HHS Awards $210M ICATT Contract to MinuteClinic for Medical Labs, Not Competed

Contract Overview

Contract Amount: $209,835,907 ($209.8M)

Contractor: Minuteclinic, L.L.C.

Awarding Agency: Department of Health and Human Services

Start Date: 2021-10-01

End Date: 2022-05-31

Contract Duration: 242 days

Daily Burn Rate: $867.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE

Sector: Healthcare

Official Description: INCREASE COMMUNITY ACCESS TO TESTING (ICATT)

Place of Performance

Location: WOONSOCKET, PROVIDENCE County, RHODE ISLAND, 02895

State: Rhode Island Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $209.8 million to MINUTECLINIC, L.L.C. for work described as: INCREASE COMMUNITY ACCESS TO TESTING (ICATT) Key points: 1. Significant contract value of $209.8M for medical laboratory services. 2. Sole-source award to MinuteClinic, L.L.C. raises questions about competition. 3. Contract duration of 242 days suggests a short-term or urgent need. 4. The 'RI' award type indicates a 'Restricted' procurement, potentially limiting competition.

Value Assessment

Rating: questionable

The contract value of $209.8M for 242 days is substantial. Without comparable sole-source contracts for similar services, assessing value for money is difficult. The lack of competition makes benchmarking against other providers challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This method bypasses competitive bidding, potentially leading to higher prices and reduced innovation. The rationale for not competing is not provided, impacting price discovery.

Taxpayer Impact: The lack of competition in this large contract may result in taxpayers paying more than necessary for medical laboratory services.

Public Impact

Ensures access to essential medical laboratory services, particularly important during public health events. Potential for reduced access to services if MinuteClinic's capacity is strained or if pricing is prohibitive. Impact on smaller, local laboratories that may have been excluded from bidding.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
Limited transparency on pricing justification

Positive Signals

Provides critical medical laboratory access
Supports public health preparedness

Sector Analysis

The healthcare sector, particularly medical laboratories, is critical for public health infrastructure. Spending in this area can fluctuate based on public health emergencies and government initiatives. This contract's value is significant within the medical laboratory sub-sector.

Small Business Impact

The sole-source nature of this award likely excluded small businesses from participating in providing these essential medical laboratory services. There is no indication of small business subcontracting requirements.

Oversight & Accountability

The lack of competition and sole-source award warrant further oversight to ensure the government obtained fair pricing and that this approach is justified. Transparency regarding the decision-making process is crucial for accountability.

Related Government Programs

Medical Laboratories
Department of Health and Human Services Contracting
Office of Assistant Secretary for Preparedness and Response Programs

Risk Flags

Lack of competitive bidding
Sole-source award raises value concerns
Potential for inflated pricing
Limited transparency on justification
Exclusion of small businesses

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $209.8 million to MINUTECLINIC, L.L.C.. INCREASE COMMUNITY ACCESS TO TESTING (ICATT)

Who is the contractor on this award?

The obligated recipient is MINUTECLINIC, L.L.C..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of Assistant Secretary for Preparedness and Response).

What is the total obligated amount?

The obligated amount is $209.8 million.

What is the period of performance?

Start: 2021-10-01. End: 2022-05-31.

What was the specific justification for awarding this contract on a sole-source basis rather than through full and open competition?

The justification for a sole-source award typically involves circumstances where only one responsible source can provide the required supplies or services. This could be due to unique capabilities, urgent and compelling needs, or specific government property requirements. Without further documentation, the exact reason for bypassing competition for the ICATT contract remains unclear, impacting the assessment of its necessity and potential cost savings.

How does the per-unit cost of services under this contract compare to industry benchmarks for similar medical laboratory services, especially given the lack of competitive bidding?

Benchmarking the per-unit cost is challenging due to the sole-source nature of this contract. Without competitive bids, it's difficult to ascertain if MinuteClinic's pricing reflects market rates or if taxpayers are incurring a premium. A thorough cost analysis by the contracting agency would be needed to validate the pricing against independent government estimates or commercial price lists for comparable services.

What measures are in place to ensure the effectiveness and quality of medical laboratory services provided by MinuteClinic under this contract, given the absence of competitive pressure?

Effectiveness and quality are typically ensured through robust contract performance standards, service level agreements, and regular monitoring by the contracting agency. For this contract, the Office of Assistant Secretary for Preparedness and Response (ASPR) would be responsible for overseeing performance metrics, ensuring timely and accurate results, and adherence to all relevant health and safety regulations. Quality assurance processes are critical in sole-source contracts.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIXED PRICE INCENTIVE (L)

Evaluated Preference: NONE

Contractor Details

Parent Company: CVS Health Corporation

Address: 1 CVS DR, WOONSOCKET, RI, 02895

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

Financial Breakdown

Contract Ceiling: $209,835,907

Exercised Options: $209,835,907

Current Obligation: $209,835,907

Actual Outlays: $209,835,907

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline