VA awards $329M task order to QTC Medical Services for physician services in California

Contract Overview

Contract Amount: $329,333,985 ($329.3M)

Contractor: QTC Medical 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: $904.8K/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: SAN DIMAS, LOS ANGELES County, CALIFORNIA, 91773

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $329.3 million to QTC MEDICAL SERVICES INC for work described as: FY25 FUNDING TASK ORDER. Key points: 1. Contract value represents a significant investment in healthcare services for veterans. 2. The contract was awarded under full and open competition, suggesting a competitive bidding process. 3. The fixed-price nature of the contract aims to control costs and provide budget certainty. 4. This award is part of a larger framework for medical services, indicating ongoing needs. 5. The duration of the task order aligns with the fiscal year, ensuring continuous service delivery. 6. The specific North American Industry Classification System (NAICS) code points to physician-based services.

Value Assessment

Rating: good

The $329.3 million award for physician services is substantial and aligns with the Department of Veterans Affairs' mission to provide comprehensive healthcare. Benchmarking against similar large-scale medical service contracts within the VA or other federal agencies would provide further context on value for money. The firm fixed-price structure suggests an expectation of predictable costs, but actual value will depend on the efficiency of service delivery and the volume of services rendered over the contract period.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. This suggests a robust bidding environment, which typically leads to more competitive pricing and a wider selection of qualified contractors. The presence of multiple bidders, though not explicitly detailed, is implied by the nature of full and open competition, allowing the agency to select the offer that best meets its requirements.

Taxpayer Impact: A competitive bidding process generally benefits taxpayers by driving down prices and ensuring the government receives the best possible value for its investment in essential services.

Public Impact

Veterans in California will benefit from continued access to physician services. The contract ensures the delivery of medical services, potentially including examinations, consultations, and diagnostic support. The geographic impact is focused on California, serving the veteran population within that state. The contract supports the healthcare workforce by providing employment opportunities for physicians and administrative staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if service requirements are not clearly defined and managed.
Dependence on QTC Medical Services for timely and quality care delivery.
Risk of price increases in future contract renewals if competition diminishes.

Positive Signals

Awarded under full and open competition, indicating a competitive market.
Firm fixed-price contract provides cost certainty for the government.
Long-term relationship with the VA suggests established performance and understanding of needs.
Focus on a specific geographic region (California) allows for tailored service delivery.

Sector Analysis

The healthcare services sector is a significant area of federal spending, particularly for the Department of Veterans Affairs. This contract falls under the medical services sub-sector, which includes a wide range of clinical and diagnostic support. The market for these services is competitive, with numerous providers vying for government contracts. The VA's spending in this area is driven by its commitment to providing healthcare to eligible veterans, often through a mix of government-run facilities and contracted services.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). While QTC Medical Services Inc. is a large business, the contract does not preclude subcontracting opportunities. Analysis of the subcontracting plan, if available, would reveal the extent to which small businesses may participate in fulfilling the contract requirements, contributing to the broader small business ecosystem.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs contracting officers and program managers. Accountability measures are embedded in the firm fixed-price structure and performance expectations outlined in the task order. Transparency is generally maintained through contract databases like FPDS, which record award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

VA Medical Care Programs
TRICARE Medical Services
Federal Occupational Health Services
Defense Health Agency Contracts

Risk Flags

Potential for performance issues impacting veteran care.
Risk of cost overruns if scope is not tightly managed.
Dependence on contractor's ability to maintain qualified staffing levels.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $329.3 million to QTC MEDICAL SERVICES INC. FY25 FUNDING TASK ORDER.

Who is the contractor on this award?

The obligated recipient is QTC MEDICAL 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 $329.3 million.

What is the period of performance?

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

What is QTC Medical Services Inc.'s track record with the Department of Veterans Affairs?

QTC Medical Services Inc. has a significant history of contracting with the Department of Veterans Affairs, primarily for providing medical examination and diagnostic services to veterans. They are a major provider of these services, often supporting the VA's disability claims process. Their extensive work with the VA suggests a deep understanding of the agency's requirements and operational procedures. While specific performance metrics for individual contracts are not always publicly detailed, their continued awards indicate a generally satisfactory performance history. However, like any large contractor, there may have been instances of performance issues or contract disputes that would be documented in agency performance evaluations or IG reports.

How does the value of this task order compare to previous VA contracts for similar services?

The $329.3 million value of this FY25 task order is substantial and reflects a significant commitment to physician services in California. To benchmark its value, one would compare it to prior task orders or contracts awarded by the VA to QTC Medical Services or other contractors for similar services in the same or comparable geographic regions. For instance, examining the total spending on physician services in California over the past several fiscal years would provide context. If previous annual spending in this category was in the hundreds of millions, this award might represent a continuation or slight increase. Conversely, if prior spending was significantly lower, this award could indicate an expansion of services or a change in contracting strategy.

What are the primary risks associated with this contract for the VA?

The primary risks for the VA with this contract include potential issues with service quality and timeliness, especially given the large volume of services expected. Ensuring that QTC Medical Services maintains a sufficient network of qualified physicians and administrative staff across California is crucial. Another risk is contractor performance variability; even with a fixed-price contract, inefficiencies or unexpected challenges could impact the effective delivery of care. Furthermore, reliance on a single large awardee for a significant portion of services in a large state like California could pose a risk if the contractor faces operational disruptions. Finally, ensuring accurate and timely billing and adherence to all VA regulations and protocols is an ongoing oversight risk.

How effective is the firm fixed-price contract type in managing costs for physician services?

The firm fixed-price (FFP) contract type is generally considered effective for managing costs when the scope of work is well-defined and the risks of cost overruns are relatively low. For physician services, FFP can provide budget certainty for the VA, as the contractor assumes the risk of cost overruns. This structure incentivizes the contractor to be efficient and control their own costs. However, if the scope of services is highly variable or unforeseen complexities arise, an FFP contract might lead the contractor to cut corners on quality to maintain profitability, or conversely, lead to disputes if the VA believes they are not receiving adequate service for the price. For routine services like medical examinations, FFP is often a suitable choice.

What is the historical spending trend for physician services by the VA in California?

Analyzing historical spending trends for physician services by the VA in California would require accessing detailed contract databases over multiple fiscal years. Generally, the VA's spending on healthcare services, including physician services, has been on an upward trend due to increasing veteran populations, aging demographics, and expanded healthcare benefits. For California, a state with a large veteran population, spending on medical services is consistently high. This $329.3 million task order for FY25 should be viewed in the context of this broader trend. If previous years saw similar or lower figures for physician services in California, it indicates either sustained demand or a potential increase in the scope or cost of services being procured.

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: Leidos Holdings, Inc.

Address: 924 OVERLAND CT, SAN DIMAS, CA, 91773

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $329,333,985

Exercised Options: $329,333,985

Current Obligation: $329,333,985

Actual Outlays: $313,060,838

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10X22D0007

IDV Type: IDC

Timeline