VA awards $67M for Kidney Dialysis Centers to DaVita Inc. in Colorado

Contract Overview

Contract Amount: $67,024,207 ($67.0M)

Contractor: Davita Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2018-03-30

End Date: 2018-03-30

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT: 1/1/18 - 3/30/18

Place of Performance

Location: DENVER, DENVER County, COLORADO, 80202

State: Colorado Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $67.0 million to DAVITA INC. for work described as: EXPRESS REPORT: 1/1/18 - 3/30/18 Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is a delivery order with a firm fixed price, providing cost certainty. 3. The award was made by the Department of Veterans Affairs for kidney dialysis services. 4. The contract duration is zero, indicating it was likely a short-term or administrative award. 5. The North American Industry Classification System (NAICS) code 621492 points to kidney dialysis centers. 6. The contract was awarded to DaVita Inc., a known provider in the healthcare sector.

Value Assessment

Rating: fair

The contract value of $67 million for a single delivery order ending on March 30, 2018, is substantial. Without comparable contract data for similar services and durations, a precise value-for-money assessment is difficult. However, the firm fixed-price structure suggests an attempt to control costs. The specific services rendered and their necessity for veterans would be key to a more thorough value evaluation.

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. This suggests a robust bidding environment, which typically leads to better price discovery and potentially more favorable terms for the government. The number of bidders is not specified, but the method of competition implies a deliberate effort to maximize market participation.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down prices and encourage innovation, leading to more efficient use of public funds.

Public Impact

Veterans in Colorado requiring kidney dialysis services are the primary beneficiaries. The contract ensures the provision of essential medical services for chronic kidney disease. The geographic impact is focused on Colorado, serving the veteran population within that state. The contract supports the healthcare workforce employed by DaVita Inc. in providing these specialized services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract duration of zero days raises questions about the scope and timing of services.
The large dollar amount for a single delivery order warrants scrutiny regarding the specific services provided and their necessity.
Reliance on a single contractor, DaVita Inc., for a significant award could indicate market concentration.

Positive Signals

Awarded through full and open competition, suggesting a fair and competitive process.
Firm fixed-price contract type provides cost predictability for the government.
The contract addresses a critical healthcare need for veterans.

Sector Analysis

The healthcare sector, specifically kidney dialysis services, is a significant area of federal spending, particularly for agencies like the Department of Veterans Affairs. The NAICS code 621492 identifies specialized outpatient care facilities. The market for dialysis services is often characterized by a few major providers, making competition dynamics crucial. Benchmarking this contract against other VA or Medicare/Medicaid dialysis contracts would provide further context on pricing and service delivery.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a large award to a major provider, it is unlikely to have direct subcontracting opportunities for small businesses unless DaVita Inc. voluntarily engages them. The focus is on a large-scale service delivery rather than fostering small business participation.

Oversight & Accountability

The Department of Veterans Affairs is responsible for the oversight of this contract. As a delivery order under a larger contract vehicle (implied by 'AW' - DELIVERY ORDER), oversight would likely involve monitoring service delivery, quality, and adherence to the firm fixed-price terms. Transparency is generally maintained through contract databases, but specific performance metrics and Inspector General involvement would depend on the nature of any potential issues or audits.

Related Government Programs

Medicare Kidney Dialysis Services
Medicaid Kidney Dialysis Services
VA Medical Services Contracts
Outpatient Kidney Dialysis Facilities

Risk Flags

Contract duration of zero days requires clarification.
Large award value for a single delivery order warrants detailed service scope review.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $67.0 million to DAVITA INC.. EXPRESS REPORT: 1/1/18 - 3/30/18

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 $67.0 million.

What is the period of performance?

Start: 2018-03-30. End: 2018-03-30.

What was the specific scope of services covered by this $67 million delivery order for kidney dialysis centers?

The provided data indicates the contract was for 'Kidney Dialysis Centers' under NAICS code 621492, awarded to DaVita Inc. by the Department of Veterans Affairs. However, the specific scope of services, such as the number of dialysis treatments, patient volume, or specific types of dialysis (e.g., hemodialysis, peritoneal dialysis), is not detailed in this summary. The contract's delivery order nature and a zero-day duration suggest it might have been a short-term arrangement or a specific task order within a broader agreement, potentially covering a defined period or a set of immediate needs for veterans in Colorado.

How does the $67 million award compare to historical spending by the VA on kidney dialysis services?

To compare this $67 million award to historical VA spending on kidney dialysis, one would need to analyze VA's budget allocations and contract awards specifically for dialysis services over multiple fiscal years. This single delivery order represents a significant sum, but its proportion within the VA's overall healthcare budget for renal care is unknown without further data. Analyzing trends in VA spending on dialysis, including the number of contracts, average award values, and primary contractors over time, would provide context on whether this award is an outlier, a continuation of a trend, or a shift in procurement strategy.

What is DaVita Inc.'s track record with the federal government, particularly the VA, for providing healthcare services?

DaVita Inc. is a major provider of kidney dialysis services nationwide. Its track record with the federal government, especially the Department of Veterans Affairs, likely involves numerous contracts for providing dialysis treatments to veterans. A comprehensive review would examine past performance evaluations, any instances of contract disputes, overpayments, or quality of care issues reported by the VA or other federal agencies. Given DaVita's market position, it is probable they have a substantial history of serving federal beneficiaries, which would be reflected in contract databases and agency performance reports.

What are the potential risks associated with a firm fixed-price contract of this magnitude for specialized medical services?

A firm fixed-price (FFP) contract aims to provide cost certainty, but risks can arise. For specialized medical services like kidney dialysis, the primary risk is that the fixed price may not adequately cover unforeseen increases in costs (e.g., staffing, supplies, regulatory changes) or unexpected patient needs, potentially impacting the contractor's profitability or willingness to provide optimal care. Conversely, if the contractor significantly overestimates costs, taxpayers may bear a higher burden than necessary. Ensuring the FFP adequately reflects the anticipated service volume and complexity is crucial for mitigating these risks.

How does the 'full and open competition' method for this contract potentially impact the quality and cost of dialysis services for veterans?

Awarding this contract through 'full and open competition' theoretically maximizes the number of potential bidders, fostering a competitive environment. This can lead to lower prices for the government and potentially encourage providers to offer higher quality services to win the contract. For veterans, this means the VA likely sought the best value proposition, balancing cost with the quality and accessibility of care. However, the effectiveness of this competition depends on the actual number of bids received and the specific evaluation criteria used by the VA.

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: $67,024,207

Exercised Options: $67,024,207

Current Obligation: $67,024,207

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA79113D0013

IDV Type: IDC

Timeline