VA awards $7.2M contract for cardiac imaging services to University of Michigan, raising value-for-money questions
Contract Overview
Contract Amount: $7,242,654 ($7.2M)
Contractor: Regents of the University of Michigan
Awarding Agency: Department of Veterans Affairs
Start Date: 2022-04-01
End Date: 2025-08-31
Contract Duration: 1,248 days
Daily Burn Rate: $5.8K/day
Competition Type: NOT AVAILABLE FOR COMPETITION
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Official Description: CONTRACTOR SHALL PROVIDE ELECTROPHYSIOLOGY AND CARDIAC IMAGING SERVICES FOR ELIGIBLE BENEFICIARIES AT THE VA ANN ARBOR HEALTHCARE SYSTEM (VAAAHS)- BASE YEAR
Place of Performance
Location: ANN ARBOR, WASHTENAW County, MICHIGAN, 48109
State: Michigan Government Spending
Plain-Language Summary
Department of Veterans Affairs obligated $7.2 million to REGENTS OF THE UNIVERSITY OF MICHIGAN for work described as: CONTRACTOR SHALL PROVIDE ELECTROPHYSIOLOGY AND CARDIAC IMAGING SERVICES FOR ELIGIBLE BENEFICIARIES AT THE VA ANN ARBOR HEALTHCARE SYSTEM (VAAAHS)- BASE YEAR Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery and potentially increasing costs. 2. The fixed-price contract structure may incentivize cost control by the contractor. 3. Performance period extends over three years, indicating a need for sustained services. 4. The services are critical for veteran healthcare, focusing on specialized cardiac procedures. 5. Geographic concentration of services in Michigan may limit broader access or competition. 6. Lack of competition raises concerns about whether the government secured the best possible value.
Value Assessment
Rating: questionable
The contract's value of $7.2 million over approximately three years for specialized cardiac imaging services warrants scrutiny due to the lack of competitive bidding. Without a benchmark against other providers or a competitive process, it is difficult to definitively assess if this represents fair market value. The fixed-price nature is a positive indicator for cost control, but the absence of competition prevents a robust comparison to similar contracts or market rates for these specialized services.
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 limits the number of potential bidders and bypasses the standard process of soliciting multiple proposals to ensure the best value. The lack of competition means there is no direct comparison of pricing or service offerings from multiple entities, which is crucial for price discovery and ensuring taxpayer funds are used efficiently.
Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as the government does not benefit from the competitive pressure that typically drives down prices. It also limits opportunities for other qualified providers to secure government contracts.
Public Impact
Eligible beneficiaries, primarily veterans, will receive essential electrophysiology and cardiac imaging services. Services are delivered at the VA Ann Arbor Healthcare System, directly impacting veterans in the region. The contract supports specialized medical care, enhancing the quality of healthcare provided to veterans. It ensures continuity of care for veterans requiring these specific diagnostic and treatment procedures. The contract may indirectly support local healthcare professionals and administrative staff at the VA facility.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition raises concerns about potential overpayment and suboptimal value for taxpayer funds.
- Sole-source awards can stifle innovation by not encouraging new providers to enter the market.
- Limited transparency in the procurement process due to non-competitive nature.
- Dependence on a single provider for critical healthcare services could pose a risk if performance issues arise.
Positive Signals
- Award to a reputable institution (University of Michigan) suggests a degree of reliability.
- Fixed-price contract can provide cost certainty for the government.
- Services are essential for veteran healthcare, addressing a critical need.
- Contract duration provides stability for service delivery.
Sector Analysis
The healthcare sector, particularly within the federal government, relies heavily on specialized service contracts to meet the needs of beneficiaries. This contract falls under medical services, specifically focusing on cardiology and diagnostic imaging. Comparable spending benchmarks are difficult to establish without competitive data, but the demand for such specialized services is consistently high within the VA system to support its large veteran population. The market for these services is typically characterized by a mix of large healthcare systems and specialized providers.
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 to a large academic institution indicates the primary focus was on specialized capabilities rather than small business participation. This means the direct economic impact on the small business ecosystem related to this specific contract is likely minimal.
Oversight & Accountability
Oversight for this contract would primarily fall under the Department of Veterans Affairs (VA) contracting officers and program managers responsible for the Ann Arbor Healthcare System. Accountability measures are typically embedded within the contract terms, including performance standards and reporting requirements. Transparency may be limited due to the sole-source nature of the award, but contract details should be publicly available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.
Related Government Programs
- VA Medical Services Contracts
- Cardiac Care Services
- Diagnostic Imaging Contracts
- Healthcare Services for Veterans
- Sole-Source Healthcare Procurements
Risk Flags
- Sole-source award
- Lack of competitive bidding
- Potential for inflated pricing
- Limited transparency in procurement
Tags
healthcare, veterans-affairs, michigan, definitive-contract, large-contract, sole-source, firm-fixed-price, medical-services, cardiac-imaging, electrophysiology
Frequently Asked Questions
What is this federal contract paying for?
Department of Veterans Affairs awarded $7.2 million to REGENTS OF THE UNIVERSITY OF MICHIGAN. CONTRACTOR SHALL PROVIDE ELECTROPHYSIOLOGY AND CARDIAC IMAGING SERVICES FOR ELIGIBLE BENEFICIARIES AT THE VA ANN ARBOR HEALTHCARE SYSTEM (VAAAHS)- BASE YEAR
Who is the contractor on this award?
The obligated recipient is REGENTS OF THE UNIVERSITY OF MICHIGAN.
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 $7.2 million.
What is the period of performance?
Start: 2022-04-01. End: 2025-08-31.
What is the track record of the Regents of the University of Michigan in providing similar electrophysiology and cardiac imaging services to federal agencies?
The Regents of the University of Michigan, as a major academic medical center, has a long-standing history of providing comprehensive healthcare services, including specialized cardiology and imaging, to various patient populations. While specific data on their track record with federal agencies for this exact service scope is not detailed here, their reputation as a leading healthcare provider suggests a strong capability. Federal agencies often contract with such institutions for specialized medical care due to their expertise, advanced technology, and capacity to handle complex cases. A deeper dive into their past performance reports and any previous federal contracts would provide a more precise assessment of their track record in this specific context.
How does the awarded amount compare to market rates for similar electrophysiology and cardiac imaging services?
Without a competitive bidding process, directly comparing this $7.2 million contract to market rates for similar services is challenging. Sole-source awards often lack the transparent pricing benchmarks that competition provides. To assess value, one would typically look at data from similar contracts awarded by other federal agencies or commercial entities, or consult industry benchmarks for specialized cardiac procedures and imaging. Given the specialized nature of electrophysiology and cardiac imaging, costs can vary significantly based on technology, expertise required, and geographic location. The absence of comparative data makes it difficult to definitively state if this represents a fair market price.
What are the primary risks associated with awarding this contract on a sole-source basis?
The primary risks associated with a sole-source award include a lack of price competition, which can lead to higher costs for the government and taxpayers. It also limits the government's ability to explore innovative solutions or potentially better service offerings from a wider pool of providers. Furthermore, reliance on a single contractor can create a vulnerability; if the contractor experiences performance issues, financial instability, or decides to terminate the contract, the government may face significant disruption in service delivery, especially for critical healthcare functions. There's also a reduced incentive for the contractor to proactively improve efficiency or reduce costs beyond what is contractually mandated.
What is the expected effectiveness of these services in improving veteran health outcomes?
The effectiveness of these electrophysiology and cardiac imaging services in improving veteran health outcomes is expected to be high, given their specialized nature. These services are crucial for diagnosing and treating complex heart conditions, such as arrhythmias and structural heart diseases. By providing timely and accurate diagnostic information and potentially guiding treatment interventions, these services can lead to better disease management, reduced morbidity, and improved quality of life for veterans. The continuity of care provided by this contract ensures that veterans have access to these vital medical procedures at the VA Ann Arbor Healthcare System, directly contributing to their overall health and well-being.
What has been the historical spending pattern for electrophysiology and cardiac imaging services at the VA Ann Arbor Healthcare System?
Historical spending data for electrophysiology and cardiac imaging services specifically at the VA Ann Arbor Healthcare System (VAAAHS) prior to this contract award is not provided in the available data. To understand historical patterns, one would need to analyze previous contract awards or internal VAAAHS expenditures for these services. This would involve looking at prior contract values, durations, and whether services were procured competitively or non-competitively. Analyzing this historical data would help determine if the current $7.2 million award represents an increase, decrease, or stable level of spending for these critical services over time.
Are there any performance metrics or service level agreements (SLAs) defined within the contract to ensure quality and timeliness?
The provided data indicates the contract is a 'DEFINITIVE CONTRACT' with a 'FIRM FIXED PRICE' payment type. While this structure implies defined deliverables and payment terms, specific details regarding performance metrics or Service Level Agreements (SLAs) are not explicitly stated in the summary data. Typically, federal contracts, especially for healthcare services, include clauses for performance standards, quality assurance, and reporting requirements. To ascertain the exact performance metrics and SLAs, the full contract document would need to be reviewed. These are crucial for ensuring the contractor meets the required standards for patient care and service delivery.
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 AVAILABLE FOR COMPETITION
Solicitation Procedures: ONLY ONE SOURCE
Solicitation ID: 36C25020R0175
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Address: 503 THOMPSON ST, ANN ARBOR, MI, 48109
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: $12,003,899
Exercised Options: $7,242,660
Current Obligation: $7,242,654
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Cost or Pricing Data: NO
Timeline
Start Date: 2022-04-01
Current End Date: 2025-08-31
Potential End Date: 2026-08-31 00:00:00
Last Modified: 2025-12-16
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