VA awards $175M+ for diagnostic equipment maintenance, with limited competition and long-term commitment

Contract Overview

Contract Amount: $175,337 ($175.3K)

Contractor: Roche Diagnostics Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-04-20

End Date: 2027-04-19

Contract Duration: 1,825 days

Daily Burn Rate: $96/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: ANALYZER

Place of Performance

Location: LOUISVILLE, JEFFERSON County, KENTUCKY, 40206

State: Kentucky Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $175,336.62 to ROCHE DIAGNOSTICS CORPORATION for work described as: ANALYZER Key points: 1. The contract's value suggests a significant need for ongoing maintenance of critical diagnostic equipment. 2. The long duration of the contract (5 years) indicates a strategic commitment by the VA. 3. The absence of a competitive bidding process raises questions about potential cost savings. 4. The award to a single vendor may limit opportunities for smaller or specialized service providers. 5. The fixed-price nature of the contract provides cost certainty for the government. 6. The geographic scope appears concentrated in Kentucky, suggesting a regional focus for this award.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific details on the equipment covered and the scope of maintenance services. However, a 5-year commitment for over $175 million for repair and maintenance of electronic and precision equipment suggests a substantial investment. The lack of competition means there's no direct market comparison to assess if this price represents optimal value for money. Further analysis would require understanding the specific equipment's criticality, age, and typical maintenance costs in the market.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the simplified acquisition procedures, indicating it was likely awarded through a sole-source or limited competition justification. The absence of a full and open competition means that multiple vendors were not solicited, potentially limiting the government's ability to secure the most competitive pricing. The specific reasons for this limited competition, such as unique capabilities or existing infrastructure, would need further investigation.

Taxpayer Impact: The lack of a competitive process means taxpayers may not have benefited from the cost efficiencies that typically arise from multiple bids. This could result in a higher overall expenditure for the services provided.

Public Impact

Veterans in Kentucky will benefit from the continued availability and functionality of essential diagnostic equipment. The contract ensures the reliable operation of medical devices crucial for patient diagnosis and treatment within VA facilities. This award supports the VA's healthcare infrastructure, particularly in the specified geographic region. The contract likely sustains jobs related to the maintenance and repair of sophisticated medical technology.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Long-term contract duration could reduce flexibility to adopt newer technologies or services.
Sole-source award limits opportunities for other qualified vendors to compete for this business.

Positive Signals

Firm fixed-price contract provides budget certainty.
Ensures continued operational readiness of critical medical equipment.
Long-term commitment suggests a stable and reliable service provider for essential needs.

Sector Analysis

The North American Industry Classification System (NAICS) code 811219 covers 'Other Electronic and Precision Equipment Repair and Maintenance.' This sector includes services for a wide range of electronic equipment, including medical devices. The federal government is a significant purchaser of such services to maintain its extensive inventory of specialized equipment across various agencies, particularly in healthcare and defense. The market for medical equipment maintenance is often characterized by specialized knowledge and manufacturer-specific requirements, which can sometimes lead to limited competition.

Small Business Impact

The data indicates this contract was not competed under simplified acquisition procedures and was awarded as a purchase order. There is no explicit information regarding small business set-asides or subcontracting plans. Given the sole-source nature, it is less likely that small businesses were directly involved as prime contractors unless they were the sole source. Further investigation into subcontracting opportunities would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

As a purchase order awarded by the Department of Veterans Affairs, this contract would fall under the VA's internal oversight mechanisms. The VA Office of Inspector General (OIG) would have jurisdiction to investigate any potential fraud, waste, or abuse related to this award. Transparency regarding the justification for the sole-source award and the specific services rendered would be key to assessing accountability.

Related Government Programs

VA Medical Equipment Maintenance Contracts
Federal Healthcare IT Procurement
Diagnostic Imaging Equipment Services
Medical Device Service and Repair

Risk Flags

Sole-source award lacks competitive pricing.
Limited transparency on specific equipment and services.
Potential for higher costs due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $175,336.62 to ROCHE DIAGNOSTICS CORPORATION. ANALYZER

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 $175,336.62.

What is the period of performance?

Start: 2022-04-20. End: 2027-04-19.

What specific types of diagnostic equipment are covered under this contract?

The provided data does not specify the exact types of diagnostic equipment covered by this contract, only that it falls under NAICS code 811219 (Other Electronic and Precision Equipment Repair and Maintenance). This code is broad and can encompass a wide range of devices, from laboratory analyzers to imaging equipment. To fully assess the contract's value and scope, a detailed inventory of the equipment requiring maintenance, including its make, model, and function, would be necessary. Understanding the specific equipment is crucial for benchmarking maintenance costs and assessing the criticality of the services provided to the Department of Veterans Affairs' operations.

What is the historical spending pattern for diagnostic equipment maintenance by the VA, particularly in Kentucky?

The provided data does not include historical spending patterns for diagnostic equipment maintenance by the VA, either nationally or specifically within Kentucky. To establish a historical context, one would need to access past contract awards for similar services. Analyzing previous expenditures would help determine if the current $175 million award over five years represents an increase, decrease, or stable level of investment. It would also reveal trends in competition, contract duration, and pricing for similar maintenance services, providing a baseline against which the current award's value and efficiency can be more accurately assessed.

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

The data indicates this contract was awarded as 'NOT COMPETED UNDER SAP' (Simplified Acquisition Procedures), suggesting a sole-source or limited competition justification. Common reasons for sole-source awards include unique capabilities of a single provider, urgent and compelling needs where competition is not feasible, or when only one responsible source is available. Without the specific justification document, it is impossible to determine the precise rationale. Understanding this justification is critical for assessing whether the lack of competition was warranted and if taxpayers received fair value.

What are the performance metrics and service level agreements (SLAs) associated with this contract?

The provided data does not contain information on the performance metrics or service level agreements (SLAs) for this contract. These are crucial components that define the expected quality, timeliness, and responsiveness of the maintenance services. Key metrics might include response times for service calls, equipment uptime guarantees, and preventative maintenance schedules. The absence of this information makes it difficult to evaluate the contractor's performance and ensure the VA is receiving the agreed-upon level of service. A thorough review would require access to the contract's statement of work and associated performance clauses.

How does the pricing structure of this contract compare to industry benchmarks for similar maintenance services?

The provided data does not include specific pricing details or allow for direct comparison to industry benchmarks. The contract is a firm fixed-price purchase order valued at over $175 million for a 5-year period. To assess pricing, one would need to break down the costs associated with labor, parts, and overhead for the specific types of diagnostic equipment being maintained. Benchmarking would involve comparing these unit costs against market rates for similar services from other providers or against historical VA spending on comparable contracts. The sole-source nature of this award complicates direct benchmarking, as competitive pricing dynamics are absent.

Industry Classification

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

Solicitation Procedures: SIMPLIFIED ACQUISITION

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: $311,081

Exercised Options: $243,209

Current Obligation: $175,337

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline