VA awards $52.3M for kidney dialysis centers to Fresenius Medical Care, utilizing full and open competition

Contract Overview

Contract Amount: $52,347,299 ($52.3M)

Contractor: Fresenius Medical Care Holdings 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: WALTHAM, MIDDLESEX County, MASSACHUSETTS, 02451

State: Massachusetts Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $52.3 million to FRESENIUS MEDICAL CARE HOLDINGS INC for work described as: EXPRESS REPORT: DIALYSIS FY18 1ST QTR Key points: 1. The contract value of $52.3 million represents a significant investment in essential healthcare services for veterans. 2. Full and open competition suggests a potentially competitive bidding process, which can lead to better pricing. 3. The fixed-price contract type offers cost certainty for the government, mitigating risks of cost overruns. 4. This award falls under the 'Kidney Dialysis Centers' NAICS code, indicating a specialized healthcare service. 5. The contract's duration and specific delivery order details would provide further context on performance and value. 6. The absence of small business set-aside flags indicates the primary award was not specifically targeted for small businesses.

Value Assessment

Rating: good

Benchmarking the value of this $52.3 million contract requires comparison to similar dialysis service contracts awarded by the VA and other federal agencies. Given the specialized nature of kidney dialysis, pricing is often influenced by facility costs, staffing, and equipment. Without specific per-unit cost data or a direct comparison to other contracts for similar services and patient volumes, a precise value-for-money assessment is challenging. However, the use of full and open competition is a positive indicator that the VA sought competitive pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'full and open competition,' indicating that all responsible sources were permitted to submit a bid. The number of bidders is not specified in the provided data, but this procurement method generally fosters a competitive environment. A robust competition typically leads to more favorable pricing and better terms for the government as contractors vie for the award.

Taxpayer Impact: Full and open competition aims to ensure that taxpayer dollars are used efficiently by driving down costs through a competitive bidding process, maximizing the value received for the services procured.

Public Impact

Veterans requiring kidney dialysis services are the primary beneficiaries, ensuring access to essential medical treatment. The contract supports the delivery of critical healthcare services, specifically kidney dialysis, to eligible veterans. The geographic impact is centered in Massachusetts, where the delivery order is assigned. This contract likely supports a healthcare workforce, including nurses, technicians, and administrative staff, at the contracted facilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics or quality indicators in the provided data makes it difficult to assess the quality of services delivered.
Without detailed breakdowns of costs or comparisons to market rates for dialysis services, it's challenging to definitively confirm optimal value for money.
The contract is a delivery order, implying it's part of a larger contract vehicle; understanding the parent contract's terms and competition is crucial for a complete picture.

Positive Signals

The use of 'full and open competition' suggests a deliberate effort to solicit the best possible offers.
The 'firm fixed price' contract type provides budget certainty and shifts cost risk to the contractor.
Awarding to a known entity like Fresenius Medical Care, a major provider, may indicate reliability and established operational capacity.

Sector Analysis

The healthcare sector, particularly specialized medical services like kidney dialysis, is a critical area of federal spending. This contract fits within the broader category of healthcare services procured by the Department of Veterans Affairs to support its patient population. The market for dialysis services is characterized by significant infrastructure and regulatory requirements. Comparable spending benchmarks would involve analyzing other VA contracts for dialysis or similar outpatient medical services, as well as understanding the average cost per dialysis session across the industry.

Small Business Impact

The provided data indicates that small business set-asides were not utilized for this contract (ss: false, sb: false). This suggests that the primary award was not specifically designated for small businesses. While this contract may not directly benefit small businesses through a set-aside, it's possible that the prime contractor, Fresenius Medical Care, may engage small businesses as subcontractors for certain goods or services. Further analysis of subcontracting plans would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures are typically embedded within the contract terms, including performance standards and reporting requirements. Transparency is facilitated through contract databases like FPDS, which provide public access to award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

Veterans Health Administration (VHA) Medical Services
Outpatient Dialysis Services
Federal Supply Schedule (FSS) Contracts
Healthcare Services Procurement

Risk Flags

Potential for service disruption impacting patient care
Need for detailed performance metrics to ensure quality
Limited visibility into specific cost components for value assessment

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $52.3 million to FRESENIUS MEDICAL CARE HOLDINGS INC. EXPRESS REPORT: DIALYSIS FY18 1ST QTR

Who is the contractor on this award?

The obligated recipient is FRESENIUS MEDICAL CARE HOLDINGS 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 $52.3 million.

What is the period of performance?

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

What is Fresenius Medical Care's track record with the Department of Veterans Affairs for similar dialysis services?

Fresenius Medical Care Holdings Inc. has a history of contracting with the Department of Veterans Affairs. While this specific data point focuses on a single delivery order, a broader analysis of past contracts would reveal the extent and nature of their previous work with the VA. This includes examining the number of previous awards, their values, contract types, and performance history. A review of past performance evaluations and any documented issues or successes would provide a more comprehensive understanding of their reliability and capability in serving VA beneficiaries. Understanding their historical relationship with the VA is crucial for assessing the risk and potential effectiveness of this current award.

How does the value of this contract compare to other VA dialysis contracts or industry benchmarks?

The $52.3 million value of this contract for kidney dialysis centers needs to be benchmarked against similar contracts to assess value for money. Without specific per-unit cost data (e.g., cost per dialysis session) or details on patient volume and service intensity, a direct comparison is difficult. However, the VA procures a wide range of healthcare services, and dialysis is a critical, high-cost service. Comparing this award to other VA contracts for dialysis in different geographic regions, or to contracts awarded by other federal agencies like the Department of Defense or civilian agencies, would provide context. Industry benchmarks for dialysis services, often reported by healthcare consulting firms or industry associations, can also offer a reference point for pricing and service delivery models. The 'full and open competition' aspect suggests an attempt to achieve competitive pricing.

What are the key performance indicators (KPIs) associated with this contract, and how is performance monitored?

The provided data does not explicitly list the Key Performance Indicators (KPIs) for this specific delivery order. However, for healthcare services like kidney dialysis, typical KPIs would likely include patient outcomes (e.g., mortality rates, complication rates, quality of life metrics), adherence to treatment schedules, patient satisfaction scores, and operational efficiency (e.g., appointment wait times, facility cleanliness). Performance monitoring is usually conducted by the VA's contracting officer's representative (COR) or a designated technical point of contact. This involves regular reviews of contractor reports, site visits, and potentially patient feedback mechanisms to ensure the services meet the contract's requirements and quality standards. The firm fixed-price nature of the contract implies that meeting these performance standards is crucial for the contractor to receive full payment.

What is the historical spending trend for kidney dialysis centers by the Department of Veterans Affairs?

Analyzing historical spending trends for kidney dialysis centers by the Department of Veterans Affairs is essential for understanding the scale and consistency of this service procurement. While this specific data point is for FY18 (first quarter), a comprehensive review would involve examining VA spending on dialysis services over multiple fiscal years. This would reveal whether spending has been increasing, decreasing, or remaining stable, and identify any significant fluctuations. Understanding these trends can help in forecasting future needs, identifying potential market shifts, and assessing the long-term commitment of the VA to providing these services. It also helps in contextualizing the $52.3 million award within the broader budgetary allocations for veteran healthcare.

What are the potential risks associated with this contract, and what mitigation strategies are in place?

Potential risks associated with this kidney dialysis contract include service disruptions, quality of care issues, cost overruns (though mitigated by fixed-price), and contractor performance failures. Given the critical nature of dialysis, any disruption can have severe health consequences for veterans. Risks related to contractor performance might include staffing shortages, equipment malfunctions, or failure to meet clinical standards. Mitigation strategies typically involve robust contract oversight by the VA, clearly defined performance standards and remedies in the contract, regular performance reviews, and contingency planning. The 'full and open competition' process itself can be seen as a risk mitigation strategy by selecting a contractor deemed most capable and offering the best value. The VA likely has protocols in place to address emergencies and ensure continuity of care.

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

Parent Company: Fresenius Medical Care Capital City, LLC (UEI: 324661834)

Address: 920 WINTER ST, WALTHAM, MA, 02451

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

Financial Breakdown

Contract Ceiling: $52,347,299

Exercised Options: $52,347,299

Current Obligation: $52,347,299

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA79113D0019

IDV Type: IDC

Timeline