VA awards $21M BD FX40 maintenance contract to Becton, Dickinson and Company for critical equipment

Contract Overview

Contract Amount: $20,970 ($21.0K)

Contractor: Becton, Dickinson and Company

Awarding Agency: Department of Veterans Affairs

Start Date: 2021-05-20

End Date: 2022-05-19

Contract Duration: 364 days

Daily Burn Rate: $58/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: BD FX40 MAINTENANCE SERVICES

Place of Performance

Location: CLEVELAND, CUYAHOGA County, OHIO, 44106

State: Ohio Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $20,969.72 to BECTON, DICKINSON AND COMPANY for work described as: BD FX40 MAINTENANCE SERVICES Key points: 1. Contract awarded on a sole-source basis, raising questions about potential cost savings through competition. 2. The duration of the contract is one year, suggesting a need for ongoing maintenance of specific equipment. 3. The award was made under simplified acquisition procedures, typically used for smaller value procurements. 4. The North American Industry Classification System (NAICS) code 811219 indicates a focus on repair and maintenance of electronic and precision equipment. 5. The contract's value of $20.97 million warrants scrutiny regarding its necessity and efficiency. 6. The firm fixed-price contract type aims to provide cost certainty for the government.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without specific details on the BD FX40 equipment and its maintenance requirements. However, the award of nearly $21 million for a one-year maintenance contract for a single item or system raises concerns about potential overspending, especially given the lack of competition. Without comparative pricing or details on the scope of work, it's difficult to definitively assess value for money. The sole-source nature of the award further complicates a robust value assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that Becton, Dickinson and Company was the only vendor considered. This approach bypasses the standard competitive bidding process, which typically leads to better pricing and a wider selection of qualified contractors. The justification for a sole-source award would need to demonstrate why only this specific contractor could provide the required services, such as unique technical expertise or proprietary equipment.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as they limit the government's ability to leverage market competition to secure the best possible prices. This can result in less efficient use of public funds.

Public Impact

Veterans receiving care will benefit from the continued operational readiness of medical equipment maintained under this contract. The Department of Veterans Affairs ensures the functionality of critical BD FX40 equipment, vital for diagnostic and treatment procedures. The contract supports specialized maintenance services, likely requiring skilled technicians familiar with Becton, Dickinson and Company's products. The geographic impact is primarily within facilities managed by the VA, potentially across multiple states depending on equipment deployment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source award raises concerns about transparency and potential for cost overruns.
Dependence on a single contractor for critical maintenance could pose supply chain risks.

Positive Signals

Firm fixed-price contract provides cost certainty.
Award ensures continued operational readiness of essential medical equipment.
Contract is managed by the Department of Veterans Affairs, an agency focused on serving veterans.

Sector Analysis

The healthcare equipment maintenance sector is a critical component of the broader healthcare industry, ensuring the reliability and longevity of sophisticated medical devices. This contract falls within the 'Other Electronic and Precision Equipment Repair and Maintenance' category. The market for such services can be specialized, often requiring original equipment manufacturer (OEM) expertise, which can sometimes justify sole-source or limited competition awards. However, the overall spending in this niche is significant, driven by the continuous need to maintain advanced diagnostic and therapeutic equipment across healthcare systems.

Small Business Impact

This contract was not awarded to a small business, nor does it appear to have a specific small business set-aside component. The sole-source nature of the award further limits opportunities for small businesses to participate as prime contractors or potentially as subcontractors, unless Becton, Dickinson and Company voluntarily includes them in their supply chain. The impact on the small business ecosystem is likely minimal in terms of direct set-aside opportunities for this specific procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. As a purchase order awarded under simplified acquisition procedures, it may undergo less rigorous formal oversight compared to larger, competitively awarded contracts. Transparency is limited due to the sole-source nature. There is no explicit mention of Inspector General jurisdiction for this specific award, though the VA OIG generally has oversight over VA spending.

Related Government Programs

Medical Equipment Maintenance Contracts
Department of Veterans Affairs Procurement
Sole-Source Healthcare Contracts
BD Medical Device Services
Precision Equipment Repair

Risk Flags

Sole-source award
Lack of competition
High contract value for maintenance

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $20,969.72 to BECTON, DICKINSON AND COMPANY. BD FX40 MAINTENANCE SERVICES

Who is the contractor on this award?

The obligated recipient is BECTON, DICKINSON AND COMPANY.

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 $20,969.72.

What is the period of performance?

Start: 2021-05-20. End: 2022-05-19.

What specific BD FX40 equipment does this contract cover, and what is its criticality to VA healthcare operations?

The specific BD FX40 equipment is not detailed in the provided data. However, given the contract's value and the nature of Becton, Dickinson and Company's product lines, it likely refers to sophisticated medical devices such as diagnostic analyzers, laboratory automation systems, or infusion pumps. The criticality to VA healthcare operations would stem from its role in patient diagnosis, treatment, or laboratory testing. Ensuring the continuous functionality of such equipment is paramount for delivering timely and effective care to veterans, especially in critical care or high-volume laboratory settings. Without specific model numbers or descriptions, the exact function and criticality remain inferred.

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

The provided data indicates the contract was 'NOT COMPETED UNDER SAP' (Simplified Acquisition Procedures), which often implies a sole-source or limited competition scenario. For a sole-source award, the government must justify why only one vendor can meet the requirement. This typically involves factors such as proprietary technology, unique expertise held by the contractor, or the need to maintain compatibility with existing systems where only the original equipment manufacturer (OEM) can provide service. For Becton, Dickinson and Company, this could be due to patented technology in the BD FX40 system or specialized training and certification required for its maintenance that only BD possesses or can readily provide.

How does the $20.97 million price compare to similar maintenance contracts for comparable medical equipment?

Direct comparison is difficult without knowing the exact specifications and service level agreements for the BD FX40 equipment. However, a $20.97 million expenditure for a one-year maintenance contract for a single type of equipment is substantial. Typically, maintenance contracts range from 5% to 15% of the equipment's acquisition cost annually. If the BD FX40 systems are high-value capital equipment, this percentage might be justifiable. However, the lack of competition means there's no market benchmark to confirm if this price represents fair value. Further analysis would require understanding the number of units being serviced, the scope of services (e.g., preventive, corrective, parts included), and the typical lifespan of the equipment.

What are the potential risks associated with a sole-source maintenance contract for critical medical equipment?

The primary risk of a sole-source contract is the potential for inflated pricing due to the absence of competitive pressure. Taxpayers may be paying more than necessary. Another significant risk is vendor lock-in, where the government becomes overly dependent on a single supplier, limiting flexibility and potentially facing service disruptions if the vendor experiences issues. Furthermore, without competition, there might be less incentive for the contractor to innovate or improve service quality. For critical medical equipment, any lapse in maintenance or service could lead to equipment downtime, impacting patient care and potentially leading to adverse health outcomes.

What is Becton, Dickinson and Company's track record with the Department of Veterans Affairs and other federal agencies?

Becton, Dickinson and Company (BD) is a major global medical technology company that frequently contracts with federal agencies, including the Department of Veterans Affairs (VA) and the Department of Defense (DoD). Their track record typically involves supplying a wide range of medical devices, diagnostic equipment, and laboratory solutions. Historical data would likely show numerous awards for products and services. While specific performance metrics for past VA contracts are not provided here, BD is generally recognized as a significant player in the healthcare supply chain. A deeper dive into contract databases like FPDS-NG would reveal the volume and types of contracts awarded to BD by the VA and other agencies over time.

What is the historical spending pattern for BD FX40 maintenance services by the VA?

The provided data only shows a single award for $20.97 million for the period of May 20, 2021, to May 19, 2022. To understand historical spending patterns, one would need to query federal procurement databases for previous contracts related to 'BD FX40 maintenance' or similar terms awarded by the VA. It's possible this is a recurring need, and previous contracts might have been competitively awarded, sole-sourced, or awarded to different entities if the equipment is older or has changed hands. Without access to historical data, it's impossible to establish a trend or compare year-over-year spending for this specific service.

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: Becton, Dickinson and CO

Address: 7 LOVETON CIR, SPARKS, MD, 21152

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

Financial Breakdown

Contract Ceiling: $27,562

Exercised Options: $20,970

Current Obligation: $20,970

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline