HHS awards $2.38M for clinical lab testing services to Laboratory Corporation of America

Contract Overview

Contract Amount: $2,384,300 ($2.4M)

Contractor: Laboratory Corporation of America

Awarding Agency: Department of Health and Human Services

Start Date: 2025-03-26

End Date: 2026-09-30

Contract Duration: 553 days

Daily Burn Rate: $4.3K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXERCISE FOURTH OPTION PERIOD NAIHS-REFERRAL CLINICAL LAB TESTING SERVICES

Place of Performance

Location: SHIPROCK, SAN JUAN County, NEW MEXICO, 87420

State: New Mexico Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $2.4 million to LABORATORY CORPORATION OF AMERICA for work described as: EXERCISE FOURTH OPTION PERIOD NAIHS-REFERRAL CLINICAL LAB TESTING SERVICES Key points: 1. Contract value represents a moderate investment in essential healthcare services. 2. Full and open competition suggests a potentially competitive bidding process. 3. Fixed-price contract type helps mitigate cost overrun risks. 4. Contract duration of over 1.5 years provides service continuity. 5. Geographic focus on New Mexico indicates localized service delivery. 6. NAICS code 621511 points to a specialized medical laboratory service.

Value Assessment

Rating: good

The contract value of $2.38 million for 553 days of service appears reasonable for specialized clinical laboratory testing. Benchmarking against similar contracts for NAIHS-referral services would provide a more precise value-for-money assessment. However, given the fixed-price nature and the competitive award, it suggests a fair price was likely negotiated.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but this method generally fosters price discovery and encourages competitive pricing. The award to Laboratory Corporation of America suggests they offered the best value among the competing proposals.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to lower prices and better quality services through market forces.

Public Impact

Beneficiaries include Native American individuals referred through the NAIHS program. Services delivered are essential clinical laboratory testing, crucial for diagnosis and treatment. Geographic impact is primarily within New Mexico, serving the local IHS population. Workforce implications may include support for laboratory technicians and administrative staff at the contractor's facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific bidder count limits full assessment of competitive intensity.
Geographic concentration on New Mexico may not serve all eligible beneficiaries if they are outside this region.
Dependence on a single contractor for a critical service introduces some level of operational risk.

Positive Signals

Awarded under full and open competition, suggesting a robust bidding process.
Firm fixed-price contract type provides cost certainty.
Contract duration ensures continuity of essential healthcare services.

Sector Analysis

This contract falls within the healthcare services sector, specifically focusing on medical laboratory testing. The market for clinical laboratory services is substantial, with numerous providers ranging from large national corporations to smaller regional labs. This contract represents a specific procurement within the government's broader efforts to provide healthcare to underserved populations, such as Native Americans through the Indian Health Service.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information on subcontracting plans. Given the award to Laboratory Corporation of America, a large entity, it is unlikely that small businesses will be primary beneficiaries unless they are part of the contractor's supply chain or subcontracting network.

Oversight & Accountability

Oversight for this contract would typically fall under the Indian Health Service (IHS) and potentially the Department of Health and Human Services (HHS) contracting officers. Accountability measures are inherent in the firm fixed-price structure and performance requirements. Transparency is facilitated by the contract award notice, though detailed performance metrics are not publicly available.

Related Government Programs

Indian Health Service (IHS) Healthcare Contracts
HHS Clinical Laboratory Services
Federal Healthcare Procurement
Medical Testing Services Contracts

Risk Flags

Potential for service disruption if contractor faces operational issues.
Limited visibility into specific bidder numbers for competition assessment.
Geographic concentration may not cover all eligible beneficiaries.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $2.4 million to LABORATORY CORPORATION OF AMERICA. EXERCISE FOURTH OPTION PERIOD NAIHS-REFERRAL CLINICAL LAB TESTING SERVICES

Who is the contractor on this award?

The obligated recipient is LABORATORY CORPORATION OF AMERICA.

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 $2.4 million.

What is the period of performance?

Start: 2025-03-26. End: 2026-09-30.

What is the historical spending pattern for clinical laboratory services by the Indian Health Service in New Mexico?

Analyzing historical spending for clinical laboratory services by the IHS in New Mexico would provide crucial context for the current $2.38 million award. Without specific historical data, it's difficult to determine if this represents an increase, decrease, or stable level of investment. Past spending trends can reveal patterns of service utilization, contractor performance, and potential areas for cost savings or efficiency improvements. Understanding the historical budget allocation for these services is key to assessing the long-term commitment and sustainability of the current contract and identifying any significant shifts in procurement strategy or service needs within the region.

How does the per-unit cost of services under this contract compare to other IHS or federal contracts for similar laboratory testing?

A detailed comparison of per-unit costs for specific laboratory tests performed under this contract against benchmarks from other IHS or federal contracts is essential for a thorough value assessment. While the overall contract value and duration are known, the efficiency and cost-effectiveness of the services hinge on the pricing of individual tests. If this contract's per-unit costs are significantly higher than comparable federal agreements, it could indicate a lack of competitive pricing or less favorable terms. Conversely, if they are in line or lower, it suggests effective price negotiation and potentially good value for taxpayer dollars. Access to a detailed price list and comparison data is necessary for this analysis.

What is Laboratory Corporation of America's track record with the Indian Health Service and other federal agencies for similar services?

Evaluating Laboratory Corporation of America's (Labcorp) past performance with the IHS and other federal agencies is critical for assessing the risk associated with this contract. A history of successful contract completion, adherence to quality standards, and timely delivery of services would indicate a reliable partner. Conversely, any past performance issues, such as service disruptions, quality control failures, or unresolved disputes, would raise concerns about potential risks to service continuity and patient care. Reviewing past performance evaluations and any documented issues would provide insight into Labcorp's capabilities and reliability in fulfilling federal healthcare contracts.

What specific types of clinical laboratory tests are included under this contract, and what is their relative importance to patient care?

The specific types of clinical laboratory tests covered under this $2.38 million contract are fundamental to understanding its impact and value. Knowing whether the contract covers routine blood work, specialized diagnostic tests, or genetic analysis helps contextualize the service's importance. High-priority diagnostic tests are critical for timely patient treatment and management, while routine tests are essential for ongoing health monitoring. Understanding the scope of services allows for an assessment of whether the contract adequately addresses the healthcare needs of the NAIHS-referred population and whether the chosen contractor possesses the necessary expertise and capabilities for the full range of required testing.

What are the potential risks associated with relying on a single provider for these essential clinical laboratory services in New Mexico?

Relying on a single provider, Laboratory Corporation of America in this case, for essential clinical laboratory services in New Mexico presents several potential risks. These include service disruptions due to unforeseen events like equipment failure, natural disasters, or labor disputes at the contractor's facilities. There's also a risk of vendor lock-in, potentially limiting future negotiation leverage for better pricing or service enhancements. Furthermore, if the contractor's performance degrades, the IHS may face challenges in quickly transitioning to an alternative provider, potentially impacting patient care continuity. Contingency planning and robust service level agreements are crucial to mitigate these risks.

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: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Bode Cellmark Forensics Inc.

Address: 531 S SPRING ST, BURLINGTON, NC, 27215

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

Financial Breakdown

Contract Ceiling: $2,384,300

Exercised Options: $2,384,300

Current Obligation: $2,384,300

Actual Outlays: $445,853

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 75H71021D00005

IDV Type: IDC

Timeline