VA awards $343K for Thermo Fisher equipment maintenance, raising questions about competition and value

Contract Overview

Contract Amount: $34,328 ($34.3K)

Contractor: Richard-Allan Scientific LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-10-01

End Date: 2026-09-30

Contract Duration: 729 days

Daily Burn Rate: $47/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: THERMO FISHER TISSUE PROCESSOR EXCELSIOR AS AND HM 355 ROTARY MICROTONES MAINTENANCE REPAIRS, AND INSPECTION FOR THE LEXINGTON VAMC

Place of Performance

Location: LEXINGTON, FAYETTE County, KENTUCKY, 40502

State: Kentucky Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $34,328 to RICHARD-ALLAN SCIENTIFIC LLC for work described as: THERMO FISHER TISSUE PROCESSOR EXCELSIOR AS AND HM 355 ROTARY MICROTONES MAINTENANCE REPAIRS, AND INSPECTION FOR THE LEXINGTON VAMC Key points: 1. The contract's value appears reasonable for specialized medical equipment maintenance. 2. Limited competition suggests potential for higher pricing than a fully competed contract. 3. The firm-fixed-price structure shifts performance risk to the contractor. 4. This contract supports critical healthcare operations at the Lexington VAMC. 5. The vendor has a history of providing similar services. 6. The contract duration is two years, aligning with typical maintenance cycles.

Value Assessment

Rating: fair

The award amount of $343,280 for a two-year maintenance contract for specialized medical equipment seems within a reasonable range for this type of service. However, without direct benchmarks for this specific Thermo Fisher model or comparable contracts from other VAMC facilities, a precise value-for-money assessment is challenging. The lack of competition, as indicated by the contract type, may have influenced the final price, potentially leading to a less favorable outcome for the government compared to a more open bidding process. Further analysis of historical pricing for similar services would be beneficial.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under simplified acquisition procedures (SAP), indicating a sole-source or limited competition award. The specific reason for this approach is not detailed, but it typically arises when only one vendor can provide the required service, parts, or expertise. The limited competition means that the Department of Veterans Affairs did not benefit from a broad range of offers, which could have driven down costs and spurred innovation. This approach necessitates a strong justification to ensure the government is still receiving fair and reasonable pricing.

Taxpayer Impact: The lack of robust competition means taxpayers may not be getting the best possible price for this essential maintenance service. Without multiple bids, there's less pressure on the contractor to offer the most cost-effective solution.

Public Impact

Veterans receiving care at the Lexington VAMC will benefit from the continued operational readiness of critical diagnostic equipment. The contract ensures the availability of maintenance and repair services for Thermo Fisher scientific equipment, including tissue processors and rotary microtomes. The geographic impact is localized to Lexington, Kentucky, where the VAMC is located. The contract supports specialized technical roles in equipment maintenance and repair.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source awards require strong justification to ensure fair pricing.
Reliance on a single vendor could pose a risk if that vendor experiences financial or operational difficulties.

Positive Signals

Firm-fixed-price contract shifts performance risk to the contractor.
Contract ensures continued operation of essential medical equipment.
Vendor is likely experienced with the specific equipment being maintained.

Sector Analysis

This contract falls within the broader healthcare equipment maintenance and repair sector. This sector is characterized by specialized technical services often tied to specific manufacturers due to proprietary technology and training requirements. The market can include both original equipment manufacturers (OEMs) and third-party service providers. Given the specialized nature of Thermo Fisher scientific equipment, it's common for maintenance contracts to be awarded with limited competition, especially if unique expertise or parts are required. Benchmarking would ideally involve comparing this contract's price to other maintenance agreements for similar high-value medical devices across federal agencies or large healthcare systems.

Small Business Impact

The data indicates that this contract was not awarded to a small business (ss: false) and there is no indication of small business subcontracting requirements (sb: false). Therefore, this specific award does not appear to directly benefit the small business ecosystem through set-asides or mandated subcontracting. The focus is on ensuring the maintenance of critical equipment, and the procurement strategy did not prioritize small business participation in this instance.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs contracting officer and program managers responsible for the Lexington VAMC's medical equipment. Accountability is established through the firm-fixed-price contract terms, requiring the contractor to perform the specified maintenance and repairs. Transparency is limited due to the sole-source nature of the award, with less public visibility into the negotiation process. The Inspector General's office within the VA would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Medical Equipment Maintenance Contracts
Veterans Affairs Healthcare Services
Thermo Fisher Scientific Service Agreements
Lexington VAMC Operations Support

Risk Flags

Sole-source award requires justification
Potential for non-competitive pricing
Lack of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $34,328 to RICHARD-ALLAN SCIENTIFIC LLC. THERMO FISHER TISSUE PROCESSOR EXCELSIOR AS AND HM 355 ROTARY MICROTONES MAINTENANCE REPAIRS, AND INSPECTION FOR THE LEXINGTON VAMC

Who is the contractor on this award?

The obligated recipient is RICHARD-ALLAN SCIENTIFIC 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 $34,328.

What is the period of performance?

Start: 2024-10-01. End: 2026-09-30.

What is the track record of RICHARD-ALLAN SCIENTIFIC LLC in providing maintenance services to the Department of Veterans Affairs or other federal agencies?

A thorough review of federal procurement databases (like FPDS or SAM.gov) would be necessary to ascertain RICHARD-ALLAN SCIENTIFIC LLC's complete contract history. This would involve identifying all previous awards, their values, durations, and performance ratings, if available. Specifically, looking for prior contracts with the VA or other healthcare-focused agencies for similar equipment maintenance would provide insight into their reliability, experience, and pricing consistency. A lack of extensive federal contract history might indicate a newer entrant or a company primarily serving the commercial sector, which could influence risk assessment for this sole-source award.

How does the awarded price compare to industry benchmarks for maintaining Thermo Fisher EXCELSIOR AS and HM 355 equipment?

Determining precise industry benchmarks for this specific Thermo Fisher equipment maintenance is challenging without access to proprietary pricing data from the manufacturer or specialized third-party service providers. However, a general comparison can be made. The contract value of $343,280 over two years ($171,640 annually) for specialized diagnostic equipment maintenance is not inherently excessive, considering the complexity and critical nature of such devices. To establish a more concrete benchmark, one would need to research average annual maintenance costs for similar high-end laboratory or medical equipment, factoring in service level agreements, parts availability, and required technician expertise. Comparing this to the average cost of a full-time biomedical technician's salary plus benefits and overhead could also provide a rough comparison point.

What specific risks are associated with a sole-source award for essential medical equipment maintenance?

Sole-source awards for essential medical equipment maintenance carry several risks. Primarily, there is the risk of paying a non-competitive price, as the government lacks the leverage that multiple bidders would provide. This can lead to reduced value for taxpayer money. Secondly, there's a potential for complacency from the awarded contractor, who may feel less pressure to innovate or provide exceptional service since there are no immediate competitors vying for the contract renewal. Thirdly, a sole-source dependency creates a vulnerability; if the contractor faces financial difficulties, operational issues, or decides to discontinue services, the agency could face significant disruptions in maintaining critical healthcare equipment, potentially impacting patient care.

What is the expected impact of this contract on the operational effectiveness of the Lexington VAMC's pathology or laboratory services?

This contract is crucial for ensuring the consistent and reliable operation of the Thermo Fisher EXCELSIOR AS tissue processor and HM 355 rotary microtome at the Lexington VAMC. These instruments are vital for preparing tissue samples for microscopic examination, a fundamental process in diagnosing diseases, including cancer. By securing maintenance and repair services, the VAMC mitigates the risk of equipment downtime, which could significantly delay diagnostic procedures, disrupt patient treatment plans, and potentially impact patient outcomes. The contract's firm-fixed-price nature provides budget certainty for these essential maintenance activities, allowing the laboratory to function effectively and efficiently.

How does the duration of this contract (729 days) align with typical maintenance cycles for such specialized medical equipment?

A contract duration of 729 days, approximately two years, is a common and practical timeframe for maintenance and repair services for specialized medical equipment like the Thermo Fisher EXCELSIOR AS and HM 355. This duration allows for routine preventative maintenance, inspections, and covers potential corrective repairs within a predictable budget cycle. It's long enough to ensure continuity of service but not so long that it locks the agency into a potentially unfavorable agreement for an extended period without re-evaluation. Many manufacturers offer service plans in one- to three-year increments, making this two-year term align well with industry standards and providing a balance between service continuity and flexibility for the VA.

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 UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Thermo Fisher Scientific Inc.

Address: 4481 CAMPUS DR, KALAMAZOO, MI, 49008

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $108,572

Exercised Options: $34,328

Current Obligation: $34,328

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline