coverage for the inmate population's medical needs. Understanding the scope is vital to determine if the allocated funds are appropriate for the anticipated demand and if the services align with the facility's patient profile and health risks.

What is Mayo Clinic's track record in providing medical services to federal correctional facilities?

Mayo Clinic is a globally recognized healthcare institution known for its high quality of care and extensive medical expertise. While their primary focus is often on civilian healthcare and research, they do engage in government contracts. Their track record in providing services specifically to federal correctional facilities, such as those run by the Bureau of Prisons, would need to be examined. This would involve looking at past performance on similar contracts, any reported issues with service delivery, patient satisfaction, or cost management within correctional environments. Given the unique challenges of correctional healthcare, Mayo Clinic's experience in this specific niche is a critical factor in assessing the appropriateness and potential success of this sole-source award.

Are there any alternative providers capable of offering similar mission-critical medical services to this facility, and why were they not considered?

The sole-source nature of this award implies that the Department of Justice determined Mayo Clinic to be the only responsible source capable of meeting the requirement. This determination typically requires documenting why other potential sources were not considered viable. Reasons could include highly specialized expertise, unique geographic proximity, existing infrastructure, or urgent need that precludes a lengthy competition. However, without the justification documentation, it's difficult to definitively state that no alternatives exist. A review of the federal contracting landscape might reveal other large healthcare systems or specialized medical providers that could potentially offer similar services, raising questions about the thoroughness of the sole-source justification.

Industry Classification

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

Product/Service Code: MEDICAL SERVICES › OTHER MEDICAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 200 1ST ST SW, ROCHESTER, MN, 55905

Business Categories: Category Business, Corporate Entity Tax Exempt, Educational Institution, Higher Education, Hospital, Nonprofit Organization, Not Designated a Small Business, Higher Education (Private), Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $2,121,826

Exercised Options: $2,121,826

Current Obligation: $2,121,826

Actual Outlays: $2,123,490

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline