HHS awarded $20.5M for occupational and clinical support services to RAO RADIOLOGISTS, INC

Contract Overview

Contract Amount: $20,495,394 ($20.5M)

Contractor: RAO Radiologists, Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2014-05-15

End Date: 2015-07-31

Contract Duration: 442 days

Daily Burn Rate: $46.4K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: LABOR HOURS

Sector: Healthcare

Official Description: IGF::OT::IGF OCCUPATIONAL AND CLINICAL SUPPORTSERVICES FOR FOH REGION B

Place of Performance

Location: GAITHERSBURG, MONTGOMERY County, MARYLAND, 20878

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $20.5 million to RAO RADIOLOGISTS, INC. for work described as: IGF::OT::IGF OCCUPATIONAL AND CLINICAL SUPPORTSERVICES FOR FOH REGION B Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price competition. 2. The contract duration of 442 days suggests a need for ongoing, specialized services. 3. Services fall under 'All Other Miscellaneous Ambulatory Health Care Services,' a broad category. 4. The award was a definitive contract, indicating a firm commitment for a specific period. 5. The contract was not competed, suggesting potential limitations in market research or justification. 6. The base contract value is substantial, requiring careful monitoring of performance and costs.

Value Assessment

Rating: questionable

The contract value of $20.5 million for 442 days of service appears high given the lack of competition. Without comparable sole-source contracts or detailed cost breakdowns, it is difficult to benchmark the value for money. The pricing structure, based on labor hours, can be prone to cost overruns if not managed tightly. Further analysis of the specific services rendered and their necessity would be required to fully assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when a specific vendor possesses unique capabilities or when circumstances preclude full and open competition. The lack of competition limits the government's ability to leverage market forces to secure the best possible price and terms.

Taxpayer Impact: Sole-source awards can potentially lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also raises concerns about whether the government explored all avenues for competition.

Public Impact

Federal employees within HHS Region B likely benefited from these occupational and clinical support services. The services provided aimed to support the health and well-being of federal personnel. The geographic impact is primarily focused on Maryland, where the contractor is located. The contract supports a specific segment of the federal healthcare services sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of competition raises questions about the thoroughness of market research and justification for sole-source.
Labor hour pricing can lead to cost uncertainty and potential overruns if not closely monitored.
Broad service category may obscure specific cost drivers and performance metrics.

Positive Signals

Contract awarded to a specific entity, suggesting a potentially established relationship or specialized capability.
Definitive contract indicates a clear scope and commitment for the service period.
Services provided are essential for occupational and clinical support of federal employees.

Sector Analysis

This contract falls within the Healthcare sector, specifically under miscellaneous ambulatory health care services. The federal government is a significant purchaser of healthcare services, both for its employees and for beneficiaries of programs like Medicare and Medicaid. Benchmarking this contract's value would require comparing it to similar sole-source or competed contracts for occupational health and clinical support services within federal agencies.

Small Business Impact

There is no indication that this contract involved small business set-asides or subcontracting opportunities. The sole-source nature of the award further suggests that small businesses were likely not considered as primary awardees. This contract does not appear to contribute to the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Health and Human Services' internal contracting and program management offices. The Inspector General's office may conduct audits or investigations if concerns regarding fraud, waste, or abuse arise. Transparency is limited due to the sole-source nature and lack of public competition details.

Related Government Programs

Federal Occupational Health Services
Department of Health and Human Services Contracts
Ambulatory Health Care Services Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for cost overruns due to labor hour pricing
Broad service category lacks specificity

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $20.5 million to RAO RADIOLOGISTS, INC.. IGF::OT::IGF OCCUPATIONAL AND CLINICAL SUPPORTSERVICES FOR FOH REGION B

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 (Office of the Assistant Secretary for Administration).

What is the total obligated amount?

The obligated amount is $20.5 million.

What is the period of performance?

Start: 2014-05-15. End: 2015-07-31.

What specific occupational and clinical support services were provided under this contract, and how were they justified as sole-source?

The contract, awarded to RAO RADIOLOGISTS, INC., was for 'OCCUPATIONAL AND CLINICAL SUPPORTSERVICES FOR FOH REGION B.' The specific services would likely encompass a range of medical evaluations, health screenings, diagnostic services, and potentially treatment related to federal employees' occupational health and general clinical needs within HHS Region B. As a sole-source award, the justification would typically hinge on factors such as the unique qualifications of RAO RADIOLOGISTS, INC., the unavailability of other capable sources, or urgent circumstances that precluded a competitive process. Without access to the specific justification documentation (e.g., Justification and Approval - J&A), the precise nature of these services and the rationale for sole-sourcing remain unclear. However, the broad category 'All Other Miscellaneous Ambulatory Health Care Services' suggests a diverse set of support functions.

How does the labor hour pricing structure for this $20.5 million contract compare to industry standards for similar services?

Benchmarking labor hour pricing for this $20.5 million contract is challenging without specific details on the labor categories, rates, and estimated hours. However, labor hour contracts inherently carry risks of cost escalation if not managed diligently. For occupational and clinical support services, industry standards vary significantly based on the type of service (e.g., radiology, general practice, specialized occupational health), the qualifications of personnel, and geographic location. Given the sole-source nature and the substantial value, it is crucial that HHS had robust mechanisms in place to validate the reasonableness of the labor rates and to closely monitor the hours expended to ensure they align with the actual services delivered and the contract's objectives. A comparison would ideally involve analyzing rates for similar federal contracts or commercial agreements for comparable services, adjusted for location and scope.

What is the track record of RAO RADIOLOGISTS, INC. with federal contracts, particularly with the Department of Health and Human Services?

Information regarding RAO RADIOLOGISTS, INC.'s specific track record with federal contracts, especially with the Department of Health and Human Services (HHS), is not detailed in the provided data. The fact that this $20.5 million contract was awarded on a sole-source basis might suggest a pre-existing relationship or a demonstrated capability that led to this direct award. To assess their track record thoroughly, one would need to examine past performance evaluations, any prior contracts awarded to them by HHS or other federal agencies, and their history of compliance with federal acquisition regulations. A review of contract databases and performance assessment reporting tools would be necessary to understand their reliability, quality of service, and adherence to contract terms in previous engagements.

Given the sole-source award, what oversight mechanisms were in place to ensure fair pricing and effective service delivery?

When a contract is awarded on a sole-source basis, particularly for a significant amount like $20.5 million, robust oversight is critical. For this contract, oversight mechanisms would likely include contract administration by HHS personnel responsible for monitoring performance against the Statement of Work (SOW), ensuring timely delivery of services, and verifying the accuracy of invoices. Price reasonableness would be assessed through various means, potentially including comparison to historical pricing, independent cost estimates, or negotiation of rates based on available market data, even without full competition. The contract's labor hour structure necessitates close tracking of hours and labor categories to prevent overcharging. Regular performance reviews and audits, potentially by the HHS Office of Inspector General, would serve as additional oversight layers to ensure accountability and effective use of taxpayer funds.

How does this contract's value and duration compare to other federal spending on similar ambulatory health care services?

The contract value of $20.5 million over approximately 14 months (442 days) for 'All Other Miscellaneous Ambulatory Health Care Services' is substantial. Comparing it to other federal spending requires identifying comparable contracts. Federal spending on ambulatory health care services is vast, encompassing everything from direct patient care to specialized support functions. However, sole-source contracts, especially for broad service categories, make direct comparisons difficult. If this contract was for specialized occupational health services for federal employees, its value might be considered within a certain range, but the lack of competition prevents a definitive value-for-money assessment against potentially lower-cost alternatives. A broader analysis of federal spending on similar NAICS codes (like 621999) across different agencies would be needed for a comprehensive benchmark.

Industry Classification

NAICS: Health Care and Social Assistance › Other Ambulatory Health Care Services › All Other Miscellaneous Ambulatory Health Care Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: LABOR HOURS (Z)

Evaluated Preference: NONE

Contractor Details

Address: 9841 WASHINGTONIAN BLVD STE 390, GAITHERSBURG, MD, 20878

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, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $20,763,479

Exercised Options: $20,495,394

Current Obligation: $20,495,394

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline