VA's $48.1M Surgical Instrument Orders with Intuitive Surgical Inc. from July 2022 to March 2024

Contract Overview

Contract Amount: $48,107,581 ($48.1M)

Contractor: Intuitive Surgical Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-07-01

End Date: 2024-03-22

Contract Duration: 630 days

Daily Burn Rate: $76.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT: NX ORDERS PLACED DURING THE 7/2022 - 3/2024

Place of Performance

Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94086

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $48.1 million to INTUITIVE SURGICAL INC for work described as: EXPRESS REPORT: NX ORDERS PLACED DURING THE 7/2022 - 3/2024 Key points: 1. Significant spending on surgical instruments, primarily from a single vendor. 2. The Department of Veterans Affairs is the sole agency and customer. 3. Potential for price escalation due to limited competition. 4. Focus on surgical and medical instrument manufacturing sector.

Value Assessment

Rating: questionable

The total award amount of $48.1M over 21 months suggests a substantial investment. Without comparable contract data or a clear justification for the lack of competition, assessing the value for money is difficult. The benchmark of $7,636 per order is noted but lacks context for unit price comparison.

Cost Per Unit: $7,636

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source or limited competition approach. This significantly impacts price discovery, as there was no competitive pressure to drive down costs. The VA likely relied on existing relationships or specific product requirements.

Taxpayer Impact: Taxpayer funds are being spent without evidence of competitive bidding, potentially leading to higher costs than if multiple vendors had participated.

Public Impact

Veterans may receive advanced surgical tools, improving care quality. Reliance on a single supplier could impact availability and repair timelines. The significant expenditure highlights a key area of VA medical procurement. Lack of competition raises concerns about long-term cost-effectiveness for taxpayers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for price inflation
Sole-source award

Positive Signals

Ensures access to specific surgical technology
Supports critical medical needs for veterans

Sector Analysis

The spending falls within the Surgical and Medical Instrument Manufacturing sector. This sector is characterized by high innovation and specialized products. Benchmarks for this type of spending are difficult to establish without knowing the specific instruments procured, but the concentration with one vendor is notable.

Small Business Impact

There is no indication that small businesses were involved in this contract, as it was awarded to a single, likely large, corporation. This represents a missed opportunity for small business participation in government contracting.

Oversight & Accountability

The 'NOT COMPETED' status warrants further oversight to understand the justification for bypassing the competitive process. Accountability for ensuring fair pricing and maximizing taxpayer value in sole-source procurements is crucial.

Related Government Programs

Surgical and Medical Instrument Manufacturing
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Sole-source award lacks competitive justification.
Potential for overpayment due to absence of price competition.
Limited transparency on specific product details and unit pricing.
No indication of small business participation.
Risk of vendor lock-in and future price increases.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $48.1 million to INTUITIVE SURGICAL INC. EXPRESS REPORT: NX ORDERS PLACED DURING THE 7/2022 - 3/2024

Who is the contractor on this award?

The obligated recipient is INTUITIVE SURGICAL 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 $48.1 million.

What is the period of performance?

Start: 2022-07-01. End: 2024-03-22.

What was the specific justification for not competing this contract, and were alternative solutions considered?

The provided data does not detail the justification for not competing the contract. Typically, sole-source awards are made when only one responsible source can provide the required supplies or services. This could be due to proprietary technology, unique capabilities, or urgent needs. Further investigation would be required to ascertain the specific reasons and whether alternatives were explored.

How does the per-unit cost of these surgical instruments compare to market rates or similar government contracts?

The provided data indicates an average order value of $7,636, but lacks specific unit counts or instrument types to perform a direct per-unit cost comparison. Without this granular detail or access to market research and benchmarks for similar surgical instruments, it is impossible to definitively assess if the pricing is competitive or inflated due to the lack of competition.

What is the long-term strategy for procuring these surgical instruments to ensure cost-effectiveness and mitigate supply chain risks?

The current data shows a concentrated spend with a single vendor over a defined period. A long-term strategy should involve exploring competitive bidding opportunities for future requirements, potentially through multi-award contracts or by encouraging new entrants into the market. This would help mitigate risks associated with sole-source reliance and ensure better long-term cost-effectiveness for the VA.

Industry Classification

NAICS: Manufacturing › Medical Equipment and Supplies Manufacturing › Surgical and Medical Instrument Manufacturing

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1266 KIFER RD, SUNNYVALE, CA, 94086

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

Financial Breakdown

Contract Ceiling: $48,107,581

Exercised Options: $48,107,581

Current Obligation: $48,107,581

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10G19D0092

IDV Type: IDC

Timeline