VA awards $355M contract to QTC Medical Services for physician services in California

Contract Overview

Contract Amount: $355,033,387 ($355.0M)

Contractor: QTC Medical Services Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-10-01

End Date: 2024-09-30

Contract Duration: 365 days

Daily Burn Rate: $972.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: FY24 FUNDING TASK ORDER

Place of Performance

Location: SAN DIMAS, LOS ANGELES County, CALIFORNIA, 91773

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $355.0 million to QTC MEDICAL SERVICES INC for work described as: FY24 FUNDING TASK ORDER Key points: 1. Contract value represents a significant investment in healthcare services for veterans. 2. The award was made under full and open competition, suggesting a competitive bidding process. 3. The contract duration is one year, indicating a need for ongoing services. 4. The fixed-price nature of the contract aims to control costs for the government. 5. This contract supports the VA's mission to provide comprehensive healthcare to veterans. 6. The specific service code (621111) points to general physician services.

Value Assessment

Rating: good

The contract value of $355 million for one year of physician services is substantial. Benchmarking against similar contracts for physician services within the VA or other federal agencies would provide further context on value for money. The firm fixed-price structure suggests an effort to manage costs, but the overall value assessment depends on the scope and quality of services delivered. Without detailed performance metrics or comparisons to market rates for equivalent services in California, a definitive value assessment is challenging.

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 a bid. The fact that it was competed suggests that the VA sought to leverage market competition to obtain the best value. The number of bidders is not specified, but full and open competition generally leads to better price discovery and potentially lower costs for the government compared to sole-source or limited competition awards.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple companies to bid, driving down prices and ensuring the government receives competitive offers for its money.

Public Impact

Veterans in California will benefit from access to physician services. The contract ensures the delivery of essential medical services, potentially including primary care, specialty consultations, and diagnostic services. The geographic impact is focused on California, where the services will be rendered. The contract supports healthcare professionals employed by QTC Medical Services Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for service delivery gaps if contractor performance is suboptimal.
Reliance on a single contractor for a large volume of services could pose a risk.
Ensuring consistent quality of care across all services provided under the contract.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
Firm fixed-price contract type helps in cost control.
Contract supports a critical need for veteran healthcare services.

Sector Analysis

The healthcare services sector is a significant area of federal spending, particularly for the Department of Veterans Affairs. This contract falls under the broader category of healthcare services, specifically physician services. The market for medical services is competitive, with numerous providers vying for government contracts. The VA's spending in this area is substantial, reflecting its commitment to providing healthcare to a large veteran population. Comparable spending benchmarks would involve looking at other large-scale physician service contracts awarded by the VA or other federal health agencies.

Small Business Impact

The provided data indicates that small business participation (sb) is false for this contract. This suggests that small businesses were not specifically targeted through a set-aside. There is no information on subcontracting plans, but given the lack of a small business set-aside, the direct impact on the small business ecosystem may be limited unless QTC Medical Services Inc. voluntarily engages small businesses for subcontracting opportunities.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs contracting officers and program managers. Accountability measures would be tied to the performance work statement and the terms of the firm fixed-price contract. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected in relation to the contract.

Related Government Programs

VA Medical Care Programs
TRICARE Medical Services
Federal Employee Health Benefits Program Medical Services

Risk Flags

Potential for cost overruns if scope is not well-defined.
Risk of service quality issues if performance is not closely monitored.
Dependence on a single contractor for critical services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $355.0 million to QTC MEDICAL SERVICES INC. FY24 FUNDING 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 $355.0 million.

What is the period of performance?

Start: 2023-10-01. End: 2024-09-30.

What is the historical spending pattern of the VA with QTC Medical Services Inc. for similar physician services?

Analyzing historical spending with QTC Medical Services Inc. is crucial for understanding the VA's long-term relationship with the contractor and assessing spending trends. Without access to specific historical data for this analysis, we can infer that the VA has likely engaged QTC Medical Services Inc. for similar services in the past, given the contractor's specialization. A review of previous contract awards to QTC Medical Services Inc. for physician services, particularly in California, would reveal whether this $355 million award represents an increase, decrease, or consistent level of spending. It would also highlight any trends in contract duration, scope, and pricing, providing context for the current award's value and potential future needs.

How does the per-unit cost of services under this contract compare to market rates for similar physician services in California?

Benchmarking the per-unit cost against market rates is essential for determining the value for money of this $355 million contract. Since the contract is firm fixed-price, the VA has agreed upon specific prices for defined services. To assess value, these prices need to be compared with what private sector healthcare providers or other government entities pay for comparable physician services in the California region. This comparison would involve analyzing average physician salaries, consultation fees, and procedure costs in the relevant geographic area. A higher per-unit cost than market rates might indicate potential overpayment or a need to scrutinize the scope of services included. Conversely, costs below market rates could suggest a favorable deal for the government.

What specific physician services are included under this contract, and what is the expected volume for each?

The contract specifies 'Offices of Physicians (except Mental Health Specialists)' under NAICS code 621111, indicating a broad range of general physician services. However, the exact breakdown of services and their expected volumes is critical for a thorough analysis. This would typically be detailed in the Performance Work Statement (PWS). Understanding whether the contract covers primary care, specialist consultations, diagnostic services, or specific procedures is necessary to evaluate the scope and necessity of the $355 million award. Without this granular detail, it's difficult to assess if the funding is appropriately allocated or if there's potential for scope creep or underutilization of services. The volume projections directly influence the per-unit cost analysis and overall value assessment.

What are QTC Medical Services Inc.'s past performance and track record with the VA and other federal agencies?

Assessing QTC Medical Services Inc.'s past performance is a key indicator of potential success for this contract. A review of their contract history with the VA and other federal agencies would reveal their reliability, quality of service delivery, and compliance with contract terms. This includes examining past performance evaluations, any documented instances of contract disputes, overruns, or failures to meet performance standards. Positive past performance suggests a lower risk of issues with the current $355 million award, while a history of problems could raise concerns about the VA's contractor selection process and the potential for service disruptions or cost overruns. Information on their experience with similar large-scale healthcare contracts would be particularly relevant.

What risk indicators are associated with this contract, and what mitigation strategies are in place?

Several risk indicators can be associated with a contract of this magnitude. These may include potential for service delivery delays, quality control issues, contractor financial stability, or cybersecurity vulnerabilities if electronic health records are involved. The firm fixed-price nature mitigates some financial risk for the government, but performance risk remains. Mitigation strategies would typically involve robust oversight by the VA, clear performance metrics in the PWS, regular performance reviews, and contingency planning. The VA's contracting office would have assessed these risks prior to award and established mechanisms to monitor and manage them throughout the contract's duration. The presence and effectiveness of these mitigation strategies are crucial for ensuring successful contract execution.

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: Leidos Holdings, Inc.

Address: 924 OVERLAND CT, SAN DIMAS, CA, 91773

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

Financial Breakdown

Contract Ceiling: $355,033,387

Exercised Options: $355,033,387

Current Obligation: $355,033,387

Actual Outlays: $315,937,452

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10X19D0008

IDV Type: IDC

Timeline