VA awards $12.58M for surgical instruments, raising questions about competition and value

Contract Overview

Contract Amount: $12,580 ($12.6K)

Contractor: Ambu Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-09-15

End Date: 2025-09-30

Contract Duration: 15 days

Daily Burn Rate: $839/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: PROCESSORS, SWITCHES, AND SPLITTERS

Place of Performance

Location: INDIANAPOLIS, MARION County, INDIANA, 46202

State: Indiana Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $12,580.32 to AMBU INC. for work described as: PROCESSORS, SWITCHES, AND SPLITTERS Key points: 1. Contract awarded via purchase order, indicating a streamlined acquisition process. 2. Short performance period of 15 days suggests a need for immediate supply. 3. The contractor, AMBU INC., is a known entity in the medical device market. 4. Focus on surgical instruments points to critical healthcare support. 5. The award is for a relatively small dollar amount, potentially limiting broad market impact. 6. The lack of competition is a key area for further scrutiny.

Value Assessment

Rating: questionable

Benchmarking the value for this specific purchase order is challenging due to its short duration and limited scope. Without competitive bids, it's difficult to ascertain if the price reflects fair market value. However, the award to AMBU INC., a company with established products in this category, suggests a known quantity. Further analysis would require comparing the unit prices to similar recent procurements for comparable instruments, considering factors like quantity and specific features.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The contract was awarded as a 'PURCHASE ORDER' and noted as 'NOT COMPETED UNDER SAP'. This suggests it may have been procured through a simplified acquisition procedure or potentially a sole-source justification was applied, though not explicitly stated. The absence of a competitive bidding process raises concerns about price discovery and whether the government secured the best possible pricing. A full and open competition would typically involve multiple bidders, leading to a more robust price negotiation.

Taxpayer Impact: When contracts are not competed, taxpayers may not benefit from the cost savings that can arise from a competitive bidding environment. This can lead to higher prices being paid for goods and services.

Public Impact

Veterans will benefit from the supply of essential surgical instruments for medical procedures. The services delivered are the provision of surgical and medical instruments. The geographic impact is primarily within Indiana, where the contract is managed. Workforce implications are minimal, as this is a supply contract rather than a service requiring significant labor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding may result in suboptimal pricing.
Short performance period could indicate rushed procurement or potential supply chain issues.
Reliance on a single award without clear justification for non-competition warrants scrutiny.

Positive Signals

Award to a known manufacturer (AMBU INC.) suggests product quality and availability.
Purchase order mechanism can facilitate rapid acquisition of needed supplies.
Contract supports critical healthcare needs for veterans.

Sector Analysis

The market for surgical and medical instruments is a significant segment within the broader healthcare industry. This contract falls under the 'Surgical and Medical Instrument Manufacturing' (NAICS 339112) sector. The industry is characterized by innovation, regulatory oversight, and a mix of large established players and specialized smaller firms. Federal spending in this area supports the healthcare needs of military personnel and veterans, often involving high-value, specialized equipment. Benchmarking would involve comparing this award to other federal procurements for similar instrument categories.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit mention of subcontracting plans for small businesses. The award to AMBU INC., a potentially larger entity, suggests that small businesses may not have been primary participants in this specific procurement. Further investigation into subcontracting opportunities would be necessary to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this purchase order would typically fall under the Department of Veterans Affairs' procurement and financial management systems. Accountability measures would include ensuring the delivered goods meet specifications and are delivered on time. Transparency is facilitated by contract databases, though the details of the non-competitive award process would require specific inquiry. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Medical Supplies and Equipment
Veterans Health Administration Procurement
Surgical Instruments
Medical Device Manufacturing

Risk Flags

Lack of Competition
Potential for Overpricing
Short Performance Period Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $12,580.32 to AMBU INC.. PROCESSORS, SWITCHES, AND SPLITTERS

Who is the contractor on this award?

The obligated recipient is AMBU 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 $12,580.32.

What is the period of performance?

Start: 2025-09-15. End: 2025-09-30.

What is the specific justification for not competing this contract under SAP?

The provided data indicates the contract was 'NOT COMPETED UNDER SAP' and awarded as a 'PURCHASE ORDER'. The specific justification for this procurement approach is not detailed in the provided information. Typically, contracts not competed under the Simplified Acquisition Procedures (SAP) might be due to urgency, a lack of available sources, or specific program requirements that limit competition. Without further documentation from the agency, it is difficult to ascertain the precise reason. This lack of competition is a key area for further inquiry to ensure the government is obtaining the best value and that taxpayer funds are used efficiently. Understanding the justification is crucial for assessing the procurement's integrity and potential risks.

How does the unit price of these processors, switches, and splitters compare to market rates?

The provided data lists the item as 'PROCESSORS, SWITCHES, AND SPLITTERS' with a total award amount of $12,580.32 for 1 unit over 15 days. This suggests the 'unit' might refer to a kit or a specific configuration rather than a single item. Without knowing the exact quantity and specifications of the 'processors, switches, and splitters' included in this award, a direct per-unit cost comparison to market rates is not feasible. To perform such a benchmark, detailed product specifications, quantities, and the specific model numbers would be required. Additionally, comparing this to other federal procurements for similar items, considering the vendor and contract type, would provide further context on value for money.

What is AMBU INC.'s track record with the Department of Veterans Affairs?

AMBU INC. is a known manufacturer of medical devices. While the provided data does not detail their specific contract history with the Department of Veterans Affairs (VA), their presence in the market suggests they have likely supplied the VA or other federal agencies in the past. A comprehensive review of the Federal Procurement Data System (FPDS) or other government contract databases would be necessary to ascertain the full extent of AMBU INC.'s past performance with the VA, including the types of products supplied, contract values, and performance ratings. This information is crucial for assessing contractor reliability and past performance in relation to this new award.

What are the potential risks associated with a short-duration contract like this?

Short-duration contracts, such as this 15-day performance period, can present several risks. Firstly, there's a risk of supply chain disruption if the vendor faces unforeseen issues in delivering the required items within the tight timeframe. Secondly, the urgency implied by a short period might lead to less thorough vetting of the product or vendor, potentially increasing the risk of receiving substandard goods. From a pricing perspective, a short window might limit the vendor's ability to offer volume discounts or engage in extensive price negotiations, potentially leading to a higher per-unit cost. Lastly, if this is a recurring need, the short duration might indicate a lack of strategic planning for long-term supply chain management.

How does this award fit into the VA's overall spending on surgical instruments?

This award of $12,580.32 for surgical instruments represents a very small fraction of the Department of Veterans Affairs' (VA) total annual spending on medical supplies and equipment. The VA is a major purchaser of healthcare goods and services, with billions of dollars allocated annually to support veteran healthcare. While this specific contract is minor in dollar value, it contributes to the VA's ongoing need for a wide array of surgical instruments. Analyzing this award in isolation provides limited insight into the VA's broader procurement strategy for surgical instruments; a trend analysis of multiple similar awards over time would be necessary to understand patterns, preferred vendors, and overall spending levels in this category.

Industry Classification

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

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

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: Riis Holding A/S

Address: 6721 COLUMBIA GATEWAY DR STE 200, COLUMBIA, MD, 21046

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

Financial Breakdown

Contract Ceiling: $12,580

Exercised Options: $12,580

Current Obligation: $12,580

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline