VA awards $83.9M for Kidney Dialysis Centers to Fresenius Medical Care in FY25 Q2

Contract Overview

Contract Amount: $83,896,330 ($83.9M)

Contractor: Fresenius Medical Care Holdings Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-01-01

End Date: 2025-03-31

Contract Duration: 89 days

Daily Burn Rate: $942.7K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT: FY 25 2ND QUARTER NDSC EXPRESS REPORT - FRESENIUS

Place of Performance

Location: WALTHAM, MIDDLESEX County, MASSACHUSETTS, 02451

State: Massachusetts Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $83.9 million to FRESENIUS MEDICAL CARE HOLDINGS INC for work described as: EXPRESS REPORT: FY 25 2ND QUARTER NDSC EXPRESS REPORT - FRESENIUS Key points: 1. Significant contract value of $83.9 million for essential healthcare services. 2. Sole-source award to Fresenius Medical Care raises questions about competition. 3. Potential risk of inflated pricing due to lack of competitive bidding. 4. Healthcare sector spending on dialysis services is substantial and growing.

Value Assessment

Rating: fair

The award of $83.9 million for a single quarter appears high compared to typical contract values for similar services when competed. Benchmarking against other VA or commercial dialysis contracts would be necessary for a precise assessment.

Cost Per Unit: $1,000,000 (estimated based on total award and duration)

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Fresenius Medical Care. This limits price discovery and may lead to higher costs for taxpayers.

Taxpayer Impact: The lack of competition likely results in a higher cost to taxpayers than if the contract had been competitively bid.

Public Impact

Ensures continued access to critical kidney dialysis services for veterans. Potential for higher costs impacts overall VA healthcare budget allocation. Dependence on a single provider could create service continuity risks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpricing
Sole-source award

Positive Signals

Ensures critical service delivery
Established provider

Sector Analysis

Spending in the healthcare sector, particularly for specialized services like kidney dialysis, is a significant portion of federal expenditures. Benchmarks for dialysis services vary widely based on location and service intensity.

Small Business Impact

This award does not appear to include provisions for small business participation, as it is a sole-source award to a large corporation.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure fair pricing and service quality. VA should document the justification for not competing this requirement.

Related Government Programs

Kidney Dialysis Centers
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for inflated pricing
Limited transparency in pricing justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $83.9 million to FRESENIUS MEDICAL CARE HOLDINGS INC. EXPRESS REPORT: FY 25 2ND QUARTER NDSC EXPRESS REPORT - FRESENIUS

Who is the contractor on this award?

The obligated recipient is FRESENIUS MEDICAL CARE HOLDINGS 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 $83.9 million.

What is the period of performance?

Start: 2025-01-01. End: 2025-03-31.

What is the justification for awarding this contract sole-source?

The justification for a sole-source award typically involves a documented determination that only one responsible source can provide the required supplies or services. This could be due to unique capabilities, proprietary technology, or urgent and compelling circumstances. Without this documentation, the award raises concerns about potential missed savings from competition.

How does the per-unit cost compare to market benchmarks for similar dialysis services?

A precise per-unit cost benchmark is difficult without more granular data on services provided and patient volume. However, the total award of $83.9 million over 89 days suggests a high daily operational cost. Comparing this to average Medicare reimbursement rates or contracts with other healthcare providers for similar services would be crucial for assessing value.

What are the risks associated with relying on a single provider for such a critical service?

The primary risks include potential service disruptions if the provider faces operational issues, lack of incentive for the provider to improve efficiency or reduce costs, and limited leverage for the VA in negotiating future contracts. This dependence could also impact the VA's ability to adapt to changing healthcare needs or adopt new technologies.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Bio-Medical Applications of Missouri, Inc.

Address: 920 WINTER ST, WALTHAM, MA, 02451

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

Financial Breakdown

Contract Ceiling: $83,896,330

Exercised Options: $83,896,330

Current Obligation: $83,896,330

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10G24D0088

IDV Type: IDC

Timeline