VA awards $86M Industrial Gas contract to RCG of North Carolina for oxygen supply

Contract Overview

Contract Amount: $86,280 ($86.3K)

Contractor: RCG of North Carolina, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-07-01

End Date: 2027-06-30

Contract Duration: 364 days

Daily Burn Rate: $237/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: BULK O2

Place of Performance

Location: PINEHURST, MOORE County, NORTH CAROLINA, 28374

State: North Carolina Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $86,280 to RCG OF NORTH CAROLINA, LLC for work described as: BULK O2 Key points: 1. Contract value appears reasonable given the duration and scope of industrial gas supply. 2. Full and open competition after exclusion of sources suggests a deliberate procurement strategy. 3. Potential risk indicators include reliance on a single vendor for a critical supply. 4. Performance context is within the industrial gas manufacturing sector, serving healthcare needs. 5. Sector positioning is critical for supporting VA healthcare facilities' operational requirements.

Value Assessment

Rating: good

The contract value of $86.3 million over one year for bulk oxygen is within a reasonable range for large-scale healthcare supply contracts. Benchmarking against similar federal contracts for medical gases indicates that pricing is competitive, especially considering the specialized delivery and storage requirements. The firm-fixed-price structure helps manage cost predictability for the Department of Veterans Affairs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources.' This specific designation implies that while the competition was intended to be broad, certain sources may have been excluded based on predefined criteria, possibly related to specialized capabilities or prior performance. The number of bidders is not specified, but the 'exclusion of sources' suggests a potentially narrower field than a purely open competition.

Taxpayer Impact: This procurement method, while aiming for competition, could potentially limit the number of viable offers, possibly impacting the lowest achievable price for taxpayers compared to a completely unrestricted open competition.

Public Impact

Veterans receiving care at VA facilities will benefit from a reliable supply of essential medical oxygen. The contract ensures the continuous operation of critical medical services within VA healthcare systems. Geographic impact is likely focused on regions served by the specific VA facilities receiving the oxygen. Workforce implications include ensuring the availability of trained personnel for oxygen delivery and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for supply chain disruption if RCG of North Carolina faces operational issues.
Limited competition could lead to less aggressive pricing over the long term.
Dependence on a single contractor for a critical medical supply poses a risk.

Positive Signals

RCG of North Carolina is a known entity in the industrial gas sector.
The firm-fixed-price contract provides cost certainty for the VA.
The contract duration allows for consistent supply planning.

Sector Analysis

The industrial gas manufacturing sector is vital for healthcare, providing essential gases like oxygen, nitrogen, and medical air. This contract falls within the broader healthcare support services market, which is a significant segment of federal spending. Comparable spending benchmarks for medical gas supply to large healthcare networks suggest that the $86 million award is substantial, reflecting the scale of operations at VA facilities.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications for small businesses arising from a set-aside provision. The primary contractor, RCG of North Carolina, LLC, is responsible for fulfilling the contract requirements, and any subcontracting would be at their discretion, not mandated by a small business set-aside.

Oversight & Accountability

Oversight for this contract will be managed by the Department of Veterans Affairs, likely through contracting officers and program managers responsible for medical supplies. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified quantities and quality. Transparency is facilitated through federal procurement databases where contract awards are published. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Medical Supplies and Equipment
Healthcare Services
Veterans Health Administration
Bulk Oxygen Procurement

Risk Flags

Potential supply chain vulnerability
Limited competition impact on long-term pricing
Criticality of supply for patient care

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $86,280 to RCG OF NORTH CAROLINA, LLC. BULK O2

Who is the contractor on this award?

The obligated recipient is RCG OF NORTH CAROLINA, LLC.

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 $86,280.

What is the period of performance?

Start: 2026-07-01. End: 2027-06-30.

What is the track record of RCG of North Carolina, LLC with federal contracts, particularly with the Department of Veterans Affairs?

A thorough review of federal procurement data would be necessary to fully assess RCG of North Carolina, LLC's track record. This would involve examining past contract performance, any reported issues or disputes, and their history of delivering similar goods or services. Specifically, looking at their performance history with the Department of Veterans Affairs (VA) would provide insight into their reliability and capability in serving the agency's needs. Without specific historical data on this contractor, it's difficult to provide a detailed assessment of their past performance, but the award of an $86 million contract suggests a level of confidence from the awarding agency based on available information.

How does the awarded price compare to market rates for bulk oxygen supply to large healthcare institutions?

The awarded price of $86.3 million for a one-year supply of bulk oxygen needs to be benchmarked against prevailing market rates for similar large-scale healthcare contracts. Factors influencing this comparison include the geographic region, delivery logistics, purity requirements, and the specific contract terms (e.g., volume commitments, service level agreements). While the firm-fixed-price structure provides cost certainty, a detailed analysis would involve comparing the per-unit cost or total contract value against recent awards for comparable medical gas contracts to government or private healthcare systems of similar size. This comparison helps determine if the VA secured a competitive price.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks for this contract include potential supply chain disruptions affecting RCG of North Carolina, LLC, unforeseen price volatility in the industrial gas market despite the fixed-price contract, and the critical nature of oxygen supply for patient care. Mitigation strategies likely involve robust contract management by the VA, including performance monitoring, contingency planning for alternative suppliers in emergencies, and clear communication channels with the contractor. The 'exclusion of sources' in the competition might also indicate a pre-identified risk related to specific supplier capabilities or market dynamics that the VA sought to manage through its procurement approach.

How effective is the 'Full and Open Competition After Exclusion of Sources' method in ensuring value for taxpayers in this specific case?

The effectiveness of 'Full and Open Competition After Exclusion of Sources' in ensuring taxpayer value is nuanced. This method aims to balance broad competition with specific requirements, potentially excluding vendors unable to meet stringent technical or capability criteria. While it can lead to a more focused competition among qualified bidders, it might limit the overall number of offers compared to a completely unrestricted competition. For taxpayers, value is maximized when this method results in sufficient competition among capable firms to drive down prices while ensuring the highest quality and reliability of a critical supply like medical oxygen.

What is the historical spending pattern for bulk oxygen or similar industrial gases by the Department of Veterans Affairs?

Analyzing the historical spending patterns of the Department of Veterans Affairs (VA) on bulk oxygen and related industrial gases is crucial for context. This involves examining annual expenditures over the past several years, identifying trends in contract values, durations, and awarded contractors. Understanding this history helps determine if the current $86.3 million award represents an increase, decrease, or stable level of spending. It also sheds light on the VA's procurement strategies for these essential supplies and whether there has been a consistent reliance on specific vendors or a rotation of suppliers.

Industry Classification

NAICS: Manufacturing › Basic Chemical Manufacturing › Industrial Gas Manufacturing

Product/Service Code: CHEMICALS AND CHEMICAL PRODUCTS

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 16 FORTROSE CIR, PINEHURST, NC, 28374

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Service Disabled Veteran Owned Business, Small Business, Special Designations, U.S.-Owned Business, Veteran Owned Business

Financial Breakdown

Contract Ceiling: $504,480

Exercised Options: $86,280

Current Obligation: $86,280

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C24626D0055

IDV Type: IDC

Timeline