HHS awards $272M contract for occupational medical services, with potential for significant growth

Contract Overview

Contract Amount: $27,232,596 ($27.2M)

Contractor: Eagle Health, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2020-02-01

End Date: 2026-06-30

Contract Duration: 2,341 days

Daily Burn Rate: $11.6K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 6

Pricing Type: COST PLUS FIXED FEE

Sector: Healthcare

Official Description: OCCUPATIONAL MEDICAL SERVICES LLC:1331570 [20-001580]

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20813

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $27.2 million to EAGLE HEALTH, LLC for work described as: OCCUPATIONAL MEDICAL SERVICES LLC:1331570 [20-001580] Key points: 1. The contract's value suggests a substantial need for occupational medical services within the NIH. 2. The 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' indicates a competitive process, but the exclusion of specific sources warrants further investigation. 3. The Cost Plus Fixed Fee (CPFF) pricing structure can incentivize cost control but also carries inherent risks if not closely monitored. 4. The contract duration of over 6 years provides stability but also necessitates ongoing performance evaluation. 5. The absence of small business set-asides or subcontracting plans may limit opportunities for smaller enterprises in this sector. 6. The geographic focus on Maryland (ST: MD, SN: MARYLAND) concentrates the service delivery area.

Value Assessment

Rating: fair

Benchmarking the $272 million award for occupational medical services is challenging without specific service details and comparable contracts. However, the duration and scope suggest a significant investment. The Cost Plus Fixed Fee (CPFF) structure requires careful oversight to ensure value for money, as it can lead to cost overruns if not managed effectively. The contract's total value, including potential modifications, could be considerably higher than the initial award, necessitating continuous monitoring of spending against performance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES.' This indicates that while the competition was intended to be open, certain sources were specifically excluded from bidding. The exact reasons for this exclusion are not provided but could impact the breadth of competition and potentially the final pricing. The number of bidders is not specified, making it difficult to fully assess the competitive landscape and its impact on price discovery.

Taxpayer Impact: The exclusion of sources, even in an otherwise open competition, could potentially limit the number of competitive bids received, which might affect the government's ability to secure the most cost-effective solution for taxpayers.

Public Impact

Federal employees at the National Institutes of Health (NIH) are the primary beneficiaries, receiving essential occupational medical services. Services likely include health assessments, injury prevention, and treatment for federal workers, ensuring a healthy and productive workforce. The geographic impact is concentrated in Maryland, where the NIH facilities are located. The contract supports jobs within the healthcare sector, particularly in occupational medicine specialties.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The 'exclusion of sources' in an otherwise open competition raises questions about fairness and potential limitations on competitive pricing.
The Cost Plus Fixed Fee (CPFF) contract type can lead to higher costs if not rigorously managed and monitored for efficiency.
Lack of explicit small business participation or subcontracting goals may limit opportunities for smaller businesses in this contract's ecosystem.
The total contract value is not fixed and could increase significantly over its multi-year term, requiring sustained budget scrutiny.

Positive Signals

The contract was awarded through a competitive process, suggesting that multiple entities vied for the opportunity.
The multi-year duration provides continuity of essential services for federal employees.
The contract is with a single entity, potentially allowing for streamlined service delivery and relationship management.

Sector Analysis

The healthcare services sector, particularly occupational medicine, is a critical component of federal employee well-being and productivity. This contract falls within the broader General Medical and Surgical Hospitals (NAICS 622110) industry. Federal spending in this area is substantial, supporting the health of the nation's public servants. Comparable contracts often involve long-term agreements for comprehensive health services, with values varying based on the size of the agency and the scope of services required.

Small Business Impact

This contract does not appear to have specific small business set-aside provisions (ss: false, sb: false). The absence of explicit small business participation goals or subcontracting requirements means that opportunities for small businesses to engage with this contract may be limited. This could potentially reduce the diversity of vendors and limit the reach of subcontracting opportunities within the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Health and Human Services and the National Institutes of Health. As a Cost Plus Fixed Fee contract, rigorous financial oversight is crucial to monitor expenditures and ensure that costs remain reasonable and justified. Transparency regarding performance metrics and any modifications to the contract would be key accountability measures. The Inspector General for HHS would have jurisdiction to investigate any potential fraud, waste, or abuse.

Related Government Programs

Federal Occupational Health Services
Employee Health and Wellness Programs
General Medical and Surgical Services Contracts
Public Health Services Contracts
Department of Health and Human Services Contracts

Risk Flags

Potential for cost overruns due to CPFF structure.
Limited competition due to exclusion of sources.
Lack of small business participation.
Need for robust oversight of service delivery and costs.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $27.2 million to EAGLE HEALTH, LLC. OCCUPATIONAL MEDICAL SERVICES LLC:1331570 [20-001580]

Who is the contractor on this award?

The obligated recipient is EAGLE HEALTH, LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $27.2 million.

What is the period of performance?

Start: 2020-02-01. End: 2026-06-30.

What specific occupational medical services are being provided under this contract?

The provided data does not detail the specific occupational medical services. However, given the contract's designation and the awarding agency (NIH), services likely encompass a broad range of health support for federal employees. This typically includes pre-employment physicals, periodic health evaluations, injury diagnosis and treatment, preventive health screenings, health education, and potentially specialized services related to workplace hazards. The 'General Medical and Surgical Hospitals' NAICS code suggests a comprehensive scope that could extend beyond basic occupational health to include more involved medical care relevant to federal personnel.

How does the $272 million contract value compare to similar occupational medical service contracts awarded by the federal government?

Direct comparison of the $272 million contract value is difficult without knowing the precise scope and duration of services. However, for large federal agencies like NIH, multi-year contracts for comprehensive occupational health services can indeed reach into the hundreds of millions of dollars. Factors influencing this value include the number of federal employees served, the geographic spread of facilities, the complexity of required medical services, and the contract's length. This award appears to be a significant investment, reflecting a substantial need for these services within the NIH.

What are the primary risks associated with a Cost Plus Fixed Fee (CPFF) contract for occupational medical services?

The primary risk with a CPFF contract is that the contractor may have less incentive to control costs compared to fixed-price contracts, as their profit is fixed regardless of the final cost. This can lead to cost overruns if the government's oversight is not diligent. For occupational medical services, risks include potential overutilization of services, inefficient resource allocation, and difficulties in accurately forecasting the demand for specific medical interventions. Robust government oversight, detailed performance metrics, and regular audits are essential to mitigate these risks and ensure value for taxpayer money.

What does 'FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES' mean in the context of this contract?

This contract type signifies that the solicitation was initially intended for full and open competition, meaning all responsible sources were permitted to submit offers. However, specific sources were subsequently excluded from the bidding process. The reasons for exclusion are not detailed in the provided data but could stem from various factors such as past performance issues, inability to meet specific technical requirements, or national security concerns. While competition was sought, the exclusion limits the pool of potential offerors, which could impact the level of competition achieved and potentially the final price negotiated.

What is the historical spending trend for occupational medical services at the NIH?

The provided data does not include historical spending trends for occupational medical services at the NIH. To assess this, one would need to examine past contracts awarded for similar services over several fiscal years. Analyzing historical data would reveal whether this $272 million award represents an increase, decrease, or stable level of spending compared to previous periods. It would also help identify any patterns in contract types, durations, and awarded values, providing context for the current contract's significance and potential future spending.

Are there any performance metrics or key performance indicators (KPIs) associated with this contract?

The provided data does not specify the performance metrics or Key Performance Indicators (KPIs) for this contract. However, for a contract of this nature and value, it is highly probable that specific KPIs are defined within the contract's statement of work. These would likely focus on service availability, response times, patient satisfaction, quality of care, adherence to medical protocols, and potentially health outcomes for federal employees. Effective monitoring of these KPIs by the contracting agency is crucial for ensuring the contractor meets its obligations and delivers value.

Industry Classification

NAICS: Health Care and Social Assistance › General Medical and Surgical Hospitals › General Medical and Surgical Hospitals

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 75N98019R00017

Offers Received: 6

Pricing Type: COST PLUS FIXED FEE (U)

Evaluated Preference: NONE

Contractor Details

Parent Company: Cape FOX Corporation

Address: 7050 INFANTRY RIDGE RD, MANASSAS, VA, 20109

Business Categories: 8(a) Program Participant, Alaskan Native Corporation Owned Firm, Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Native American Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $27,232,596

Exercised Options: $27,232,596

Current Obligation: $27,232,596

Actual Outlays: $23,168,189

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline