HHS awards $37.4M contract for clinical center of excellence services to OptumServe Health Services

Contract Overview

Contract Amount: $37,429,167 ($37.4M)

Contractor: Optumserve Health Services, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2022-09-29

End Date: 2030-09-28

Contract Duration: 2,921 days

Daily Burn Rate: $12.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: WTCHP CLINICAL CENTER OF EXCELLENCE

Place of Performance

Location: LA CROSSE, LA CROSSE County, WISCONSIN, 54601

State: Wisconsin Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $37.4 million to OPTUMSERVE HEALTH SERVICES, INC. for work described as: WTCHP CLINICAL CENTER OF EXCELLENCE Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract type is Cost Plus Fixed Fee, which can lead to cost overruns if not managed carefully. 3. The duration of the contract is approximately 8 years, indicating a long-term need for these services. 4. The award is for 'All Other Outpatient Care Centers' services, a broad category. 5. The contract is managed by the Centers for Disease Control and Prevention (CDC). 6. The base award amount is over $12.8M, with significant potential for growth over the contract term.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the services provided and comparable market rates. The Cost Plus Fixed Fee (CPFF) contract type introduces inherent risk for cost control, as the government pays the actual costs plus a fixed fee. While CPFF can be appropriate for research and development or when costs are uncertain, it requires robust oversight to ensure value. The base award of $12.8M over an 8-year period suggests an average annual value of approximately $1.6M, which needs to be assessed against the scope of work.

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 presence of 8 bidders suggests a healthy level of competition for this requirement. A competitive process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: The full and open competition ensures that taxpayer dollars are likely being used more efficiently by leveraging the competitive market to secure the best possible offer.

Public Impact

The contract aims to establish a 'Clinical Center of Excellence,' which could lead to improved healthcare delivery and research capabilities. Services are likely to benefit patients seeking outpatient care, though the specific patient population is not detailed. The geographic impact is noted as Wisconsin (WI), suggesting a focus on services within that state. The contract may have implications for the healthcare workforce, potentially creating or sustaining jobs in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost Plus Fixed Fee contract type can incentivize higher costs if not rigorously managed.
The broad service category 'All Other Outpatient Care Centers' may lack specificity, potentially leading to scope creep or unclear deliverables.
Long contract duration (8 years) requires sustained oversight to ensure continued relevance and value.

Positive Signals

Awarded through full and open competition with multiple bidders, indicating market interest and potential for competitive pricing.
Establishment of a 'Center of Excellence' suggests a strategic investment in improving healthcare services or research.
Contract is managed by the CDC, a reputable agency with experience in public health initiatives.

Sector Analysis

The healthcare services sector is vast and complex, with significant government spending on outpatient care, research, and public health initiatives. Contracts for clinical centers of excellence often involve specialized services, data management, and program support. Comparable spending benchmarks would depend heavily on the specific services rendered, but the CDC's involvement suggests a focus on public health outcomes or disease management.

Small Business Impact

There is no indication that this contract included small business set-asides, nor is there information on subcontracting plans. Further analysis would be needed to determine the extent of small business participation and its impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Health and Human Services (HHS) and specifically the Centers for Disease Control and Prevention (CDC). The effectiveness of oversight will depend on the agency's established processes for managing CPFF contracts, including regular reviews of costs, performance, and adherence to the statement of work. Transparency measures and reporting requirements stipulated in the contract will be crucial for accountability.

Related Government Programs

Public Health Services
Outpatient Care Services
Healthcare Research and Development
Disease Surveillance and Control Programs

Risk Flags

Cost Plus Fixed Fee contract type requires careful monitoring to ensure cost efficiency.
Long contract duration necessitates ongoing evaluation for relevance and value.
Broad service description requires clear definition of deliverables and performance standards.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $37.4 million to OPTUMSERVE HEALTH SERVICES, INC.. WTCHP CLINICAL CENTER OF EXCELLENCE

Who is the contractor on this award?

The obligated recipient is OPTUMSERVE HEALTH SERVICES, INC..

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 $37.4 million.

What is the period of performance?

Start: 2022-09-29. End: 2030-09-28.

What specific clinical services will the 'Clinical Center of Excellence' provide under this contract?

The provided data indicates the contract is for 'All Other Outpatient Care Centers' services and establishes a 'Clinical Center of Excellence.' However, the specific clinical services are not detailed. Typically, a Center of Excellence focuses on advancing best practices, research, and specialized care within a particular domain. For the CDC, this could involve areas like infectious disease management, chronic disease prevention, or public health data analysis and interpretation. The exact scope would be defined in the contract's Statement of Work (SOW), which would detail deliverables, performance metrics, and the precise nature of the clinical support or research activities to be undertaken.

How does the Cost Plus Fixed Fee (CPFF) structure compare to other contract types for similar services?

Cost Plus Fixed Fee (CPFF) contracts are often used when the level of uncertainty in performance costs is high, such as in research and development or when the scope is not fully defined at the outset. In this structure, the contractor is reimbursed for all allowable costs incurred, plus a predetermined fixed fee representing profit. Compared to Firm-Fixed-Price (FFP) contracts, CPFF offers less cost certainty for the government but can be more flexible. Compared to Cost Plus Incentive Fee (CPIF) or Cost Plus Award Fee (CPAF), CPFF provides a fixed profit margin, which may offer less incentive for the contractor to control costs aggressively compared to performance-based fee structures. For routine outpatient services, FFP might be preferred if the scope is well-defined and stable.

What are the potential risks associated with the 8-year duration of this contract?

An 8-year contract duration, while providing stability, carries several potential risks. Firstly, the healthcare landscape, including medical advancements, treatment protocols, and public health priorities, can change significantly over such a period. This contract might become misaligned with current needs or technological capabilities if not managed proactively. Secondly, long-term contracts can reduce flexibility for the government to adapt to new requirements or to incorporate innovative solutions from other vendors. Thirdly, sustained oversight is critical; complacency or reduced vigilance over time could lead to inefficiencies or a decline in service quality. Regular contract reviews and potential modifications would be essential to mitigate these risks and ensure the contract remains relevant and cost-effective.

What is the significance of the base award amount versus the total potential value?

The base award amount of $12,814,000 represents the initial funding obligated for the contract. The total award amount is $37,429,167.39, indicating that the contract includes options or contract line items (CLINs) that allow for significant growth beyond the base. This structure suggests that the government anticipates needing more services or has flexibility to expand the scope over the contract's life. The difference highlights the potential scalability of the services provided by OptumServe Health Services. It is crucial to understand the conditions under which these additional funds would be exercised, ensuring they align with demonstrated needs and provide continued value for money.

How might the 'Center of Excellence' concept impact public health outcomes in Wisconsin?

The establishment of a 'Clinical Center of Excellence' in Wisconsin, managed by the CDC, holds the potential to significantly enhance public health outcomes within the state. Such centers typically focus on advancing knowledge, improving care delivery models, and implementing evidence-based practices. Depending on the specific focus area (e.g., infectious diseases, chronic conditions, health equity), this could lead to more effective disease prevention strategies, better patient management, improved diagnostic capabilities, and the dissemination of best practices to other healthcare providers in the region. It could also foster research and innovation tailored to the specific health challenges faced by Wisconsin's population, ultimately contributing to a healthier populace.

Industry Classification

NAICS: Health Care and Social Assistance › Outpatient Care Centers › All Other Outpatient Care Centers

Product/Service Code: MEDICAL SERVICES › GENERAL HEALTH CARE SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 75D301-22-R-72142

Offers Received: 8

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Unitedhealth Group Incorporated

Address: 328 FRONT ST S, LA CROSSE, WI, 54601

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

Financial Breakdown

Contract Ceiling: $81,026,168

Exercised Options: $41,157,272

Current Obligation: $37,429,167

Actual Outlays: $21,261,276

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline