VA awards $1.05M for reference lab services, highlighting a competitive procurement for medical testing

Contract Overview

Contract Amount: $1,050,000 ($1.1M)

Contractor: Quest Diagnostics Incorporated

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-10-01

End Date: 2026-09-30

Contract Duration: 364 days

Daily Burn Rate: $2.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: FY26 TASK ORDER FOR SFVA REFERENCE LAB SERVICES.

Place of Performance

Location: SAN FRANCISCO, SAN FRANCISCO County, CALIFORNIA, 94121

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $1.1 million to QUEST DIAGNOSTICS INCORPORATED for work described as: FY26 TASK ORDER FOR SFVA REFERENCE LAB SERVICES. Key points: 1. The contract leverages a Blanket Purchase Agreement (BPA) Call, indicating a pre-negotiated framework for efficient service acquisition. 2. With four bidders, the competition level suggests a healthy market for these specialized laboratory services. 3. The firm-fixed-price structure provides cost certainty for the government, aligning contractor incentives with performance. 4. This award falls under the Medical Laboratories NAICS code, a critical component of healthcare delivery. 5. The duration of 364 days suggests a focused, short-term need for these reference lab services.

Value Assessment

Rating: good

The award amount of $1.05 million for a one-year period appears reasonable for reference laboratory services, especially considering it was procured via a BPA Call. Benchmarking against similar contracts would require access to a broader dataset of reference lab services procured by the VA or other agencies. However, the competitive nature of the award suggests that pricing was likely scrutinized by multiple bidders.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with four distinct bidders participating. This level of competition is generally favorable as it allows multiple qualified vendors to propose solutions, driving innovation and potentially leading to better pricing. The presence of four bidders indicates a robust market for these services and suggests that the solicitation was accessible to a wide range of potential providers.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are used efficiently by fostering a competitive environment that encourages lower prices and higher quality services. This approach maximizes the value received for the government's investment.

Public Impact

Veterans in California will benefit from access to essential reference laboratory services. The contract ensures the delivery of critical medical diagnostic testing, supporting clinical decision-making. This award supports the operational needs of the Department of Veterans Affairs healthcare system. The services provided are crucial for maintaining the health and well-being of beneficiaries.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased demand on reference lab services impacting turnaround times if not managed effectively.
Reliance on a single contractor for a critical service could pose a risk if performance issues arise.

Positive Signals

Awarded through a competitive process, indicating potential for good value.
Firm-fixed-price contract provides budget certainty.
BPA Call mechanism suggests pre-vetted capabilities and pricing.

Sector Analysis

The healthcare sector, specifically the provision of medical laboratory services, is a significant area of federal spending. This contract falls under the Medical Laboratories (NAICS 621511) industry. The market for diagnostic testing is large and competitive, with numerous private companies offering a wide array of services. Federal agencies, particularly the Department of Veterans Affairs, are major consumers of these services to support their healthcare missions.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses, nor does it appear to have a small business subcontracting requirement based on the provided information. The award was made under full and open competition, suggesting that larger, established providers were likely the primary participants. Further analysis would be needed to determine if any small businesses participated as subcontractors.

Oversight & Accountability

The contract is managed by the Department of Veterans Affairs, which has established oversight mechanisms for its procurements. As a BPA Call, it likely falls under the existing oversight of the parent BPA. Transparency is generally maintained through contract award databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

VA Medical Care.
Laboratory Testing Services.
Diagnostic Services.
Healthcare Services Contracts.

Risk Flags

Potential for service disruption if contractor faces operational issues.
Need for ongoing performance monitoring to ensure quality and timeliness.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $1.1 million to QUEST DIAGNOSTICS INCORPORATED. FY26 TASK ORDER FOR SFVA REFERENCE LAB SERVICES.

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 $1.1 million.

What is the period of performance?

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

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

Analyzing the historical spending patterns for reference laboratory services by the Department of Veterans Affairs (VA) is crucial for understanding budget trends and identifying potential areas for cost savings or efficiency improvements. While specific historical data for this exact task order is not provided, the VA consistently allocates significant funds towards laboratory services to support its vast network of healthcare facilities and veteran population. Past contract awards for similar services, often procured through various mechanisms like Indefinite Delivery/Indefinite Quantity (IDIQ) contracts, BPAs, or direct solicitations, would reveal trends in contract values, durations, and the number of competitors. Examining these patterns over multiple fiscal years can highlight fluctuations in demand, the impact of policy changes, and the evolution of service requirements. For instance, an increase in spending might correlate with an expansion of healthcare services or an aging veteran population requiring more diagnostic tests. Conversely, a decrease could indicate a shift towards in-house capabilities or more efficient testing methods. Understanding this historical context is vital for evaluating the current award's value and forecasting future budgetary needs.

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

Benchmarking the pricing of this $1.05 million contract for reference laboratory services against similar contracts awarded by other federal agencies is essential for assessing value for money. Without direct access to a comparative database of all federal contract pricing for identical services, a precise comparison is challenging. However, the fact that this contract was awarded under full and open competition with four bidders suggests that the pricing is likely competitive within the market. Factors influencing price include the specific tests ordered, geographic location, turnaround time requirements, and the volume of services. Agencies like the Department of Defense or Health and Human Services may have similar contracts. A thorough analysis would involve identifying comparable contracts based on service scope (e.g., specific types of lab tests), contract type (e.g., firm-fixed-price), duration, and volume. Differences in pricing could be attributed to variations in market conditions, negotiated rates, or the specific needs of each agency. The VA's use of a BPA Call indicates that some level of pre-negotiation on pricing may have occurred, potentially leading to more favorable rates than a completely new solicitation.

What are the potential risks associated with relying on Quest Diagnostics Incorporated for these reference lab services?

Relying on any single contractor, including Quest Diagnostics Incorporated, for critical reference lab services presents potential risks that warrant careful management. One primary risk is service disruption due to unforeseen circumstances such as natural disasters, pandemics, or internal operational issues within Quest Diagnostics. Such disruptions could lead to delays in test results, impacting patient care and clinical decision-making within the VA system. Another risk is performance degradation over time; while the initial service may be satisfactory, quality or turnaround times could decline if not continuously monitored and enforced through contract management. Pricing volatility is also a consideration, although the firm-fixed-price nature of this contract mitigates some of that risk for the current period. Furthermore, over-reliance on a single provider might reduce the VA's leverage in future negotiations or limit its ability to adopt newer, potentially more cost-effective technologies if Quest Diagnostics does not readily integrate them. Robust contract surveillance, clear performance metrics, and contingency planning are essential to mitigate these risks.

How effective is the use of a BPA Call for procuring reference laboratory services compared to other contracting methods?

The use of a Blanket Purchase Agreement (BPA) Call for procuring reference laboratory services, as seen in this $1.05 million award, offers several advantages over traditional contract methods. BPAs are essentially charge accounts established with pre-qualified vendors, allowing agencies to quickly order goods or services under pre-negotiated terms and conditions. A BPA Call leverages this existing agreement, streamlining the acquisition process significantly. This method is particularly effective for recurring needs or when an agency anticipates multiple, smaller purchases over time. It reduces administrative burden, shortens lead times, and can often result in better pricing due to the established relationship and potential for volume discounts. Compared to a full and open competition for each individual requirement, a BPA Call is more efficient. However, it relies on the initial BPA having been established through a competitive process to ensure fair pricing and access. For reference lab services, where needs can fluctuate, a BPA Call provides flexibility and speed while maintaining a degree of oversight and competition inherent in the initial BPA.

What is the track record of Quest Diagnostics Incorporated in fulfilling federal contracts, particularly within the healthcare sector?

Quest Diagnostics Incorporated has a substantial track record of fulfilling federal contracts, particularly within the healthcare and laboratory services sectors. As a major national provider of diagnostic testing, they frequently engage with government agencies, including the Department of Veterans Affairs, Department of Defense, and others. Their experience typically encompasses a wide range of laboratory services, from routine blood work to complex genetic testing. Federal agencies often leverage Quest Diagnostics' extensive laboratory network and established logistical capabilities. Performance reviews and past performance information, often available through federal procurement databases, generally indicate a capacity to meet contractual requirements. However, like any large contractor, there may be instances of performance issues or disputes on specific contracts, which are inherent in the scale of operations. The VA's decision to award this BPA Call to Quest Diagnostics suggests a positive assessment of their past performance and capabilities relevant to the required reference lab services.

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: 4

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: $1,050,000

Exercised Options: $1,050,000

Current Obligation: $1,050,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C26120A0046

IDV Type: BPA

Timeline