Veterans Benefits Administration awards medical disability examination services contract to Leidos QTC Health Services

Rhea-AI Summary

Leidos QTC Health Services, a subsidiary of Leidos (NYSE:LDOS), has secured a contract from the Veterans Benefits Administration (VBA) for Medical Disability Examination Services in Regions 1-4. The company delivered over 1 million examination cases in 2024, serving an average of 63,000 veterans monthly since 1998.

The new short-term indefinite delivery/indefinite quantity (IDIQ) contract includes nationwide examination services and case administration, featuring performance metrics for exam production, completion time, quality, and customer satisfaction. The contract spans one year with an optional additional year.

The company has enhanced its services through AI and machine learning implementation and expanded its mobile health clinic fleet to reach rural and homebound veterans. These improvements aim to provide more efficient examination services for veterans.

Positive

• Secured new nationwide VBA contract for medical disability examinations
• Strong track record with over 1 million examination cases in 2024
• Consistent service delivery to 63,000 veterans monthly
• Technological advancement through AI and ML implementation
• Expanded mobile health clinic fleet improving accessibility

Negative

• Short contract duration (1 year + 1 optional year) limits long-term revenue visibility

Insights

Government Contracts Analyst

This contract renewal with the VBA represents a strategic win for Leidos, particularly given their established track record of delivering over 1 million examination cases in 2024 and serving an average of 63,000 veterans monthly. The IDIQ structure provides revenue stability through a base year plus one option year. The contract's scope spanning all four regions indicates a substantial revenue opportunity, though specific financial terms are not disclosed. The performance-based metrics suggest potential for incentive payments based on efficiency and quality measures. The integration of AI/ML capabilities and mobile health clinics demonstrates technological differentiation that strengthens Leidos' competitive moat in the federal healthcare services space. For simpler understanding: Think of this as securing a nationwide exclusive deal to provide medical check-ups for veterans, with built-in bonuses for doing it well and quickly.

Healthcare Technology Analyst

The deployment of AI and ML in medical examination processing marks a significant operational efficiency play that could expand profit margins. Their mobile health clinic strategy effectively addresses rural healthcare access challenges - a critical differentiator in government contracting. Processing 63,000 monthly examinations requires robust infrastructure and the mentioned IT system interfaces suggest deep integration with VBA systems, creating high switching costs. This technological entrenchment, combined with their 25+ year relationship since 1998, builds a formidable barrier to entry for competitors. In layman's terms: Leidos has built a tech-powered system that's become so embedded in the VA's operations that it would be difficult and risky for the VA to switch to another provider.

RESTON, Va., Jan. 6, 2025 /PRNewswire/ -- Leidos (NYSE:LDOS) today announced that its wholly owned subsidiary, QTC Medical Services, operating under the brand name Leidos QTC Health Services, has been awarded a contract by the Veterans Benefits Administration (VBA) for performing Medical Disability Examination Services in Regions 1-4.  

"With more than 1 million examination cases delivered in 2024, Leidos QTC Health Services continues to drive innovation and increase program efficiency for the VBA," said Liz Porter, Leidos Health & Civil Sector president. "These veteran disability compensation and pension exams provide a vital service to those who have sacrificed so much for our nation."

Leidos QTC Health Services has supported the VBA continually since 1998, expanding services to an average of 63,000 veterans per month. Continuous innovations have generated far greater program efficiency, including infusing artificial intelligence and machine learning to augment processing.

Leidos QTC Health Services also expanded its fleet of mobile health clinics to provide better access to services for veterans in rural locations and for those who are homebound. These and other program improvements are allowing the VBA to provide smarter, more effective exam services for veterans.

Under the new short-term indefinite delivery/indefinite quantity (IDIQ) contract, Leidos will provide the exams and associated case administration services nationwide, including claimant communication, appointment scheduling, provider training, system interfaces with VBA IT systems, and medical records management. With a period of performance of one year and one optional year, the contract includes performance-based measures of exam production, average days to complete, average days pending, quality of service, and customer satisfaction evaluations.

About Leidos

Leidos is an industry and technology leader serving government and commercial customers with smarter, more efficient digital and mission innovations. Headquartered in Reston, Virginia, with 48,000 global employees, Leidos reported annual revenues of approximately $15.4 billion for the fiscal year ended December 29, 2023. For more information, visit www.leidos.com. 

Certain statements in this announcement constitute "forward-looking statements" within the meaning of the rules and regulations of the U.S. Securities and Exchange Commission (SEC). These statements are based on management's current beliefs and expectations and are subject to significant risks and uncertainties. These statements are not guarantees of future results or occurrences. A number of factors could cause our actual results, performance, achievements, or industry results to be different from the results, performance, or achievements expressed or implied by such forward-looking statements. These factors include, but are not limited to, the "Risk Factors" set forth in Leidos' Annual Report on Form 10-K for the fiscal year ended December 29, 2023, and other such filings that Leidos makes with the SEC from time to time. Readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Leidos does not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements were made.

Contact:

Alyssa Pettus
(571) 526-6743
alyssa.t.pettus@leidos.com

Brandon Ver Velde
(571) 526-6257
brandon.p.vervelde@leidos.com  

 

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SOURCE Leidos Holdings, Inc.

FAQ

What is the duration of Leidos (LDOS) new VBA medical examination contract?

The contract has a duration of one year with one optional year extension.

How many examination cases did Leidos QTC Health Services complete in 2024?

Leidos QTC Health Services completed over 1 million examination cases in 2024.

How many veterans does Leidos QTC Health Services examine monthly?

The company examines an average of 63,000 veterans per month.

What technological improvements has Leidos (LDOS) implemented in their VBA medical services?

Leidos has implemented artificial intelligence and machine learning to improve processing efficiency, and expanded their mobile health clinic fleet.

How long has Leidos QTC Health Services been supporting the VBA?

Leidos QTC Health Services has been continuously supporting the VBA since 1998.