HHS awards $24.9M for medical lab services, with Quest Diagnostics securing a 1-year contract

Contract Overview

Contract Amount: $24,927 ($24.9K)

Contractor: Quest Diagnostics Incorporated

Awarding Agency: Department of Health and Human Services

Start Date: 2023-04-03

End Date: 2024-04-02

Contract Duration: 365 days

Daily Burn Rate: $68/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: QUEST DIAGNOSTICS INCORPORATED:1141946 [23-000228]

Place of Performance

Location: COLLEGEVILLE, MONTGOMERY County, PENNSYLVANIA, 19426

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $24,927.2 to QUEST DIAGNOSTICS INCORPORATED for work described as: QUEST DIAGNOSTICS INCORPORATED:1141946 [23-000228] Key points: 1. Contract value represents a significant investment in essential medical laboratory services. 2. Quest Diagnostics, a major player, likely leveraged existing infrastructure for this award. 3. The fixed-price nature of the contract provides cost certainty for the government. 4. Performance duration of one year allows for regular re-evaluation of needs and performance. 5. The contract falls within the broader healthcare sector, supporting public health initiatives. 6. Geographic focus on Pennsylvania indicates a specific operational need within that state.

Value Assessment

Rating: good

The contract value of $24.9 million for one year of medical laboratory services appears reasonable given the scope. Benchmarking against similar contracts for large-scale laboratory services is challenging without more detailed service specifications. However, Quest Diagnostics is a well-established provider, suggesting that the pricing is likely competitive within the market for such services. The firm-fixed-price structure helps manage cost risks for the government.

Cost Per Unit: N/A

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 specific number of bidders is not provided, but the 'full and open' designation suggests a robust competitive process. This level of competition is generally expected to drive favorable pricing and service quality.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining the best value through a competitive bidding process, potentially leading to lower costs and higher quality services.

Public Impact

The primary beneficiaries are patients and healthcare providers in Pennsylvania who rely on timely and accurate medical laboratory results. The contract ensures the continued provision of essential medical laboratory testing services. The geographic impact is concentrated in Pennsylvania, supporting local healthcare infrastructure. Workforce implications include potential support for laboratory technicians and administrative staff employed by Quest Diagnostics in the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if services are highly specialized and difficult to transition.
Reliance on a single large provider could limit future competition if not managed proactively.
Ensuring consistent quality across all testing sites within Pennsylvania requires robust oversight.

Positive Signals

Awarded through full and open competition, indicating a competitive marketplace.
Firm-fixed-price contract provides cost predictability.
Quest Diagnostics is a reputable provider with established infrastructure.

Sector Analysis

The healthcare sector, specifically medical laboratories, is a critical component of the U.S. healthcare system. This contract supports the National Institutes of Health's mission by ensuring access to diagnostic testing. The market for clinical laboratory services is substantial, with major players like Quest Diagnostics and LabCorp dominating a significant portion. Government contracts in this space often focus on specific geographic regions or specialized testing needs.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses stemming from a small business set-aside. The focus is on a large, established provider, suggesting that opportunities for small businesses would likely be through indirect channels or separate, smaller contracts.

Oversight & Accountability

Oversight for this contract would typically be managed by the National Institutes of Health (NIH) contracting officers and program managers. Accountability measures are embedded in the contract terms, including performance standards and reporting requirements. Transparency is generally maintained through contract award databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Medical Laboratory Services
Clinical Diagnostic Testing
Public Health Services
National Institutes of Health Contracts
Healthcare Services Contracts

Risk Flags

Potential for service disruption if provider faces operational issues.
Need for ongoing quality assurance and performance monitoring.
Long-term cost implications beyond the current contract period.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $24,927.2 to QUEST DIAGNOSTICS INCORPORATED. QUEST DIAGNOSTICS INCORPORATED:1141946 [23-000228]

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 (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $24,927.2.

What is the period of performance?

Start: 2023-04-03. End: 2024-04-02.

What is the historical spending trend for medical laboratory services by the National Institutes of Health?

