VA awards $119M clinical lab testing contract to University of Kentucky for 3 years

Contract Overview

Contract Amount: $119,141 ($119.1K)

Contractor: University of Kentucky

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-07-01

End Date: 2027-06-30

Contract Duration: 364 days

Daily Burn Rate: $327/day

Competition Type: NOT COMPETED UNDER SAP

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: CLINICAL LAB TESTING SERVICES

Place of Performance

Location: LOUISVILLE, JEFFERSON County, KENTUCKY, 40206

State: Kentucky Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $119,140.92 to UNIVERSITY OF KENTUCKY for work described as: CLINICAL LAB TESTING SERVICES Key points: 1. Contract awarded on a firm-fixed-price basis, indicating predictable costs for the government. 2. The contract was not competed under simplified acquisition procedures, suggesting a potential lack of broad market engagement. 3. Performance period extends over one year, with options for future renewals. 4. The awardee, University of Kentucky, is a single entity, raising questions about the breadth of competition. 5. The contract falls under the 'Testing Laboratories and Services' NAICS code, a common category for medical support services. 6. Geographic focus is Kentucky, potentially limiting broader access to specialized services.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the scope of services and comparable contracts. The firm-fixed-price structure provides cost certainty. However, the lack of competition raises concerns about whether the University of Kentucky's pricing reflects the best possible value for the government compared to a more competitive scenario. Further analysis would require understanding the specific types of clinical lab tests and their associated market rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as 'NOT COMPETED UNDER SAP,' which typically implies a sole-source or limited competition award. The absence of a competitive bidding process means that the University of Kentucky was likely the only or primary entity considered for this award. This limits the government's ability to leverage market forces to drive down prices and ensure the most innovative solutions are considered.

Taxpayer Impact: The lack of competition means taxpayers may not be receiving the most cost-effective pricing available in the market for these essential clinical laboratory services.

Public Impact

Veterans in Kentucky will benefit from access to essential clinical laboratory testing services. The contract supports the Department of Veterans Affairs' mission to provide comprehensive healthcare to its beneficiaries. The services delivered are critical for diagnosis, treatment monitoring, and overall patient care within the VA system. The geographic impact is concentrated within Kentucky, serving VA facilities and potentially affiliated healthcare providers in the state.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing and reduced innovation.
Limited transparency into the selection process due to sole-source award.
Potential for vendor lock-in if alternative providers are not actively sought.
Geographic concentration might not serve all veteran needs efficiently if travel is required.

Positive Signals

Award to a known entity (University of Kentucky) may indicate established relationship and understanding of VA needs.
Firm-fixed-price contract provides cost predictability.
Contract duration allows for stable service provision.

Sector Analysis

Clinical laboratory testing services are a critical component of the healthcare sector, supporting diagnosis and treatment across various medical disciplines. The market for these services is substantial, encompassing both public and private providers. This contract fits within the broader category of healthcare support services, where the VA procures a wide range of medical supplies and services to fulfill its healthcare mission. Benchmarking would involve comparing pricing and service scope against other VA contracts for similar laboratory services or against commercial healthcare providers.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb: false'. There is no explicit mention of subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal, and opportunities for small businesses to participate in delivering these services are not apparent from the provided data.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures are inherent in the firm-fixed-price contract structure, requiring the contractor to deliver specified services. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

VA Medical Services Contracts
Clinical Laboratory Services
Healthcare Support Services
Federal Medical Contracts

Risk Flags

Lack of Competition
Potential for Suboptimal Pricing
Limited Transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $119,140.92 to UNIVERSITY OF KENTUCKY. CLINICAL LAB TESTING SERVICES

Who is the contractor on this award?

The obligated recipient is UNIVERSITY OF KENTUCKY.

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 $119,140.92.

What is the period of performance?

Start: 2026-07-01. End: 2027-06-30.

What is the historical spending pattern for clinical laboratory testing services by the Department of Veterans Affairs?

Analyzing historical spending patterns for clinical laboratory testing services by the VA is crucial for understanding trends, identifying potential cost efficiencies, and assessing the overall investment in this area. While specific historical data for this exact contract is not provided, the VA generally allocates significant resources to healthcare services, including laboratory testing, to support its vast network of medical centers and clinics. Past spending would likely show a consistent need for these services, potentially with fluctuations based on healthcare demand, technological advancements, and policy changes. Examining prior contract awards, their values, durations, and the contractors involved would reveal whether the University of Kentucky has been a long-term provider or if the VA has historically utilized a more diverse range of suppliers. Understanding these patterns can help contextualize the current $119 million award and assess if it aligns with previous investment levels or represents a significant shift in procurement strategy.

How does the University of Kentucky's pricing for these services compare to other federal contracts for similar laboratory testing?

Directly comparing the University of Kentucky's pricing to other federal contracts for similar laboratory testing is challenging without detailed service scope and pricing breakdowns. The provided data indicates a firm-fixed-price contract valued at approximately $119 million over three years. However, the specific types of tests, volume, turnaround times, and geographic coverage are not detailed. To perform a robust comparison, one would need to identify contracts with comparable service offerings, ideally from the VA or other agencies like the Department of Defense, and analyze their per-unit costs or overall contract values relative to the scope of work. Given this contract was not competed under simplified acquisition, it suggests a potentially limited market analysis was conducted, which could impact the competitiveness of the pricing. A thorough benchmark would involve gathering pricing data for a standardized set of common laboratory tests and comparing the University of Kentucky's rates against those benchmarks and against prices awarded through competitive solicitations.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The provided data does not specify the Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this clinical laboratory testing services contract. Typically, such contracts would include detailed metrics to ensure the quality, timeliness, and accuracy of the laboratory services provided. Common KPIs for laboratory testing might include turnaround times for specific tests (e.g., STAT results within X hours, routine results within Y days), accuracy rates (e.g., percentage of results within acceptable error margins), specimen rejection rates, and customer satisfaction scores from the VA facilities utilizing the services. SLAs would define the expected performance levels for these KPIs and outline remedies or penalties if the contractor fails to meet them. Without these details, it is difficult to assess the contractor's performance obligations and the mechanisms in place to ensure the VA receives high-quality, reliable laboratory services.

What is the track record of the University of Kentucky in performing similar federal contracts?

The University of Kentucky's track record in performing similar federal contracts is a critical factor in assessing the risk and potential success of this $119 million award. As an academic medical center, it likely has extensive experience in providing clinical laboratory services within its own healthcare system and potentially to other entities. However, its experience specifically with large-scale federal contracts, particularly with the Department of Veterans Affairs, needs to be evaluated. This would involve reviewing past performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), any history of contract disputes, timely delivery of services, and adherence to quality standards on previous government engagements. A strong track record with the VA or similar agencies would indicate a lower performance risk, while a history of issues could signal potential challenges in meeting the requirements of this new, substantial contract.

What is the potential impact of this contract on the broader healthcare services market in Kentucky?

This $119 million contract awarded to the University of Kentucky for clinical laboratory testing services could have a notable impact on the healthcare services market within the state. By consolidating a significant portion of the VA's laboratory testing needs with a single provider, it may reduce opportunities for other commercial laboratories in Kentucky to compete for this federal business. This could potentially concentrate market share and influence pricing dynamics among local providers. However, it could also lead to increased operational capacity and expertise at the University of Kentucky, potentially benefiting the broader healthcare ecosystem through knowledge sharing or specialized service development. The extent of the impact will depend on the specific services covered, the volume of testing, and whether the University of Kentucky subcontracts any portion of the work to other local entities.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Architectural, Engineering, and Related Services › Testing Laboratories and Services

Product/Service Code: MEDICAL SERVICES › LABORATORY TESTING 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: 800 ROSE ST, LEXINGTON, KY, 40536

Business Categories: Category Business, Educational Institution, Government, Higher Education, U.S. National Government, Not Designated a Small Business, Higher Education (Public), U.S. Regional/State Government

Financial Breakdown

Contract Ceiling: $119,141

Exercised Options: $119,141

Current Obligation: $119,141

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C24925D0074

IDV Type: IDC

Timeline