HHS awards $306M contract to Walgreen Co. for ambulatory health care services in Illinois

Contract Overview

Contract Amount: $306,212,245 ($306.2M)

Contractor: Walgreen CO.

Awarding Agency: Department of Health and Human Services

Start Date: 2022-06-14

End Date: 2025-05-31

Contract Duration: 1,082 days

Daily Burn Rate: $283.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 11

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: ICATT

Place of Performance

Location: DEERFIELD, LAKE County, ILLINOIS, 60015

State: Illinois Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $306.2 million to WALGREEN CO. for work described as: ICATT Key points: 1. Contract value of $306 million over its period of performance suggests a significant investment in ambulatory health care. 2. The contract was awarded under full and open competition, indicating a broad market solicitation. 3. The fixed-price contract type may offer cost certainty for the government, but could limit flexibility. 4. The duration of the contract (1082 days) allows for sustained service delivery. 5. The specific North American Industry Classification System (NAICS) code 621999 covers a broad range of 'All Other Miscellaneous Ambulatory Health Care Services'. 6. The contract's geographic focus is Illinois, suggesting localized service delivery.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the services provided under NAICS 621999. However, a $306 million award for ambulatory health care services over approximately three years indicates a substantial program. The firm fixed-price structure suggests an attempt to control costs, but the ultimate value for money will depend on the quality and efficiency of the services delivered by Walgreen Co. compared to potential alternatives or previous contracts for similar services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning that all responsible sources were permitted to submit a bid. The presence of 11 bids indicates a competitive marketplace for these services. A higher number of bidders generally suggests a more robust competition, which can lead to better pricing and service offerings for the government.

Taxpayer Impact: The robust competition for this contract is beneficial for taxpayers as it likely drove down prices and encouraged innovative solutions, ensuring the government receives the best possible value for its investment.

Public Impact

The primary beneficiaries are likely individuals in Illinois requiring miscellaneous ambulatory health care services, as defined by NAICS code 621999. The contract facilitates the delivery of a range of health care services that fall outside more specific ambulatory care categories. The geographic impact is concentrated within the state of Illinois. The contract may have implications for the healthcare workforce in Illinois, potentially creating or sustaining jobs related to service delivery.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The broad NAICS code (621999) could obscure the specific nature and cost-effectiveness of the services procured.
Lack of detailed service descriptions makes it difficult to assess performance metrics and value for money.
The significant contract value warrants close monitoring to ensure efficient resource utilization.

Positive Signals

Awarded under full and open competition with 11 bidders, indicating a healthy market and potential for competitive pricing.
Firm fixed-price contract type provides cost predictability for the government.
Long contract duration allows for stable service provision and potential for building strong working relationships.

Sector Analysis

The healthcare sector, particularly ambulatory health care services, is a significant area of federal spending. NAICS code 621999 encompasses a wide array of services not classified elsewhere, such as outpatient mental health and substance abuse centers, dialysis centers, and other miscellaneous health care providers. Federal spending in this area often supports public health initiatives, specialized medical treatments, and community-based care. Benchmarking this contract's value against similar broad-category ambulatory care contracts would require further data on specific service lines and geographic markets.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false) and there is no explicit mention of small business subcontracting requirements (sb: false). This suggests that the primary focus was on securing the best offer through full and open competition, rather than specifically targeting small business participation. Consequently, the direct impact on the small business ecosystem may be limited unless Walgreen Co. voluntarily engages small businesses as subcontractors.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services (HHS) and its contracting officers. The Centers for Disease Control and Prevention (CDC) is the specific agency. Transparency is facilitated by contract award data, but detailed performance reports and Inspector General (IG) audits would provide deeper insights into accountability. The effectiveness of oversight will depend on the rigor of performance monitoring and adherence to contract terms.

Related Government Programs

Medicare and Medicaid Services
Public Health Services
Community Health Centers Program
Substance Abuse and Mental Health Services Administration (SAMHSA) Grants
Federally Qualified Health Centers (FQHCs)

Risk Flags

Broad NAICS code may obscure specific service details.
Lack of detailed performance metrics.
Potential for cost overruns or quality issues in long-term FFP contracts.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $306.2 million to WALGREEN CO.. ICATT

Who is the contractor on this award?

