VA awards $5.5M for reference lab testing to Laboratory Corporation of America, a sole-source contract

Contract Overview

Contract Amount: $5,535,962 ($5.5M)

Contractor: Laboratory Corporation of America

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-10-01

End Date: 2024-09-30

Contract Duration: 365 days

Daily Burn Rate: $15.2K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: REFERENCE LAB TESTING FOR VISN 19

Place of Performance

Location: OKLAHOMA CITY, OKLAHOMA County, OKLAHOMA, 73104

State: Oklahoma Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $5.5 million to LABORATORY CORPORATION OF AMERICA for work described as: REFERENCE LAB TESTING FOR VISN 19 Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract is a BPA Call, indicating it's part of a larger agreement. 3. The contract duration is one year, suggesting a need for ongoing services. 4. The firm-fixed-price structure aims to control costs for the government. 5. The service falls under Medical Laboratories, a critical healthcare support function. 6. The contractor, Laboratory Corporation of America, is a major player in the lab testing market.

Value Assessment

Rating: fair

Benchmarking the value of this specific BPA call is challenging without knowing the underlying BPA's terms and pricing. However, the total award of $5.5 million for one year of reference laboratory testing suggests a significant volume of services. Given the sole-source nature, direct comparison to competitive bids is not possible. The firm-fixed-price contract type provides cost certainty, but the absence of competition may have led to a higher price than if multiple vendors had bid.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the Simplified Acquisition Procedures (SAP) and is listed as 'NOT COMPETED UNDER SAP'. The data indicates it was awarded as a sole-source BPA Call. This means that the Department of Veterans Affairs (VA) likely determined that only one source, Laboratory Corporation of America, could fulfill the requirement, or that it was advantageous to award it without competition under specific circumstances. The lack of competition limits the VA's ability to leverage market forces to achieve the best possible price.

Taxpayer Impact: Taxpayers may not be receiving the best value due to the absence of competitive bidding. Sole-source awards can sometimes result in higher costs compared to contracts that undergo a competitive procurement process.

Public Impact

Veterans receiving care through VISN 19 will benefit from access to essential reference laboratory testing services. The contract ensures the availability of medical laboratory services, crucial for diagnosis and treatment monitoring. The geographic impact is focused on VISN 19, which serves veterans in a specific region. This contract supports the operational needs of the VA's healthcare system, indirectly impacting healthcare professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Lack of competition may reduce incentives for the contractor to offer innovative or cost-saving solutions.
Reliance on a single provider for critical lab services could pose a risk if the contractor faces operational issues.

Positive Signals

Firm-fixed-price contract provides cost certainty for the VA.
Laboratory Corporation of America is a well-established provider with extensive experience in laboratory services.
The contract ensures continuity of essential reference lab testing for veterans in VISN 19.

Sector Analysis

The healthcare sector, particularly clinical diagnostics, is a significant area of federal spending. Reference laboratory testing is a vital component of healthcare delivery, supporting diagnosis, treatment, and monitoring of diseases. The market for laboratory services is large and includes major national providers like Laboratory Corporation of America. Federal agencies, especially the Department of Defense and the Department of Veterans Affairs, are substantial purchasers of these services to support their healthcare facilities and patient populations. Spending in this area is driven by the need for accurate and timely diagnostic information.

Small Business Impact

This contract does not appear to have a small business set-aside. As a sole-source award to a large corporation, it does not directly benefit small businesses through prime contract awards. There is no information provided regarding subcontracting plans or requirements for small business participation. Therefore, the impact on the small business ecosystem from this specific award is likely minimal.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. As a BPA Call, it is part of a larger Basic Ordering Agreement (BOA) or similar framework, which itself would have established oversight mechanisms. Transparency is limited due to the sole-source nature, but contract awards are generally reported in federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Veterans Affairs Medical Care.
Federal Civilian Health and Medical Program of the Uniformed Services (TRICARE).
Department of Defense Medical Services.

Risk Flags

Sole-source award
Potential for higher costs due to lack of competition
Risk of service disruption from single provider

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $5.5 million to LABORATORY CORPORATION OF AMERICA. REFERENCE LAB TESTING FOR VISN 19

Who is the contractor on this award?

The obligated recipient is LABORATORY CORPORATION OF AMERICA.

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 $5.5 million.

What is the period of performance?

Start: 2023-10-01. End: 2024-09-30.

What is the historical spending pattern for reference laboratory testing services by VISN 19?

Analyzing historical spending for VISN 19's reference laboratory testing requires access to detailed procurement data over multiple fiscal years. Without specific historical data for this VISN and service category, it's difficult to establish a precise trend. However, federal healthcare spending, particularly for services like laboratory testing, generally shows a consistent demand driven by patient needs and healthcare system operations. Factors such as changes in veteran population, new diagnostic technologies, and shifts in healthcare policy can influence spending levels. The current $5.5 million award for a one-year period provides a snapshot, but understanding if this represents an increase, decrease, or stable level of spending would necessitate a multi-year analysis of comparable contracts and overall VISN 19 healthcare expenditures.

How does the pricing of this contract compare to similar reference laboratory testing contracts awarded by other federal agencies?

Direct price comparison is challenging without specific line-item pricing and service level agreements for this $5.5 million sole-source BPA Call. However, Laboratory Corporation of America is a major national provider, and their pricing is generally competitive within the market. The absence of competition in this sole-source award means that the VA did not benefit from a bidding process that could drive prices down. To benchmark effectively, one would need to compare the unit costs for specific tests (e.g., CBC, metabolic panels) against similar contracts awarded competitively by agencies like the DoD or other VA VISNs. Generally, competitive awards tend to yield lower prices than sole-source procurements for comparable services.

What are the key performance indicators (KPIs) used to evaluate the performance of Laboratory Corporation of America under this contract?

While the specific KPIs for this BPA Call are not detailed in the provided data, typical performance metrics for reference laboratory testing contracts include turnaround time for test results, accuracy rates, specimen rejection rates, and customer satisfaction (e.g., feedback from VA medical facilities). The firm-fixed-price nature of the contract implies that the contractor is responsible for delivering the agreed-upon services within the specified quality standards. The VA would likely monitor these KPIs through regular performance reviews and potentially through data reporting requirements mandated in the contract's statement of work. Failure to meet critical KPIs could lead to contract remedies or non-renewal.

What is the risk associated with relying on a single contractor for critical laboratory services?

The primary risk associated with relying on a single contractor, especially for critical services like laboratory testing, is the potential for service disruption. If Laboratory Corporation of America experiences operational issues, such as equipment failure, staffing shortages, or supply chain problems, it could directly impact the VA's ability to provide timely and accurate diagnostic information to veterans. This could lead to delays in patient care, misdiagnoses, or increased costs if the VA needs to seek emergency alternative solutions. Furthermore, a sole-source arrangement can reduce the contractor's incentive to innovate or offer cost efficiencies, as they face no direct competitive pressure.

What is the track record of Laboratory Corporation of America with the Department of Veterans Affairs?

Laboratory Corporation of America (Labcorp) has a significant and long-standing relationship with the Department of Veterans Affairs, providing a wide range of laboratory services across various VISNs. They are a major national provider of clinical laboratory testing and have consistently been awarded contracts by the VA, often through competitive processes but also through sole-source or limited competition awards when deemed appropriate. Their track record generally reflects extensive experience in handling large volumes of tests and meeting the complex needs of federal healthcare systems. While specific performance metrics for all past contracts are not detailed here, their continued presence as a key contractor suggests a generally satisfactory performance history, though like any large contractor, they may have faced performance reviews or issues on specific contracts over time.

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: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Bode Cellmark Forensics Inc.

Address: 531 S SPRING ST, BURLINGTON, NC, 27215

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

Financial Breakdown

Contract Ceiling: $5,535,962

Exercised Options: $5,535,962

Current Obligation: $5,535,962

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C25922A0002

IDV Type: BPA

Timeline