VA awards $1M for ICU medical pump rentals, with 2 bidders competing for a 5-year contract

Contract Overview

Contract Amount: $100,661 ($100.7K)

Contractor: Infusystem, Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-03-06

End Date: 2026-03-05

Contract Duration: 1,095 days

Daily Burn Rate: $92/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: ICU MEDICAL CADD SOLIS PUMP RENTAL (15 PER MONTH FOR 5 YEARS)

Place of Performance

Location: WEST HAVEN, NEW HAVEN County, CONNECTICUT, 06516

State: Connecticut Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $100,660.78 to INFUSYSTEM, INC for work described as: ICU MEDICAL CADD SOLIS PUMP RENTAL (15 PER MONTH FOR 5 YEARS) Key points: 1. The contract value appears reasonable given the duration and scope of pump rentals. 2. Competition was present, with two bidders vying for the contract. 3. The fixed-price nature of the contract helps mitigate cost overrun risks. 4. This contract supports the VA's mission to provide medical equipment to veterans. 5. The award falls within the broader category of medical equipment and supplies. 6. Rental agreements can offer flexibility compared to outright purchase of equipment.

Value Assessment

Rating: good

The total award of approximately $1 million over five years for 15 pumps per month suggests a monthly cost of roughly $1,118 per pump. This appears to be within a reasonable range for specialized medical equipment rentals, especially considering maintenance and support often included in such agreements. Benchmarking against similar VA or other federal contracts for pump rentals would provide a more precise value-for-money assessment, but initial indications suggest fair pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was competed under Simplified Acquisition Procedures (SAP), which typically involves a limited number of bidders. With two bidders identified, this indicates some level of competition, but it is not considered full and open competition. The limited competition might suggest that the market for this specific type of pump rental is concentrated among a few providers, or that the acquisition threshold limited the scope of outreach.

Taxpayer Impact: While two bidders offer some price discovery, taxpayers may not be realizing the absolute lowest price achievable through broader competition. However, SAP is designed for efficiency in smaller acquisitions, balancing cost and speed.

Public Impact

Veterans receiving care at VA facilities will benefit from access to necessary ICU medical pumps. The contract ensures the availability of critical medical equipment for patient treatment. The services are likely delivered at VA medical centers across the country. This contract supports the healthcare workforce by providing essential tools for patient care.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition could potentially lead to higher prices than a fully competed contract.
Reliance on a rental model may incur higher long-term costs compared to purchasing equipment outright.
The specific terms of the rental agreement regarding maintenance and support need careful review to ensure full value.

Positive Signals

The contract ensures the availability of critical medical equipment for patient care.
The fixed-price nature provides cost certainty for the Department of Veterans Affairs.
The use of SAP suggests an efficient acquisition process for this type of need.

Sector Analysis

This contract falls within the broader medical device manufacturing and rental sector, specifically focusing on electromedical apparatus. The market for medical equipment, including infusion pumps, is substantial, driven by healthcare demand. Rental agreements are common for high-cost or rapidly evolving technology, allowing healthcare providers to manage capital expenditure and access updated equipment. Comparable spending benchmarks would involve analyzing other federal or large healthcare system contracts for similar pump rental services.

Small Business Impact

The provided data does not indicate any specific small business set-aside or subcontracting requirements for this contract. Given the nature of specialized medical equipment and the likely limited number of qualified providers, it is possible that larger, established companies dominate this niche. Further analysis would be needed to determine if small businesses were excluded or had opportunities to participate as subcontractors.

Oversight & Accountability

The contract is a Purchase Order awarded by the Department of Veterans Affairs, which is subject to internal VA oversight and potentially the Government Accountability Office (GAO) for protests. The fixed-price nature simplifies financial oversight. Transparency is generally maintained through contract databases like FPDS. Specific performance monitoring would be handled by the VA contracting officer's representative (COR) to ensure equipment meets specifications and service levels.

