VA awards $375K for laboratory testing services to Quest Diagnostics, highlighting a 364-day contract duration

Contract Overview

Contract Amount: $375,000 ($375.0K)

Contractor: Quest Diagnostics Incorporated

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-06-01

End Date: 2027-05-31

Contract Duration: 364 days

Daily Burn Rate: $1.0K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: KANSAS CITY OY4 TASK ORDER - REFERRAL LABORATORY TESTING SERVICES FOR VISN 15

Place of Performance

Location: KANSAS CITY, JACKSON County, MISSOURI, 64128

State: Missouri Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $375,000 to QUEST DIAGNOSTICS INCORPORATED for work described as: KANSAS CITY OY4 TASK ORDER - REFERRAL LABORATORY TESTING SERVICES FOR VISN 15 Key points: 1. The contract value of $375,000 for a 364-day period suggests a daily rate of approximately $1,030. 2. Quest Diagnostics, a large established provider, secured this task order under full and open competition. 3. The fixed-price contract type aims to control costs and provide predictable spending. 4. This award falls within the Medical Laboratories NAICS code, indicating specialized diagnostic services. 5. The contract's duration is relatively short, suggesting potential for re-competition or task order adjustments. 6. The Department of Veterans Affairs is the primary agency, indicating a focus on healthcare services for veterans.

Value Assessment

Rating: good

The contract value of $375,000 over 364 days results in a daily rate of approximately $1,030. This rate appears reasonable for specialized laboratory testing services, especially considering the potential complexity and turnaround times required for diagnostic work. Benchmarking against similar contracts for referral laboratory testing services would provide a more precise assessment, but the fixed-price nature suggests an effort to manage costs effectively. Without specific details on the types of tests or volume, a definitive value-for-money judgment is challenging, but the established provider and competitive award suggest a fair market price.

Cost Per Unit: $1,030 per day

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple qualified vendors had the opportunity to bid. The specific number of bidders is not provided, but the 'full and open' designation suggests a robust competitive process. This level of competition is generally favorable for price discovery and ensures that the government receives offers from a wide range of potential providers, leading to potentially better pricing and service options.

Taxpayer Impact: Full and open competition typically benefits taxpayers by driving down prices through market forces and encouraging innovation among bidders, ensuring the government secures services at the most competitive rates available.

Public Impact

Veterans in VISN 15 will benefit from access to essential referral laboratory testing services. The contract supports the delivery of critical diagnostic capabilities to aid in patient care and treatment. Services are geographically focused within the VISN 15 network, primarily serving Missouri. The contract supports the operational needs of the VA healthcare system, indirectly impacting healthcare professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased costs if the scope of 'referral laboratory testing' is broader than anticipated.
Dependence on a single large provider could limit future flexibility or innovation if not managed proactively.
The specific performance metrics and quality assurance measures are not detailed, posing a potential risk to service quality.

Positive Signals

Award to a well-established provider like Quest Diagnostics suggests a high likelihood of reliable service delivery.
The fixed-price contract structure provides cost certainty for the VA.
Full and open competition indicates a healthy market and potential for competitive pricing.

Sector Analysis

The healthcare sector, specifically clinical laboratory services, is a critical component of the broader healthcare industry. This contract falls under NAICS code 621511 (Medical Laboratories). The market for laboratory testing is substantial, driven by increasing demand for diagnostics across all healthcare settings. Large providers like Quest Diagnostics dominate a significant portion of this market, offering a wide range of tests. This contract represents a small but essential piece of the VA's overall healthcare procurement strategy, ensuring access to specialized diagnostic services not necessarily available in-house.

Small Business Impact

This contract does not appear to have a small business set-aside. Quest Diagnostics is a large corporation, and there is no indication of subcontracting requirements for small businesses within the provided data. Therefore, the direct impact on the small business ecosystem for this specific award is likely minimal. Future task orders or larger contracts within this service area might include small business participation goals, but this particular award does not.

Oversight & Accountability

The Department of Veterans Affairs has established oversight mechanisms for contracts, including this task order. Performance will likely be monitored by VA contracting officers and program managers to ensure compliance with the terms and conditions of the firm-fixed-price contract. While specific Inspector General (IG) involvement is not detailed for this task order, the VA OIG has broad jurisdiction over VA programs and contracts, and could investigate any reported issues of fraud, waste, or abuse. Transparency is generally maintained through contract databases like FPDS.

Related Government Programs

VA VISN 15 Laboratory Services
Medical Diagnostic Testing Contracts
Federal Healthcare Services Procurement
Quest Diagnostics Federal Contracts

Risk Flags

Potential for service disruption if contractor faces internal issues.
Risk of reduced negotiation leverage in future contract periods due to single-provider reliance.
Lack of direct competition may limit innovation or adoption of new methodologies.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $375,000 to QUEST DIAGNOSTICS INCORPORATED. KANSAS CITY OY4 TASK ORDER - REFERRAL LABORATORY TESTING SERVICES FOR VISN 15

Who is the contractor on this award?

The obligated recipient is QUEST DIAGNOSTICS INCORPORATED.

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 $375,000.

What is the period of performance?

Start: 2026-06-01. End: 2027-05-31.

What is the historical spending pattern of the Department of Veterans Affairs on referral laboratory testing services?

The Department of Veterans Affairs (VA) consistently allocates significant funds towards laboratory services to support its vast network of healthcare facilities and veteran patient care. Historical data indicates a substantial and often increasing trend in spending on diagnostic and laboratory testing. This spending is driven by the growing veteran population, advancements in medical technology leading to more complex testing, and the VA's commitment to providing comprehensive healthcare. While specific figures fluctuate year-to-year based on agency priorities, budget allocations, and evolving healthcare needs, laboratory services represent a core operational expenditure. Analyzing past VA budgets and contract awards for similar services reveals a sustained investment, often in the hundreds of millions of dollars annually across the entire VA system, underscoring the critical nature of these services.

How does the awarded price per day compare to industry benchmarks for similar laboratory testing services?

The awarded price of approximately $1,030 per day for referral laboratory testing services provides a starting point for comparison. Industry benchmarks for laboratory services can vary widely depending on the specific tests performed, the volume, the geographic location, and the provider's overhead. For routine or high-volume tests, the daily rate might seem high. However, 'referral laboratory testing' often implies specialized, less common, or complex assays that require advanced equipment and expertise, which command higher prices. Large national providers like Quest Diagnostics often benefit from economies of scale, which can help moderate costs. A precise benchmark would require detailed knowledge of the specific tests included in this contract and their associated market rates. Without that granularity, the $1,030 daily rate appears within a plausible range for specialized diagnostic services, especially when considering the fixed-price nature aimed at cost control.

What are the potential risks associated with awarding a contract for essential laboratory services to a single provider like Quest Diagnostics?

Awarding essential services like referral laboratory testing to a single provider, even a large and reputable one like Quest Diagnostics, carries inherent risks. A primary concern is the potential for over-reliance and reduced leverage in future negotiations; if Quest Diagnostics becomes the sole or primary provider, their pricing power may increase in subsequent contract periods. There's also a risk of service disruption if the contractor faces internal issues, such as staffing shortages, equipment failures, or supply chain disruptions, which could directly impact patient care within the VA network. Furthermore, a lack of direct competition might stifle innovation or the adoption of more cost-effective methodologies that alternative providers might offer. While Quest Diagnostics is a capable provider, the VA must maintain robust performance monitoring and contingency planning to mitigate these risks.

What is Quest Diagnostics' track record with federal government contracts, particularly with the Department of Veterans Affairs?

Quest Diagnostics has a significant and long-standing track record of serving the federal government, including extensive work with the Department of Veterans Affairs (VA) and other agencies like the Department of Defense and Health and Human Services. They are a major provider of clinical laboratory services and have secured numerous contracts and task orders over the years for a wide array of testing needs. Their experience includes providing routine and specialized diagnostic testing, drug testing, and other related laboratory services. Historically, their performance with the VA has generally been positive, reflecting their established infrastructure and expertise. However, like any large contractor, there may have been instances of performance issues or contract disputes on specific awards, which are typical in the complex landscape of federal procurement. Overall, their extensive federal contracting history suggests a capacity to meet government requirements.

How does the duration of this contract (364 days) impact the overall value and flexibility for the VA?

The 364-day duration of this contract is a common strategy in federal contracting, often used to align with fiscal year cycles or to allow for more frequent re-evaluation of needs and pricing without committing to a longer-term, potentially less flexible agreement. For the VA, this duration provides a balance: it ensures continuity of essential laboratory services for a defined period while retaining flexibility. A shorter duration like this allows the VA to adapt more quickly to changes in technology, patient demand, or budget constraints. It also provides opportunities to re-compete the service, potentially leveraging new market entrants or revised pricing structures. While it necessitates more frequent procurement actions, it generally offers better value by preventing long-term lock-in and ensuring services remain aligned with current requirements and market conditions.

Industry Classification

NAICS: Health Care and Social Assistance › Medical and Diagnostic Laboratories › Medical Laboratories

Product/Service Code: MEDICAL SERVICES › LABORATORY TESTING 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: 500 PLAZA DR, SECAUCUS, NJ, 07094

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

Financial Breakdown

Contract Ceiling: $375,000

Exercised Options: $375,000

Current Obligation: $375,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C25522D0028

IDV Type: IDC

Timeline