VA awards $23.3M contract for community outpatient clinics, highlighting a need for accessible veteran care

Contract Overview

Contract Amount: $23,258,796 ($23.3M)

Contractor: Valor Healthcare Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-09-28

End Date: 2024-09-27

Contract Duration: 365 days

Daily Burn Rate: $63.7K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: FIVE (5) COMMUNITY BASED OUTPATIENT CLINICS (CBOCS) - FUNDING BASE YEAR TWO

Place of Performance

Location: DALLAS, DALLAS County, TEXAS, 75254

State: Texas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $23.3 million to VALOR HEALTHCARE INC for work described as: FIVE (5) COMMUNITY BASED OUTPATIENT CLINICS (CBOCS) - FUNDING BASE YEAR TWO Key points: 1. Contract value represents a significant investment in expanding healthcare access for veterans. 2. The award was made through full and open competition, suggesting a competitive market for these services. 3. The fixed-price nature of the contract aims to control costs and provide budget certainty. 4. This contract addresses the ongoing need for specialized outpatient care centers for veterans. 5. The geographic focus on Texas indicates a concentrated effort to serve veterans in that region.

Value Assessment

Rating: good

The contract value of $23.3 million for five community-based outpatient clinics (CBOCs) appears reasonable given the scope of services. Benchmarking against similar multi-clinic awards is challenging without more specific service details, but the price per clinic is approximately $4.66 million. This falls within a typical range for establishing and operating such facilities, especially considering the fixed-price structure which often includes operational overhead. The Department of Veterans Affairs (VA) has a history of utilizing CBOCs to extend healthcare reach, and this award aligns with that strategy.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded using full and open competition, indicating that all responsible sources were permitted to submit offers. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment. A competitive process allows the government to solicit a range of proposals, potentially leading to better service offerings and more favorable pricing. The VA's decision to use full and open competition suggests confidence in the market's ability to meet its needs for CBOC services.

Taxpayer Impact: Taxpayers benefit from full and open competition through potentially lower prices and higher quality services as contractors vie for the award. This method ensures that the government is not limited to a single provider, increasing the likelihood of securing the best value for public funds.

Public Impact

Veterans in Texas will benefit from increased access to community-based outpatient healthcare services. The contract supports the delivery of essential outpatient medical care, potentially including primary care, mental health, and specialty services. The geographic impact is concentrated in Texas, aiming to improve healthcare accessibility for veterans in specific communities within the state. This award may indirectly support local healthcare workforces in Texas through employment opportunities at the contracted clinics.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics in the provided data makes it difficult to assess the contractor's track record on similar VA contracts.
The duration of the base year (one year) might indicate a need for future re-competition or contract modifications, potentially introducing transition risks.

Positive Signals

The award through full and open competition suggests the contractor was selected based on a competitive evaluation, implying a strong initial proposal.
The firm fixed-price contract type indicates a commitment to cost control and predictable budgeting for the VA.
The contract's focus on community-based outpatient clinics aligns with the VA's strategic goals to improve veteran healthcare accessibility.

Sector Analysis

The healthcare sector, particularly the provision of outpatient services, is a critical component of the U.S. healthcare system. Community-based outpatient clinics (CBOCs) play a vital role in extending healthcare access to underserved or geographically dispersed populations, such as veterans. The market for healthcare services, especially those contracted by federal agencies like the VA, is substantial. This contract fits within the broader category of healthcare facility operation and management, where providers compete on quality, cost, and accessibility. Comparable spending benchmarks would typically involve analyzing the average cost per patient or per clinic for similar services across different regions and providers.

Small Business Impact

The provided data indicates that small business participation (ss: false, sb: false) was not a specific set-aside requirement for this contract. This suggests that the primary focus was on securing the best value through full and open competition, rather than reserving a portion for small businesses. While there is no explicit subcontracting requirement mentioned, the prime contractor, Valor Healthcare Inc., may still engage small businesses as subcontractors to fulfill certain aspects of the contract. The impact on the small business ecosystem would depend on whether Valor Healthcare actively seeks out and utilizes small business partners.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs, likely through its acquisition and program management offices. Accountability measures are inherent in the firm fixed-price contract type, which obligates the contractor to deliver services within the agreed-upon price. Transparency is generally facilitated through contract award databases and public reporting mechanisms. The VA's Office of Inspector General (OIG) would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

VA Community Care Network (CCN)
VA Primary Care Services
VA Mental Health Services
Federal Healthcare Contracts

Risk Flags

Contract duration limited to base year
Lack of detailed performance history provided
Potential for increased costs if services expand beyond base year scope

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $23.3 million to VALOR HEALTHCARE INC. FIVE (5) COMMUNITY BASED OUTPATIENT CLINICS (CBOCS) - FUNDING BASE YEAR TWO

Who is the contractor on this award?

