VA awards $253.8M contract for physician services, with 69.7M in prior spending

Contract Overview

Contract Amount: $253,800,000 ($253.8M)

Contractor: QTC Medical Services Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-04-01

End Date: 2021-03-31

Contract Duration: 364 days

Daily Burn Rate: $697.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: OPTION YEAR 4 TASK ORDER

Place of Performance

Location: DIAMOND BAR, LOS ANGELES County, CALIFORNIA, 91765

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $253.8 million to QTC MEDICAL SERVICES INC for work described as: OPTION YEAR 4 TASK ORDER Key points: 1. Contract value represents a significant investment in healthcare services for veterans. 2. The contract was awarded using full and open competition, suggesting a competitive market. 3. The duration of the task order is one year, indicating a need for ongoing services. 4. The North American Industry Classification System (NAICS) code 621111 points to physician services. 5. The contract's performance is in California, a key region for veteran population. 6. The firm fixed-price contract type aims to control costs and provide predictable spending.

Value Assessment

Rating: good

The total award amount of $253.8 million for this task order is substantial. While direct comparison to similar contracts is difficult without more specific service details, the prior spending of $69.7 million suggests a consistent need and established service level. The firm fixed-price structure is generally favorable for cost control. Benchmarking the per-unit cost would require detailed service metrics, but the overall award size indicates a significant commitment to securing these physician services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit offers. This typically leads to a more robust selection of qualified contractors and potentially better pricing due to market forces. The number of bidders is not specified, but the competitive nature of the award process is a positive indicator for price discovery and value for money.

Taxpayer Impact: Taxpayers benefit from a competitive process that is designed to secure the best value and price for essential physician services.

Public Impact

Veterans in California will benefit from access to essential physician services. The contract ensures the delivery of medical services, supporting the VA's healthcare mission. The geographic impact is focused on the state of California. This contract supports the healthcare workforce by engaging physicians to serve veterans.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if not managed tightly given the large award amount.
Ensuring consistent quality of care across all contracted physicians is crucial.
Dependence on a single contractor for a large volume of services carries inherent risk.

Positive Signals

Awarded through full and open competition, indicating a healthy market.
Firm fixed-price contract type helps manage cost certainty.
The contract addresses a critical need for physician services within the VA system.

Sector Analysis

This contract falls within the Healthcare sector, specifically focusing on physician services. The U.S. healthcare market is vast, with significant government spending on medical services for beneficiaries. The NAICS code 621111 represents a core component of healthcare delivery. Comparable spending benchmarks would involve analyzing other large VA or DoD contracts for similar physician staffing and services, which often run into hundreds of millions of dollars annually.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, QTC MEDICAL SERVICES INC, is likely a large business. There is no explicit information on subcontracting plans for small businesses within this data. The absence of a small business set-aside suggests that the competition was geared towards larger entities capable of fulfilling the extensive service requirements.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs contracting officers and program managers. Accountability measures are embedded in the contract terms, including performance standards and payment schedules tied to service delivery. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

VA Medical Services Contracts
Physician Staffing Contracts
Healthcare Services for Veterans
Department of Veterans Affairs Procurement

Risk Flags

Performance Risk
Cost Control Risk
Contractor Dependency Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $253.8 million to QTC MEDICAL SERVICES INC. OPTION YEAR 4 TASK ORDER

Who is the contractor on this award?

The obligated recipient is QTC MEDICAL SERVICES 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 $253.8 million.

What is the period of performance?

Start: 2020-04-01. End: 2021-03-31.

What is the track record of QTC MEDICAL SERVICES INC with the Department of Veterans Affairs?

QTC MEDICAL SERVICES INC has a significant history of contracting with the Department of Veterans Affairs. The provided data shows prior spending of $69.7 million on this specific contract vehicle, indicating a sustained relationship. A deeper analysis would involve reviewing their entire contract portfolio with the VA, including performance reviews, past performance evaluations, and any documented disputes or awards. This would provide a comprehensive understanding of their reliability and effectiveness in delivering services to the VA.

How does the awarded amount compare to typical physician service contracts for the VA?

The awarded amount of $253.8 million for this task order is substantial and reflects a significant commitment to securing physician services. While specific benchmarks vary widely based on the scope, duration, and geographic region, contracts of this magnitude are not uncommon for large federal healthcare providers like the VA, especially when covering extensive needs across a state or region. The prior spending of $69.7 million suggests this is a continuation or expansion of previously valued services, indicating it aligns with the VA's ongoing requirements and budget allocations for such critical support.

What are the primary risks associated with this contract?

Key risks include ensuring consistent quality of care across all physicians, managing potential scope creep given the large award, and the inherent dependency on a single contractor for critical services. Performance issues or contractor failure could disrupt veteran healthcare access. Additionally, ensuring compliance with VA regulations and maintaining adequate staffing levels by the contractor are ongoing risks that require diligent oversight. The firm fixed-price nature, while good for cost control, can also incentivize the contractor to minimize costs, potentially impacting service quality if not carefully monitored.

How effective is the firm fixed-price contract type in managing costs for physician services?

The firm fixed-price (FFP) contract type is generally effective in managing costs because it shifts the risk of cost overruns to the contractor. The VA agrees to pay a set price, and the contractor is responsible for performing the work within that budget. This provides cost certainty for the government. However, for complex services like physician care, FFP can sometimes lead to the contractor seeking ways to reduce costs that might impact quality or scope if not meticulously defined and overseen. Clear performance standards and quality metrics are essential to mitigate this risk.

What is the historical spending trend for physician services by the VA in California?

Historical spending trends for physician services by the VA in California are likely substantial, given the large veteran population in the state. This specific contract's prior spending of $69.7 million indicates a significant, ongoing investment. To assess broader trends, one would need to analyze aggregated VA spending data for NAICS code 621111 (Offices of Physicians) and related codes within California over several fiscal years. This would reveal patterns of growth, shifts in service delivery models, and the overall budget allocation towards physician services in the region.

Industry Classification

NAICS: Health Care and Social Assistance › Offices of Physicians › Offices of Physicians (except Mental Health Specialists)

Product/Service Code: MEDICAL SERVICES › NURSING, NURSING HOME, EVAL/SCREEN

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leidos Holdings, Inc.

Address: 21700 COPLEY DR STE 200, DIAMOND BAR, CA, 91765

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

Financial Breakdown

Contract Ceiling: $253,800,000

Exercised Options: $253,800,000

Current Obligation: $253,800,000

Actual Outlays: $151,655,785

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA119A16D0038

IDV Type: IDC

Timeline