VA awards $215M for medical disability exams, with QTC Medical Services Inc. as the primary contractor

Contract Overview

Contract Amount: $298,922,398 ($298.9M)

Contractor: QTC Medical Services Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2014-12-31

End Date: 2016-06-30

Contract Duration: 547 days

Daily Burn Rate: $546.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 11

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MEDICAL DISABILITY EXAMINATIONS UNDER PL 104-275. MODIFICATION TO EXERCISE OPTION YEAR 4. TOTAL FUNDING AVAILABLE IS $215,087,320.00. | IGF::OT::IGF FOR OTHER FUNCTIONS

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $298.9 million to QTC MEDICAL SERVICES INC for work described as: MEDICAL DISABILITY EXAMINATIONS UNDER PL 104-275. MODIFICATION TO EXERCISE OPTION YEAR 4. TOTAL FUNDING AVAILABLE IS $215,087,320.00. | IGF::OT::IGF FOR OTHER FUNCTIONS Key points: 1. Contract value of $215 million over approximately 1.5 years suggests a significant investment in medical disability evaluations. 2. The contract was awarded under full and open competition, indicating a potentially competitive bidding process. 3. The duration of the contract (547 days) is relatively short for a large-scale service requirement, potentially indicating a need for ongoing re-competition or shorter-term needs. 4. The firm-fixed-price contract type aims to control costs by fixing the price regardless of actual costs incurred. 5. The primary service code (621111) points to a focus on physician services, excluding mental health specialists. 6. The contract's performance period spans from late 2014 to mid-2016, providing context for the services rendered.

Value Assessment

Rating: good

The total funding available of $215,087,320.00 for a period of roughly 1.5 years indicates a substantial per-month expenditure. Benchmarking against similar large-scale medical examination contracts would be necessary for a precise value-for-money assessment. However, the firm-fixed-price structure suggests an attempt to manage costs effectively. The number of bids received (10) under full and open competition is a positive indicator of market interest and potential for competitive pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with 10 bids received. This level of competition is generally favorable, suggesting that multiple qualified vendors had the opportunity to bid, which can lead to better pricing and service options for the government. The presence of 10 bidders indicates a healthy market for these services.

Taxpayer Impact: A competitive bidding process with multiple bidders typically results in more favorable pricing for taxpayers, as contractors vie to offer the most attractive terms.

Public Impact

Veterans requiring medical disability examinations are the primary beneficiaries of this contract. The services delivered are crucial for determining eligibility and benefits for veterans. The contract supports the Department of Veterans Affairs' mission to provide comprehensive care and support to former service members. Geographic impact is likely nationwide, as QTC Medical Services operates across the US to provide these examinations. The contract supports a workforce of medical professionals, including physicians and administrative staff, involved in conducting and processing these examinations.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor lock-in if subsequent contracts are not competitively re-awarded.
Ensuring consistent quality of examinations across all providers and locations.
Managing the administrative overhead associated with a large volume of disability claims.

Positive Signals

Awarded under full and open competition, indicating a robust market.
Firm-fixed-price contract type helps control costs.
Significant funding allocated suggests a commitment to addressing veteran disability claims.

Sector Analysis

The healthcare services sector, specifically the niche of medical disability examinations, is critical for government agencies like the VA. This contract falls under the broader category of professional medical services. The market for such services is often characterized by specialized providers capable of handling large volumes and meeting stringent government requirements. Comparable spending benchmarks would involve looking at other large federal contracts for similar examination services.

Small Business Impact

The 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 set-aside provision. The primary contractor, QTC Medical Services Inc., would be responsible for fulfilling the contract requirements, and any subcontracting would be at their discretion, not mandated by a small business set-aside.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs' contracting officers and program managers. The firm-fixed-price nature of the contract provides a degree of cost control. Transparency is generally facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Veterans Health Administration Services
Disability Benefits Programs
Medical Examination Services
Federal Healthcare Contracts

Risk Flags

Contract duration is relatively short for the funding amount, suggesting potential for frequent re-competition or task order adjustments.
Need to ensure consistent quality and timeliness of examinations across all service locations.
Potential for increased costs in future contract renewals if competition diminishes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $298.9 million to QTC MEDICAL SERVICES INC. MEDICAL DISABILITY EXAMINATIONS UNDER PL 104-275. MODIFICATION TO EXERCISE OPTION YEAR 4. TOTAL FUNDING AVAILABLE IS $215,087,320.00. | IGF::OT::IGF FOR OTHER FUNCTIONS

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 $298.9 million.

What is the period of performance?

Start: 2014-12-31. End: 2016-06-30.

What is the historical spending pattern for medical disability examinations by the Department of Veterans Affairs?

Historical spending on medical disability examinations by the VA has been substantial and has generally trended upwards over the years, driven by an increasing veteran population and evolving healthcare needs. Contracts for these services are often large, multi-year awards, reflecting the continuous demand. The VA has historically relied on both in-house capabilities and external contractors like QTC Medical Services to conduct these crucial evaluations. Analyzing past contract awards, including their values, durations, and competition levels, reveals a consistent need for these services and highlights the VA's strategy of leveraging private sector expertise to manage workload and ensure timely processing of claims. Fluctuations in spending can be attributed to changes in legislation, policy updates, and the overall economic environment impacting veteran benefits.

How does the per-contractor cost for QTC Medical Services compare to industry benchmarks for similar disability examination services?

Determining the precise per-contractor cost for QTC Medical Services requires access to detailed pricing data within the contract, which is not fully available in the provided summary. However, the total contract value of $215 million over approximately 1.5 years (547 days) suggests a significant operational scale. Industry benchmarks for disability examinations vary widely based on the complexity of the examination, geographic location, and specific services required. Factors such as the number of examinations performed, the types of specialists involved, and administrative overhead contribute to the overall cost. Given that this contract was awarded under full and open competition with 10 bidders, it implies that QTC's pricing was competitive within the market at the time of award. A thorough benchmark would necessitate comparing QTC's unit costs (e.g., cost per exam) against those of other major providers in the federal and commercial sectors, considering the scope and quality of services.

What are the key performance indicators (KPIs) used to evaluate the performance of QTC Medical Services under this contract?

While specific Key Performance Indicators (KPIs) are not detailed in the provided contract summary, federal contracts for medical disability examinations typically include stringent performance metrics. These often encompass timeliness of appointment scheduling, turnaround time for submitting examination reports, accuracy and completeness of reports, and patient satisfaction scores. The Department of Veterans Affairs would likely monitor QTC's adherence to these metrics to ensure veterans receive timely and accurate assessments. Performance evaluations would also consider compliance with all regulatory requirements and VA policies. Failure to meet established KPIs could result in contractual remedies, including financial penalties or even contract termination, underscoring the importance of robust performance management.

What is the track record of QTC Medical Services in fulfilling large federal contracts, particularly for the VA?

QTC Medical Services Inc. has a significant track record of fulfilling large federal contracts, particularly with the Department of Veterans Affairs, for providing medical disability examinations. They are a well-established provider in this space, often handling substantial portions of the VA's examination workload. Their experience includes managing complex logistical operations across numerous locations to serve veterans nationwide. Past performance reviews and contract awards indicate a capacity to handle high volumes of claims and meet demanding service level agreements. However, like any large contractor, their history may include periods of both highly successful performance and instances where performance issues or contract disputes arose, which would be documented in federal contract databases and performance reports.

What are the potential risks associated with relying on a single primary contractor for a significant portion of medical disability examinations?

Relying on a single primary contractor like QTC Medical Services for a significant portion of medical disability examinations presents several potential risks. One primary risk is contractor dependency; if QTC experiences operational failures, financial instability, or significant performance issues, it could severely disrupt the VA's ability to process disability claims, leading to delays for veterans. Another risk is reduced competitive pressure in future contract renewals, potentially leading to higher costs or less innovation if the market becomes concentrated. Furthermore, a single point of failure increases vulnerability to unforeseen events, such as natural disasters or widespread IT system outages affecting the contractor's operations. The VA mitigates these risks through robust contract oversight, performance monitoring, and contingency planning, including maintaining relationships with other potential providers.

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: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 11

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Leidos Holdings, Inc. (UEI: 611641312)

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: $335,062,783

Exercised Options: $298,922,398

Current Obligation: $298,922,398

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA79811D0003

IDV Type: IDC

Timeline