The obligated recipient is VALOR HEALTHCARE 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 $23.3 million.

What is the period of performance?

Start: 2023-09-28. End: 2024-09-27.

What is Valor Healthcare Inc.'s track record with the Department of Veterans Affairs for similar clinic operations?

Valor Healthcare Inc. has a history of contracting with the Department of Veterans Affairs for the operation of community-based outpatient clinics (CBOCs). For instance, they have been awarded contracts in various locations to provide primary care and other outpatient services to veterans. Analyzing their past performance on similar contracts would involve reviewing performance evaluations, any past performance issues or commendations, and the overall duration and success of previous VA agreements. A deeper dive would examine their ability to meet performance standards, manage costs effectively, and ensure patient satisfaction in previous engagements. Without specific contract numbers or performance reports for this particular award, a comprehensive assessment of their track record relies on broader contract history analysis.

How does the awarded amount compare to the VA's historical spending on similar CBOC contracts?

The awarded amount of $23.3 million for five CBOCs over a one-year base period (approximately $4.66 million per clinic annually) needs to be benchmarked against the VA's historical spending patterns for similar services. The VA has historically awarded numerous contracts for CBOC operations, with costs varying significantly based on location, scope of services (e.g., primary care, mental health, specialty services), and contract duration. For example, some VA CBOC contracts have ranged from a few million dollars to over ten million dollars annually per clinic, depending on the complexity and patient volume. To provide a precise comparison, one would need to analyze the average cost per clinic for contracts awarded in the same fiscal year or preceding years, controlling for geographic region and service offerings. The current award appears to be within a reasonable range for multi-clinic service contracts, but a detailed historical analysis would be required for a definitive value assessment.

What are the primary risk indicators associated with this contract award?

Several risk indicators can be identified for this contract. Firstly, the reliance on a single base year contract (365 days) suggests potential future uncertainty regarding contract renewal or recompete, which could impact the stability of operations and staffing. Secondly, while awarded through full and open competition, the specific details of the contractor's past performance and financial stability are not provided, which are crucial for assessing execution risk. Thirdly, the nature of healthcare delivery involves inherent risks related to patient care quality, regulatory compliance, and potential medical malpractice claims. Finally, the geographic concentration in Texas might expose the contract to regional healthcare market fluctuations or specific state-level regulatory changes. A thorough risk assessment would also consider the contractor's experience with the VA's specific requirements and reporting protocols.

How effective are community-based outpatient clinics (CBOCs) in improving veteran healthcare access and outcomes?

Community-based outpatient clinics (CBOCs) are a cornerstone of the VA's strategy to improve healthcare access and outcomes for veterans, particularly those living far from major medical centers. Studies and VA reports generally indicate that CBOCs successfully increase access to primary care and essential outpatient services, reducing travel burdens and wait times for many veterans. By decentralizing care, CBOCs can lead to earlier diagnosis and treatment, potentially improving health outcomes. However, the effectiveness can vary based on the scope of services offered, the quality of care provided, and the integration of CBOCs with the broader VA healthcare system. Challenges can include ensuring consistent quality across all CBOCs, managing referrals for specialized care, and maintaining adequate staffing levels. Overall, CBOCs are considered an effective mechanism for expanding the VA's reach and serving veteran populations.

What is the typical contract duration and value for VA CBOC operations?

VA contracts for community-based outpatient clinics (CBOCs) can vary significantly in duration and value. Contracts often include an initial base year with options for several subsequent option years, allowing for flexibility and continuity of care. Base year values can range from a few million dollars to over $10 million annually per clinic, depending on the services provided, patient volume, and geographic location. Longer-term contracts, potentially spanning five years or more when all options are exercised, are common to ensure stability for both the provider and the veteran patient population. The total contract value can therefore escalate into the tens or even hundreds of millions of dollars over the full contract period. The specific contract structure, including the number of option years and their associated values, is determined by the VA's projected needs and budget.

Industry Classification

NAICS: Health Care and Social Assistance › Outpatient Care Centers › All Other Outpatient Care Centers

Product/Service Code: MEDICAL SERVICES › GENERAL HEALTH CARE SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 14643 DALLAS PKWY STE 100, DALLAS, TX, 75254

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

Financial Breakdown

Contract Ceiling: $23,258,796

Exercised Options: $23,258,796

Current Obligation: $23,258,796

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C24822D0084

IDV Type: IDC

Timeline