VA awards $246M for medical disability exams, impacting veterans nationwide

Contract Overview

Contract Amount: $246,359,263 ($246.4M)

Contractor: QTC Medical Services Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2017-03-28

End Date: 2017-09-30

Contract Duration: 186 days

Daily Burn Rate: $1.3M/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MEDICAL DISABILITY EXAMINATIONS (MDES) UNDER SECTION 504 OF THE VETERANS BENEFITS IMPROVEMENTS ACT OF 1996 (PUBLIC LAW 104 275; 38 U.S.C. 5101), DISTRICT 6 (NATIONAL MISSION); THE PURPOSE OF THIS MODIFICATION IS TO CHANGE THE ASSIGNED ADMINISTRATIVE CONTRACTING OFFICER. IGF::OT::IGF

Place of Performance

Location: DIAMOND BAR, LOS ANGELES County, CALIFORNIA, 91765

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $246.4 million to QTC MEDICAL SERVICES INC for work described as: MEDICAL DISABILITY EXAMINATIONS (MDES) UNDER SECTION 504 OF THE VETERANS BENEFITS IMPROVEMENTS ACT OF 1996 (PUBLIC LAW 104 275; 38 U.S.C. 5101), DISTRICT 6 (NATIONAL MISSION); THE PURPOSE OF THIS MODIFICATION IS TO CHANGE THE ASSIGNED ADMINISTRATIVE CONTRACTING OFFICER. IGF::OT::… Key points: 1. Contract provides essential medical disability examinations for veterans. 2. Focus on ensuring accurate assessments for benefits eligibility. 3. Large contract value indicates significant demand for these services. 4. Administrative changes suggest ongoing program management and oversight. 5. Services are critical for veterans accessing earned benefits. 6. Potential for nationwide impact on veteran healthcare access.

Value Assessment

Rating: good

The contract value of $246 million over its period of performance is substantial, reflecting the scale of medical disability examinations required by the VA. Benchmarking against similar large-scale contracts for veteran healthcare services suggests this is within a reasonable range for comprehensive examination programs. The firm-fixed-price structure provides cost certainty for the government, though it relies on accurate initial estimates of service volume. Without specific per-examination cost data, a detailed value-for-money assessment is limited, but the overall investment aligns with the VA's mission to support veterans.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple bidders had the opportunity to submit proposals. The specific number of bidders is not provided, but the competitive nature of the award process is a positive sign for price discovery and potentially achieving a fair market price. Full and open competition generally leads to a wider range of solutions and encourages contractors to offer competitive pricing to win the award.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it promotes a more efficient allocation of resources and can lead to lower overall costs through competitive bidding.

Public Impact

Veterans nationwide will benefit from timely and accurate medical disability examinations. Services are crucial for determining eligibility for VA benefits, including compensation and healthcare. The contract supports the VA's mission to provide comprehensive care and support to service members and veterans. Potential positive impact on the healthcare workforce through employment opportunities with the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for administrative inefficiencies if contract management is not robust.
Ensuring consistent quality of examinations across all service locations.
Dependence on a single contractor for a critical veteran service.

Positive Signals

Awarded through full and open competition, suggesting a competitive process.
Firm-fixed-price contract provides cost predictability.
Significant investment indicates commitment to veteran healthcare needs.

Sector Analysis

The healthcare services sector, particularly within government contracting, is characterized by significant demand for specialized medical services. This contract falls under the 'Offices of Physicians' industry code (621111), which includes a broad range of medical examination and diagnostic services. The market for veteran healthcare services is substantial, with the Department of Veterans Affairs being a primary procurer. Comparable spending benchmarks would involve analyzing other large VA contracts for medical examinations or similar health assessment services.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. As a large-value contract, it is likely that the prime contractor, QTC Medical Services Inc., may engage small businesses as subcontractors to fulfill certain aspects of the service delivery. Further analysis would be needed to determine the extent of small business participation and subcontracting plans.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs' contracting officers and program managers. The modification changing the administrative contracting officer suggests active management. Transparency is generally facilitated through contract award databases and reporting requirements. The Inspector General's office within the VA would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Veterans Health Administration (VHA) Medical Services
VA Disability Compensation Program
TRICARE Medical Services
DoD Medical Readiness Examinations

Risk Flags

Contract duration is relatively short for a large-scale program.
Potential for administrative contracting officer changes to impact continuity.
Dependence on a single contractor for critical veteran services.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $246.4 million to QTC MEDICAL SERVICES INC. MEDICAL DISABILITY EXAMINATIONS (MDES) UNDER SECTION 504 OF THE VETERANS BENEFITS IMPROVEMENTS ACT OF 1996 (PUBLIC LAW 104 275; 38 U.S.C. 5101), DISTRICT 6 (NATIONAL MISSION); THE PURPOSE OF THIS MODIFICATION IS TO CHANGE THE ASSIGNED ADMINISTRATIVE CONTRACTING OFFICER. IGF::OT::IGF

Who is the contractor on this award?

The obligated recipient is QTC MEDICAL SERVICES INC.

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 $246.4 million.

What is the period of performance?

Start: 2017-03-28. End: 2017-09-30.

What is the historical spending pattern for Medical Disability Examinations (MDES) by the VA?

Historical spending on Medical Disability Examinations (MDES) by the Department of Veterans Affairs (VA) has been substantial and generally increasing over the years, reflecting the growing veteran population and evolving healthcare needs. Prior to this $246 million award, the VA has consistently allocated significant funds to ensure veterans receive necessary examinations for benefits claims. For instance, in fiscal years preceding this contract, the VA awarded multiple contracts, some in the hundreds of millions, for similar examination services. This trend indicates a sustained and critical need for these services to process disability claims efficiently and accurately. The specific amount awarded in this contract is indicative of a large-scale, potentially nationwide, program requirement. Analyzing year-over-year spending can reveal trends in demand, contractor performance, and potential shifts in service delivery models.

How does the per-examination cost under this contract compare to industry benchmarks?

Determining the precise per-examination cost under this contract is challenging without access to the detailed breakdown of services and the total number of examinations performed. The contract is a firm-fixed-price award valued at $246,359,263.07, with a duration of 186 days (approximately 6 months). To establish a per-examination cost, one would need the total number of examinations delivered. Industry benchmarks for medical disability examinations can vary significantly based on the complexity of the examination, the specialty of the physician, and geographic location. General estimates for a standard disability examination might range from a few hundred to over a thousand dollars. If this contract supported, for example, 200,000 examinations, the average cost per exam would be around $1,231. This figure would then need to be compared against similar VA contracts or private sector benchmarks for comparable services to assess value for money. Without the volume data, a definitive comparison is not possible.

What are the key performance indicators (KPIs) used to evaluate QTC Medical Services Inc.'s performance on this contract?

Key Performance Indicators (KPIs) for contracts involving medical disability examinations typically focus on timeliness, accuracy, and quality of service delivery. For QTC Medical Services Inc. on this VA contract, common KPIs would likely include: 1. **Timeliness of Examination Scheduling:** The average number of days from request to appointment. 2. **Timeliness of Report Submission:** The average number of days from examination to submission of the final report to the VA. 3. **Accuracy and Completeness of Reports:** Assessed through VA reviews, measuring the rate of reports requiring correction or additional information. 4. **Veteran Satisfaction:** Measured through surveys to gauge the patient experience during the examination. 5. **Compliance with VA Guidelines:** Adherence to specific protocols and standards set forth by the VA for conducting examinations. Performance against these KPIs would directly impact contractor payment and potential for future awards.

What is the potential impact of this contract on the overall VA backlog of disability claims?

This contract for Medical Disability Examinations (MDES) is directly aimed at alleviating and managing the VA's backlog of disability claims. By providing a substantial capacity for conducting these crucial examinations, the contract enables the VA to process claims more efficiently. A well-executed MDES contract can significantly reduce the time veterans wait for their claims to be adjudicated, as the examination is often a critical step in the process. If QTC Medical Services Inc. performs effectively, meeting or exceeding targets for scheduling and report submission, it can lead to a measurable decrease in the claims backlog. Conversely, any performance issues, such as delays in scheduling or report generation, could exacerbate the backlog. Therefore, the successful implementation of this contract is vital for the VA's efforts to improve its claims processing times and veteran satisfaction.

Are there any known issues or concerns with QTC Medical Services Inc.'s past performance on similar government contracts?

Assessing QTC Medical Services Inc.'s past performance requires a review of contract databases, performance evaluations (like Contractor Performance Assessment Reporting System - CPARS), and any publicly available information regarding disputes or corrective actions. While specific details for this particular $246 million VA contract are not immediately available in the provided data, QTC Medical Services Inc. is a significant provider of medical examination services to the VA and other government agencies. Generally, large contractors of this scale may encounter performance challenges related to service delivery volume, quality control, or administrative processes. Any past issues, if they exist, would typically be documented in performance reviews and considered during the source selection process for new contracts. A thorough due diligence would involve examining CPARS reports and any official records of contractor performance deficiencies or commendations.

Industry Classification

NAICS: Health Care and Social Assistance › Offices of Physicians › Offices of Physicians (except Mental Health Specialists)

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leidos Holdings, Inc.

Address: 21700 COPLEY DR STE 200, DIAMOND BAR, CA, 91765

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $265,557,132

Exercised Options: $246,359,263

Current Obligation: $246,359,263

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA119A16D0038

IDV Type: IDC

Timeline