VA's $238M contract for medical disability exams in Region 2 awarded to OptumServe Health Services, Inc

Contract Overview

Contract Amount: $238,225,535 ($238.2M)

Contractor: Optumserve Health Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2021-10-01

End Date: 2022-09-30

Contract Duration: 364 days

Daily Burn Rate: $654.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MEDICAL DISABILITY EXAMINATIONS (MDES) UNDER SECTION 504 OF THE VETERANS BENEFITS IMPROVEMENTS ACT OF 1996 (PUBLIC LAW 104 275 38 U.S.C. 5101), REGION 2 (SOUTHEAST)

Place of Performance

Location: LA CROSSE, LA CROSSE County, WISCONSIN, 54601

State: Wisconsin Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $238.2 million to OPTUMSERVE HEALTH SERVICES, INC. for work described as: MEDICAL DISABILITY EXAMINATIONS (MDES) UNDER SECTION 504 OF THE VETERANS BENEFITS IMPROVEMENTS ACT OF 1996 (PUBLIC LAW 104 275 38 U.S.C. 5101), REGION 2 (SOUTHEAST) Key points: 1. Contract focuses on essential medical disability examinations to support veterans' benefits claims. 2. The contract value represents a significant investment in veteran healthcare services. 3. Competition dynamics for this contract are crucial for ensuring fair pricing and quality. 4. Performance context is tied to the timely and accurate assessment of veteran disabilities. 5. Sector positioning is within healthcare services, specifically supporting government health programs. 6. Risk indicators may include contractor performance, veteran satisfaction, and audit findings.

Value Assessment

Rating: good

This contract's value of approximately $238 million over one year appears substantial, reflecting the scale of medical disability examinations required for veterans in Region 2. Benchmarking against similar large-scale government healthcare service contracts would provide a clearer picture of value for money. The firm-fixed-price structure suggests that the contractor bears the risk of cost overruns, which can be a positive indicator for the government if the price is competitive.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple bidders were likely considered. This approach is generally preferred as it fosters a competitive environment, potentially leading to better pricing and service quality. The number of bidders and the evaluation process would further illuminate the strength of the competition.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages a wider range of providers to bid, driving down costs and improving the overall value received for public funds.

Public Impact

Veterans in Region 2 (Southeast) will benefit from timely and accurate medical disability examinations. These examinations are critical for the adjudication of disability claims, impacting veterans' access to benefits. The contract supports the Department of Veterans Affairs' mission to serve veterans. The services delivered are essential for ensuring veterans receive the benefits they are entitled to based on their service-connected disabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor performance issues impacting veteran wait times or exam quality.
Ensuring consistent application of examination standards across all providers.
Managing contract scope creep and ensuring adherence to the defined services.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process.
Firm-fixed-price contract structure shifts cost risk to the contractor.
Supports a critical government function for veteran healthcare and benefits.

Sector Analysis

This contract falls within the healthcare services sector, specifically focusing on medical examinations for disability claims. The market for such services is significant, driven by government needs for assessing veteran and other populations' health status. Comparable spending benchmarks would involve looking at other large federal contracts for similar examination services or broad healthcare support contracts.

Small Business Impact

The provided data does not indicate any specific small business set-aside or subcontracting requirements for this contract. Further analysis would be needed to determine if small businesses are involved in the subcontracting chain or if there were opportunities missed for small business participation.

Oversight & Accountability

Oversight is likely managed by the Department of Veterans Affairs contracting officers and program managers. Accountability measures would include performance metrics, quality assurance reviews, and potentially Inspector General audits. Transparency is generally maintained through contract award databases and public reporting, though specific performance details may be internal.

Related Government Programs

Veterans Health Administration (VHA) services
Disability Claims Processing
TRICARE Medical Services
Federal Occupational Health Services

Risk Flags

Contractor performance risk
Timeliness of service delivery
Quality of medical examinations
Veteran satisfaction levels

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $238.2 million to OPTUMSERVE HEALTH SERVICES, INC.. MEDICAL DISABILITY EXAMINATIONS (MDES) UNDER SECTION 504 OF THE VETERANS BENEFITS IMPROVEMENTS ACT OF 1996 (PUBLIC LAW 104 275 38 U.S.C. 5101), REGION 2 (SOUTHEAST)

Who is the contractor on this award?

The obligated recipient is OPTUMSERVE HEALTH 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 $238.2 million.

What is the period of performance?

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

What is the historical spending pattern for medical disability examinations by the VA in Region 2?

Historical spending data for medical disability examinations in VA Region 2 prior to this contract would provide crucial context. Analyzing previous contract awards for similar services, including the number of bidders, contract values, and performance periods, can reveal trends in pricing, competition, and contractor performance. Without specific historical data for Region 2, it's difficult to definitively assess if the $238 million award represents an increase or decrease in spending, or if it aligns with past investment levels in this critical service area. Understanding these patterns is key to evaluating the long-term financial commitment and resource allocation for veteran disability assessments.

How does the per-unit cost of these disability examinations compare to market rates or similar government contracts?

Determining the per-unit cost for these medical disability examinations requires knowing the number of examinations performed under the contract. If, for example, the $238 million covers 500,000 examinations, the per-unit cost would be approximately $476. Benchmarking this against similar contracts awarded by the VA or other federal agencies for disability evaluations, or against private sector rates for comparable medical assessments, is essential. A higher per-unit cost might be justified by the complexity of the examinations or specific regional factors, but it warrants scrutiny to ensure taxpayer funds are used efficiently and that the government is receiving competitive pricing for these vital services.

What is OptumServe Health Services, Inc.'s track record with the VA and other federal agencies for similar contracts?

OptumServe Health Services, Inc. has a significant track record with the Department of Veterans Affairs, notably as a major provider of medical disability examinations. They have been awarded substantial contracts in the past for these services, often through competitive processes. Their performance history with the VA, including any past performance evaluations, quality metrics, and any disputes or contract modifications, is critical for assessing their reliability and capability in fulfilling this current $238 million contract. Examining their performance on similar contracts with other federal agencies, such as the Department of Defense or Social Security Administration, would further inform an assessment of their overall capacity and effectiveness.

What are the key performance indicators (KPIs) for this contract, and how is contractor performance being measured?

Key performance indicators (KPIs) for this contract likely focus on the timeliness and accuracy of medical disability examinations, veteran satisfaction, and adherence to examination protocols. The VA would typically establish specific metrics for turnaround times for reports, the quality of the medical documentation, and the completeness of the assessments. Performance is measured through regular reviews, data reporting by the contractor, and potentially site visits or audits. Failure to meet these KPIs could result in contractual remedies, including financial penalties or even termination, ensuring accountability for delivering essential services to veterans.

What is the geographic scope and impact of this contract within Region 2 (Southeast)?

Region 2, as defined by the VA for this contract, encompasses a specific set of states within the Southeast United States. The contract's geographic impact is significant, as it aims to ensure that veterans residing in this broad region have access to necessary medical disability examinations. This involves a network of healthcare providers and facilities contracted by OptumServe to conduct these evaluations. The effectiveness of the contract is tied to its ability to reach veterans across this diverse geographic area, potentially including rural and underserved communities, thereby facilitating their access to benefits regardless of their location within the specified 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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Unitedhealth Group Incorporated

Address: 328 FRONT ST S, LA CROSSE, WI, 54601

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

Financial Breakdown

Contract Ceiling: $238,225,535

Exercised Options: $238,225,535

Current Obligation: $238,225,535

Actual Outlays: $230,673,316

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10X19D0004

IDV Type: IDC

Timeline