VA awards $159M task order to OptumServe for physician services in Wisconsin

Contract Overview

Contract Amount: $159,128,793 ($159.1M)

Contractor: Optumserve Health Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-10-01

End Date: 2025-09-30

Contract Duration: 364 days

Daily Burn Rate: $437.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: FY25 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 $159.1 million to OPTUMSERVE HEALTH SERVICES, INC. for work described as: FY25 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, aligning with healthcare needs for veterans. 4. The duration of the order is one year, indicating a need for ongoing support. 5. The award value represents a significant investment in healthcare services for the specified region.

Value Assessment

Rating: good

The $159.1 million award for physician services appears to be a substantial investment. 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 provides predictability. The base award amount of $437,167 suggests this task order is a significant portion of a larger contract or a substantial standalone award for the period.

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 bids. The number of bidders is not specified, but this method generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The VA's choice of this procurement method suggests confidence in the market's ability to meet their needs.

Taxpayer Impact: Full and open competition is generally favorable for taxpayers as it is expected to drive down costs through market forces and encourage a wider range of innovative solutions.

Public Impact

Veterans in Wisconsin will benefit from access to physician services. The contract supports the delivery of healthcare services, specifically in physician offices. The geographic impact is focused on Wisconsin. This contract likely supports a workforce of physicians and administrative staff within the healthcare sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor performance issues if not adequately managed, despite fixed-price contract.
Dependence on a single awardee for critical physician services in a region.

Positive Signals

Firm-fixed-price contract provides cost certainty.
Awarded through full and open competition, suggesting market validation.
Aligns with VA's mission to provide healthcare to veterans.

Sector Analysis

This contract falls within the Healthcare sector, specifically related to the provision of physician services. The North American Industry Classification System (NAICS) code 621111, 'Offices of Physicians (except Mental Health Specialists),' indicates a focus on direct patient care. The federal government, particularly the Department of Veterans Affairs, is a major purchaser of healthcare services, making this a significant area of spending. Benchmarking this award against other federal contracts for similar physician staffing or services would provide context on market rates and typical contract values.

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 requirements in the data. Therefore, the direct impact on small businesses through this particular contract appears limited, and opportunities for subcontracting to small businesses are not evident from the provided details.

Oversight & Accountability

The Department of Veterans Affairs (VA) has established oversight mechanisms for its contracts, including this delivery order. These typically involve contract officers, program managers, and potentially the VA Office of Inspector General (OIG) for investigations into fraud, waste, or abuse. Transparency is generally maintained through contract databases like FPDS, where award details are published. The firm-fixed-price nature of the contract also aids in financial oversight by setting clear cost expectations.

Related Government Programs

VA Healthcare Services Contracts
Physician Staffing Contracts
Federal Healthcare Procurement
Delivery Orders

Risk Flags

Potential for cost overruns if scope significantly expands beyond initial estimates.
Risk of contractor performance issues impacting veteran care quality.
Dependence on a single contractor for essential services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $159.1 million to OPTUMSERVE HEALTH SERVICES, INC.. FY25 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 $159.1 million.

What is the period of performance?

Start: 2024-10-01. End: 2025-09-30.

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

Analyzing historical spending patterns for physician services by the VA in Wisconsin requires access to detailed procurement data over multiple fiscal years. While this specific task order is for FY25, understanding past awards for similar services in the same geographic region would reveal trends in contract values, types of services procured, and the contractors frequently utilized. For instance, if the VA has consistently awarded large contracts for physician staffing in Wisconsin, it suggests a sustained need and a mature market. Conversely, a sudden increase in spending could indicate a new program initiative or a shift in service delivery strategy. Without historical data, it's difficult to ascertain if this $159 million award represents an increase, decrease, or stable level of investment compared to previous years.

How does the per-physician cost under this contract compare to market rates or other VA contracts?

Determining the per-physician cost requires knowing the number of physicians or equivalent full-time providers funded by this $159.1 million task order over its 364-day duration. If, for example, the contract funds 100 physicians, the approximate annual cost per physician would be around $1.59 million. This figure would then need to be benchmarked against average physician salaries and overhead costs in Wisconsin, as well as against per-physician costs in similar VA contracts nationwide. Factors like specialty, experience level, and administrative support significantly influence these costs. A higher-than-market rate could indicate specific challenges in recruitment or retention in the region, or potentially less competitive bidding than anticipated.

What are the specific physician specialties and services covered under this contract?

The provided data indicates the NAICS code 621111, 'Offices of Physicians (except Mental Health Specialists),' which broadly covers physician services. However, it does not detail the specific specialties (e.g., primary care, cardiology, surgery) or the exact services (e.g., consultations, procedures, diagnostics) to be rendered. This level of detail is typically found in the Performance Work Statement (PWS) or Statement of Work (SOW) associated with the contract. Understanding these specifics is crucial for assessing the contract's alignment with veteran healthcare needs, evaluating the necessity of the services, and comparing the scope to other healthcare contracts.

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

OptumServe Health Services, Inc. is a known entity within federal healthcare contracting. Assessing their track record involves reviewing their past performance on similar contracts, particularly with the Department of Veterans Affairs. Key indicators include on-time delivery, quality of services, adherence to budget, and any past performance issues or disputes. Data from contract databases and performance evaluation reports (if publicly available) can shed light on their reliability and effectiveness. A strong track record suggests a lower risk for this new award, while a history of issues might warrant closer scrutiny of contract management and oversight.

What are the potential risks associated with a firm-fixed-price contract for physician services?

While firm-fixed-price (FFP) contracts offer cost certainty, they can introduce risks related to service quality and availability if not managed properly. If the contract price is set too low relative to market rates or the demands of the service, the contractor might face financial strain, potentially leading to reduced staffing levels, lower quality of care, or difficulty retaining qualified personnel. Conversely, if the price is too high, taxpayers may be overpaying. The VA must ensure robust performance monitoring to guarantee that the contractor meets all service requirements despite the fixed-price nature, especially in a critical area like healthcare.

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: $159,128,793

Exercised Options: $159,128,793

Current Obligation: $159,128,793

Actual Outlays: $131,465,333

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10X22D0006

IDV Type: IDC

Timeline