VA awards $183M task order to OptumServe for physician services in Wisconsin

Contract Overview

Contract Amount: $183,049,279 ($183.0M)

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: $501.5K/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 $183.0 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. Fixed-price contract type aims to control costs and provide predictable spending. 3. Task order duration of one year indicates a need for immediate or short-term services. 4. Awarded to a single contractor, OptumServe Health Services, Inc. 5. The North American Industry Classification System (NAICS) code 621111 points to physician office services. 6. The contract is categorized under 'WI' (Wisconsin) for its service location.

Value Assessment

Rating: good

The total award amount of $183,049,279.28 for a one-year period for physician services is substantial. Benchmarking this 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 provides cost certainty for the government. The specific services rendered and the geographic scope (Wisconsin) will influence the reasonableness of the price.

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 offers. The number of bidders is not specified, but this method generally fosters price discovery and encourages competitive pricing. The VA likely sought to maximize value and obtain the best possible services by allowing a broad range of potential contractors to compete.

Taxpayer Impact: A full and open competition process is generally favorable for taxpayers as it is designed to yield the most competitive pricing and best value by allowing a wide pool of qualified vendors to bid on the requirement.

Public Impact

Veterans in Wisconsin will benefit from access to physician services. The contract supports the delivery of healthcare services, specifically medical consultations and treatments. Services are geographically focused within Wisconsin, impacting local healthcare infrastructure. The contract likely supports a workforce of physicians and potentially administrative staff within the awarded contractor's organization.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor lock-in if performance is consistently good, reducing future competition.
Dependence on a single provider for critical physician services could pose a risk if service levels decline.
The large contract value may indicate a significant scope of work, requiring robust performance monitoring.

Positive Signals

Awarded through full and open competition, suggesting a competitive environment.
Firm fixed-price contract type provides cost predictability.
The contract addresses a clear need for physician services within the VA system.

Sector Analysis

This contract falls within the Healthcare sector, specifically the provision of physician services. The market for healthcare services, particularly to government entities like the VA, is substantial and competitive. This award to OptumServe, a known provider in the health services space, aligns with industry trends of large healthcare organizations securing significant government contracts to deliver specialized services.

Small Business Impact

The provided data indicates that small business participation (ss and sb fields) is false for this specific award. There is no explicit mention of small business set-asides or subcontracting plans. Therefore, the direct impact on small businesses through this particular contract appears limited, though OptumServe may engage small businesses in its broader operations.

Oversight & Accountability

The Department of Veterans Affairs (VA) has established oversight mechanisms for its contracts, including this task order. Performance will likely be monitored through contract officers' representatives (CORs) and quality assurance personnel. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

VA Physician Services Contracts
Federal Healthcare Services
OptumServe Health Contracts
NAICS 621111 Services

Risk Flags

Potential for service disruption if contractor performance falters.
Risk of reduced cost efficiency due to lack of ongoing competition.
Dependence on a single entity for critical healthcare services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $183.0 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 $183.0 million.

What is the period of performance?

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

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

Analyzing historical VA spending on physician services specifically within Wisconsin requires access to detailed procurement data beyond this single task order. While this $183 million award for FY24 is significant, understanding the VA's broader commitment to physician staffing in the state would involve examining contract awards over multiple fiscal years, potentially across different contracting vehicles and awardees. Trends in spending could reveal increasing reliance on contracted services, shifts in provider types, or changes in service delivery models. Without a comprehensive historical dataset for Wisconsin physician services, it's difficult to contextualize this award's magnitude relative to past investments or identify long-term spending patterns.

How does the per-physician cost of this contract compare to industry benchmarks?

Determining the per-physician cost requires knowing the number of physicians funded by this $183 million task order and the duration they are expected to serve. Assuming the task order funds a significant number of physicians for the full year, the average cost per physician could be estimated. However, without explicit details on the staffing levels and specific physician specialties covered, a direct comparison to industry benchmarks is challenging. Industry benchmarks vary widely based on specialty, experience, location, and whether services are provided in-house or contracted. A thorough analysis would involve comparing the estimated average cost per physician against data from healthcare staffing agencies and similar government contracts.

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

OptumServe Health Services, Inc. has a significant track record of contracting with the Department of Veterans Affairs. They have been awarded numerous contracts for various health services, including telehealth, claims processing, and medical staffing. Their performance history with the VA, as reflected in contract databases and performance evaluations, would be crucial in assessing the risk associated with this new task order. A review of past performance would examine factors such as on-time delivery, quality of service, and adherence to contract terms. Generally, OptumServe is a large, established player in the federal health IT and services market, suggesting a capacity to handle large-scale contracts.

What specific physician services are included under this task order?

The NAICS code 621111, 'Offices of Physicians (except Mental Health Specialists),' indicates that the services procured under this task order primarily involve general medical and specialist physician services, excluding mental health practitioners. This could encompass a wide range of activities such as primary care, specialty consultations, diagnostic services, and potentially some procedural work, depending on the specific requirements outlined in the task order's statement of work. The exact scope would detail the types of physicians required (e.g., internists, cardiologists, surgeons), the volume of services expected, and the specific locations or facilities where these services are to be rendered within Wisconsin.

What are the potential risks associated with a single award for such a large sum?

Awarding a single task order for $183 million carries several potential risks. Firstly, there's a risk of contractor over-reliance; if OptumServe underperforms or faces operational issues, it could significantly disrupt VA physician services in Wisconsin. Secondly, the lack of ongoing competition for this specific block of work might reduce the incentive for the contractor to optimize costs or innovate over the contract period, although the firm fixed-price nature mitigates some cost risk. Thirdly, if the initial competition was somehow flawed or if market conditions change, the VA might be locked into a less-than-optimal arrangement. Robust performance monitoring and clear exit strategies are essential to mitigate these risks.

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: $183,049,279

Exercised Options: $183,049,279

Current Obligation: $183,049,279

Actual Outlays: $116,250,963

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10X22D0006

IDV Type: IDC

Timeline