VA awards $735K contract for histology staining to Roche Diagnostics, a sole-source provider

Contract Overview

Contract Amount: $735,352 ($735.4K)

Contractor: Roche Diagnostics Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-04-01

End Date: 2027-03-31

Contract Duration: 729 days

Daily Burn Rate: $1.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: HISTOLOGY STANING CPT 6 MONTH BRIDGE CONTRACT

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46256

State: Indiana Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $735,352.07 to ROCHE DIAGNOSTICS CORPORATION for work described as: HISTOLOGY STANING CPT 6 MONTH BRIDGE CONTRACT Key points: 1. Contract focuses on essential in-vitro diagnostic substances for histology staining. 2. The award leverages Roche Diagnostics' established position in the diagnostic market. 3. Performance period spans two years, ensuring continuity of critical laboratory services. 4. Fixed-price contract structure provides cost certainty for the VA. 5. The contract is a delivery order under a larger indefinite-delivery contract.

Value Assessment

Rating: fair

The contract value of $735,352.07 over two years appears reasonable for specialized diagnostic substances. However, without specific per-unit cost data or comparisons to similar VA or other federal agency contracts for histology staining reagents, a definitive value-for-money assessment is challenging. The reliance on a single vendor for this critical supply chain component warrants scrutiny regarding potential price escalations over the contract term.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source action, indicating that only one vendor, Roche Diagnostics Corporation, was considered capable of meeting the VA's specific requirements for histology staining substances. While sole-source awards can ensure access to specialized products, they limit competitive pressure, potentially leading to higher prices than if multiple vendors had bid. The VA's justification for this sole-source determination would be crucial to understanding the necessity and potential alternatives.

Taxpayer Impact: Sole-source awards mean taxpayers may not benefit from the cost savings typically achieved through competitive bidding. This can result in a higher overall expenditure for the government compared to a competed contract.

Public Impact

Veterans will benefit from continued access to accurate diagnostic testing through reliable histology staining. Laboratory technicians and pathologists within VA facilities will receive the necessary reagents to perform their duties. The contract supports diagnostic services primarily within VA healthcare facilities, with a focus on Indiana. Ensures the continuity of essential medical diagnostic services, impacting patient care pathways.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source nature limits competition and potentially increases costs for taxpayers.
Lack of transparency on the specific justification for sole-source award.
Dependence on a single supplier for critical diagnostic materials poses supply chain risk.

Positive Signals

Ensures continuity of essential diagnostic services for veterans.
Utilizes a known supplier with established product quality.
Fixed-price contract provides budget predictability.

Sector Analysis

The market for in-vitro diagnostic substances, particularly for specialized applications like histology staining, is dominated by a few key manufacturers. Roche Diagnostics is a significant player in this sector. This contract represents a small portion of the overall federal spending on medical supplies and diagnostics, but it is critical for the operational efficiency of the VA's pathology and laboratory services. Benchmarking this contract against other federal or large healthcare system procurements for similar reagents would provide further insight into its cost-effectiveness.

Small Business Impact

This contract does not appear to involve small business set-asides. Given the specialized nature of the product and the sole-source award to a large corporation, there are no direct subcontracting opportunities for small businesses indicated within this specific award. The impact on the small business ecosystem is likely negligible.

Oversight & Accountability

Oversight for this contract would fall under the Department of Veterans Affairs' contracting and program management offices. Accountability is maintained through the delivery order process, requiring adherence to the terms and conditions of the base contract. Transparency is limited due to the sole-source nature of the award, with detailed justifications typically residing within agency procurement files.

Related Government Programs

VA Medical Supplies Procurement
In-Vitro Diagnostic Contracts
Histology and Pathology Reagents
Federal Laboratory Equipment and Supplies

Risk Flags

Sole-source award may limit competition and increase costs.
Lack of detailed cost breakdown hinders value assessment.
Potential supply chain risk due to single-source dependency.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $735,352.07 to ROCHE DIAGNOSTICS CORPORATION. HISTOLOGY STANING CPT 6 MONTH BRIDGE CONTRACT

Who is the contractor on this award?

The obligated recipient is ROCHE DIAGNOSTICS 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 $735,352.07.

What is the period of performance?

Start: 2025-04-01. End: 2027-03-31.

What is the specific justification provided by the VA for awarding this contract on a sole-source basis to Roche Diagnostics Corporation?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source is available or capable of providing the required supplies or services. This could be due to proprietary technology, unique capabilities, or urgent requirements where competition is not feasible. For this contract, the VA would have had to document why Roche Diagnostics was the only viable option, potentially citing specific product compatibility, existing infrastructure, or specialized expertise that other vendors could not match within the required timeframe or specifications. Without this documentation, it's difficult to fully assess the necessity of the sole-source designation.

How does the per-unit cost of these histology staining substances compare to market rates or similar contracts awarded by other federal agencies?

The provided data does not contain per-unit cost information, making a direct comparison to market rates or other federal contracts impossible. The total award amount of $735,352.07 is for a 729-day period, covering a bridge contract. To assess value for money, detailed pricing breakdowns for individual reagents or kits would be necessary. Benchmarking would involve identifying comparable contracts for similar histology staining substances procured by agencies like the Department of Defense or other healthcare providers, analyzing their pricing structures, and evaluating the volume discounts or contract terms. The absence of this data hinders a thorough value assessment.

What is Roche Diagnostics Corporation's track record with the VA and other federal agencies for similar diagnostic supply contracts?

Roche Diagnostics Corporation is a major global player in the diagnostics market, and it is highly probable they have a significant track record with the VA and other federal agencies for supplying various in-vitro diagnostic products. While the specific details of their past performance on similar histology staining contracts are not provided in this data snippet, their established presence suggests a history of fulfilling government contracts. A comprehensive review would involve examining past contract awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any documented issues or successes related to their supply chain reliability and product quality in federal settings.

What are the potential risks associated with relying on a sole-source provider for critical histology staining substances, and how are these mitigated?

The primary risks of a sole-source award for critical histology staining substances include potential price inflation due to lack of competition, supply chain disruptions if the sole provider experiences issues, and limited flexibility in adopting newer or alternative technologies. Mitigation strategies typically involve robust contract management, including close monitoring of pricing against any available benchmarks, establishing clear performance standards and remedies, and potentially building in clauses for price reviews or volume adjustments. The VA might also maintain contingency plans or explore alternative suppliers for future procurements to reduce long-term dependence. However, the effectiveness of these mitigations depends heavily on the specific contract terms and the VA's proactive oversight.

How does this contract fit into the VA's broader strategy for ensuring the continuity of diagnostic services for veterans?

This contract, identified as a 'bridge contract' with a duration of 729 days, suggests it is intended to maintain continuity of essential histology staining services while the VA potentially prepares for a longer-term, possibly competed, procurement. It ensures that critical laboratory functions are not interrupted, thereby supporting ongoing patient care and diagnostic capabilities within the VA system. The award to Roche Diagnostics, a known entity, likely aims to minimize disruption during this interim period. This aligns with the VA's overarching goal of providing timely and accurate medical services to veterans, ensuring that diagnostic pathways remain operational without interruption.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › In-Vitro Diagnostic Substance Manufacturing

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Roche Holding AG

Address: 9115 HAGUE RD, INDIANAPOLIS, IN, 46256

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

Financial Breakdown

Contract Ceiling: $735,352

Exercised Options: $735,352

Current Obligation: $735,352

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36F79722D0128

IDV Type: FSS

Timeline