VA awards $91.8M purchase order for Baxter Healthcare beds and services, citing sole-source justification

Contract Overview

Contract Amount: $91,769 ($91.8K)

Contractor: Baxter Healthcare Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-05-13

End Date: 2027-04-30

Contract Duration: 717 days

Daily Burn Rate: $128/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: HILL-ROM BEDS SERVICES

Place of Performance

Location: BROOKLYN, KINGS County, NEW YORK, 11209

State: New York Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $91,769.2 to BAXTER HEALTHCARE CORPORATION for work described as: HILL-ROM BEDS SERVICES Key points: 1. The contract's value of $91.8 million over approximately two years suggests a significant investment in essential medical equipment. 2. The sole-source award indicates a lack of competitive bidding, potentially limiting price discovery and value for taxpayers. 3. The duration of the contract (717 days) provides a stable supply chain for critical healthcare infrastructure. 4. The specific NAICS code (811210) points to a focus on repair and maintenance of electronic and precision equipment, highlighting the technical nature of the services. 5. The contract is a purchase order, a common instrument for acquiring goods and services, but its sole-source nature warrants scrutiny. 6. The absence of small business set-aside flags suggests this contract was not specifically targeted to support small businesses.

Value Assessment

Rating: fair

Benchmarking the value of this $91.8 million purchase order for Baxter Healthcare beds and services is challenging without specific details on the quantity and type of equipment or services provided. However, the sole-source nature of the award raises concerns about whether the Department of Veterans Affairs (VA) secured the best possible price. Typically, competitive bidding allows for price discovery and can lead to more favorable terms for the government. Without comparative data from similar sole-source awards or open market pricing for comparable equipment, it's difficult to definitively assess value for money. The fixed-price nature of the contract provides some cost certainty, but the lack of competition is a primary indicator of potential value concerns.

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 (VA) did not conduct a competitive solicitation process. This typically occurs when a specific product or service is only available from a single source, or in urgent situations where competition is not feasible. The lack of competition means that multiple bidders were not considered, and the VA did not benefit from the price reductions or innovations that can arise from a competitive environment. This approach can limit the VA's ability to explore alternative solutions or secure more advantageous pricing.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as the government may not achieve the most competitive pricing available in the market. The absence of competition means there is less pressure on the contractor to offer the lowest possible price.

Public Impact

Veterans receiving care within VA facilities will benefit from the availability of essential medical beds and associated services. The contract ensures the continued operation and maintenance of critical medical equipment within VA healthcare systems. The primary geographic impact is within New York (NY), where the services are being delivered. The contract supports the healthcare workforce by ensuring they have the necessary equipment to provide patient care.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential value for taxpayers.
Lack of transparency in the justification for sole-source award.
Potential for higher costs due to absence of competitive bidding.
No indication of small business participation or subcontracting opportunities.

Positive Signals

Ensures availability of critical medical equipment for veterans.
Provides a stable and predictable supply of beds and services.
Fixed-price contract offers cost certainty for the VA.

Sector Analysis

The healthcare equipment and services sector is a critical component of the broader healthcare industry, encompassing the manufacturing, distribution, and maintenance of medical devices and related support. This contract falls within the segment of medical equipment repair and maintenance, specifically for electronic and precision equipment. The market for such services is often characterized by specialized technical expertise and established relationships with healthcare providers. The Department of Veterans Affairs is a significant purchaser of healthcare goods and services, and contracts like this are essential for maintaining its operational capacity. Comparable spending benchmarks would typically involve analyzing other large sole-source or competitively awarded contracts for similar medical equipment maintenance services across federal agencies or large healthcare systems.

Small Business Impact

This contract does not appear to include any specific small business set-aside provisions, as indicated by the 'sb': false flag. Consequently, there is no direct analysis of subcontracting opportunities for small businesses within this award. The absence of a set-aside suggests that the primary contractor, Baxter Healthcare Corporation, was selected without a mandate to engage small businesses for a portion of the work. This could mean missed opportunities for small businesses to participate in the federal supply chain for medical equipment services.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of Veterans Affairs (VA). As a purchase order, it falls under the VA's internal procurement and contract management processes. Accountability measures would include performance monitoring against the terms of the purchase order, ensuring timely delivery and quality of services. Transparency is limited due to the sole-source nature of the award, with less public information available compared to a competitively bid contract. The VA's Office of Inspector General (OIG) would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Department of Veterans Affairs Medical Equipment Procurement
Healthcare Services Contracts
Medical Device Maintenance and Repair
Sole-Source Healthcare Awards

Risk Flags

Sole-source award raises concerns about competition and potential value.
Lack of transparency regarding justification for sole-source award.
Potential for price escalation due to lack of competitive pressure.
Dependence on a single supplier for critical medical equipment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $91,769.2 to BAXTER HEALTHCARE CORPORATION. HILL-ROM BEDS SERVICES

Who is the contractor on this award?

The obligated recipient is BAXTER HEALTHCARE CORPORATION.

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 $91,769.2.

What is the period of performance?

Start: 2025-05-13. End: 2027-04-30.

What is the specific justification provided by the VA for awarding this contract as sole-source to Baxter Healthcare Corporation?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source justifications are based on factors such as the unique capabilities of a single contractor, urgent and compelling needs where competition is not feasible, or when only one responsible source exists. For this contract, the VA would have had to document why Baxter Healthcare Corporation was the only viable option. Common reasons in the healthcare sector include proprietary technology, existing infrastructure integration, or specialized maintenance expertise that cannot be replicated by other vendors within the required timeframe. Without the official justification document, it is impossible to ascertain the precise rationale.

How does the $91.8 million contract value compare to historical spending on similar bed services by the VA?

To compare this $91.8 million contract value to historical VA spending on similar bed services, one would need to access historical contract databases and filter for contracts with the Department of Veterans Affairs related to medical beds and associated maintenance or services, particularly those awarded to Baxter Healthcare Corporation or its competitors. Analyzing the total expenditure over previous contract periods, the average contract value, and the number of contracts awarded for similar items would provide context. A higher or lower value compared to historical averages, especially when considering inflation and changes in equipment technology, would indicate whether this award represents an increase or decrease in investment. The sole-source nature also complicates direct comparison, as competitive contracts might yield different price points.

What are the key performance indicators (KPIs) that the VA will use to evaluate Baxter Healthcare Corporation's performance under this contract?

The provided data does not specify the Key Performance Indicators (KPIs) for this contract. However, for a contract involving medical beds and services, typical KPIs would likely include metrics related to equipment uptime and availability, response times for maintenance and repair requests, quality of repairs (e.g., reduction in repeat issues), adherence to service level agreements (SLAs), and potentially patient satisfaction related to the equipment's functionality. The contract terms and conditions, which are not detailed here, would outline these specific performance expectations and the methods for measuring them. The VA would monitor these KPIs to ensure Baxter Healthcare Corporation is meeting its contractual obligations.

What is the risk associated with relying on a single supplier for critical medical equipment like hospital beds?

Relying on a single supplier for critical medical equipment like hospital beds, especially through a sole-source contract, introduces several risks. Firstly, there is a risk of price escalation over time, as the supplier faces less competitive pressure to offer cost savings. Secondly, supply chain disruptions, whether due to the supplier's internal issues, natural disasters, or geopolitical events, can have a severe impact on the availability of essential equipment, potentially affecting patient care. Thirdly, the lack of alternative suppliers limits the VA's ability to adopt newer technologies or more advanced equipment if they become available from other manufacturers. Finally, the VA may become overly dependent on the supplier's service and support, potentially leading to less favorable contract renegotiations in the future.

Does the NAICS code 811210 (Electronic and Precision Equipment Repair and Maintenance) accurately reflect the scope of services for hospital beds?

The NAICS code 811210, 'Electronic and Precision Equipment Repair and Maintenance,' can be a relevant classification for hospital beds, particularly if the beds are highly sophisticated and incorporate electronic components, diagnostic features, or advanced control systems. Many modern hospital beds include electronic adjustments, patient monitoring sensors, and communication interfaces, which fall under the purview of electronic equipment. However, if the contract primarily involves the supply of the beds themselves, or basic mechanical maintenance, other NAICS codes might also be applicable or even more precise. The 'Electronic and Precision Equipment' aspect suggests a focus on the technical maintenance and repair of these advanced features, rather than just the provision of the physical bed structure.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Electronic and Precision Equipment Repair and Maintenance

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 36C24225Q0388

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: ONE BAXTER PARKWAY, DEERFIELD, IL, 60015

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: $236,580

Exercised Options: $91,769

Current Obligation: $91,769

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline