VA awards $2.5M for Lab Reference Tests to Quest Diagnostics, highlighting full and open competition

Contract Overview

Contract Amount: $2,504,872 ($2.5M)

Contractor: Quest Diagnostics Incorporated

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-10-01

End Date: 2025-09-30

Contract Duration: 364 days

Daily Burn Rate: $6.9K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: LAB REFERENCE TESTS

Place of Performance

Location: SECAUCUS, HUDSON County, NEW JERSEY, 07094

State: New Jersey Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.5 million to QUEST DIAGNOSTICS INCORPORATED for work described as: LAB REFERENCE TESTS Key points: 1. Spending on medical laboratories (NAICS 621511) is substantial, with this contract representing a portion of that. 2. Quest Diagnostics is a major player in the diagnostics market, indicating a competitive landscape. 3. The contract's value is moderate, but the duration and fixed-price nature suggest predictable costs. 4. Potential risks include reliance on a single provider for specific tests, though competition was full and open.

Value Assessment

Rating: good

The contract value of $2.5M over one year appears reasonable given the service category. Benchmarking against similar large-scale lab testing contracts would provide further validation, but the firm fixed-price structure suggests cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. This method generally promotes competitive pricing and ensures the government receives fair market value.

Taxpayer Impact: The competitive bidding process is expected to yield a fair price, minimizing unnecessary taxpayer expenditure for essential laboratory services.

Public Impact

Veterans will continue to receive access to essential diagnostic laboratory services. The award supports a significant private sector healthcare provider, contributing to the broader healthcare economy. Transparency in the procurement process is maintained through the use of full and open competition.

Waste & Efficiency Indicators

Waste Risk Score: 68 / 10

Warning Flags

Potential for vendor lock-in if specific tests become highly specialized.
Geographic concentration in New Jersey might limit accessibility for some VA facilities if not managed.
Reliance on a single awardee for a broad range of tests.

Positive Signals

Awarded under full and open competition, ensuring market-tested pricing.
Firm fixed-price contract provides cost certainty.
Contract duration is standard for this type of service.
Clear identification of the service provided (Medical Laboratories).

Sector Analysis

The healthcare sector, particularly diagnostic services, is a significant area of federal spending. Benchmarks for medical laboratory services vary widely based on test complexity and volume, but this contract appears to be a standard procurement for a large service provider.

Small Business Impact

While this contract was awarded to a large corporation, Quest Diagnostics, the procurement process itself (full and open competition) theoretically allows for small business participation as subcontractors or through joint ventures, though not explicitly stated in the provided data.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract to ensure the quality and timeliness of laboratory services provided. The use of a BPA Call suggests an existing framework agreement, which may streamline oversight.

Related Government Programs

Medical Laboratories
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Potential for price creep in future contract renewals if competition diminishes.
Dependence on a large, established provider may limit flexibility for adopting novel diagnostic technologies.
Geographic limitations of the awardee's facilities could impact service delivery in remote VA locations.
Contract value is significant, warranting close monitoring of performance and cost.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.5 million to QUEST DIAGNOSTICS INCORPORATED. LAB REFERENCE TESTS

Who is the contractor on this award?

The obligated recipient is QUEST DIAGNOSTICS INCORPORATED.

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 $2.5 million.

What is the period of performance?

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

What is the average cost per test under this contract, and how does it compare to industry averages for similar volume contracts?

The provided data does not include a per-test cost breakdown. To determine the average cost per test, the total contract value ($2,504,872.38) would need to be divided by the estimated number of tests to be performed. A comparison to industry averages would require access to detailed pricing information and volume data from Quest Diagnostics and benchmark data from similar government or commercial contracts.

What specific types of laboratory tests are covered under this contract, and are there any single-source dependencies for critical tests?

The contract is categorized under NAICS code 621511 (Medical Laboratories), indicating a broad range of diagnostic tests. While the awardee is Quest Diagnostics, the 'full and open competition' suggests that the VA sought competitive bids for these services. Specific dependencies on single-source tests would need further investigation into the contract's detailed scope of work and any potential sole-source justifications for highly specialized assays.

How does the VA ensure the quality and turnaround time of these reference tests, given the potential scale of services provided by Quest Diagnostics?

The VA typically ensures quality and timeliness through performance work statements (PWS) within the contract, which outline specific requirements for test accuracy, reporting, and turnaround times. Regular performance reviews, quality assurance checks, and potentially site visits to the performing laboratories are standard oversight mechanisms. The BPA Call structure may also include specific service level agreements (SLAs) that are monitored.

Industry Classification

NAICS: Health Care and Social Assistance › Medical and Diagnostic Laboratories › Medical Laboratories

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 500 PLAZA DR, SECAUCUS, NJ, 07094

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

Financial Breakdown

Contract Ceiling: $2,504,872

Exercised Options: $2,504,872

Current Obligation: $2,504,872

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C24519A0049

IDV Type: BPA

Timeline