VA awards $2.9M contract for Dyerburg CBOC services to Sterling Medical Associates, Inc

Contract Overview

Contract Amount: $2,945,676 ($2.9M)

Contractor: Sterling Medical Associates, Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-10-01

End Date: 2025-09-30

Contract Duration: 364 days

Daily Burn Rate: $8.1K/day

Competition Type: NOT COMPETED UNDER SAP

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: INTERIM DYERSBURG CBOC SERVICES

Place of Performance

Location: DYERSBURG, DYER County, TENNESSEE, 38024

State: Tennessee Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.9 million to STERLING MEDICAL ASSOCIATES, INC for work described as: INTERIM DYERSBURG CBOC SERVICES Key points: 1. Contract awarded on a firm-fixed-price basis, indicating predictable costs for the government. 2. The contract duration is one year, suggesting a need for ongoing outpatient care services. 3. Awarded by the Department of Veterans Affairs, aligning with healthcare services for veterans. 4. The North American Industry Classification System (NAICS) code 621498 points to outpatient care centers. 5. This contract was not competed under the Simplified Acquisition Procedures (SAP), raising questions about competition. 6. The contract is a delivery order, implying it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract or a similar vehicle.

Value Assessment

Rating: fair

The contract value of $2.9 million for one year of outpatient care services at the Dyerburg CBOC appears to be within a reasonable range for such services. However, without specific benchmarks for per-patient costs or a comparison to similar contracts in the region or for similar facilities, a definitive value-for-money assessment is challenging. The firm-fixed-price structure helps control costs, but the lack of competition could potentially lead to suboptimal pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'NOT COMPETED UNDER SAP,' which typically indicates a sole-source or limited competition award. The absence of a competitive bidding process means that multiple vendors were not given the opportunity to propose their services. This lack of competition limits the government's ability to leverage market forces to secure the best possible pricing and service terms.

Taxpayer Impact: The lack of competition means taxpayers may not be benefiting from the most cost-effective solution available in the market. Without competitive bids, there's a risk that the awarded price is higher than it would have been under a fully open competition.

Public Impact

Veterans in the Dyerburg, Tennessee area will benefit from continued access to outpatient care services. The contract ensures the provision of essential healthcare services, including primary care and potentially specialized outpatient treatments. The geographic impact is localized to Dyerburg and surrounding communities within the service area of the CBOC. The contract supports healthcare professionals and administrative staff employed by Sterling Medical Associates, Inc. at the facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Absence of competitive bidding process limits transparency in pricing.
Potential for reduced service innovation due to lack of market pressure.

Positive Signals

Firm-fixed-price contract provides cost certainty.
Contract ensures continuity of care for veterans.
Award to an established provider may indicate reliable service delivery.

Sector Analysis

The healthcare services sector, particularly outpatient care centers, is a significant area of federal spending, especially for the Department of Veterans Affairs. This contract falls within the broader category of healthcare services, which includes a wide range of medical facilities and providers. Benchmarking this contract's value would ideally involve comparing its per-patient cost and scope of services to other VA community-based outpatient clinics (CBOCs) or similar private sector facilities, considering regional economic factors.

Small Business Impact

Information regarding small business set-asides or subcontracting plans was not provided for this contract. As it was not competed under SAP and details on competition are limited, it is unclear if small businesses had an opportunity to participate in the bidding process or if subcontracting opportunities were mandated.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures are typically embedded within the contract terms, including performance standards and reporting requirements. Transparency is limited by the non-competitive nature of the award; however, contract award data is generally made public through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

VA Community Care Network (CCN)
VA Medical Services Contracts
Outpatient Healthcare Services

Risk Flags

Lack of Competition
Potential for Overpricing
Limited Transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.9 million to STERLING MEDICAL ASSOCIATES, INC. INTERIM DYERSBURG CBOC SERVICES

Who is the contractor on this award?

The obligated recipient is STERLING MEDICAL ASSOCIATES, 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 $2.9 million.

What is the period of performance?

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

What is the historical spending pattern for Dyerburg CBOC services, and how does this award compare?

To assess historical spending patterns for the Dyerburg CBOC services, one would need to examine past contract awards for this specific facility or for similar services provided at this location. Without access to that historical data, it's difficult to definitively state how this $2.9 million award compares. However, if previous contracts were competed and awarded at lower prices, or if the scope of services was similar, this award might represent an increase in cost. Conversely, if the previous contracts were for a shorter duration or smaller scope, this award could reflect an expansion of services or inflation adjustments. A thorough analysis would require reviewing prior contract values, durations, and the specific services rendered to establish a baseline for comparison.

What specific outpatient care services are included under this contract?

The contract specifies 'INTERIM DYERSBURG CBOC SERVICES' and falls under NAICS code 621498, 'All Other Outpatient Care Centers.' This suggests a broad range of outpatient medical services. Typically, CBOCs provide primary care, routine check-ups, management of chronic conditions, basic diagnostic services (like lab work and X-rays), and potentially referrals to specialists. The 'interim' nature of the contract might imply it's a temporary solution while a more permanent arrangement is sought, or it could refer to the period covered. A detailed breakdown of services would be found in the contract's Statement of Work (SOW), which outlines the specific medical procedures, staffing levels, operating hours, and any specialized care to be provided.

What are the potential risks associated with a sole-source award for essential healthcare services?

A sole-source award for essential healthcare services like those provided by the Dyerburg CBOC carries several potential risks. Primarily, the lack of competition can lead to inflated pricing, meaning taxpayers may be overpaying for the services rendered. Without competitive pressure, the contractor may have less incentive to innovate or improve service quality beyond the minimum contractual requirements. Furthermore, a sole-source award can limit the government's flexibility; if the current contractor underperforms, transitioning to a new provider can be complex and costly, especially for essential services where continuity of care is paramount for beneficiaries. There's also a risk of vendor lock-in, where the government becomes dependent on a single provider.

How does the firm-fixed-price contract type mitigate financial risk for the VA?

A firm-fixed-price (FFP) contract type is generally advantageous for the government, like the VA, as it shifts most of the financial risk to the contractor. Under an FFP agreement, the price is set and not subject to adjustment based on the contractor's cost experience. This means the VA knows exactly how much the services will cost for the duration of the contract, allowing for more predictable budgeting and financial planning. The contractor is responsible for managing their costs to ensure profitability within the agreed-upon price. This structure incentivizes the contractor to be efficient and control their expenses, as any cost overruns are absorbed by them, not the government.

What is the significance of the contract being a 'Delivery Order'?

The designation of this award as a 'Delivery Order' typically indicates that it is being issued under a pre-existing contract vehicle, such as an Indefinite Delivery/Indefinite Quantity (IDIQ) contract, a blanket purchase agreement (BPA), or another type of master contract. This means that the underlying terms, conditions, and potentially some pricing structures were established previously, possibly through a competitive process for the master contract. A delivery order then specifies the exact quantity, delivery schedule, and sometimes price for a particular order placed against that master agreement. For this specific contract, it suggests that Sterling Medical Associates, Inc. may have already held or been awarded a broader contract with the VA, and this delivery order represents a specific task or requirement for the Dyerburg CBOC.

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: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 411 OAK ST, CINCINNATI, OH, 45219

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

Financial Breakdown

Contract Ceiling: $2,945,676

Exercised Options: $2,945,676

Current Obligation: $2,945,676

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C24925D0022

IDV Type: IDC

Timeline