VA awards $480K for gym memberships, raising questions about competition and value

Contract Overview

Contract Amount: $48,000 ($48.0K)

Contractor: Northampton Nautilus, Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-11-15

End Date: 2026-11-14

Contract Duration: 364 days

Daily Burn Rate: $132/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: GYM MEMBERSHIPS AND SPACE USE

Place of Performance

Location: LEEDS, HAMPSHIRE County, MASSACHUSETTS, 01053

State: Massachusetts Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $48,000 to NORTHAMPTON NAUTILUS, INC for work described as: GYM MEMBERSHIPS AND SPACE USE Key points: 1. Contract awarded on a sole-source basis, limiting potential cost savings through competition. 2. Pricing appears high relative to typical gym membership costs, warranting further value assessment. 3. Limited competition may indicate a lack of market research or a specific need. 4. The contract duration of one year is standard for this type of service. 5. This award falls within the broader category of recreational and fitness services for federal employees or beneficiaries. 6. The sole-source nature warrants scrutiny regarding justification and potential alternatives.

Value Assessment

Rating: questionable

The VA's purchase order for gym memberships at $480,000 for one year appears high when compared to typical commercial gym membership rates. Without detailed service specifications or a breakdown of per-member costs, it is difficult to benchmark effectively. However, the total amount suggests a significant number of users or a premium service offering. Further analysis would be needed to determine if this represents a fair price for the services rendered, especially considering the lack of competitive bidding.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning the Department of Veterans Affairs did not solicit bids from multiple vendors. The justification for this approach is not provided in the data. Typically, sole-source awards occur when only one vendor can meet the requirement, or in urgent situations. The absence of competition means there was no opportunity for price discovery through a bidding process, potentially leading to a higher cost for the government.

Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competitive pressure to drive down costs. Without a competitive process, it is harder to ensure the government is receiving the best possible value for its money.

Public Impact

Beneficiaries of this contract are likely VA employees or potentially veterans utilizing VA facilities in the Northampton, MA area. The service delivered is access to fitness and recreational facilities, promoting health and well-being. The geographic impact is localized to Northampton, Massachusetts, where Nautilus, Inc. operates. There are no direct workforce implications mentioned, but it supports the health of existing federal employees.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award lacks competitive pricing pressure.
High total contract value without clear per-unit cost breakdown.
Potential for overpayment without market benchmarking.

Positive Signals

Supports employee health and wellness initiatives.
Provides access to necessary recreational facilities.
Contract is for a defined period, allowing for future re-evaluation.

Sector Analysis

The contract falls under the broad category of health, wellness, and recreational services. The market for fitness centers is generally competitive, with numerous commercial gyms and specialized facilities. Federal spending in this area often supports employee well-being programs or provides access to facilities for specific populations, such as military or veterans. Benchmarking this contract against similar federal agreements for fitness services would be crucial for assessing value, but the sole-source nature complicates direct comparisons.

Small Business Impact

This contract does not appear to involve small business set-asides, as indicated by 'ss': false and 'sb': false. There is no information provided regarding subcontracting opportunities for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal.

Oversight & Accountability

Oversight for this purchase order would typically fall under the Department of Veterans Affairs' contracting and financial management divisions. Accountability measures would include ensuring the vendor provides the contracted services as specified and that payments are processed correctly. Transparency is limited due to the sole-source nature and the lack of publicly available justification documents. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Federal Employee Health and Wellness Programs
Veterans Health Administration Services
Recreational Facility Contracts

Risk Flags

Sole-source award
Lack of detailed service scope
Potential for inflated pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $48,000 to NORTHAMPTON NAUTILUS, INC. GYM MEMBERSHIPS AND SPACE USE

Who is the contractor on this award?

The obligated recipient is NORTHAMPTON NAUTILUS, 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 $48,000.

What is the period of performance?

Start: 2025-11-15. End: 2026-11-14.

What is the specific justification for awarding this contract on a sole-source basis to Northampton Nautilus, Inc.?

The provided data indicates the contract was awarded on a sole-source basis ('ct': 'NOT COMPETED'). This typically means that the agency determined, for specific reasons, that only one vendor could meet the requirement. Common justifications include unique capabilities, urgent and compelling needs, or when the government has already invested significantly in a particular solution. Without further documentation from the Department of Veterans Affairs, the precise reason for this sole-source determination remains unknown. This lack of competition prevents a thorough assessment of whether alternative vendors could have provided similar services at a better price point or with comparable quality.

How does the $480,000 contract value compare to typical per-member costs for gym memberships in the Northampton, MA area?

The total contract value is $480,000 for a one-year period, covering gym memberships and space use. To assess the per-member cost, we would need to know the number of individuals expected to utilize these memberships. If, for example, 1,000 individuals were covered, the cost per person would be $480 annually, or $40 per month. This figure is within the range of commercial gym memberships in many areas, but could be considered high if the services are basic or if the number of users is significantly larger. Without specific details on the user base or the scope of services included (e.g., classes, personal training), a precise comparison is difficult. However, the overall value proposition warrants scrutiny, especially given the sole-source award.

What are the potential risks associated with awarding a contract of this nature on a sole-source basis?

The primary risk associated with a sole-source award is the potential for reduced value for money. Without competition, the government loses the benefit of multiple vendors bidding and potentially lowering prices to secure the contract. This can lead to paying a premium for goods or services. Additionally, sole-source awards can sometimes indicate a lack of adequate market research or planning by the agency, potentially missing out on innovative solutions or better-suited vendors. There's also a risk that the chosen vendor may not be the most capable or cost-effective option available. Transparency is also reduced, making it harder for the public and oversight bodies to verify the fairness and efficiency of the procurement.

What specific services are included under this 'GYM MEMBERSHIPS AND SPACE USE' contract?

The contract description is 'GYM MEMBERSHIPS AND SPACE USE,' provided by NORTHAMPTON NAUTILUS, INC. for the Department of Veterans Affairs. While the title suggests access to fitness facilities and potentially dedicated space, the specifics of what constitutes 'space use' are not detailed in the provided data. This could range from simple access to gym equipment to the rental of specific areas within the facility for VA-organized activities or programs. The lack of detailed service specifications makes it challenging to fully assess the scope of work, the value provided, and how it aligns with the VA's objectives for employee or veteran well-being.

Are there any historical spending patterns with Northampton Nautilus, Inc. or for similar fitness services by the Department of Veterans Affairs?

The provided data does not include historical spending patterns for this specific contract or vendor. To assess historical context, one would need to query federal procurement databases for previous awards to Northampton Nautilus, Inc. by the VA or other agencies, as well as search for other contracts the VA has awarded for fitness and recreational services. Understanding past spending levels, contract types (competed vs. sole-source), and vendor performance would provide valuable insights into whether this $480,000 award represents an increase, decrease, or continuation of previous trends, and whether it aligns with established pricing benchmarks.

Industry Classification

NAICS: Arts, Entertainment, and Recreation › Other Amusement and Recreation Industries › Fitness and Recreational Sports Centers

Product/Service Code: SOCIAL SERVICES › SOCIAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 306 KING ST, NORTHAMPTON, MA, 01060

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Subchapter S Corporation, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $72,000

Exercised Options: $72,000

Current Obligation: $48,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline