Hopi Health Care Center contract for nursing services awarded at $12.18M, with a high per-unit cost

Contract Overview

Contract Amount: $12,175,062 ($12.2M)

Contractor: RAO Radiologists, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2021-09-22

End Date: 2025-09-22

Contract Duration: 1,461 days

Daily Burn Rate: $8.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EMERGENCY ROOM REGISTERED NURSES AT HOPI HEALTH CARE CENTER

Place of Performance

Location: POLACCA, NAVAJO County, ARIZONA, 86042

State: Arizona Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $12.2 million to RAO RADIOLOGISTS, INC. for work described as: EMERGENCY ROOM REGISTERED NURSES AT HOPI HEALTH CARE CENTER Key points: 1. The contract's value suggests a significant need for temporary nursing staff at the Hopi Health Care Center. 2. Competition dynamics appear favorable with full and open competition, though the per-unit cost warrants scrutiny. 3. Risk indicators include potential overspending due to high per-unit costs and reliance on temporary staff. 4. Performance context is critical, as the quality and availability of nurses directly impact patient care. 5. The contract positions the Indian Health Service within the broader healthcare staffing sector, highlighting a persistent challenge. 6. The duration of the contract (4 years) indicates a long-term need for these services.

Value Assessment

Rating: questionable

The total contract value of $12.18 million over four years for registered nurses is substantial. However, the benchmarked per-unit cost of $8,333 per nurse per period (likely monthly or bi-weekly, given the duration and total value) appears high when compared to typical market rates for temporary nursing services. This suggests potential overpayment or a need for deeper analysis into the specific services and qualifications required. Without more granular data on hours worked or specific roles, a definitive value-for-money assessment is challenging, but the initial benchmark raises concerns.

Cost Per Unit: $8,333 per unit (benchmark)

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of two bidders suggests a degree of competition, which is generally positive for price discovery. However, the effectiveness of this competition in driving down costs is questionable given the high per-unit benchmark. Further investigation into the bidding process and the specific requirements could reveal if the competition was robust enough to secure the best possible pricing.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it encourages multiple vendors to offer competitive pricing, potentially leading to cost savings. However, in this instance, the high per-unit cost suggests that the competitive process may not have translated into optimal value for taxpayer dollars.

Public Impact

Beneficiaries include patients of the Hopi Health Care Center, who will receive essential nursing care. Services delivered are temporary registered nursing support, crucial for maintaining operational capacity. Geographic impact is focused on the service area of the Hopi Health Care Center in Arizona. Workforce implications involve supplementing the existing healthcare staff and potentially addressing nursing shortages.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High per-unit cost may indicate inefficient pricing or a lack of competitive pressure on specific service elements.
Reliance on temporary staff can lead to inconsistencies in care quality and team cohesion.
The long contract duration might mask underlying issues with permanent staffing or retention at the facility.
The specific nature of 'temporary help services' needs clarification to ensure it aligns with genuine, short-term needs rather than a permanent staffing gap.

Positive Signals

Awarded under full and open competition, suggesting a fair process for vendor selection.
The contract aims to ensure continuity of care by providing necessary nursing resources.
The Indian Health Service is addressing a critical need for healthcare professionals in an underserved area.

Sector Analysis

This contract falls within the Healthcare sector, specifically focusing on temporary staffing services. The market for healthcare staffing, particularly for specialized roles like registered nurses, is substantial and often characterized by high demand and fluctuating supply. The Indian Health Service, like many healthcare providers, faces challenges in recruiting and retaining permanent staff, leading to increased reliance on contract services. Comparable spending benchmarks for temporary nursing services can vary widely based on location, specialty, and contract terms, but the per-unit cost here appears elevated.

Small Business Impact

There is no indication that this contract involved small business set-asides, as the 'sb' field is false. The primary contractor, RAO RADIOLOGISTS, INC., is likely not a small business given the contract value. Subcontracting opportunities for small businesses are not explicitly detailed but could exist if the primary contractor engages them for specific support services. The impact on the small business ecosystem is minimal unless RAO RADIOLOGISTS, INC. actively seeks small business subcontractors.

Oversight & Accountability

Oversight mechanisms would typically involve the contracting officer's representative (COR) at the Indian Health Service, responsible for monitoring performance and ensuring compliance with contract terms. Accountability measures are tied to the contractor's adherence to service level agreements and quality standards. Transparency is facilitated through contract databases like FPDS, but detailed performance reports are often internal. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Indian Health Service Contracts
Temporary Healthcare Staffing
Registered Nurse Services
Federal Healthcare Procurement
Emergency Room Staffing

Risk Flags

High Per-Unit Cost
Long Duration for Temporary Services
Potential for Inconsistent Care Quality

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $12.2 million to RAO RADIOLOGISTS, INC.. EMERGENCY ROOM REGISTERED NURSES AT HOPI HEALTH CARE CENTER

Who is the contractor on this award?

The obligated recipient is RAO RADIOLOGISTS, INC..

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 $12.2 million.

What is the period of performance?

Start: 2021-09-22. End: 2025-09-22.

What is the specific breakdown of services provided under this contract, and how does it justify the per-unit cost?

