VA awards $61.2M for dialysis services, with Davita Inc. securing a significant portion

Contract Overview

Contract Amount: $61,215,322 ($61.2M)

Contractor: Davita Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2017-12-31

End Date: 2017-12-31

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT: DIALYSIS FY18 1ST QTR

Place of Performance

Location: DENVER, DENVER County, COLORADO, 80202

State: Colorado Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $61.2 million to DAVITA INC. for work described as: EXPRESS REPORT: DIALYSIS FY18 1ST QTR Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is a delivery order, indicating it's part of a larger indefinite-delivery/indefinite-quantity (IDIQ) contract. 3. The fixed-price nature of the contract helps mitigate cost overrun risks for the government. 4. The primary contractor, Davita Inc., is a major player in the dialysis market. 5. The contract supports essential healthcare services for veterans, specifically kidney dialysis. 6. The award is for a single delivery order, implying a specific need or phase of service.

Value Assessment

Rating: good

The total award amount of $61.2 million for dialysis services appears substantial, but without specific performance metrics or a breakdown of services rendered, a direct value-for-money assessment is challenging. Davita Inc. is a known provider in this sector, and the fixed-price contract offers some cost certainty. Benchmarking against similar VA or Department of Defense contracts for dialysis services would be necessary for a more precise valuation. The contract's duration (ending Dec 31, 2017) suggests this is a completed or near-completed task order.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The number of bidders is not specified, but this procurement method generally fosters a competitive environment, which can lead to better pricing and service options for the government. The open competition suggests that the VA sought the best value available in the market for these critical dialysis services.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages multiple providers to offer competitive bids, potentially driving down costs and improving the quality of services received.

Public Impact

Veterans requiring kidney dialysis services are the primary beneficiaries. The contract ensures the continued provision of essential medical services for veterans' health. The geographic impact is likely concentrated in areas where VA facilities require these specialized services, potentially within Colorado given the 'SN' field. The contract supports the healthcare workforce, including medical professionals and support staff involved in dialysis treatment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics makes it difficult to assess the quality of services delivered.
The contract is a single delivery order, raising questions about the overall scope and long-term strategy for dialysis services.
Reliance on a single large provider like Davita Inc. could present future dependency risks.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Fixed-price contract type helps control costs and manage budget predictability.
Supports critical healthcare needs for the veteran population.

Sector Analysis

The healthcare sector, specifically medical services, is characterized by significant government spending to support populations like veterans. Kidney dialysis is a specialized and critical medical service with a well-established provider market. Contracts for such services are common across federal agencies, including the VA, which operates its own healthcare system. The market for dialysis services is dominated by a few large national providers, making competition dynamics important to monitor.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses (SS: false, SB: false). As Davita Inc. is a large corporation, it is unlikely that significant subcontracting opportunities for small businesses would arise directly from this specific delivery order, unless specialized support services were required. The focus appears to be on securing established, large-scale providers for essential healthcare services.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' procurement and healthcare administration divisions. Accountability measures are inherent in the fixed-price contract structure, requiring the contractor to deliver services as specified. Transparency is generally maintained through federal procurement databases like FPDS-NG, where contract awards are reported. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

VA Medical Services Contracts
Federal Healthcare Procurement
Kidney Disease Treatment Programs
Indefinite Delivery/Indefinite Quantity (IDIQ) Contracts

Risk Flags

Potential for service quality variations among different delivery locations.
Risk of contractor performance issues impacting patient care.
Dependence on a limited number of large providers in the dialysis market.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $61.2 million to DAVITA INC.. EXPRESS REPORT: DIALYSIS FY18 1ST QTR

Who is the contractor on this award?

The obligated recipient is DAVITA 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 $61.2 million.

What is the period of performance?

Start: 2017-12-31. End: 2017-12-31.

What is Davita Inc.'s track record with the Department of Veterans Affairs for dialysis services?

Davita Inc. has a significant history of contracting with the Department of Veterans Affairs (VA) for dialysis services. As a major national provider of kidney dialysis, Davita frequently partners with government agencies to serve eligible populations, including veterans. Analyzing past VA contracts with Davita would reveal the volume and value of services provided, as well as any performance history, including any documented issues or commendations. This specific award of $61.2 million for a delivery order ending in late 2017 suggests an ongoing relationship. Further investigation into prior delivery orders under the same or similar IDIQ vehicles would provide a clearer picture of Davita's consistent performance and reliability in meeting the VA's dialysis needs.

How does the $61.2 million award compare to other federal spending on dialysis services?

The $61.2 million award for dialysis services by the Department of Veterans Affairs (VA) represents a substantial investment in a critical healthcare need. To benchmark this figure, one would compare it against the VA's total annual spending on dialysis across all its facilities and against similar contracts awarded by other federal agencies, such as the Department of Defense or Indian Health Service. For instance, if the VA's total dialysis spending is in the hundreds of millions annually, this $61.2 million delivery order would represent a significant, but not dominant, portion. Comparing it to contracts for similar services in the private sector, adjusted for government purchasing power and specific service requirements, would also provide context. Without broader spending data, it's difficult to definitively state if this award is high or low relative to the entire federal landscape, but it clearly indicates a major service requirement.

What are the primary risks associated with this contract for the VA?

The primary risks associated with this contract for the VA include potential issues related to service quality and continuity, contractor performance, and cost management, despite the fixed-price structure. While Davita Inc. is a large, established provider, any lapse in service quality or availability could have severe health consequences for veterans. There's also a risk of over-reliance on a single large contractor, which could reduce future negotiating leverage or create vulnerabilities if the contractor faces operational challenges. Furthermore, while fixed-price contracts mitigate cost overruns, the scope of services might not perfectly align with evolving patient needs, potentially requiring contract modifications or new procurements. Ensuring robust oversight and performance monitoring is crucial to mitigate these risks.

How effective is the VA in securing competitive pricing for dialysis services?

The VA's effectiveness in securing competitive pricing for dialysis services is generally considered good, largely due to its mandate to use full and open competition whenever feasible. The data indicates this contract was awarded under such a mechanism. By fostering competition among multiple qualified providers, the VA can leverage market forces to achieve favorable pricing. However, the dialysis market has a degree of consolidation, with a few dominant players like Davita. This concentration can sometimes limit the number of truly competitive bids. The VA's ability to negotiate effectively, coupled with strong contract management and performance monitoring, plays a crucial role in ensuring competitive pricing over the long term. Analyzing historical pricing trends and the number of bidders on similar VA dialysis contracts would provide a more definitive assessment.

What are the historical spending patterns for dialysis services within the VA?

Historical spending patterns for dialysis services within the VA indicate a consistent and significant investment in this critical area of healthcare. The VA operates a vast network of healthcare facilities, many of which require specialized services like dialysis to treat veterans suffering from kidney disease. Annual spending on dialysis services has likely trended upwards over the years, reflecting an aging veteran population, advancements in medical technology that extend treatment options, and potentially increasing healthcare costs. The VA often utilizes IDIQ contracts for services like dialysis, allowing for flexibility in awarding delivery orders as needs arise. Examining spending data over multiple fiscal years would reveal the total investment, the primary contractors utilized, and any shifts in procurement strategies or service delivery models.

Industry Classification

NAICS: Health Care and Social Assistance › Outpatient Care Centers › Kidney Dialysis Centers

Product/Service Code: MEDICAL SERVICES › OTHER MEDICAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 2000 16TH ST, DENVER, CO, 80202

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

Financial Breakdown

Contract Ceiling: $61,215,322

Exercised Options: $61,215,322

Current Obligation: $61,215,322

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA79113D0013

IDV Type: IDC

Timeline