VA's Midwest Medical Disability Exams Total $196M, Awarded to OptumServe Under Full and Open Competition

Contract Overview

Contract Amount: $196,059,311 ($196.1M)

Contractor: Optumserve Health Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-10-01

End Date: 2023-09-30

Contract Duration: 364 days

Daily Burn Rate: $538.6K/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 3 (MIDWEST)

Place of Performance

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

State: Wisconsin Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $196.1 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 3 (MIDWEST) Key points: 1. The Department of Veterans Affairs (VA) awarded a significant contract worth over $196 million for medical disability examinations in Region 3 (Midwest). 2. OptumServe Health Services, Inc. secured the contract through full and open competition, indicating a competitive bidding process. 3. The contract duration is one year, with a start date of October 1, 2022, and an end date of September 30, 2023. 4. The North American Industry Classification System (NAICS) code 621111 points to physician's offices, suggesting a focus on clinical assessments. 5. The contract type is Firm Fixed Price, which helps in budget predictability for the VA.

Value Assessment

Rating: good

The contract's firm fixed price structure provides cost certainty for the VA. Benchmarking against similar large-scale disability examination contracts would be beneficial to fully assess pricing efficiency.

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 had the opportunity to bid. This competitive environment generally leads to better price discovery and potentially more favorable pricing for the government.

Taxpayer Impact: The competitive award process is expected to ensure taxpayer funds are used efficiently for essential veteran disability evaluations.

Public Impact

Veterans in the Midwest region will receive medical disability examinations crucial for determining benefit eligibility. The contract supports healthcare service providers and administrative staff involved in the examination process. OptumServe's performance will directly impact the timeliness and accuracy of disability claims processing for veterans. The large contract value highlights the significant demand for these services within the VA system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if performance is consistently good over multiple contract periods.
Ensuring consistent quality of examinations across all providers under OptumServe.
Monitoring contract performance to ensure adherence to timelines and accuracy standards.

Positive Signals

Awarded through full and open competition.
Firm Fixed Price contract type provides budget certainty.
Significant investment in veteran healthcare services.

Sector Analysis

This contract falls within the healthcare services sector, specifically focusing on medical examinations for disability claims. Spending benchmarks for similar government contracts in this area can vary widely based on geographic region and scope of services.

Small Business Impact

The data does not indicate any specific provisions or set-asides for small businesses in this contract. Further analysis would be needed to determine if small businesses were involved as subcontractors or if opportunities were missed.

Oversight & Accountability

The VA's procurement process, including the use of full and open competition, is subject to oversight to ensure fairness and efficiency. Performance monitoring and contract management are key accountability mechanisms.

Related Government Programs

Offices of Physicians (except Mental Health Specialists)
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Potential for quality variations across numerous examiners.
Dependence on a single large contractor for a critical service.
Ensuring timely processing of examinations to avoid claim backlogs.
Geographic coverage challenges in a large region.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $196.1 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 3 (MIDWEST)

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 $196.1 million.

What is the period of performance?

Start: 2022-10-01. End: 2023-09-30.

What is the historical performance of OptumServe Health Services, Inc. in delivering similar medical examination services to the VA or other government agencies?

Assessing OptumServe's past performance is crucial for understanding their capability to meet the demands of this large contract. Reviewing previous contract awards, performance evaluations, and any documented issues or successes can provide insights into their reliability, quality of service, and adherence to timelines. This historical data helps the VA make informed decisions about vendor selection and contract management, ultimately impacting the efficiency and effectiveness of disability claim processing for veterans.

How does the per-veteran cost of these examinations compare to similar contracts in other VA regions or with other federal agencies?

Benchmarking the per-veteran cost against comparable contracts is essential for evaluating the value for money. Variations in cost can be influenced by factors such as geographic location, complexity of examinations required, and prevailing labor rates. A thorough cost comparison can identify potential inefficiencies or areas where savings might be achieved in future procurements, ensuring taxpayer dollars are utilized optimally for veteran services.

What mechanisms are in place to ensure the quality and consistency of medical disability examinations provided under this contract across the Midwest region?

Ensuring consistent quality is paramount for fair and accurate disability determinations. The VA likely employs quality assurance protocols, including review of examination reports, provider credentialing, and potentially site visits or audits. Clear performance standards and metrics within the contract, coupled with regular performance reviews, are vital for maintaining high standards and addressing any quality deficiencies promptly.

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: $196,059,311

Exercised Options: $196,059,311

Current Obligation: $196,059,311

Actual Outlays: $190,530,811

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10X19D0007

IDV Type: IDC

Timeline