VA awards $212.6M task order to OptumServe for physician services in Wisconsin

Contract Overview

Contract Amount: $212,623,700 ($212.6M)

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: $582.5K/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 $212.6 million to OPTUMSERVE HEALTH SERVICES, INC. for work described as: FY24 FUNDING TASK ORDER. Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is a firm-fixed-price delivery order, providing cost certainty for the government. 3. Services are for physician offices, a critical component of healthcare delivery. 4. The contract duration is one year, aligning with annual budget cycles. 5. The awardee, OptumServe Health Services, Inc., is a significant player in health services. 6. The North American Industry Classification System (NAICS) code 621111 indicates a focus on physician services. 7. The contract is managed by the Department of Veterans Affairs, indicating a focus on veteran healthcare. 8. The contract is a single award, but the competition method is full and open.

Value Assessment

Rating: good

The contract value of $212.6 million for a one-year period for physician services appears substantial. Benchmarking against similar contracts for physician staffing within the VA or other federal agencies would be necessary for a precise value-for-money assessment. However, the firm-fixed-price structure suggests a degree of cost control. The base contract BR value of $582,531 indicates this task order represents a significant portion of the overall contract potential.

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 number of bidders is not specified, but the method implies a robust competitive environment. This approach is generally expected to yield competitive pricing and a wider range of potential solutions.

Taxpayer Impact: Full and open competition is favorable for taxpayers as it typically drives down costs through market forces and encourages multiple vendors to offer their best pricing and services.

Public Impact

Veterans in Wisconsin will benefit from access to physician services. The contract supports the delivery of essential healthcare services to the veteran population. The geographic impact is focused on Wisconsin. The contract will likely involve the employment of physicians and supporting medical staff. This award contributes to the operational capacity of the VA healthcare system in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor performance issues given the large dollar value and single award nature of this task order.
Dependence on a single contractor for critical physician services could pose a risk if performance falters.
Ensuring adequate oversight is crucial for a contract of this magnitude to guarantee quality of care and adherence to terms.

Positive Signals

Awarded through full and open competition, suggesting a competitive process that should yield good value.
Firm-fixed-price contract type provides cost certainty for the government.
The contractor, OptumServe, is a known entity in the health services sector, potentially indicating experience.
The contract directly addresses a critical need for physician services within the VA system.

Sector Analysis

The healthcare sector, particularly within federal agencies like the VA, relies heavily on contracted services to supplement government-provided care. Physician services are a core component of healthcare delivery, and the market for these services is competitive, involving numerous private sector providers. This contract fits within the broader category of healthcare services procurement, aiming to ensure adequate staffing and patient care.

Small Business Impact

The provided data does not indicate if this contract included small business set-asides or subcontracting plans. As a large contract awarded to a single entity, it's possible that subcontracting opportunities may exist for smaller firms, but this would need further investigation. The primary awardee is OptumServe Health Services, Inc., which is a large business.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs contracting officers and program managers. Accountability measures are inherent in the firm-fixed-price contract type, which obligates the contractor to deliver services at an agreed-upon price. Transparency would be enhanced through public contract databases and reporting requirements, though specific performance metrics and oversight activities are not detailed in the provided data.

Related Government Programs

Department of Veterans Affairs Medical Services Contracts
Federal Physician Staffing Contracts
Healthcare Services for Federal Agencies
Delivery Orders under Indefinite Delivery/Indefinite Quantity (IDIQ) Contracts

Risk Flags

Large contract value
Single award task order
Potential for performance issues
Reliance on contractor for critical services

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $212.6 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 $212.6 million.

What is the period of performance?

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

What is the track record of OptumServe Health Services, Inc. with the Department of Veterans Affairs for similar physician services?

OptumServe Health Services, Inc. has a significant history of contracting with the Department of Veterans Affairs, particularly for health services. They have been awarded numerous contracts, including large ones, for various medical support functions. Analyzing their past performance on similar physician services contracts, including any reported issues, successes, or contract modifications, would provide crucial context for this specific award. A review of past performance evaluations and any disputes or claims filed against them by the VA would be informative. Given their scale, it's likely they have experience, but the quality and consistency of that experience are key factors.

How does the per-unit cost or overall value of this contract compare to similar physician services contracts awarded by the VA or other federal agencies?

Without specific details on the types of physicians, hours of service, or geographic locations covered by this $212.6 million task order, a direct per-unit cost comparison is challenging. However, the total value for a one-year period suggests a significant volume of services. Benchmarking would involve identifying comparable VA or DoD contracts for physician staffing in similar specialties and regions. Factors like the urgency of need, complexity of services, and prevailing market rates for physicians in Wisconsin would influence the 'fairness' of the price. A detailed analysis would require access to more granular service delivery data and comparative contract data.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks include potential contractor underperformance leading to gaps in physician availability or quality of care, cost overruns if the firm-fixed-price model is not strictly adhered to or if scope creep occurs, and potential reliance on a single provider impacting flexibility. Mitigation strategies typically involve robust contract oversight by the VA, clear performance standards and metrics, regular performance reviews, and contingency planning for service disruptions. The firm-fixed-price nature itself is a risk mitigation tool against cost overruns, provided the scope is well-defined and managed.

How effective is the VA in managing large physician services contracts to ensure quality patient care and efficient resource utilization?

The VA's effectiveness in managing large physician services contracts can vary. Historically, the VA has faced challenges in staffing and contract management, but also has successes in leveraging external providers to meet demand. Effective management relies on strong program oversight, clear performance metrics, timely payments, and proactive issue resolution. The success of this specific contract will depend on the VA's ability to monitor OptumServe's performance against contract requirements, ensure patient satisfaction, and manage the relationship effectively to achieve the intended healthcare outcomes for veterans.

What has been the historical spending trend for physician services by the Department of Veterans Affairs over the past five fiscal years?

Historical spending data for physician services by the VA would reveal trends in reliance on contracted medical professionals. Over the past five fiscal years, the VA has generally increased its reliance on contract services to supplement its direct care workforce, driven by staffing shortages and increasing demand for healthcare. This trend reflects a broader pattern in federal healthcare procurement. Analyzing specific spending figures for physician services would quantify this trend and provide context for the significance of the $212.6 million award, indicating whether it aligns with or deviates from established spending patterns.

What is the potential impact of this contract on the local healthcare workforce in Wisconsin?

This contract could have a notable impact on the local healthcare workforce in Wisconsin. OptumServe may need to recruit physicians and support staff specifically for this contract, potentially drawing from the existing local talent pool or creating new employment opportunities. The demand for physicians could influence local salary rates and competition among healthcare employers. The VA's reliance on contracted services also affects the overall dynamics of healthcare provision within the state, potentially freeing up VA resources for other critical needs or creating a more complex ecosystem of care providers.

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: $212,623,700

Exercised Options: $212,623,700

Current Obligation: $212,623,700

Actual Outlays: $178,206,738

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10X22D0005

IDV Type: IDC

Timeline