VA awards $32.2M for Surgery Quality and Workflow Management, with 4 bidders competing

Contract Overview

Contract Amount: $32,198,755 ($32.2M)

Contractor: Peraton Healthcare Solutions LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2011-09-13

End Date: 2013-08-30

Contract Duration: 717 days

Daily Burn Rate: $44.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: SURGERY QUALITY AND WORKFLOW MANAGER (SQWM)

Place of Performance

Location: KING OF PRUSSIA, MONTGOMERY County, PENNSYLVANIA, 19406

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $32.2 million to PERATON HEALTHCARE SOLUTIONS LLC for work described as: SURGERY QUALITY AND WORKFLOW MANAGER (SQWM) Key points: 1. The contract value of $32.2M over its period of performance suggests a significant investment in healthcare IT infrastructure. 2. With 4 bidders, the competition level indicates a moderately contested market for these specialized services. 3. The firm-fixed-price contract type aims to control costs by shifting risk to the contractor. 4. The contract's duration of approximately 717 days (2 years) allows for sustained support and development. 5. The North American Industry Classification System (NAICS) code 541519 points to a focus on IT services beyond standard software development. 6. The award to PERATON HEALTHCARE SOLUTIONS LLC highlights a specific contractor's capability in this niche.

Value Assessment

Rating: good

The contract value of $32.2M for Surgery Quality and Workflow Management appears reasonable given the specialized nature of healthcare IT services and the duration of the contract. Benchmarking against similar contracts for IT workflow management in large healthcare systems would provide a more precise value assessment. The firm-fixed-price structure suggests an effort to manage costs effectively, but detailed cost breakdowns are not available to fully assess pricing efficiency.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with four distinct bidders vying for the opportunity. This level of competition is generally positive, suggesting that multiple vendors were aware of and capable of meeting the VA's requirements. The presence of four bidders indicates a healthy, though not intensely crowded, market for these specialized IT services, which can lead to better price discovery and a wider range of technical solutions.

Taxpayer Impact: The full and open competition with multiple bidders is beneficial for taxpayers as it likely drove down the final award price compared to a sole-source or limited competition scenario. This competitive process helps ensure that taxpayer funds are used more efficiently by selecting the best value offer.

Public Impact

The primary beneficiaries are the Department of Veterans Affairs (VA) healthcare facilities, which will receive enhanced surgery quality and workflow management capabilities. The services delivered are expected to improve the efficiency and effectiveness of surgical operations within the VA system. The geographic impact is likely nationwide, affecting VA medical centers and clinics that perform surgeries. Workforce implications may include improved tools and processes for surgical staff, potentially leading to better patient care and reduced administrative burden.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the system becomes deeply integrated without clear exit strategies.
Dependence on a single contractor for critical workflow management could pose risks if performance falters.
The complexity of healthcare IT systems means integration challenges could arise, impacting timely delivery.

Positive Signals

The firm-fixed-price contract type incentivizes the contractor to deliver within budget.
Full and open competition suggests a robust selection process, likely yielding a capable vendor.
The contract's focus on quality and workflow management directly addresses critical healthcare operational needs.

Sector Analysis

The healthcare IT sector is a rapidly growing segment of the technology market, driven by the increasing need for digital solutions in patient care, administration, and research. Contracts like this, focusing on specialized workflow management, are crucial for optimizing operations within large healthcare providers such as the VA. The market for such solutions is competitive, with established players and emerging innovators vying for contracts that promise significant improvements in efficiency and patient outcomes. Comparable spending benchmarks would typically be found within IT services for large federal health agencies.

Small Business Impact

This contract was awarded under full and open competition and does not indicate a specific small business set-aside. Therefore, the direct impact on small businesses is likely limited unless Peraton Healthcare Solutions LLC engages them as subcontractors. The subcontracting opportunities would depend on Peraton's strategy and the specific needs of the project, but there is no explicit requirement for small business participation mandated by the contract award itself.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to meet defined performance standards. Transparency is generally facilitated through contract award databases, but detailed operational performance metrics are typically internal to the agency. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

VA Electronic Health Record (EHR) Modernization
Healthcare Information Technology Services
Clinical Workflow Optimization Software
Medical Quality Improvement Programs
Federal Health IT Procurement

Risk Flags

Potential for scope creep if requirements are not tightly managed.
Risk of vendor performance issues impacting critical healthcare operations.
Integration challenges with existing VA IT infrastructure.
Dependence on contractor for specialized workflow management expertise.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $32.2 million to PERATON HEALTHCARE SOLUTIONS LLC. SURGERY QUALITY AND WORKFLOW MANAGER (SQWM)

Who is the contractor on this award?

The obligated recipient is PERATON HEALTHCARE SOLUTIONS LLC.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $32.2 million.

What is the period of performance?

Start: 2011-09-13. End: 2013-08-30.

What is the track record of Peraton Healthcare Solutions LLC with the Department of Veterans Affairs?

Peraton Healthcare Solutions LLC has a history of contracting with the Department of Veterans Affairs, as indicated by this award and potentially others. Analyzing past performance on similar VA contracts would reveal their reliability, quality of service, and adherence to schedules and budgets. Specific details on past performance metrics, such as on-time delivery, cost overruns, or customer satisfaction ratings, would provide a clearer picture of their capabilities and suitability for managing critical healthcare IT systems. A review of contract close-out data and any performance-related disputes or awards would further inform this assessment.

How does the $32.2M contract value compare to similar IT workflow management contracts within the federal government?

The $32.2M contract value for Surgery Quality and Workflow Management (SQWM) needs to be contextualized by its duration (approx. 2 years) and the scope of services. For large federal agencies, particularly in healthcare, IT modernization and workflow optimization projects can range from millions to hundreds of millions of dollars. A direct comparison to similar SQWM contracts is difficult without more specific data on the functionalities and scale of services. However, for a two-year engagement focused on a critical area like surgical workflow, this value appears within a reasonable range for a specialized IT service provider supporting a major agency like the VA. Further benchmarking against contracts for EHR modules or clinical decision support systems could offer additional context.

What are the primary risks associated with this contract for the VA?

Key risks for the VA include potential performance issues where Peraton Healthcare Solutions LLC may not deliver the expected improvements in surgery quality or workflow efficiency. There's also a risk of cost overruns if the firm-fixed-price contract doesn't adequately account for unforeseen complexities, although this type of contract aims to mitigate that. Integration challenges with existing VA IT infrastructure represent another significant risk, potentially leading to delays or reduced functionality. Furthermore, over-reliance on a single vendor for critical operational systems could create vulnerabilities if the vendor experiences financial instability or strategic shifts. Ensuring robust contract management and performance monitoring is crucial to mitigate these risks.

How effective is the firm-fixed-price contract type in ensuring value for money in this context?

The firm-fixed-price (FFP) contract type is generally considered effective in ensuring value for money when the scope of work is well-defined and risks can be reasonably anticipated. For the VA's Surgery Quality and Workflow Manager (SQWM) contract, FFP incentivizes Peraton Healthcare Solutions LLC to control costs and deliver the specified services efficiently, as any cost savings benefit the contractor. This shifts the primary cost risk to the contractor. However, the effectiveness hinges on the clarity and completeness of the contract's requirements. If the scope is ambiguous or unforeseen technical challenges arise, the VA might face difficulties in obtaining desired outcomes without potential change orders, which could increase the overall cost. Robust performance metrics are essential to ensure the 'value' aspect is met alongside the 'price' certainty.

What is the historical spending trend for similar IT services within the VA's surgical departments?

Analyzing historical spending trends for IT services specifically within the VA's surgical departments requires access to detailed procurement data over multiple fiscal years. Generally, federal agencies like the VA have seen a consistent increase in IT spending, particularly in areas aimed at improving efficiency, patient care, and data management. Investments in areas like workflow management, quality improvement software, and electronic health record integration are common. Without specific historical data for surgical IT services, it's difficult to pinpoint precise trends. However, it's reasonable to assume that spending in this area has been significant and likely growing as the VA seeks to modernize its healthcare operations and leverage technology for better patient outcomes.

What are the implications of the NAICS code 541519 (Other Computer Related Services) for the scope of this contract?

The NAICS code 541519, 'Other Computer Related Services,' indicates that the contract's scope extends beyond standard software development or IT infrastructure management. This classification suggests services could include IT consulting, systems integration, data analytics, IT support, and potentially the development or implementation of specialized software solutions not covered by more specific codes. For the Surgery Quality and Workflow Manager (SQWM) contract, this broad classification implies that Peraton Healthcare Solutions LLC might be engaged in a comprehensive set of activities, including analyzing existing surgical workflows, recommending and implementing technological improvements, providing ongoing support, and potentially developing custom tools to enhance quality and efficiency within the VA's surgical operations.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Other Computer Related Services

Product/Service Code: IT AND TELECOM - INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS › ADP AND TELECOMMUNICATIONS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: VA118-11-RP-0429

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L3harris Technologies, Inc (UEI: 004203337)

Address: 1150 1ST AVE STE 910, KING OF PRUSSIA, PA, 90

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $59,796,086

Exercised Options: $32,198,755

Current Obligation: $32,198,755

Subaward Activity

Number of Subawards: 5

Total Subaward Amount: $13,310,702

Contract Characteristics

Cost or Pricing Data: NO

Timeline