The obligated recipient is WALGREEN CO..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Disease Control and Prevention).

What is the total obligated amount?

The obligated amount is $306.2 million.

What is the period of performance?

Start: 2022-06-14. End: 2025-05-31.

What specific types of 'All Other Miscellaneous Ambulatory Health Care Services' are covered under this contract?

The contract falls under NAICS code 621999, which is a broad category for miscellaneous ambulatory health care services not elsewhere classified. This can include a wide range of services such as outpatient mental health and substance abuse treatment, dialysis centers, blood and organ banks, ambulance services, and other specialized outpatient care. Without access to the detailed contract statement of work (SOW), it is impossible to ascertain the precise services being procured. This lack of specificity makes it challenging to evaluate the contract's objectives, performance, and value for money.

How does the $306 million contract value compare to historical federal spending on similar ambulatory health care services in Illinois?

Comparing this $306 million contract to historical spending requires a granular analysis of federal contracts awarded under NAICS 621999 or closely related codes within Illinois. Federal procurement data often aggregates spending, making direct comparisons difficult without specific filtering. However, a contract of this magnitude suggests a substantial and ongoing need for the services provided by Walgreen Co. within the state. Further investigation into historical contract awards for similar services by HHS or other agencies in Illinois would be necessary to establish a meaningful benchmark and assess whether this award represents an increase, decrease, or stable level of federal investment.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The provided data does not include specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. These are critical components that define the expected quality, timeliness, and outcomes of the services to be delivered by Walgreen Co. Typically, such metrics would be detailed in the contract's Statement of Work (SOW). Without this information, assessing the contractor's performance and ensuring accountability for taxpayer funds is significantly hampered. The effectiveness of the contract hinges on clearly defined and measurable KPIs and SLAs that align with the government's objectives for procuring these ambulatory health care services.

What is Walgreen Co.'s track record in delivering government contracts, particularly within the healthcare sector?

Walgreen Co. is a major retail pharmacy chain with extensive experience in providing healthcare services. While primarily known for its retail operations, the company has engaged in government contracting, including partnerships with Medicare and Medicaid, and providing pharmacy services to federal agencies and the military. Its track record in delivering large-scale, complex government healthcare contracts would need to be assessed based on past performance reviews, any documented issues or successes, and its capacity to manage the specific requirements of this $306 million award. A review of its contract history with agencies like HHS would provide further insight.

What are the potential risks associated with a firm fixed-price contract of this magnitude and duration?

A firm fixed-price (FFP) contract of this magnitude ($306 million) and duration (over 3 years) carries several potential risks. For the government, the primary risk is that the contractor may not be incentivized to control costs beyond meeting the minimum requirements, potentially leading to less-than-optimal value if the initial price was too high or if unforeseen efficiencies could have been achieved. Conversely, if costs escalate unexpectedly for the contractor, they might cut corners on quality or service delivery to maintain profitability, impacting patient care. The long duration also increases the risk of market changes or technological advancements rendering the contracted services less relevant or efficient over time.

How does the geographic focus on Illinois impact the accessibility and delivery of these ambulatory health care services?

The contract's explicit focus on Illinois means that the ambulatory health care services procured will be delivered within the state. This geographic specificity suggests that the services are intended to meet the needs of a particular population or address specific health challenges prevalent in Illinois. It allows for targeted resource allocation and potentially more efficient delivery by concentrating efforts within a defined region. However, it also means that individuals outside of Illinois will not directly benefit from this particular contract, and the effectiveness will depend on Walgreen Co.'s established presence and operational capacity within the state.

Industry Classification

NAICS: Health Care and Social Assistance › Other Ambulatory Health Care Services › All Other Miscellaneous Ambulatory Health Care Services

Product/Service Code: MEDICAL SERVICES › SPECIALIZED TECHNICAL/ MEDICAL SUPPORT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 75D301-22-R-72297

Offers Received: 11

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Walgreens Boots Alliance, Inc.

Address: 200 WILMOT RD STE 2002, DEERFIELD, IL, 60015

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

Financial Breakdown

Contract Ceiling: $306,212,245

Exercised Options: $306,212,245

Current Obligation: $306,212,245

Actual Outlays: $290,871,939

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline