VA awards $280M in FY22 for kidney dialysis centers, with Davita Inc. as the primary contractor

Contract Overview

Contract Amount: $279,803,103 ($279.8M)

Contractor: Davita Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2021-10-01

End Date: 2022-09-30

Contract Duration: 364 days

Daily Burn Rate: $768.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT: FY22 TOTALS

Place of Performance

Location: DENVER, DENVER County, COLORADO, 80202

State: Colorado Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $279.8 million to DAVITA INC. for work described as: EXPRESS REPORT: FY22 TOTALS Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract value represents a significant portion of federal spending in this specific healthcare service category. 3. Fixed-price contract type may offer cost certainty for the government, but requires careful scope management. 4. The duration of the contract (one year) suggests a need for ongoing, potentially adaptable services. 5. The primary contractor, Davita Inc., is a major player in the dialysis market, indicating potential market concentration. 6. The award is for a specific service (kidney dialysis centers), highlighting a focused area of federal healthcare procurement.

Value Assessment

Rating: good

The contract value of approximately $280 million for kidney dialysis centers in FY22 appears substantial. Benchmarking against similar contracts would be necessary for a precise value-for-money assessment. However, the firm fixed-price structure suggests an attempt to control costs. The specific per-unit cost for dialysis services would be a key metric to compare against industry standards and other government contracts to fully evaluate efficiency.

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 bids. The number of bidders is not specified, but this procurement method generally fosters price discovery and encourages competitive pricing. The VA's use of this method suggests they sought the best value through a broad market solicitation.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it is expected to drive down prices through robust bidding and increase the likelihood of obtaining high-quality services at a competitive rate.

Public Impact

Beneficiaries include veterans requiring kidney dialysis services, ensuring access to essential medical care. Services delivered are critical for managing end-stage renal disease, improving patient health outcomes. The geographic impact is focused on Colorado, as indicated by the 'CO' state code. The contract supports the healthcare workforce involved in providing dialysis treatment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for over-reliance on a single large provider if competition was limited in practice.
Ensuring consistent quality of care across all service delivery points is crucial.
Managing contract scope and preventing scope creep is important for fixed-price contracts.

Positive Signals

Awarded through full and open competition, maximizing potential for competitive pricing.
Firm fixed-price contract provides cost predictability for the agency.
Focus on a critical healthcare service for a specific patient population.

Sector Analysis

The healthcare services sector, particularly specialized medical services like kidney dialysis, represents a significant area of federal procurement. This contract fits within the broader category of healthcare services for veterans. Comparable spending benchmarks would involve analyzing other VA contracts for dialysis and similar medical treatments, as well as Medicare/Medicaid reimbursement rates for these services.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract (ss: false, sb: false). Therefore, the primary contractor, Davita Inc., is likely a large business. Subcontracting opportunities for small businesses are not detailed but could exist depending on Davita's operational needs and procurement practices.

Oversight & Accountability

Oversight mechanisms would typically involve the Department of Veterans Affairs' contracting officers, program managers, and potentially the VA Office of Inspector General. Accountability is maintained through contract performance monitoring, adherence to service level agreements, and payment based on deliverables. Transparency is facilitated by contract databases like FPDS, though detailed performance metrics may not always be publicly available.

Related Government Programs

Veterans Health Administration (VHA) Medical Services
Outpatient Care Services
Chronic Disease Management Programs
Federal Healthcare Procurement

Risk Flags

Potential for high concentration in contractor market
Need for robust performance monitoring
Ensuring equitable access across geographic areas

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $279.8 million to DAVITA INC.. EXPRESS REPORT: FY22 TOTALS

Who is the contractor on this award?

The obligated recipient is DAVITA 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 $279.8 million.

What is the period of performance?

Start: 2021-10-01. End: 2022-09-30.

What is Davita Inc.'s track record with the Department of Veterans Affairs for providing dialysis services?

Davita Inc. has a significant history of contracting with the Department of Veterans Affairs (VA) for kidney dialysis services. As a major national provider of dialysis, their involvement with the VA is extensive. Analyzing past performance reviews, any documented disputes, or contract modifications would provide a clearer picture of their reliability and effectiveness in serving veterans. The current award suggests a continued positive or at least acceptable relationship, but a deeper dive into historical contract performance data, including any quality metrics or patient satisfaction scores, would be beneficial for a comprehensive assessment.

How does the awarded amount compare to previous years' spending on kidney dialysis centers by the VA?

To assess the trend in spending, historical data for kidney dialysis center contracts awarded by the VA would need to be analyzed. The FY22 award of approximately $280 million represents a specific point in time. Comparing this figure to awards in FY21, FY20, and prior years would reveal whether spending has increased, decreased, or remained relatively stable. Factors influencing these changes could include shifts in veteran population needs, changes in healthcare costs, or adjustments in service delivery models. Without historical data, it's difficult to determine if this award signifies a significant deviation from past spending patterns.

What are the key performance indicators (KPIs) used to measure the success of this contract?

Key performance indicators for a kidney dialysis center contract typically focus on patient outcomes, service quality, and operational efficiency. These might include metrics such as patient survival rates, complication rates (e.g., infections, hospitalizations), adherence to treatment schedules, patient satisfaction scores, and compliance with clinical best practices. The contract itself would outline specific KPIs and acceptable performance thresholds. The VA would monitor these KPIs to ensure the contractor is meeting its obligations and providing high-quality care to veterans requiring dialysis.

Are there any specific geographic limitations or requirements for service delivery within Colorado?

The data indicates the contract is associated with Colorado ('sn': 'COLORADO'). This suggests that the services are intended to be delivered to veterans within the state of Colorado. The specific locations of the dialysis centers are not detailed in the provided summary, but the contract likely specifies service areas or facilities within Colorado where veterans can receive treatment. The VA's procurement strategy often aligns with the geographic distribution of its patient population, ensuring access to necessary services in relevant regions.

What is the potential impact of this contract on the broader healthcare market for dialysis services?

This contract represents a significant procurement by a major federal agency, the VA, for essential healthcare services. For Davita Inc., it signifies a substantial revenue stream and reinforces their position as a key provider within the dialysis market, particularly in Colorado. The award through full and open competition suggests that other large dialysis providers may have also bid, indicating a competitive landscape. The VA's spending influences market dynamics by setting standards for service delivery and pricing, potentially impacting how other healthcare payers and providers operate within the dialysis sector.

Industry Classification

NAICS: Health Care and Social Assistance › Outpatient Care Centers › Kidney Dialysis Centers

Product/Service Code: MEDICAL SERVICES › OTHER MEDICAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2000 16TH ST, DENVER, CO, 80202

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

Financial Breakdown

Contract Ceiling: $279,803,103

Exercised Options: $279,803,103

Current Obligation: $279,803,103

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C79119D0018

IDV Type: IDC

Timeline