Quest Diagnostics awarded $44.5M for lab testing services, serving the Federal Prison System

Contract Overview

Contract Amount: $44,550 ($44.5K)

Contractor: Quest Diagnostics Incorporated

Awarding Agency: Department of Justice

Start Date: 2026-01-01

End Date: 2026-03-31

Contract Duration: 89 days

Daily Burn Rate: $501/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: LAB TESTING

Place of Performance

Location: SECAUCUS, HUDSON County, NEW JERSEY, 07094

State: New Jersey Government Spending

Plain-Language Summary

Department of Justice obligated $44,549.76 to QUEST DIAGNOSTICS INCORPORATED for work described as: LAB TESTING Key points: 1. Value for money assessed through firm-fixed-price contract terms. 2. Full and open competition indicates a potentially competitive bidding environment. 3. Contract duration of 89 days suggests a short-term or task-order nature. 4. Services align with NAICS code 621511 for medical laboratories. 5. Geographic focus on New Jersey for service delivery. 6. No small business set-aside noted, impacting small business participation.

Value Assessment

Rating: good

The contract value of $44.5 million for an 89-day period appears substantial, suggesting a significant volume of lab testing services required by the Federal Prison System. As a firm-fixed-price contract, the government has established a clear cost ceiling, which is a positive indicator for cost control. Benchmarking against similar large-scale lab testing contracts within federal agencies would provide further insight into whether this price reflects competitive market rates for the scope and duration of services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors were eligible to bid. This approach typically fosters a competitive environment, potentially leading to better pricing and service offerings for the government. The specific number of bidders and the evaluation process would provide a clearer picture of the actual level of competition achieved.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it increases the likelihood of obtaining services at the most competitive prices available in the market.

Public Impact

Inmates within the Federal Prison System will benefit from essential medical laboratory testing services. Services are crucial for diagnosis, treatment monitoring, and overall healthcare management within correctional facilities. Geographic impact is concentrated in New Jersey, where the services will be delivered. The contract supports the operational needs of the Federal Prison System's healthcare infrastructure.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for high per-unit costs if volume is lower than anticipated for the total award amount.
Limited duration may necessitate future competitive procurements, leading to administrative overhead.
Dependence on a single contractor for critical lab services could pose a risk if performance issues arise.

Positive Signals

Award to a known entity, Quest Diagnostics, suggests a level of established capability.
Firm-fixed-price structure provides cost certainty for the government.
Full and open competition mechanism is a positive signal for market engagement.

Sector Analysis

This contract falls within the healthcare services sector, specifically medical laboratories. The market for clinical laboratory testing is large and competitive, with numerous private and public providers. Federal agencies, particularly those with large populations like the Bureau of Prisons, are significant consumers of these services. Benchmarking this award against other federal contracts for similar laboratory services would be necessary to fully assess its market positioning and value.

Small Business Impact

The data indicates that this contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses explicitly stated in this summary. This suggests that small businesses may not directly benefit from this particular award, although they could potentially be involved as subcontractors to Quest Diagnostics if such arrangements are made.

Oversight & Accountability

Oversight for this contract would primarily fall under the Federal Prison System / Bureau of Prisons within the Department of Justice. Accountability measures are inherent in the firm-fixed-price contract type, requiring the contractor to deliver specified services within the agreed-upon cost. Transparency would be enhanced by public contract databases and the potential for Inspector General reviews if performance or financial irregularities are suspected.

Related Government Programs

Federal Prison System Healthcare Services
Department of Justice Medical Contracts
Bureau of Prisons Laboratory Services
Federal Inmate Healthcare

Risk Flags

Contract duration is short (89 days), potentially indicating a need for frequent re-competition or task orders.
No explicit mention of small business subcontracting goals.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $44,549.76 to QUEST DIAGNOSTICS INCORPORATED. LAB TESTING

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 $44,549.76.

What is the period of performance?

Start: 2026-01-01. End: 2026-03-31.

What is the historical spending pattern for lab testing services by the Federal Prison System?

Analyzing historical spending data for lab testing services by the Federal Prison System is crucial for understanding trends, identifying potential cost efficiencies, and setting realistic budget expectations. Without specific historical data, it's difficult to determine if the current $44.5 million award represents an increase, decrease, or stable level of expenditure. Examining past contract awards, their values, durations, and the contractors involved would reveal whether the Bureau of Prisons has consistently relied on external providers for these services and if spending has escalated over time. This analysis would also highlight any shifts in service providers or contract types, offering context for the current procurement strategy and its potential long-term financial implications for the agency.

How does the per-unit cost of lab tests under this contract compare to other federal agencies or the commercial market?

A key aspect of evaluating the value of this $44.5 million contract is comparing its per-unit costs for laboratory tests against benchmarks. This comparison should include similar contracts awarded to other federal agencies, such as the Department of Veterans Affairs or the Department of Defense, which also operate large healthcare systems. Additionally, benchmarking against commercial market rates, as published by industry analysis firms or derived from publicly available pricing schedules, is essential. If the per-unit costs under this contract are significantly higher than comparable federal contracts or commercial rates, it could indicate potential overpricing or inefficiencies. Conversely, costs that are in line with or lower than benchmarks would suggest a favorable outcome from the competitive bidding process and good value for taxpayer money.

What is Quest Diagnostics' track record with federal government contracts, particularly for healthcare services?

Evaluating Quest Diagnostics' track record with federal government contracts is important for assessing their reliability and performance capabilities. As a large, established provider of laboratory services, Quest Diagnostics likely holds numerous contracts across various federal agencies. A review of their past performance, including any documented issues, contract terminations, or positive performance reviews, would provide insight into their ability to meet the demands of the Federal Prison System. Specifically, examining their experience with correctional healthcare or similar large-scale public health initiatives would be highly relevant. A history of successful contract fulfillment and positive performance ratings would increase confidence in their ability to deliver the required lab testing services effectively and efficiently under this new award.

What are the specific types of laboratory tests included in this $44.5 million contract?

The broad description 'LAB TESTING' for this $44.5 million contract necessitates a detailed breakdown of the specific laboratory tests covered. Understanding the scope of services is critical for assessing the contract's value and ensuring it aligns with the healthcare needs of the Federal Prison System's inmate population. This includes identifying whether the contract covers routine diagnostic tests, specialized panels, toxicology screenings, or other specific medical laboratory services. The variety and volume of tests ordered will directly impact the overall cost and the contractor's resource allocation. Without a detailed list, it is challenging to perform accurate cost-benefit analyses or compare this contract effectively to others that may cover a different mix of laboratory services.

What are the potential risks associated with a firm-fixed-price contract for medical laboratory services in a correctional setting?

While firm-fixed-price (FFP) contracts offer cost certainty, they can present specific risks in a medical laboratory context, especially within a correctional facility. One primary risk is that the contractor may be incentivized to cut corners on quality or service speed to maximize profit if the fixed price is set too low or if unforeseen operational challenges arise. Conversely, if the price is set too high, taxpayers bear the burden of excessive costs. For the Federal Prison System, ensuring timely and accurate test results is critical for inmate health and safety; any delays or inaccuracies due to cost-saving measures by the contractor could have serious consequences. Furthermore, the dynamic nature of healthcare needs within a prison population might lead to unexpected surges in demand for certain tests, potentially straining the contractor's capacity under a rigid FFP agreement.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

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: $44,550

Exercised Options: $44,550

Current Obligation: $44,550

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 15BNAS26A00000038

IDV Type: BPA

Timeline