HHS Awards $3.9M for Reference Lab Services to Quest Diagnostics, Serving Minnesota

Contract Overview

Contract Amount: $3,924,879 ($3.9M)

Contractor: Quest Diagnostics Incorporated

Awarding Agency: Department of Health and Human Services

Start Date: 2022-05-04

End Date: 2027-04-30

Contract Duration: 1,822 days

Daily Burn Rate: $2.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: REFERENCE LAB AND PATHOLOGY SERVICES

Place of Performance

Location: BEMIDJI, BELTRAMI County, MINNESOTA, 56601

State: Minnesota Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $3.9 million to QUEST DIAGNOSTICS INCORPORATED for work described as: REFERENCE LAB AND PATHOLOGY SERVICES Key points: 1. Quest Diagnostics, a major player in the lab services market, secured this contract. 2. The contract value is substantial for the specific service category. 3. Potential risks include vendor lock-in and the need for ongoing performance monitoring. 4. The sector is essential healthcare infrastructure, with significant government spending.

Value Assessment

Rating: fair

The contract value of $3.9M over five years for reference lab services appears reasonable given the scope. Benchmarking against similar large-scale pathology contracts is difficult without more granular data, but it falls within expected ranges for specialized medical services.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. This method is generally effective in achieving fair market prices by allowing multiple qualified vendors to submit proposals.

Taxpayer Impact: The competitive award process aims to ensure taxpayer funds are used efficiently for essential healthcare services.

Public Impact

Ensures access to critical diagnostic testing for patients served by the Indian Health Service in Minnesota. Supports the operational needs of the Indian Health Service by outsourcing specialized laboratory functions. Potential for improved patient outcomes through timely and accurate diagnostic results.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract duration extends over multiple years, requiring sustained oversight.
Reliance on a single vendor for a critical service.
Geographic concentration of service delivery.

Positive Signals

Awarded through full and open competition.
Firm fixed price contract limits cost uncertainty.
Essential service for a vulnerable population.

Sector Analysis

This contract falls within the healthcare sector, specifically medical laboratories. Government spending in this area is driven by the need to provide essential health services, particularly to underserved populations like those served by the Indian Health Service.

Small Business Impact

The data indicates this contract was awarded to a large corporation, Quest Diagnostics. There is no explicit indication of small business participation or subcontracting in the provided details.

Oversight & Accountability

The Indian Health Service is responsible for overseeing this contract. Robust oversight mechanisms are crucial to ensure service quality, adherence to pricing, and timely delivery of results, especially given the duration and critical nature of the services.

Related Government Programs

Medical Laboratories
Department of Health and Human Services Contracting
Indian Health Service Programs

Risk Flags

Potential for price increases in future contract renewals.
Dependence on a single provider for critical lab services.
Ensuring consistent quality across all tests and locations.
Data security and patient privacy compliance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $3.9 million to QUEST DIAGNOSTICS INCORPORATED. REFERENCE LAB AND PATHOLOGY SERVICES

Who is the contractor on this award?

The obligated recipient is QUEST DIAGNOSTICS INCORPORATED.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Indian Health Service).

What is the total obligated amount?

The obligated amount is $3.9 million.

What is the period of performance?

Start: 2022-05-04. End: 2027-04-30.

What is the specific breakdown of services included in the $3.9M contract, and how does this compare to the typical cost of these services?

The provided data lacks a detailed breakdown of specific reference laboratory and pathology services. A comprehensive analysis would require reviewing the contract's statement of work to understand the exact tests and procedures covered. Benchmarking would then involve comparing these specific services against industry price lists and other government contracts for similar scopes of work to assess value for money.

What are the key performance indicators (KPIs) for this contract, and how will Quest Diagnostics' performance be monitored to mitigate risks?

Key performance indicators likely include turnaround times for test results, accuracy rates, specimen integrity, and patient satisfaction. The Indian Health Service should have a robust contract management plan that includes regular performance reviews, site visits, and mechanisms for addressing any deficiencies or service failures to ensure quality and mitigate risks.

How does the firm fixed price structure impact the government's ability to benefit from potential cost savings or efficiencies identified during the contract period?

A firm fixed price contract provides cost certainty for the government, protecting against cost overruns. However, it may limit the government's ability to directly benefit from cost savings achieved by the contractor through efficiencies. Incentives for cost reduction or performance improvement could be incorporated into future contracts to address this.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 75H70522Q00007

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 500 PLAZA DR, SECAUCUS, NJ, 07094

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

Financial Breakdown

Contract Ceiling: $3,924,879

Exercised Options: $3,924,879

Current Obligation: $3,924,879

Actual Outlays: $2,670,754

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: V797D70090

IDV Type: FSS

Timeline