VA awards $30M for nationwide dialysis services, with Fresenius Medical Care as the primary contractor

Contract Overview

Contract Amount: $29,999,050 ($30.0M)

Contractor: Fresenius Medical Care Holdings Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2016-07-01

End Date: 2016-07-01

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 24

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: IGF::OT::IGF EXPRESS REPORT: FY16 Q4 NATIONWIDE DIALYSIS SERVICES

Place of Performance

Location: WALTHAM, MIDDLESEX County, MASSACHUSETTS, 02451

State: Massachusetts Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $30.0 million to FRESENIUS MEDICAL CARE HOLDINGS INC for work described as: IGF::OT::IGF EXPRESS REPORT: FY16 Q4 NATIONWIDE DIALYSIS SERVICES Key points: 1. Contract awarded via full and open competition, suggesting a competitive bidding process. 2. The contract is a delivery order under a larger indefinite-delivery/indefinite-quantity (IDIQ) contract, indicating potential for future task orders. 3. The fixed-price contract type helps mitigate cost overrun risks for the government. 4. The contract duration is not specified, but the award date suggests it covers a specific period. 5. The North American Industry Classification System (NAICS) code 621492 points to specialized kidney dialysis centers. 6. The contractor, Fresenius Medical Care Holdings Inc., is a major player in the dialysis market.

Value Assessment

Rating: good

The contract value of approximately $30 million for nationwide dialysis services appears reasonable given the scope. Benchmarking against similar large-scale healthcare service contracts would provide a more precise value-for-money assessment. The fixed-price nature of the contract is a positive indicator for cost control. Without specific per-patient or per-treatment cost data, a detailed unit cost analysis is challenging, but the overall award suggests competitive pricing was achieved.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of 24 bidders (as indicated by 'no': 24) suggests a robust competitive environment. A high number of bidders typically leads to better price discovery and potentially lower costs for the government, as contractors vie to win the award.

Taxpayer Impact: The extensive competition for this contract is beneficial for taxpayers, as it likely drove down prices and ensured the government received competitive bids for essential dialysis services.

Public Impact

Veterans requiring kidney dialysis services across the nation will benefit from this contract. The contract ensures the provision of essential medical services for patients with end-stage renal disease. Geographic impact is nationwide, covering all areas where VA facilities require dialysis support. The contract supports the healthcare workforce within dialysis centers, including technicians, nurses, and physicians.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for contractor lock-in if this is a sole-source follow-on or if competition diminishes in future solicitations.
Dependence on a single large contractor could create risks if their service quality or capacity falters.
The broad scope of 'nationwide' may mask regional variations in service quality or cost-effectiveness.

Positive Signals

Awarded through full and open competition, indicating a healthy market and potential for ongoing competition.
Fixed-price contract type provides cost certainty for the government.
The contractor is a well-established provider in the dialysis sector, suggesting experience and capacity.
The contract addresses a critical healthcare need for a significant veteran population.

Sector Analysis

The healthcare services sector, specifically focusing on specialized medical facilities like kidney dialysis centers, is a significant area of federal spending. This contract falls under the NAICS code 621492. The market for dialysis services is substantial, with major providers competing for both government and private sector contracts. Federal spending in this area is driven by the healthcare needs of specific populations, such as veterans.

Small Business Impact

The provided data does not indicate any specific small business set-aside provisions for this contract. It is possible that subcontracting opportunities may exist for small businesses within the broader scope of services required for nationwide dialysis operations, but this is not explicitly detailed in the award information. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting and program management offices. Inspector General reviews may occur periodically to ensure compliance and identify any potential fraud, waste, or abuse. Transparency is generally maintained through contract award databases, though specific performance metrics and detailed operational oversight are internal to the agency.

Related Government Programs

VA Medical Services Contracts
Healthcare Services for Veterans
End-Stage Renal Disease Treatment Programs
Indefinite Delivery/Indefinite Quantity Contracts

Risk Flags

Contract awarded as a delivery order under an IDIQ, requiring monitoring of future task orders.
Contractor is a large, established entity; monitor for potential market dominance issues.
Nationwide scope requires careful regional performance monitoring.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $30.0 million to FRESENIUS MEDICAL CARE HOLDINGS INC. IGF::OT::IGF EXPRESS REPORT: FY16 Q4 NATIONWIDE DIALYSIS SERVICES

Who is the contractor on this award?

The obligated recipient is FRESENIUS MEDICAL CARE 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 $30.0 million.

What is the period of performance?

Start: 2016-07-01. End: 2016-07-01.

What is the historical spending pattern for nationwide dialysis services by the Department of Veterans Affairs?

Analyzing historical spending for nationwide dialysis services by the VA requires accessing contract databases over multiple fiscal years. While this specific award is for approximately $30 million in FY16 Q4, understanding the VA's total expenditure on dialysis services would involve aggregating data from numerous contracts, including IDIQs and individual delivery orders, across different regions and facilities. Trends might show increasing demand due to an aging veteran population or changes in treatment protocols. Comparing year-over-year spending can reveal budget allocations and potential shifts in contracting strategies, such as moving towards larger, consolidated contracts or increasing reliance on specific providers like Fresenius Medical Care.

How does the pricing of this Fresenius Medical Care contract compare to other VA dialysis contracts or private sector benchmarks?

A direct pricing comparison is challenging without detailed service line items (e.g., cost per dialysis session, medication costs, equipment rental). However, the fact that this contract was awarded under full and open competition with 24 bidders suggests that Fresenius Medical Care's pricing was competitive. To benchmark effectively, one would need to compare the effective per-unit costs derived from this contract against similar contracts awarded by the VA to other providers or against publicly available pricing data from large private healthcare systems for comparable dialysis services. Variations in pricing can be influenced by geographic location, service intensity, and included ancillary services.

What are the key performance indicators (KPIs) used to evaluate Fresenius Medical Care's performance under this contract?

Key performance indicators for a dialysis services contract typically focus on patient outcomes, service availability, and operational efficiency. These might include metrics such as patient wait times for appointments, infection control rates, adherence to treatment schedules, patient satisfaction scores, and compliance with VA and regulatory standards. The contract likely includes clauses for performance monitoring and potential remedies for substandard service. The VA's quality assurance personnel would be responsible for tracking these KPIs and ensuring the contractor meets the required service levels throughout the contract period.

What is Fresenius Medical Care's track record with the VA and other federal agencies for healthcare services?

Fresenius Medical Care Holdings Inc. is a major global healthcare company specializing in dialysis products and services. Its track record with the VA and other federal agencies would likely include numerous contracts for providing dialysis treatments and related services. A review of federal procurement data (e.g., FPDS) would reveal the extent and nature of their past awards. Positive indicators would include a history of successful contract performance, few disputes or terminations, and positive past performance reviews. Conversely, any significant contract issues, performance failures, or legal challenges would be areas of concern.

What is the potential risk associated with relying on a single large contractor like Fresenius Medical Care for nationwide dialysis services?

Relying heavily on a single large contractor like Fresenius Medical Care for nationwide dialysis services presents several potential risks. These include service disruptions due to unforeseen events (e.g., natural disasters, labor disputes, or company-specific issues), potential for reduced competitive pressure in future contract renewals leading to price increases, and challenges in enforcing performance standards if the contractor becomes indispensable. The government mitigates these risks through robust contract management, clear performance expectations, contingency planning, and by fostering a competitive market environment where alternative providers can emerge or scale up.

Industry Classification

NAICS: Health Care and Social Assistance › Outpatient Care Centers › Kidney Dialysis Centers

Product/Service Code: MEDICAL SERVICES › OTHER MEDICAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 24

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Fresenius Medical Care Capital City, LLC (UEI: 324661834)

Address: 920 WINTER ST, WALTHAM, MA, 02451

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

Financial Breakdown

Contract Ceiling: $29,999,050

Exercised Options: $29,999,050

Current Obligation: $29,999,050

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA79113D0019

IDV Type: IDC

Timeline