The contract specifies 'EMERGENCY ROOM REGISTERED NURSES AT HOPI HEALTH CARE CENTER' under 'Temporary Help Services'. The per-unit cost benchmark of $8,333 is derived from the total award ($12,175,061.59) divided by the number of units. Without knowing the definition of a 'unit' (e.g., per nurse per month, per shift, per hour block), it's difficult to precisely justify the cost. However, assuming a unit represents a significant period or a specific service package, this rate appears high compared to general market averages for RNs, even for specialized or emergency room roles. Factors that could influence this include the remote location, specific skill sets required (e.g., trauma nursing), 24/7 availability, and potentially high demand in the region. A detailed breakdown of required hours, qualifications, and the contractor's overhead and profit margins would be necessary for a thorough justification.

How does the $8,333 per-unit cost benchmark compare to similar contracts for registered nurses within the Indian Health Service or other federal agencies?

Benchmarking the $8,333 per-unit cost requires a clear definition of the 'unit'. If the unit represents a monthly cost per nurse, this figure is significantly above average market rates for temporary RNs, which often range from $4,000 to $7,000 per month depending on location and specialty. Even for high-demand areas or specialized roles, exceeding $8,333 per month would typically require exceptional circumstances or a very specific service package. Within the Indian Health Service (IHS) and other federal agencies, contracts for temporary nursing staff are scrutinized for value. While specific contract data varies, a per-unit cost at this level would likely trigger a review to ensure it aligns with fair market value, considering factors like geographic differentials, required certifications, and the urgency of the need. Without more granular data on the contract's unit definition and specific service requirements, a precise comparison is difficult, but the initial benchmark suggests a potential outlier.

What are the potential risks associated with relying on temporary nursing staff for emergency room services at the Hopi Health Care Center?

Relying on temporary nursing staff for emergency room services presents several risks. Firstly, there's a potential for inconsistent quality of care, as temporary staff may have varying levels of familiarity with the facility's protocols, electronic health records, and specific patient populations. This can also lead to increased training burdens and potential errors. Secondly, continuity of care can be compromised, as temporary nurses may not develop the same long-term relationships with patients or understanding of community health needs as permanent staff. Thirdly, high turnover among temporary staff can disrupt team dynamics and place additional strain on permanent employees who must constantly orient new personnel. Finally, the cost associated with temporary staffing is often higher than permanent hires due to agency fees and premium pay, potentially impacting the facility's budget and overall financial sustainability. Ensuring rigorous vetting, comprehensive orientation, and clear performance expectations is crucial to mitigate these risks.

What is the track record of the contractor, RAO RADIOLOGISTS, INC., in providing temporary healthcare staffing services to the federal government?

Information regarding RAO RADIOLOGISTS, INC.'s specific track record in providing temporary healthcare staffing services to the federal government is not detailed in the provided data snippet. The data indicates they were awarded this specific contract. To assess their track record, one would need to examine past performance evaluations, other federal contracts awarded to them for similar services, and any reported issues or successes. A comprehensive review would involve searching federal procurement databases (like FPDS or SAM.gov) for their contract history, looking for performance metrics, and checking for any debarment or suspension actions. Without this additional data, it's difficult to ascertain their experience and reliability in this particular service area beyond this single award.

How does the contract duration of 1461 days (approximately 4 years) align with the typical need for 'temporary help services'?

A contract duration of 1461 days (approximately 4 years) for 'Temporary Help Services' raises questions about the definition and application of 'temporary'. Typically, temporary help services are intended to fill short-term gaps, such as covering for employee leave, managing seasonal workloads, or assisting during specific projects. A four-year duration suggests a more persistent need that might be better addressed through permanent hiring or longer-term service agreements. While federal agencies can use temporary staffing contracts for extended periods, it often warrants justification to ensure it's not masking a need for permanent positions or that market conditions genuinely preclude permanent hiring. The Indian Health Service may have specific justifications for this extended temporary need, possibly related to recruitment challenges in remote areas or fluctuating healthcare demands. However, the length of the contract duration warrants scrutiny to ensure efficient resource allocation and appropriate staffing strategies.

What are the implications of this contract being awarded under 'FIRM FIXED PRICE' type?

The 'FIRM FIXED PRICE' (FFP) contract type means that the total price of the contract is fixed and not subject to adjustment based on the contractor's cost experience. This shifts the risk of cost overruns entirely to the contractor, RAO RADIOLOGISTS, INC. For the government, this provides cost certainty, as the final price is known upfront. It incentivizes the contractor to control costs efficiently to maximize profit. However, for FFP contracts to be effective, the scope of work must be clearly defined and stable. If the requirements change significantly, modifications to the contract would be necessary, potentially negating some of the initial price certainty. In the context of temporary nursing services, an FFP award suggests that the agency has a clear understanding of the required services and anticipates stable demand over the contract period, allowing the contractor to bid a fixed price with confidence.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Employment Services › Temporary Help Services

Product/Service Code: MEDICAL SERVICES › NURSING, NURSING HOME, EVAL/SCREEN

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 75H71221R00021

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 8603 WESTWOOD CENTER DR STE 330, VIENNA, VA, 22182

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Minority Owned Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $12,175,062

Exercised Options: $12,175,062

Current Obligation: $12,175,062

Actual Outlays: $9,996,314

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36F79720D0062

IDV Type: FSS

Timeline