VA awards $35M for physician services, with 4 bidders competing for a firm-fixed-price delivery order

Contract Overview

Contract Amount: $35,000,000 ($35.0M)

Contractor: Loyal Source Government Services LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-09-25

End Date: 2025-12-31

Contract Duration: 97 days

Daily Burn Rate: $360.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: FY25 Q4 AND FY26 Q1 ADDITIONAL EXAMS

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32826

State: Florida Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $35.0 million to LOYAL SOURCE GOVERNMENT SERVICES LLC for work described as: FY25 Q4 AND FY26 Q1 ADDITIONAL EXAMS Key points: 1. The contract value of $35 million for a 97-day period suggests a high daily rate for physician services. 2. With 4 bidders, the competition level indicates a moderately contested market for these specialized medical services. 3. The firm-fixed-price contract type shifts performance risk to the contractor, LOYAL SOURCE GOVERNMENT SERVICES LLC. 4. This award falls within the 'Offices of Physicians' sector, a critical component of healthcare delivery. 5. The short duration of the contract may point to an urgent or temporary need for these services. 6. The base contract value of $3,608,250 for the initial period appears significantly lower than the total potential value.

Value Assessment

Rating: fair

The awarded amount of $35 million for a 97-day period translates to a daily rate of approximately $360,825. This rate is exceptionally high and warrants further investigation into the specific services provided and the qualifications of the physicians. Without more granular data on the scope of work, it is difficult to benchmark against similar contracts. However, the high daily expenditure suggests potential for overpayment if not carefully managed and justified by the critical nature of the services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with four bidders participating. This level of competition is generally positive, suggesting that multiple vendors were aware of and capable of meeting the VA's requirements. The presence of four bidders indicates a reasonably healthy market for these physician services, which should theoretically lead to competitive pricing. However, the ultimate price achieved still needs to be evaluated against the value delivered.

Taxpayer Impact: The full and open competition with multiple bidders is beneficial for taxpayers as it increases the likelihood of obtaining services at a fair market price, preventing potential price gouging.

Public Impact

Veterans will benefit from the provision of physician services, potentially addressing critical staffing shortages or specialized care needs. The services delivered are expected to be direct patient care, contributing to the overall health and well-being of the beneficiary population. The geographic impact is focused on Florida, where the contractor is located, suggesting services may be delivered at VA facilities within the state. This contract supports the healthcare workforce by engaging physicians, potentially including those with specialized skills required by the VA.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The extremely high daily rate ($360,825) raises concerns about potential overspending and the justification for such costs.
The short contract duration (97 days) coupled with a large award amount could indicate an emergency procurement or a poorly planned requirement.
Lack of detailed scope of work makes it difficult to assess the true value for money and compare it to industry standards.
The base contract value is significantly lower than the total potential, suggesting substantial option periods or undefined future needs.

Positive Signals

The contract was awarded under full and open competition, indicating a broad outreach to potential providers.
Four bidders participated, suggesting a competitive environment that should drive reasonable pricing.
The firm-fixed-price contract type transfers risk to the contractor, ensuring cost certainty for the government.
The award supports the VA's mission to provide healthcare services to veterans.

Sector Analysis

The healthcare sector, particularly the provision of physician services, is a significant area of federal spending. The North American Industry Classification System (NAICS) code 621111, 'Offices of Physicians (except Mental Health Specialists),' encompasses a wide range of medical practices. Federal agencies, especially the Department of Veterans Affairs, frequently contract for these services to supplement their existing medical staff, address specialized needs, or cover temporary shortages. Market size for physician services is substantial, with government contracts forming a notable portion. Benchmarking this contract's value is challenging without specific service details, but the daily rate appears exceptionally high compared to typical physician compensation models.

Small Business Impact

This contract does not appear to have a small business set-aside (ss: false, sb: false). The award was made to LOYAL SOURCE GOVERNMENT SERVICES LLC, which is likely a larger entity given the contract value. There is no explicit information provided regarding subcontracting plans for small businesses. Without specific set-aside goals or subcontracting requirements, the direct impact on the small business ecosystem for this particular contract is likely minimal, though larger prime contractors may engage small businesses in other capacities.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. The firm-fixed-price nature of the contract provides some cost control, as the price is set regardless of the contractor's actual costs. Accountability measures would involve performance monitoring to ensure the services meet the required standards and specifications outlined in the contract. Transparency is facilitated by the public nature of contract awards, allowing for analysis. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

VA Medical Services Contracts
Physician Staffing Contracts
Healthcare Services for Veterans
Federal Medical Personnel Procurement
Defense Health Agency Contracts

Risk Flags

High Daily Rate
Short Contract Duration
Potential for Poor Value for Money
Lack of Detailed Scope of Work

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $35.0 million to LOYAL SOURCE GOVERNMENT SERVICES LLC. FY25 Q4 AND FY26 Q1 ADDITIONAL EXAMS

Who is the contractor on this award?

The obligated recipient is LOYAL SOURCE GOVERNMENT SERVICES LLC.

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 $35.0 million.

What is the period of performance?

Start: 2025-09-25. End: 2025-12-31.

What specific physician services are being procured under this contract, and what is the justification for the high daily rate?

The provided data indicates the contract is for 'Offices of Physicians (except Mental Health Specialists)' (NAICS 621111) and has a total value of $35 million for a 97-day period. This results in an approximate daily rate of $360,825. Without a detailed Statement of Work (SOW), it is impossible to ascertain the exact services. However, such a high daily rate could be justified by the need for highly specialized physicians (e.g., trauma surgeons, rare specialists), services provided in high-cost-of-living areas, or a critical, time-sensitive need that commands a premium. It is crucial for the VA to have robust documentation justifying this rate, potentially including market research and comparisons to other high-demand medical specialties or emergency staffing situations. The short duration might also imply a need for immediate, high-intensity support.

How does the pricing of this contract compare to similar physician service contracts awarded by the VA or other federal agencies?

Benchmarking this contract's pricing is challenging without specific details on the services rendered. However, a daily rate of $360,825 for physician services is exceptionally high. Typical rates for physicians, even specialists, often fall within a range of a few thousand dollars per day, depending on specialty, location, and contract type. Rates can escalate significantly during emergencies or for extremely rare specialties. For instance, contracts for locum tenens physicians might range from $1,000 to $3,000 per day. If this $360,825 daily rate is accurate and reflects standard operational needs, it suggests a significant deviation from typical market rates. Further investigation into the specific qualifications, scope of work, and any unique circumstances surrounding this award is necessary for a proper comparison.

What are the potential risks associated with a firm-fixed-price contract of this magnitude and short duration?

A firm-fixed-price (FFP) contract, while offering cost certainty to the government, places the risk of cost overruns on the contractor. For a contract of $35 million over just 97 days, the primary risk for the government is not necessarily cost overrun by the contractor, but rather paying an excessively high price for the services if the initial negotiation or market assessment was flawed. The short duration, combined with a large award value, could indicate an urgent need, which might lead to rushed procurement processes and potentially less rigorous price negotiation. If the contractor cannot deliver the required services effectively within the timeframe, the government faces the risk of service disruption and the cost/time associated with finding a replacement. The high daily rate itself is a significant risk factor, suggesting potential for poor value for money if not meticulously managed and justified.

What is the track record of LOYAL SOURCE GOVERNMENT SERVICES LLC in providing similar physician services to the federal government?

LOYAL SOURCE GOVERNMENT SERVICES LLC has a history of receiving federal contracts, primarily with the Department of Defense and the Department of Veterans Affairs. While specific details on their performance for physician services require deeper database analysis, their presence as a prime contractor suggests they have the capacity and experience to manage government contracts. However, the scale and nature of this particular $35 million award for a short duration warrant scrutiny. It would be prudent to examine past performance evaluations (e.g., CPARS reports) for this contractor, particularly on contracts involving medical staffing or physician services, to assess their reliability, quality of service, and adherence to contractual obligations. A review of their past contract values and durations could also provide context for this current award.

How does this contract align with the VA's overall spending on physician services and its strategic goals for healthcare delivery?

The VA is a major provider of healthcare services to veterans and consistently spends billions annually on medical services, including physician staffing. Contracts like this one are essential for the VA to meet its obligations, especially when facing physician shortages or requiring specialized expertise. This specific contract, valued at $35 million for a short period, represents a significant investment in physician services. Its alignment with strategic goals depends on the specific need it addresses – whether it's to rapidly expand capacity in a particular facility, cover unexpected departures, or provide highly specialized care not readily available internally. The high daily rate, however, raises questions about cost-effectiveness and whether this represents an optimal use of resources compared to long-term staffing solutions or alternative care models.

What are the implications of awarding a large contract with a high daily rate to a single contractor, even with multiple bidders?

Awarding a large contract with a high daily rate, even after competition, can have several implications. While competition helps establish a baseline price, the winning bid reflects the price at which the contractor is willing to perform. If the winning bid is significantly higher than anticipated or market benchmarks, it suggests either a highly inflated market perception by bidders or a potential flaw in the government's cost estimation or negotiation strategy. For taxpayers, this means a higher expenditure for the same or similar services compared to potentially lower-cost alternatives. It also concentrates significant spending with one entity, potentially reducing opportunities for other capable contractors, including small businesses, if subcontracting is not mandated or actively pursued. The VA must ensure the value proposition is sound and that the services delivered justify the substantial cost.

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: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 12612 CHALLENGER PKWY STE 365, ORLANDO, FL, 32826

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $35,000,000

Exercised Options: $35,000,000

Current Obligation: $35,000,000

Actual Outlays: $12,271,797

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10X25D0001

IDV Type: IDC

Timeline