VA awards $274.7M task order to OptumServe for physician services in Wisconsin

Contract Overview

Contract Amount: $274,717,830 ($274.7M)

Contractor: Optumserve Health 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: $752.7K/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: LA CROSSE, LA CROSSE County, WISCONSIN, 54601

State: Wisconsin Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $274.7 million to OPTUMSERVE HEALTH SERVICES, INC. for work described as: FY24 FUNDING TASK ORDER Key points: 1. Task order awarded under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract, suggesting potential for follow-on work. 2. Firm-fixed-price contract type indicates that the price is set and not subject to upward adjustment based on contractor costs. 3. Awarded via full and open competition, implying a broad search for qualified contractors. 4. The contract duration is one year, aligning with typical annual budgeting cycles for operational services. 5. The North American Industry Classification System (NAICS) code 621111 points to a focus on physician office services. 6. The award represents a significant investment in healthcare delivery for veterans in Wisconsin.

Value Assessment

Rating: good

The awarded amount of $274.7 million for a one-year physician services contract appears substantial, but without specific benchmarks for similar VA contracts in Wisconsin or comparable regions, a precise value-for-money assessment is challenging. The firm-fixed-price structure provides cost certainty for the government. Further analysis would require comparing the per-physician cost or cost per patient encounter to industry standards and other VA contracts for similar services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through full and open competition, indicating that the Department of Veterans Affairs sought proposals from all responsible sources. The number of bidders is not specified, but this method generally fosters a competitive environment, which can lead to better pricing and service offerings. The agency's approach suggests confidence in the market's ability to provide qualified providers for these essential physician services.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it maximizes the pool of potential offerors, increasing the likelihood of receiving competitive pricing and innovative solutions, thereby optimizing the use of public funds.

Public Impact

Veterans in Wisconsin will benefit from access to physician services, potentially improving healthcare outcomes and reducing wait times. The contract supports the delivery of essential medical services, likely encompassing a range of specialties provided by physicians. The geographic impact is focused on Wisconsin, ensuring that the state's veteran population has access to these critical healthcare resources. This award will likely create or sustain employment opportunities for physicians, nurses, and administrative staff within the healthcare sector in Wisconsin.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if the definition of 'physician services' is not clearly delineated.
Dependence on a single contractor for a significant portion of physician services could create risks if performance issues arise.
Ensuring consistent quality of care across all services provided under this large contract requires robust oversight.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that likely yielded a fair price.
Firm-fixed-price contract type provides budget certainty for the VA.
The contract duration of one year allows for annual review and potential adjustments based on performance and needs.

Sector Analysis

The healthcare services sector, particularly for government contracts, is highly competitive. This contract falls under the broader category of healthcare support services, specifically focusing on physician staffing and services. The market for such services is substantial, driven by ongoing demand from federal agencies like the VA. Benchmarking this contract would involve comparing its cost structure and service scope to other large-scale physician service contracts awarded by federal or state entities.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. However, the prime contractor, OptumServe Health Services, Inc., may engage small businesses as subcontractors, depending on their own procurement strategies and the specific needs of the services delivered. Analysis of subcontracting plans would be necessary to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs' contracting officers and program managers. Accountability measures are typically embedded within the contract's performance work statement (PWS), outlining specific deliverables, quality standards, and reporting requirements. Transparency is generally facilitated through contract award databases and public reporting mechanisms. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

VA Community Care Network (CCN)
VA Medical Services Contracts
Federal Healthcare Services Contracts
Physician Staffing Contracts

Risk Flags

Potential for physician shortages in the region due to large contract demand.
Need for robust quality assurance to ensure consistent patient care.
Reliance on a single contractor for a significant service area.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $274.7 million to OPTUMSERVE HEALTH SERVICES, INC.. FY24 FUNDING TASK ORDER

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 $274.7 million.

What is the period of performance?

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

What is the historical spending pattern for physician services by the VA in Wisconsin?

Analyzing historical spending for physician services by the VA in Wisconsin would require accessing and aggregating data from previous contract awards and task orders related to NAICS code 621111 or similar service descriptions within the state. This would involve examining spending trends over the past 5-10 fiscal years to identify fluctuations, significant increases or decreases, and the primary contractors involved. Understanding these patterns can help contextualize the current $274.7 million award, determining if it represents a significant increase, a continuation of a trend, or a shift in procurement strategy. It would also highlight any recurring issues or successes with previous service providers.

How does the cost per physician or per patient encounter under this contract compare to industry benchmarks?

To compare the cost per physician or per patient encounter, detailed service delivery metrics and pricing breakdowns from the contract are needed. This would involve identifying the number of physicians or anticipated patient encounters funded by the $274.7 million award and dividing the total cost by these units. These calculated rates would then be benchmarked against national averages for physician services in similar settings (e.g., outpatient clinics, specialized care), considering factors like geographic location, physician specialty, and the complexity of services. Data from industry reports, healthcare consulting firms, or publicly available contract databases for comparable services could be used for this comparison. A significant deviation from benchmarks could indicate either exceptional value or potential overpricing.

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

OptumServe Health Services, Inc. has a significant history of contracting with the VA and other federal agencies, particularly in providing health services and IT solutions. Their track record includes large-scale contracts for areas such as telehealth, claims processing, and medical staffing. A thorough review would involve examining past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any past disputes or contract terminations, and the overall volume and scope of their federal awards. Understanding their performance history, including any documented strengths or weaknesses, provides insight into their capability to successfully execute this current task order and manage the associated risks.

What are the specific physician services being procured under this task order?

The task order specifies services under NAICS code 621111, 'Offices of Physicians (except Mental Health Specialists).' This broadly covers a range of medical services provided by physicians, excluding those primarily focused on mental health. Specific services likely include primary care, specialty physician consultations, diagnostic services, and potentially minor procedures, depending on the defined scope within the Performance Work Statement (PWS). The exact nature and extent of these services are crucial for assessing the contract's value and ensuring it aligns with the VA's needs for veteran healthcare in Wisconsin. Without the PWS, the precise service mix remains generalized.

What is the potential impact of this contract on the availability of physicians for other VA facilities or healthcare providers in the region?

This $274.7 million contract could potentially impact the availability of physicians in the Wisconsin region. If OptumServe Health Services, Inc. draws heavily from the local physician pool to fulfill this contract, it might reduce the number of available physicians for other healthcare providers, including other VA facilities or private hospitals and clinics. This could lead to increased competition for physician talent, potentially driving up salaries or making it harder for other entities to recruit. Conversely, if OptumServe brings in physicians from outside the immediate region or utilizes existing networks effectively, the impact might be less pronounced. The scale of the contract suggests a significant demand for physician resources.

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: $274,717,830

Exercised Options: $274,717,830

Current Obligation: $274,717,830

Actual Outlays: $236,769,168

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10X19D0001

IDV Type: IDC

Timeline