VA awards $750K IT contract for medical coding services to Sierra7, Inc. under full and open competition

Contract Overview

Contract Amount: $749,781 ($749.8K)

Contractor: Sierra7, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-10-01

End Date: 2024-09-30

Contract Duration: 730 days

Daily Burn Rate: $1.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: MEDICAL CODING AUDIT SERVICES FOR PHOENIX MEDICAL CODING & AUDITING - BASE + 4OYS

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85012

State: Arizona Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $749,780.61 to SIERRA7, INC. for work described as: MEDICAL CODING AUDIT SERVICES FOR PHOENIX MEDICAL CODING & AUDITING - BASE + 4OYS Key points: 1. Contract awarded via a Blanket Purchase Agreement (BPA) Call, indicating a pre-competed framework. 2. The contract is for custom computer programming services, specifically medical coding and auditing. 3. Sierra7, Inc. is the sole awardee for this specific BPA Call. 4. The contract duration is 2 years, with a base period and four option years. 5. The contract type is Firm Fixed Price, which shifts cost risk to the contractor. 6. The award was made under full and open competition, suggesting a broad search for qualified vendors.

Value Assessment

Rating: good

The contract value of approximately $750,000 over two years for medical coding audit services appears reasonable given the scope. Benchmarking against similar IT service contracts for specialized functions like medical coding is challenging without more granular data on service levels and complexity. However, the firm-fixed-price structure suggests that the VA has negotiated a defined price for specific deliverables, which can be advantageous for cost control.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit an offer. The data indicates three bids were received. A competitive process like this generally leads to better price discovery and ensures the government receives offers from a range of qualified vendors, potentially driving down costs and improving service quality.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best value for the government by encouraging multiple vendors to offer their most competitive pricing and solutions.

Public Impact

Veterans will benefit from improved accuracy and efficiency in medical coding and auditing processes. This contract supports the Department of Veterans Affairs' mission to provide healthcare services to veterans. The services are delivered within Arizona, potentially impacting local VA facilities. The contract may support IT and administrative roles related to medical coding and auditing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if future needs are highly specific to Sierra7's proprietary systems.
Reliance on a single BPA Call awardee could limit future competition if not managed carefully.
The effectiveness of the auditing services will depend on the contractor's expertise and adherence to VA standards.

Positive Signals

Awarded under full and open competition, indicating a robust initial selection process.
Firm Fixed Price contract type provides cost certainty for the VA.
The BPA Call mechanism suggests a pre-vetted and potentially efficient procurement method.

Sector Analysis

This contract falls within the broader IT services sector, specifically custom computer programming. The market for medical coding and auditing services is specialized, often involving a blend of healthcare expertise and IT capabilities. The VA's spending in this area is significant, driven by the need for accurate billing, compliance, and operational efficiency within its vast healthcare system. Comparable spending benchmarks would typically be found within government-wide IT service contracts or specific healthcare IT procurements.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a result, large businesses like Sierra7, Inc. were eligible to compete. There is no explicit information on subcontracting plans for small businesses within this specific BPA Call award. The impact on the small business ecosystem is neutral to potentially negative if opportunities were not actively sought through subcontracting.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs contracting officers and program managers. Accountability measures are embedded in the Firm Fixed Price contract type, requiring the contractor to meet defined performance standards. Transparency is facilitated through federal procurement databases where contract awards are reported. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Veterans Health Administration IT Services
Medical Information Systems
Healthcare Auditing Services
Custom Computer Programming Services
Blanket Purchase Agreements

Risk Flags

Potential for performance issues if contractor lacks specialized medical coding expertise.
Risk of non-compliance with evolving healthcare coding standards.
Dependence on a single vendor for a critical function via BPA Call.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $749,780.61 to SIERRA7, INC.. MEDICAL CODING AUDIT SERVICES FOR PHOENIX MEDICAL CODING & AUDITING - BASE + 4OYS

Who is the contractor on this award?

The obligated recipient is SIERRA7, INC..

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 $749,780.61.

What is the period of performance?

Start: 2022-10-01. End: 2024-09-30.

What is Sierra7, Inc.'s track record with the Department of Veterans Affairs and other federal agencies?

Sierra7, Inc. has a history of contracting with the Department of Veterans Affairs, primarily in IT services and support roles. Their contract portfolio often includes areas like program management, cybersecurity, and IT infrastructure support. Analyzing their past performance ratings, any past performance issues, and the types of services they have successfully delivered to the VA and other agencies (like the Department of Defense or Health and Human Services) would provide insight into their reliability and capability for this medical coding audit services contract. A review of contract databases like FPDS or SAM.gov would reveal the extent and nature of their federal awards.

How does the awarded price compare to market rates for similar medical coding audit services?

Benchmarking the $750,000 contract value against market rates for medical coding audit services requires detailed analysis of the specific services, scope, and service level agreements. Factors such as the volume of records to be audited, the complexity of coding systems used (e.g., ICD-10, CPT), the required turnaround time, and the level of reporting needed significantly influence pricing. Without these specifics, a direct comparison is difficult. However, the firm-fixed-price nature suggests the VA aimed for cost certainty. Industry reports on IT services and healthcare consulting rates, along with data from similar government contracts, could provide a comparative basis, but a precise per-unit cost comparison is not feasible with the provided data.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential inaccuracies in medical coding leading to compliance issues or improper billing, contractor performance failures (e.g., missed deadlines, inadequate audit quality), and potential cost overruns if the scope expands beyond the initial agreement (though mitigated by FFP). Mitigations include the firm-fixed-price structure, which places cost risk on the contractor, the requirement for qualified personnel, and the VA's oversight mechanisms. The competitive award process also mitigates risk by selecting a vendor deemed capable. The contract's duration and option periods allow for performance monitoring before full commitment.

How effective are medical coding audit services in ensuring VA healthcare program integrity and financial accuracy?

Medical coding audit services are crucial for ensuring the integrity and financial accuracy of VA healthcare programs. Accurate coding is the foundation for proper billing, reimbursement, and statistical analysis of healthcare services. Audits identify errors, inconsistencies, and potential fraud, waste, or abuse in the coding process. By verifying that diagnoses and procedures are correctly translated into standardized codes, these services help the VA maintain compliance with regulations (like HIPAA and Medicare/Medicaid rules), optimize revenue cycles, and ensure that healthcare data accurately reflects patient care. Effective audits directly contribute to the financial health and operational efficiency of the VA healthcare system.

What has been the historical spending trend for medical coding audit services by the VA?

Analyzing historical spending trends for medical coding audit services by the VA would reveal the agency's commitment to this function over time. Consistent or increasing spending suggests a sustained focus on ensuring coding accuracy and compliance. Fluctuations might indicate shifts in priorities, changes in auditing strategies, or the consolidation/outsourcing of these services. Understanding this trend provides context for the current $750,000 award, indicating whether it represents a typical investment, an increase, or a decrease in this area. Accessing historical contract data for the VA in this specific service category is necessary for a comprehensive trend analysis.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Custom Computer Programming Services

Product/Service Code: MEDICAL SERVICES › CERTIFIED MEDICAL SUPPORT

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

Address: 1676 INTERNATIONAL DR STE 930, MCLEAN, VA, 22102

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Hispanic American Owned Business, Minority Owned Business, Self-Certified Small Disadvantaged Business, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $1,014,511

Exercised Options: $1,014,511

Current Obligation: $749,781

Parent Contract

Parent Award PIID: 36C10G21A0005

IDV Type: BPA

Timeline