Related Government Programs

Medical Equipment Procurement
Healthcare Services Contracts
Department of Veterans Affairs Medical Supplies

Risk Flags

Limited Competition
Potential for Higher Long-Term Costs
Dependence on Rental Model

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $100,660.78 to INFUSYSTEM, INC. ICU MEDICAL CADD SOLIS PUMP RENTAL (15 PER MONTH FOR 5 YEARS)

Who is the contractor on this award?

The obligated recipient is INFUSYSTEM, 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 $100,660.78.

What is the period of performance?

Start: 2023-03-06. End: 2026-03-05.

What is the track record of INFUSYSTEM, INC. with the Department of Veterans Affairs?

A review of federal procurement data indicates that INFUSYSTEM, INC. has received multiple awards from the Department of Veterans Affairs, primarily for medical equipment rentals and services. These awards span various locations and contract types, suggesting an established relationship. Analyzing the historical performance and value of these prior contracts would provide insight into their reliability and pricing competitiveness. Without specific details on past performance issues or successes, it's difficult to definitively assess their track record, but their continued awards suggest a generally satisfactory performance history.

How does the per-pump rental cost compare to industry benchmarks?

The estimated monthly cost per pump is approximately $1,118 ($1,006,607.8 / 15 pumps / 60 months). This figure needs to be benchmarked against current market rates for similar ICU CADD Solis pump rentals. Factors such as included maintenance, software updates, delivery, and support services significantly influence rental pricing. Industry benchmarks can vary widely based on the specific pump model, contract duration, volume, and geographic location. A comprehensive comparison would require accessing pricing data from other federal agencies, large hospital systems, or specialized medical equipment leasing companies.

What are the primary risks associated with this type of medical equipment rental contract?

Key risks include potential price increases upon renewal, dependence on a single supplier if competition diminishes, and the possibility of equipment malfunction or unavailability impacting patient care. There's also a risk that the total cost of rental over the contract's life could exceed the cost of purchasing the equipment outright, especially if the pumps are needed for an extended period beyond the initial contract term. Ensuring robust service level agreements (SLAs) and clear maintenance responsibilities within the contract is crucial to mitigate operational risks.

How effective is the Department of Veterans Affairs in managing medical equipment rental contracts?

The VA generally has established procedures for managing equipment contracts, including the appointment of Contracting Officer's Representatives (CORs) to oversee performance and ensure compliance. The effectiveness can vary depending on the specific contract, the COR's diligence, and the clarity of the contract terms. For rental agreements, effective management involves tracking equipment usage, ensuring timely maintenance, monitoring service levels, and conducting periodic reviews of costs against evolving market conditions and potential purchase options. The VA's extensive experience in healthcare procurement suggests a mature, albeit complex, management framework.

What has been the historical spending pattern for ICU medical pump rentals by the VA?

Analyzing historical spending patterns for ICU medical pump rentals by the VA would reveal trends in demand, pricing, and supplier relationships. This data could show if spending has increased or decreased over time, whether specific models are consistently procured, and if there have been shifts in competition levels. Understanding past spending helps in forecasting future needs and identifying potential cost-saving opportunities, such as negotiating bulk discounts or exploring alternative procurement strategies like direct purchase for long-term needs.

Are there opportunities for technology refresh or upgrades within this rental agreement?

Rental agreements can sometimes include provisions for technology refresh or upgrades, allowing the VA to access newer pump models as they become available without the burden of purchasing new capital equipment. The specific terms of this contract would need to be examined to determine if such options exist and under what conditions. If upgrades are not explicitly included, the VA might need to re-compete the contract or negotiate amendments to incorporate newer technology, potentially impacting cost and service delivery.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Electromedical and Electrotherapeutic Apparatus Manufacturing

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

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 36C24123Q0208

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Infusystem Holdings, Inc.

Address: 3851 W HAMLIN RD, ROCHESTER HILLS, MI, 48309

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

Financial Breakdown

Contract Ceiling: $297,449

Exercised Options: $123,569

Current Obligation: $100,661

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline