VA's $44.4M contract for healthcare data exchange services awarded to Change Healthcare Holdings, Inc

Contract Overview

Contract Amount: $44,432,033 ($44.4M)

Contractor: Change Healthcare Holdings, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2014-09-01

End Date: 2020-02-29

Contract Duration: 2,007 days

Daily Burn Rate: $22.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: CLEARINGHOUSE TO SUPPORT HEALTHCARE ELECTRONIC DATA INTERCHANGE (EDI). IGF::CL::IGF

Place of Performance

Location: DENVER, DENVER County, COLORADO, 80209

State: Colorado Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $44.4 million to CHANGE HEALTHCARE HOLDINGS, INC. for work described as: CLEARINGHOUSE TO SUPPORT HEALTHCARE ELECTRONIC DATA INTERCHANGE (EDI). IGF::CL::IGF Key points: 1. Contract aimed to enhance healthcare electronic data interchange (EDI) capabilities for the VA. 2. The contract duration spanned over five years, indicating a significant commitment to the service. 3. Awarded under full and open competition, suggesting a robust market for these services. 4. The fixed-price nature of the contract provides cost certainty for the government. 5. Performance was concentrated in Colorado, potentially impacting regional IT service providers. 6. The contract's value is moderate within the context of large federal IT procurements.

Value Assessment

Rating: good

The contract value of $44.4 million over approximately five years for healthcare electronic data interchange (EDI) support appears reasonable for the scope of services. Benchmarking against similar large-scale IT infrastructure and data processing contracts within the federal government suggests that the pricing is within expected ranges. The firm fixed-price structure further aids in cost management and predictability for the Department of Veterans Affairs (VA). Without specific performance metrics or detailed cost breakdowns, a precise value-for-money assessment is challenging, but the competitive award process provides a degree of confidence in the pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded through a full and open competition process, indicating that multiple vendors were eligible to bid. The presence of two bids suggests a competitive environment, though the exact number of interested parties and the rigor of the evaluation process are not detailed. A full and open competition generally fosters price discovery and encourages vendors to offer competitive terms and pricing to secure the award.

Taxpayer Impact: A full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining services at a fair market price by allowing all qualified vendors to participate and bid.

Public Impact

Veterans will benefit from improved efficiency and accuracy in healthcare data exchange. The contract supports the modernization of the VA's healthcare IT infrastructure. Services delivered are crucial for seamless information flow between healthcare providers. The primary geographic impact is within the VA's operational network, with specific service delivery in Colorado. This contract likely supported IT professionals and data management specialists.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on contracts are not competitively procured.
Reliance on a single vendor for critical healthcare data exchange could pose a risk.
Ensuring data security and privacy compliance for sensitive health information is paramount.

Positive Signals

Awarded through full and open competition, indicating market availability of solutions.
Firm fixed-price contract provides budget certainty for the VA.
The contract duration suggests a stable, long-term solution for EDI needs.

Sector Analysis

The contract falls within the broader Information Technology sector, specifically focusing on data processing and hosting services essential for healthcare electronic data interchange (EDI). The market for such services is substantial, driven by the increasing digitization of healthcare records and the need for interoperability between different healthcare systems. Comparable federal spending in this area often involves significant investments in cloud computing, data management platforms, and secure network infrastructure to support agency operations and data sharing.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses, and there is no explicit mention of small business subcontracting goals. Given the nature and scale of the services required for healthcare data exchange, it is possible that larger, established IT service providers were the primary bidders. Further analysis would be needed to determine if any subcontracting opportunities were made available to small businesses.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and program managers within the Department of Veterans Affairs. Accountability measures would be defined in the contract's statement of work and performance standards. Transparency is generally facilitated through contract award databases like FPDS-NG, though detailed operational oversight and Inspector General jurisdiction would depend on specific contract clauses and VA policies.

Related Government Programs

VA Health Information Technology
Healthcare Data Standards
Electronic Health Records (EHR) Systems
Federal Health IT Initiatives
Health Data Interoperability

Risk Flags

Data Security and Privacy Risk
Vendor Performance Risk
Interoperability Challenges
Regulatory Compliance Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $44.4 million to CHANGE HEALTHCARE HOLDINGS, INC.. CLEARINGHOUSE TO SUPPORT HEALTHCARE ELECTRONIC DATA INTERCHANGE (EDI). IGF::CL::IGF

Who is the contractor on this award?

The obligated recipient is CHANGE HEALTHCARE HOLDINGS, 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 $44.4 million.

What is the period of performance?

Start: 2014-09-01. End: 2020-02-29.

What was the specific performance history of Change Healthcare Holdings, Inc. on this contract?

Detailed performance metrics for Change Healthcare Holdings, Inc. on this specific contract are not publicly available in the provided data. However, the contract was awarded under a firm fixed-price structure, suggesting that performance was expected to meet defined standards. The duration of the contract (approximately five years) implies a level of satisfaction or at least continued need for the services provided. Without access to performance reports, contractor past performance evaluations, or any potential contract modifications or disputes, a comprehensive assessment of their performance history on this particular award remains limited. Future analysis could involve reviewing contract close-out documents or agency performance reviews if accessible.

How does the $44.4 million contract value compare to similar VA or federal healthcare IT contracts?

The $44.4 million contract value for healthcare electronic data interchange (EDI) support over approximately five years is a moderate-sized award within the federal IT landscape. For the Department of Veterans Affairs (VA), which manages a vast healthcare system, this amount is significant but not exceptionally large compared to major EHR system procurements or large-scale cloud migration projects. When compared to similar federal contracts for data processing, hosting, and IT infrastructure services, particularly those supporting healthcare operations, $44.4 million falls within a common range for multi-year service agreements. Larger contracts can easily exceed hundreds of millions or even billions of dollars, while smaller, more specialized IT support contracts might be in the low millions. This contract's value suggests a substantial, but not enterprise-wide, scope of service for EDI.

What were the primary risks associated with this healthcare data exchange contract?

Key risks associated with this healthcare data exchange contract include data security and privacy breaches, given the sensitive nature of Protected Health Information (PHI). Interoperability challenges between different healthcare systems and the VA's infrastructure could also pose a risk, potentially leading to service disruptions or inefficiencies. Vendor performance issues, such as failure to meet service level agreements or technical difficulties, represent another risk. Furthermore, reliance on a single vendor for critical EDI functions could create a vulnerability if the vendor experiences financial instability or operational failures. Ensuring compliance with evolving healthcare regulations (like HIPAA) throughout the contract's lifecycle is also a continuous risk management consideration.

How effective was this contract in improving the VA's healthcare electronic data interchange capabilities?

The effectiveness of this contract in improving the VA's healthcare electronic data interchange (EDI) capabilities cannot be definitively assessed solely from the provided award data. The contract's objective was to support EDI, which is crucial for efficient healthcare operations. A successful outcome would imply smoother data flow, reduced errors in data transmission, and enhanced interoperability between VA systems and external healthcare partners. The fact that the contract was awarded and executed over several years suggests it met a continuing need. However, without specific performance reports, user feedback, or metrics on error reduction or processing times, a quantitative measure of its effectiveness is unavailable.

What are the historical spending patterns for healthcare data exchange services at the VA?

Historical spending patterns for healthcare data exchange services at the VA are not detailed in the provided data for this single contract. However, it is understood that the VA, as one of the largest healthcare providers in the U.S., consistently invests significant resources in health IT infrastructure, including systems that facilitate electronic data interchange. Spending in this area typically fluctuates based on technological advancements, evolving interoperability standards, and the VA's strategic priorities for modernizing its healthcare IT. This $44.4 million contract represents one component of the VA's broader investment in managing and exchanging healthcare data, likely part of a larger, ongoing effort to improve its IT capabilities.

Industry Classification

NAICS: Information › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services › Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: VA741-14-R-0150

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Mckesson Corporation (UEI: 177667227)

Address: 3055 LEBANON PIKE STE 1000, NASHVILLE, TN, 37214

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

Financial Breakdown

Contract Ceiling: $44,432,033

Exercised Options: $44,432,033

Current Obligation: $44,432,033

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline