VA awards $52.9M for anesthesia equipment maintenance, with limited competition

Contract Overview

Contract Amount: $52,922 ($52.9K)

Contractor: Draeger Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-04-24

End Date: 2027-04-06

Contract Duration: 712 days

Daily Burn Rate: $74/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: DRAEGER ANESTHESIA SERVICE

Place of Performance

Location: MOUNTAIN HOME, WASHINGTON County, TENNESSEE, 37684

State: Tennessee Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $52,921.67 to DRAEGER INC for work described as: DRAEGER ANESTHESIA SERVICE Key points: 1. Value for money appears fair given the firm-fixed-price structure and duration. 2. Competition dynamics are limited, raising potential concerns about price discovery. 3. Risk indicators include reliance on a single vendor for critical equipment. 4. Performance context suggests a need for ongoing maintenance of specialized medical devices. 5. Sector positioning is within healthcare equipment services, a critical support function.

Value Assessment

Rating: fair

The contract value of $52.9 million over approximately two years suggests a significant investment in maintaining specialized anesthesia equipment. Benchmarking against similar contracts for medical equipment maintenance is challenging without more specific details on the scope of services and equipment covered. However, the firm-fixed-price nature provides cost certainty for the government. The price per year is approximately $26.45 million, which needs to be evaluated against the criticality and volume of equipment serviced.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

This contract was not competed under the Simplified Acquisition Procedures (SAP), indicating it likely exceeded the threshold for full and open competition. The data specifies 'NOT COMPETED UNDER SAP,' which implies a limited competition approach was used, potentially due to specific vendor capabilities or existing relationships. The number of bidders is not explicitly stated but the 'limited' designation suggests fewer than expected for a fully competitive process.

Taxpayer Impact: Limited competition can lead to higher prices for taxpayers if effective market research and justification for limited competition are not rigorously applied. This may result in less favorable pricing compared to a scenario with multiple competing vendors.

Public Impact

Veterans Affairs medical facilities will benefit from maintained anesthesia equipment, ensuring continuity of care. Essential services include repair and maintenance for critical life-support medical devices. Geographic impact is likely nationwide, supporting VA hospitals and clinics. Workforce implications include ensuring medical staff have reliable equipment for patient procedures.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for increased costs due to limited competition.
Dependence on a single contractor for critical equipment maintenance.
Risk of service disruptions if the contractor faces operational issues.

Positive Signals

Firm-fixed-price contract provides cost predictability.
Long-term contract ensures sustained maintenance support.
Focus on essential medical equipment supports patient care.

Sector Analysis

The healthcare equipment maintenance sector is vital for the functioning of medical facilities. This contract falls within the broader category of medical equipment repair and maintenance services, specifically for anesthesia systems. The market includes specialized firms capable of servicing complex medical devices. Spending in this area is driven by the need to ensure patient safety and operational efficiency in hospitals and clinics.

Small Business Impact

The provided data indicates that small business participation (sb: false) and set-asides (ss: false) were not factors in this contract award. This suggests the contract was not specifically targeted towards small businesses, and larger, specialized firms likely competed or were considered. There is no indication of subcontracting requirements for small businesses within this award.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures are inherent in the firm-fixed-price structure, requiring the contractor to deliver services as specified. Transparency is facilitated through contract databases, though detailed performance metrics may not always be publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Medical Equipment Maintenance Services
Anesthesia Systems Support
Veterans Affairs Healthcare Procurement
Federal Medical Device Services

Risk Flags

Limited Competition
Potential for Price Escalation
Contractor Dependency Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $52,921.67 to DRAEGER INC. DRAEGER ANESTHESIA SERVICE

Who is the contractor on this award?

The obligated recipient is DRAEGER 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 $52,921.67.

What is the period of performance?

Start: 2025-04-24. End: 2027-04-06.

What is the historical spending pattern for anesthesia equipment maintenance at the VA?

Analyzing historical spending patterns for anesthesia equipment maintenance at the Department of Veterans Affairs (VA) is crucial for understanding the context of the current $52.9 million award. Without specific historical data for this exact service category, a general approach would involve examining VA's overall spending on medical equipment maintenance and repair over the past 5-10 years. This would include looking at trends in contract values, the number of contracts awarded, and the types of services procured. It's also important to identify if similar large-scale maintenance contracts for anesthesia equipment have been awarded previously and their associated costs. Understanding if this $52.9 million represents an increase, decrease, or stable level of investment compared to prior periods can provide insights into the VA's strategic priorities and budget allocation for critical medical infrastructure. Furthermore, examining the duration and scope of previous contracts can help benchmark the current award's value and identify any significant changes in service requirements or market pricing.

How does the pricing of this contract compare to similar anesthesia equipment maintenance contracts awarded by other federal agencies?

Comparing the pricing of this $52.9 million VA contract to similar anesthesia equipment maintenance contracts awarded by other federal agencies is essential for assessing value for money. This requires identifying comparable contracts, which would involve searching federal procurement databases for awards with similar scopes of work, equipment types (e.g., specific anesthesia machines, ventilators), contract durations, and service levels (e.g., preventive maintenance, emergency repairs, parts replacement). Key metrics for comparison would include the total contract value, the annual cost, and potentially a cost per unit or cost per machine serviced, if such data is available. Factors such as geographic location, the number of facilities serviced, and the specific vendor's pricing structure can influence costs. A significant deviation from market rates, after accounting for these variables, could indicate either an exceptionally good deal for the government or potential overpricing. Without access to a comprehensive database of comparable contracts and their detailed pricing, a precise benchmark is difficult, but the general approach involves identifying similar procurements and analyzing their financial terms.

What are the specific risks associated with relying on a single contractor for critical anesthesia equipment maintenance?

Relying on a single contractor for critical anesthesia equipment maintenance, as suggested by the limited competition for this VA contract, introduces several significant risks. Firstly, there is a risk of price escalation in future contract renewals, as the incumbent contractor may face less competitive pressure to offer favorable pricing. Secondly, service quality and responsiveness could decline if the contractor becomes complacent or faces internal resource constraints, potentially impacting patient care. Thirdly, there's a dependency risk; if the contractor experiences financial difficulties, operational disruptions, or decides to exit the market, the VA could face a critical gap in essential maintenance services, leading to equipment downtime and potential patient safety issues. Finally, the lack of competition may stifle innovation in maintenance practices or the adoption of new technologies, as the contractor may have less incentive to invest in improvements when faced with limited market alternatives.

What is the track record of Draeger Inc. in providing similar maintenance services to the federal government?

Draeger Inc. is a known entity in the medical device and anesthesia equipment market. To assess their track record for providing similar maintenance services to the federal government, one would need to review their past federal contract awards. This would involve searching procurement databases for previous contracts awarded to Draeger Inc. for maintenance, repair, and support of anesthesia machines and related equipment. Key aspects to examine include the value and duration of these past contracts, the agencies they served (beyond the VA, if applicable), their performance ratings (if publicly available through sources like the Contractor Performance Assessment Reporting System - CPARS), and any instances of contract disputes, terminations, or significant issues. A history of successful, on-time, and within-budget performance on similar federal contracts would indicate a lower risk associated with their current award. Conversely, a pattern of performance issues or contract problems would raise concerns about their ability to meet the VA's requirements effectively.

What are the potential implications of this contract on the availability and cost of anesthesia equipment maintenance in the broader healthcare market?

This contract's implications on the broader healthcare market depend on several factors, including the specific terms of the agreement and Draeger Inc.'s market share in anesthesia equipment. If this contract represents a significant portion of Draeger's service revenue or requires substantial resource allocation, it could potentially limit their capacity or availability for other healthcare providers, potentially driving up costs or extending lead times for maintenance services elsewhere. Conversely, if Draeger Inc. has ample capacity and this contract is part of their standard service offering, its impact might be minimal. The limited competition aspect is also relevant; if this trend of limited competition for specialized medical equipment maintenance is prevalent across the federal government and the private sector, it could contribute to a general increase in maintenance costs for such critical equipment nationwide. Understanding the competitive landscape for anesthesia equipment maintenance services is key to assessing these broader market effects.

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

Address: 3135 QUARRY RD, TELFORD, PA, 18969

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: $131,488

Exercised Options: $52,922

Current Obligation: $52,922

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline