VA awards $26.3M contract for surgical implants, highlighting potential value concerns

Contract Overview

Contract Amount: $26,254 ($26.3K)

Contractor: Arthrex Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-04-09

End Date: 2026-05-08

Contract Duration: 29 days

Daily Burn Rate: $905/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: SURGICAL IMPLANT

Place of Performance

Location: ORLANDO, ORANGE County, FLORIDA, 32827

State: Florida Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $26,253.88 to ARTHREX INC for work described as: SURGICAL IMPLANT Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery. 2. Limited competition may lead to higher costs for taxpayers. 3. The contract duration is relatively short, suggesting potential for future re-competition. 4. Focus on surgical implants indicates a critical need within VA healthcare. 5. The awardee, Arthrex Inc., is a significant player in the medical device market. 6. Fixed-price contract type aims to control costs, but initial pricing needs scrutiny.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to the lack of competitive bids. While Arthrex Inc. is a known supplier, the absence of multiple offers prevents a direct comparison of pricing against market alternatives or other federal contracts for similar implants. The fixed-price nature provides some cost certainty, but the initial award price requires further analysis to ensure it represents a fair market value. Without competitive data, assessing the overall value-for-money is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a 'NOT AVAILABLE FOR COMPETITION' basis, indicating that the VA did not solicit offers from multiple vendors. This sole-source approach means that Arthrex Inc. was the only provider considered for this specific requirement. The lack of competition limits the VA's ability to leverage market forces to achieve the best possible pricing and terms.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's ability to secure the most economical solution.

Public Impact

Veterans will benefit from access to necessary surgical implants. The contract supports the delivery of critical surgical and medical services within VA facilities. The geographic impact is primarily within Florida, where the contract is managed. The contract supports the medical device manufacturing sector, indirectly impacting the workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition raises concerns about potential overpayment.
Limited transparency into the justification for sole-source award.
Dependence on a single supplier could pose supply chain risks.

Positive Signals

Contract awarded to a known entity in the medical device industry.
Fixed-price contract type offers some cost predictability.
Short contract duration allows for future reassessment of competition.

Sector Analysis

The medical device industry is a significant sector within healthcare, characterized by innovation and specialized manufacturing. This contract for surgical implants falls under the broader category of medical supplies and equipment. Spending in this area is substantial across federal agencies, particularly within the Department of Defense and Veterans Affairs, to support healthcare services for service members and veterans. Benchmarking against similar implant procurements would require detailed product specifications and market analysis.

Small Business Impact

This contract does not appear to include a small business set-aside. As a sole-source award to Arthrex Inc., a large corporation, there are no direct subcontracting opportunities for small businesses mandated by this specific award. The impact on the small business ecosystem is minimal in the context of this direct award, though Arthrex Inc. may engage small businesses in its broader supply chain.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs. As a delivery order under an unspecified basic ordering agreement or contract, the specific oversight mechanisms depend on the parent contract's terms. Transparency is limited due to the sole-source nature. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

VA Medical Supplies
Surgical Equipment Procurement
Medical Device Contracts
Federal Healthcare Spending

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for inflated pricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $26,253.88 to ARTHREX INC. SURGICAL IMPLANT

Who is the contractor on this award?

The obligated recipient is ARTHREX 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 $26,253.88.

What is the period of performance?

Start: 2026-04-09. End: 2026-05-08.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data indicates the contract was awarded under 'NOT AVAILABLE FOR COMPETITION,' which is a designation for sole-source procurements. The specific justification would typically be documented by the agency (Department of Veterans Affairs) in accordance with federal acquisition regulations (FAR). Common reasons for sole-source awards include unique capabilities of the contractor, urgent and compelling needs where competition is not feasible, or when only one responsible source exists. Without access to the agency's justification documentation, the precise reason remains unknown, but it implies that the VA determined that soliciting offers from multiple vendors was not practicable or in the government's best interest for this particular requirement.

How does the pricing of this contract compare to similar surgical implants procured by the VA or other federal agencies?

Direct price comparison is difficult without knowing the exact specifications of the surgical implants covered by this $26.3 million contract and without access to competitive bidding data. As this was a sole-source award, there were no competing bids to establish a market-driven price. To perform a robust comparison, one would need to identify comparable contracts for similar implant types (e.g., orthopedic, cardiovascular) awarded competitively by the VA or other agencies like the Department of Defense. Analyzing the unit prices, quantities, and contract types of those competitive awards would provide a benchmark. Additionally, comparing the awarded price against publicly available commercial price lists or industry benchmarks for these specific implant types, adjusted for volume and federal purchasing power, would be necessary.

What are the potential risks associated with a sole-source award for critical surgical implants?

Sole-source awards for critical items like surgical implants carry several potential risks. Firstly, the absence of competition can lead to higher prices than might be achieved through a competitive process, resulting in increased costs for the government and taxpayers. Secondly, it can reduce the incentive for the awarded contractor to innovate or offer the most cost-effective solutions, as they face no direct market pressure from competitors. Thirdly, it can create a dependency on a single supplier, potentially leading to supply chain vulnerabilities if the contractor experiences production issues, quality control problems, or significant price increases in the future. Finally, it limits the government's ability to explore alternative technologies or suppliers that might offer better performance or value.

What is the track record of Arthrex Inc. in supplying surgical implants to the federal government?

Arthrex Inc. is a well-established company in the medical device industry, known for its orthopedic implants and surgical products. While specific details of their past federal contract performance are not provided in the data, companies of this size typically have a history of supplying various government agencies, including the Department of Veterans Affairs and the Department of Defense. Their track record would generally involve supplying a range of surgical implants and related equipment. A deeper analysis would involve reviewing past contract awards, performance evaluations (if publicly available), and any reported issues or successes in fulfilling federal requirements. Their continued presence in the market suggests a generally accepted level of performance and product quality.

How does this contract fit into the broader spending patterns for surgical implants within the Department of Veterans Affairs?

This $26.3 million contract represents a significant, albeit specific, investment in surgical implants by the Department of Veterans Affairs. The VA procures a wide array of medical supplies and equipment to serve its large veteran population. Spending on surgical implants is a critical component of healthcare services, particularly for orthopedic, cardiovascular, and other specialized procedures. Analyzing this contract in the context of broader VA spending would involve comparing its value against the total annual budget for medical supplies, the aggregate spending on implants across all VA facilities, and historical trends in implant procurement. This single award, while substantial, is likely one of many such procurements necessary to meet the diverse surgical needs of veterans nationwide.

Industry Classification

NAICS: Manufacturing › Medical Equipment and Supplies Manufacturing › Surgical Appliance and Supplies Manufacturing

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

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Arthrex, Inc.

Address: 1370 CREEKSIDE BLVD, NAPLES, FL, 34108

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

Financial Breakdown

Contract Ceiling: $26,254

Exercised Options: $26,254

Current Obligation: $26,254

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10G24D0028

IDV Type: IDC

Timeline