VA awards $7M+ to Duke University Health System for neurosurgery services under a non-competitive contract

Contract Overview

Contract Amount: $7,045,368 ($7.0M)

Contractor: Duke University Health System, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-04-01

End Date: 2026-10-31

Contract Duration: 943 days

Daily Burn Rate: $7.5K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: NEUROSURGERY PHYSICIAN SERVICES

Place of Performance

Location: DURHAM, DURHAM County, NORTH CAROLINA, 27705

State: North Carolina Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $7.0 million to DUKE UNIVERSITY HEALTH SYSTEM, INC. for work described as: NEUROSURGERY PHYSICIAN SERVICES Key points: 1. Contract awarded without competition, raising questions about potential cost savings and market fairness. 2. The fixed-price contract structure aims to control costs, but the lack of competition limits benchmarking. 3. Performance duration of over two years suggests a significant, ongoing need for these specialized services. 4. The award is concentrated within North Carolina, potentially impacting veterans in other regions. 5. Specialized neurosurgery services are critical for complex medical care, indicating a high-stakes procurement.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to the lack of competitive bids. The fixed-price nature provides some cost certainty for the government. However, without comparison to other providers or historical data for similar services, it's difficult to definitively assess if the pricing represents excellent value for money. The raw dollar amount of over $7 million over 943 days indicates a substantial investment in specialized medical care.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. This approach is typically used when only one source is capable of meeting the requirement, or in cases of urgent need. The lack of competition means there was no opportunity for multiple vendors to bid, which could limit price discovery and potentially lead to higher costs than if a competitive process had been employed.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of a competitive bidding process. This could mean that funds allocated for these essential services might be higher than necessary.

Public Impact

Veterans requiring specialized neurosurgery care will benefit directly from these services. The contract ensures the availability of critical medical expertise within the VA system. Services are geographically focused within North Carolina, supporting local veteran healthcare needs. The contract supports highly skilled medical professionals, including neurosurgeons and support staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing for taxpayers.
Sole-source awards can indicate potential barriers to entry for other qualified providers.
Limited transparency into the justification for sole-source award.

Positive Signals

Ensures continuity of critical neurosurgery services for veterans.
Fixed-price contract provides cost predictability.
Award to a reputable health system like Duke University Health System suggests a focus on quality.

Sector Analysis

The healthcare sector, particularly specialized medical services, represents a significant portion of federal spending. This contract falls under the 'Colleges, Universities, and Professional Schools' NAICS code, indicating a focus on academic medical centers that often provide highly specialized care. Benchmarking against similar neurosurgery contracts within the VA or other federal agencies would be necessary for a comprehensive value assessment, but such data is not readily available for sole-source awards.

Small Business Impact

This contract does not appear to have a small business set-aside component, nor is there information suggesting significant subcontracting opportunities for small businesses. The award is directly to a large academic health system, which typically handles such specialized services in-house or through direct partnerships rather than through broad subcontracting networks.

Oversight & Accountability

Oversight of this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. The fixed-price nature of the contract provides a degree of accountability by defining the scope and cost upfront. Transparency regarding the justification for the sole-source award and ongoing performance monitoring would be key oversight mechanisms. Inspector General involvement would typically be triggered by specific allegations of fraud, waste, or abuse.

Related Government Programs

VA Medical Services Contracts
Specialized Healthcare Services
Academic Medical Center Partnerships
Neurosurgery Services

Risk Flags

Sole-source award lacks competitive pricing pressure.
Limited public data on justification for non-competition.
Potential for higher costs compared to a competed contract.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $7.0 million to DUKE UNIVERSITY HEALTH SYSTEM, INC.. NEUROSURGERY PHYSICIAN SERVICES

Who is the contractor on this award?

The obligated recipient is DUKE UNIVERSITY HEALTH SYSTEM, 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 $7.0 million.

What is the period of performance?

Start: 2024-04-01. End: 2026-10-31.

What is the specific justification provided by the VA for awarding this neurosurgery contract on a sole-source basis to Duke University Health System?

The provided data indicates the contract was 'NOT COMPETED' and is a 'DEFINITIVE CONTRACT'. While the specific justification is not detailed in the provided snippet, sole-source awards are typically justified when only one responsible source is available to meet the government's needs. This could be due to unique capabilities, specialized expertise, or urgent requirements that cannot be fulfilled through a competitive process. For neurosurgery services, it might relate to Duke's specific facilities, highly specialized surgeons, or established patient care protocols that are difficult to replicate. A formal Justification for Other Than Full and Open Competition (JOFOC) would typically be required and publicly available through sources like SAM.gov for such awards.

How does the per-diem or per-procedure cost for neurosurgery services under this contract compare to industry benchmarks or other VA contracts?

Direct comparison of per-unit costs is not feasible with the provided data. The contract is a Firm Fixed Price (FFP) award valued at $7,045,367.91 over 943 days, with no breakdown of services or units. Benchmarking would require detailed cost breakdowns, such as average cost per surgical procedure, per consultation, or per patient day, and comparison against similar contracts within the VA or the broader healthcare market. Given the sole-source nature, a direct competitive benchmark is absent. However, the VA often publishes data on its contracts, and internal benchmarks may exist, but these are not publicly detailed in this summary.

What are the potential risks associated with awarding a significant healthcare contract like this without competition?

The primary risk of awarding a significant contract without competition is the potential for paying a higher price than would be achieved through a competitive process. Without multiple bids, there is less pressure on the contractor to offer the most cost-effective solution. Additionally, a sole-source award can limit the government's visibility into the full range of available providers and innovative solutions that might be offered by other qualified entities. There's also a risk that the chosen contractor may not be the most capable or efficient, although in this case, Duke University Health System is a well-regarded institution. Transparency and robust oversight become even more critical in sole-source situations.

What is the historical spending pattern for neurosurgery services at this VA facility or within this region?

The provided data only details the current contract award. To assess historical spending patterns, one would need to access historical contract databases (e.g., FPDS, USASpending.gov) for the specific VA facility or region associated with this award (likely North Carolina, given the 'SN' field). Analyzing past awards for 'NEUROSURGERY PHYSICIAN SERVICES' or similar medical specialties would reveal trends in contract values, durations, competition levels, and awarded contractors over time. This analysis would help determine if this $7M+ award represents an increase, decrease, or consistent level of spending for these critical services.

What performance metrics or quality indicators are likely being used to evaluate Duke University Health System's delivery of neurosurgery services under this contract?

While specific performance metrics are not detailed in the provided data, healthcare contracts, especially for specialized services like neurosurgery, typically include stringent performance standards. These often encompass patient outcomes (e.g., complication rates, recovery times), adherence to clinical protocols, patient satisfaction scores, timeliness of service delivery, and availability of qualified medical personnel. The VA is known for its focus on quality of care, and contracts usually contain clauses for monitoring these indicators. Failure to meet these metrics could lead to contract modifications, penalties, or termination.

Industry Classification

NAICS: Educational Services › Colleges, Universities, and Professional Schools › Colleges, Universities, and Professional Schools

Product/Service Code: MEDICAL SERVICES › MEDICAL, DENTAL, AND SURGICAL SVCS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Duke University

Address: 2301 ERWIN RD, DURHAM, NC, 27705

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

Financial Breakdown

Contract Ceiling: $7,045,368

Exercised Options: $7,045,368

Current Obligation: $7,045,368

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline