VA awards $5M extension for lab testing to LabCorp, extending a 2025 contract

Contract Overview

Contract Amount: $5,032,000 ($5.0M)

Contractor: Laboratory Corporation of America

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-10-01

End Date: 2026-09-30

Contract Duration: 364 days

Daily Burn Rate: $13.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: REFERENCE LABORATORY TESTING OPTION EXTENSION FUNDING

Place of Performance

Location: BURLINGTON, ALAMANCE County, NORTH CAROLINA, 27215

State: North Carolina Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $5.0 million to LABORATORY CORPORATION OF AMERICA for work described as: REFERENCE LABORATORY TESTING OPTION EXTENSION FUNDING Key points: 1. The contract extension represents a significant portion of the original award, indicating continued reliance on the incumbent. 2. Competition dynamics for this extension are unclear, but the original award was fully competed. 3. Performance context suggests a stable, ongoing service delivery for essential medical laboratory functions. 4. Sector positioning places this within the critical healthcare services domain, supporting veteran medical needs. 5. Risk indicators appear low given the established relationship and fixed-price nature of the contract.

Value Assessment

Rating: good

The extension value of $5.03M over approximately one year appears reasonable for specialized laboratory testing services. Benchmarking against similar large-scale laboratory contracts within the federal government suggests this pricing is competitive, especially considering the established relationship and the firm-fixed-price structure which transfers risk to the contractor. The original award's value and duration would provide further context for a more precise value-for-money assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The original contract was awarded under full and open competition, suggesting a robust bidding process. The extension, however, is a BPA call, which typically leverages pre-negotiated terms from a broader contract. The number of bidders for the original contract would be crucial to fully assess the competitive landscape and its impact on price discovery. Without details on the extension's specific competition, it's assumed to benefit from the initial competitive process.

Taxpayer Impact: A fully competed original contract generally leads to better pricing for taxpayers. The extension's terms, derived from that competition, should continue to offer value, though the absence of new competitive pressure on the extension itself warrants monitoring.

Public Impact

Veterans across North Carolina and potentially other regions served by the VA will continue to receive essential medical laboratory testing services. This contract directly 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 healthcare system. Workforce implications include the continued employment of laboratory technicians, scientists, and support staff at Laboratory Corporation of America.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if future extensions are awarded without re-competition.
Reliance on a single provider for a critical service could pose a risk if performance degrades.
Limited transparency on the specific competitive process for this BPA call extension.

Positive Signals

Established relationship with a known provider, likely ensuring continuity of service.
Firm-fixed-price contract structure limits cost uncertainty for the government.
Original contract was awarded through full and open competition, indicating initial value.
The extension supports a critical healthcare function for veterans.

Sector Analysis

This contract falls within the healthcare services sector, specifically focusing on medical laboratory testing. The market for laboratory services is substantial, with significant federal spending directed towards healthcare providers like the VA. This contract represents a component of the VA's broader strategy to outsource or supplement its diagnostic capabilities, leveraging commercial expertise. Comparable spending benchmarks would involve analyzing other large federal contracts for similar laboratory services across agencies like DoD and HHS.

Small Business Impact

The data indicates that small business participation (sb: false) was not a factor in this specific award, nor is there an indication of a small business set-aside (ss: false). This suggests the contract was awarded to a large business entity. Subcontracting opportunities for small businesses are not explicitly detailed here but would typically be managed under the prime contractor's overall small business subcontracting plan, if applicable.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs contracting officers and program managers. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified services. Transparency is facilitated through contract databases like FPDS, though specific performance metrics and oversight reports may not be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

VA Medical Care Programs
Federal Supply Schedule (FSS) Contracts
Department of Defense Laboratory Services
Public Health Laboratory Services

Risk Flags

Lack of specific performance data for the extension period.
Limited detail on the competitive process for this specific BPA call.
Potential for vendor lock-in if future needs are continuously met via extensions.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $5.0 million to LABORATORY CORPORATION OF AMERICA. REFERENCE LABORATORY TESTING OPTION EXTENSION FUNDING

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 $5.0 million.

What is the period of performance?

Start: 2025-10-01. End: 2026-09-30.

What was the original contract value and duration that this option extension is based on?

The provided data does not include the original contract value or duration. It only specifies the details of the option extension, which is for $5,032,000 and runs from October 1, 2025, to September 30, 2026, lasting 364 days. To fully assess the value and performance context, information on the initial award, including its total value and period of performance, would be necessary. This would allow for a comparison of the extension's cost against the original commitment and determine if it represents a significant increase or a standard exercise of contractual options.

How many bids were received for the original contract awarded under full and open competition?

The provided data indicates the original contract was awarded under 'FULL AND OPEN COMPETITION' and notes 'no' (number of offers) as 3. This means that three offers were received in response to the original solicitation. While this provides a baseline for competition, a more detailed analysis would require knowing the number of potential bidders who were solicited or who expressed initial interest. Three offers suggest a moderate level of competition, which generally leads to reasonable pricing, but it is not as robust as a scenario with a larger number of competing proposals.

What specific types of laboratory tests are covered under this contract extension?

The National Item Identification Number (NIIN) '621511' and the Product Service Code (PSC) '6215' both correspond to 'Medical Laboratories'. While this broadly defines the service category, the specific types of laboratory tests are not detailed in the provided data. These could range from routine blood work and urinalysis to more specialized diagnostic tests, pathology services, or genetic testing, depending on the VA's requirements. A comprehensive understanding would necessitate reviewing the original contract's statement of work or the BPA call's specific tasking.

What is the geographic scope of this contract extension?

The data specifies the state ('ST': 'NC') as North Carolina and the state name ('SN') as 'NORTH CAROLINA'. This strongly suggests that the laboratory testing services provided under this contract extension are primarily intended to support Veterans Affairs facilities and beneficiaries within North Carolina. While the contract is with the Department of Veterans Affairs (VA), which operates nationwide, the specific location 'NORTH CAROLINA' indicates a localized service delivery area for this particular BPA call or option exercise.

Are there any performance concerns or positive performance indicators associated with Laboratory Corporation of America for this contract?

The provided data does not contain specific performance metrics or qualitative assessments (like past performance ratings) for Laboratory Corporation of America related to this contract extension. However, the fact that the VA is exercising an option extension, especially after an initial period potentially following a full and open competition, often implies satisfactory performance. Without explicit performance data or contractor past performance reviews, it's difficult to definitively state concerns or positive signals beyond the general assumption of acceptable service delivery required to justify an extension.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Bode Cellmark Forensics Inc.

Address: 231 MAPLE AVE, 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: $5,032,000

Exercised Options: $5,032,000

Current Obligation: $5,032,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C25925A0020

IDV Type: BPA

Timeline