VA awards $140.9M for additional exams to OptumServe Health Services, Inc. through full and open competition

Contract Overview

Contract Amount: $140,927,408 ($140.9M)

Contractor: Optumserve Health Services, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-09-25

End Date: 2025-12-31

Contract Duration: 97 days

Daily Burn Rate: $1.5M/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: LA CROSSE, LA CROSSE County, WISCONSIN, 54601

State: Wisconsin Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $140.9 million to OPTUMSERVE HEALTH SERVICES, INC. for work described as: FY25 Q4 AND FY26 Q1 ADDITIONAL EXAMS Key points: 1. The contract value represents a significant investment in healthcare services for veterans. 2. Full and open competition suggests a potentially competitive bidding process, which can drive better pricing. 3. The short performance period (approx. 3 months) may indicate a need for surge capacity or a specific, time-bound requirement. 4. The North American Industry Classification System (NAICS) code 621111 points to a focus on physician services. 5. The contract's geographic focus on Wisconsin (WI) highlights a regional need for these services.

Value Assessment

Rating: good

The contract value of $140.9 million for approximately three months of services appears substantial. Benchmarking against similar contracts for physician services requires detailed analysis of scope, duration, and geographic coverage. However, the firm-fixed-price structure suggests that the contractor bears the risk of cost overruns, which is generally favorable for the government. The price per day is approximately $1.45 million, which needs to be evaluated against the volume and complexity of exams provided.

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 presence of four bidders (no) suggests a reasonable level of competition for this requirement. A competitive process is expected to lead to a more efficient price discovery and potentially a better value for the government compared to sole-source or limited competition awards.

Taxpayer Impact: Taxpayers benefit from the potential for cost savings and improved service quality that can arise from a competitive bidding environment. The government can be more confident that it is receiving fair market value for the services procured.

Public Impact

Veterans in Wisconsin will benefit from access to necessary medical examinations. The services delivered are likely diagnostic or evaluative in nature, supporting veteran healthcare claims and treatment. The geographic impact is concentrated within Wisconsin, addressing a specific regional demand. The contract supports healthcare professionals and administrative staff employed by OptumServe Health Services, Inc.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The short duration of the contract could lead to continuity of care concerns if not properly managed or extended.
Reliance on a single contractor for a large volume of exams may create dependency and limit future flexibility.
The significant dollar amount for a short period warrants scrutiny to ensure efficient use of funds.

Positive Signals

The use of full and open competition is a positive signal for achieving competitive pricing.
The firm-fixed-price contract structure shifts cost risk to the contractor.
The award to OptumServe, a known entity in health services, suggests a degree of established capability.

Sector Analysis

This contract falls within the Healthcare sector, specifically focusing on physician services. The market for healthcare services, particularly for government contracts supporting veterans, is substantial and competitive. Companies like OptumServe operate within a landscape of large, established healthcare providers and specialized government contractors. The spending benchmark for physician services can vary widely based on specialty, location, and service volume, making direct comparisons challenging without more granular data.

Small Business Impact

The 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 set-aside provision. The primary contractor, OptumServe Health Services, Inc., is a large entity, and its internal subcontracting practices would determine any indirect impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs contracting officers and program managers. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified services. Transparency is generally facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Veterans Health Administration Medical Services
Disability Examination Services
Medical Evaluation Board Services
Compensation and Pension Exams

Risk Flags

Short contract duration may indicate a temporary need or potential for future contract extensions.
Large contract value for a short period warrants scrutiny for efficiency and necessity.
Geographic concentration in Wisconsin might not address national examination needs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $140.9 million to OPTUMSERVE HEALTH SERVICES, INC.. FY25 Q4 AND FY26 Q1 ADDITIONAL EXAMS

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 $140.9 million.

What is the period of performance?

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

What is the historical spending pattern of the VA with OptumServe Health Services, Inc. for similar examination services?

Analyzing historical spending with OptumServe for similar examination services requires accessing contract databases over multiple fiscal years. While this specific award is for FY25 Q4 and FY26 Q1, OptumServe has a significant history of performing health services for the VA. Past awards might reveal trends in contract values, performance periods, and the types of examinations provided. For instance, if OptumServe has consistently received large, short-term contracts for exams, it suggests a strategic approach by the VA to manage fluctuating demand or specific program needs. Conversely, a lack of consistent awards could indicate a more dynamic or competitive landscape for these services. Understanding this history provides context for the current $140.9 million award, helping to assess if it aligns with previous investments or represents a significant shift in procurement strategy or volume.

How does the per-diem cost of these exams compare to other VA contracts or private sector benchmarks?

Calculating a precise per-diem cost requires knowing the exact number of exams to be performed within the contract's duration. However, we can estimate a daily expenditure of approximately $1.45 million ($140.9M / 97 days). To benchmark this against other VA contracts, one would need to identify similar 'additional exam' procurements, noting their scope, geographic reach, and the specific types of medical professionals involved. Comparing to the private sector is more complex, as rates vary significantly by specialty, location, and whether the service is part of a larger package. If these exams are routine, the cost might be benchmarked against standard physician consultation fees. If they are highly specialized, the cost could be higher. A 'good' rating suggests that initial analysis indicates this cost is reasonable, but a deeper dive into the specific services rendered is necessary for a definitive conclusion.

What are the key performance indicators (KPIs) for this contract, and how will performance be measured?

While the specific Key Performance Indicators (KPIs) are not detailed in the provided data, contracts of this nature typically include metrics related to timeliness of appointments, turnaround time for exam reports, accuracy and completeness of documentation, and veteran satisfaction. The VA would establish specific targets for these KPIs, and OptumServe's performance would be evaluated against them. For example, a KPI might be to schedule an exam within 30 days of referral and deliver the final report within 14 days of the exam. Failure to meet these KPIs could result in contractual remedies, such as performance improvement plans or financial penalties, depending on the contract's terms and conditions. Robust performance measurement is crucial for ensuring the quality and efficiency of veteran healthcare services.

What is the potential impact of this contract on the VA's overall capacity to conduct veteran examinations?

This $140.9 million contract for additional exams suggests that the VA is augmenting its existing capacity to meet demand, potentially due to increased veteran utilization, backlogs, or specific program requirements. The short duration (approx. 3 months) implies it's intended to address a temporary surge or a specific, time-bound need rather than a permanent increase in baseline capacity. By outsourcing these additional exams to OptumServe, the VA can potentially reduce wait times and ensure veterans receive timely assessments, which is critical for processing claims and initiating treatment. The success of this contract in impacting overall capacity will depend on the efficiency of OptumServe's service delivery and its integration with the VA's existing examination processes.

Given the firm-fixed-price structure, what are the risks associated with potential scope creep or unforeseen complexities?

The firm-fixed-price (FFP) contract structure places the risk of cost overruns on the contractor, OptumServe. However, risks related to scope creep or unforeseen complexities can still impact the VA. If the scope of 'additional exams' is not clearly defined, OptumServe might interpret it narrowly, potentially leading to disputes or the need for contract modifications if the VA requires services beyond the initial understanding. Unforeseen complexities, such as the need for highly specialized equipment or personnel not initially anticipated, could strain OptumServe's ability to deliver within the fixed price. While the FFP protects the VA from direct cost increases, it could lead to performance issues or delays if the contractor struggles to manage unexpected challenges. Clear contract language and diligent oversight 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: 4

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: $140,927,408

Exercised Options: $140,927,408

Current Obligation: $140,927,408

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10X25D0002

IDV Type: IDC

Timeline