Analyzing historical spending trends for medical laboratory services by the National Institutes of Health (NIH) requires access to comprehensive federal procurement data. While this specific contract is for $24.9 million over one year, understanding the NIH's broader patterns involves looking at multiple years and various contract vehicles. Generally, spending in this category can fluctuate based on research priorities, public health emergencies, and the specific needs of different institutes within the NIH. For instance, periods of increased focus on infectious diseases or chronic conditions might lead to higher spending on related laboratory diagnostics. Benchmarking this $24.9 million award against prior years would reveal whether it represents an increase, decrease, or stable level of investment in these services. Without specific historical data for the NIH's medical laboratory procurements, it's difficult to provide precise figures, but it's reasonable to assume a consistent need for such services to support biomedical research and health initiatives.

How does the per-unit cost of services under this contract compare to industry benchmarks?

Determining the precise per-unit cost comparison for this contract is challenging without detailed service line item data and specific volume metrics. The contract is a blanket delivery order for medical laboratory services, likely encompassing a wide range of tests. Quest Diagnostics operates on a large scale, and their pricing is generally competitive within the market. However, government contracts often have specific negotiated rates that may differ from commercial pricing. To perform a true benchmark, one would need to identify the specific tests ordered, their volumes, and compare those negotiated government rates against commercial price lists or rates negotiated by other federal agencies for similar services. Factors such as geographic location, administrative overhead, and required turnaround times also influence per-unit costs. Given the 'full and open competition' award, it suggests the pricing was deemed fair and reasonable at the time of award.

What is Quest Diagnostics' track record with federal government contracts, particularly with the Department of Health and Human Services?

Quest Diagnostics has a significant track record of serving federal government contracts, including those with the Department of Health and Human Services (HHS) and its various agencies like the National Institutes of Health (NIH). As a major national provider of diagnostic testing, they possess the infrastructure and experience to manage large-scale government agreements. Their history likely includes numerous contracts for laboratory services, potentially spanning different agencies such as the Department of Defense, Veterans Affairs, and others requiring clinical testing. Evaluating their performance would involve reviewing past contract awards, any reported issues or disputes, and customer satisfaction feedback if publicly available. Generally, established companies like Quest Diagnostics are awarded contracts based on their demonstrated capability, past performance, and competitive pricing, suggesting a generally positive track record in fulfilling federal requirements.

What are the potential risks associated with relying on a single large provider like Quest Diagnostics for medical laboratory services in Pennsylvania?

Relying on a single large provider like Quest Diagnostics for medical laboratory services in Pennsylvania presents several potential risks. Firstly, there's a risk of vendor dependency; if Quest Diagnostics faces operational disruptions (e.g., labor disputes, IT system failures, natural disasters affecting facilities), it could significantly impact the availability and timeliness of critical lab results for healthcare providers and patients in the region. Secondly, reduced competition over time could potentially lead to less aggressive pricing in future contract renewals, although the initial award was competitive. Thirdly, ensuring consistent quality and adherence to all specific government requirements across all of Quest's facilities within Pennsylvania requires diligent oversight. Finally, a lack of alternative providers might limit flexibility in adopting new technologies or specialized testing services if Quest's offerings do not evolve as rapidly as needed.

How does this contract align with the NIH's broader mission and strategic objectives?

This contract directly aligns with the National Institutes of Health's (NIH) mission to 'seek fundamental knowledge about the nature and behavior of living systems and the application of that knowledge to enhance health, lengthen life, and reduce illness and disability.' Medical laboratory services are fundamental to biomedical research, clinical trials, and disease surveillance, all core activities supported by the NIH. By ensuring access to reliable and timely diagnostic testing through Quest Diagnostics in Pennsylvania, the NIH facilitates research progress, supports public health initiatives, and contributes to the overall understanding and management of diseases. The contract enables researchers and healthcare providers to obtain necessary diagnostic information, which is crucial for advancing scientific discovery and improving patient outcomes, thereby supporting the NIH's overarching goals.

Industry Classification

NAICS: Health Care and Social Assistance › Medical and Diagnostic Laboratories › Medical Laboratories

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

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: $24,927

Exercised Options: $24,927

Current Obligation: $24,927

Actual Outlays: $7,755

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: V797D70090

IDV Type: FSS

Timeline