VA awards $69K for anesthesia and ventilator maintenance, raising questions about competition and value

Contract Overview

Contract Amount: $69,063 ($69.1K)

Contractor: Draeger Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-01-01

End Date: 2026-12-31

Contract Duration: 729 days

Daily Burn Rate: $95/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: ANESTHESIA AND VENTILATOR MAINTENANCE (67 MACHINES TOTAL)

Place of Performance

Location: HINES, COOK County, ILLINOIS, 60141

State: Illinois Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $69,063.4 to DRAEGER INC for work described as: ANESTHESIA AND VENTILATOR MAINTENANCE (67 MACHINES TOTAL) Key points: 1. The contract value appears low for maintaining 67 machines, suggesting potential for cost savings or under-service. 2. The sole-source award limits price discovery and may not reflect market competitive rates. 3. Lack of competition is a significant risk indicator for potential overpricing or suboptimal service quality. 4. The contract duration of two years for a maintenance service needs closer examination for efficiency. 5. The small business impact is minimal as no set-aside was utilized. 6. The geographic location in Illinois is noted, but the service reach is not specified.

Value Assessment

Rating: questionable

The award of $69,063.40 for the maintenance of 67 anesthesia and ventilator machines over two years averages to approximately $1,030 per machine annually. This figure needs to be benchmarked against similar contracts for the same or comparable equipment. Without comparative data, it is difficult to definitively assess value for money. However, the lack of competition raises concerns that the price may not be as competitive as it could be.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Draeger Inc., was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they generally lead to less price competition and potentially higher costs for the government.

Taxpayer Impact: Sole-source awards limit the government's ability to secure the best possible pricing through competitive negotiation, potentially resulting in higher expenditures for taxpayers compared to a fully competed contract.

Public Impact

Veterans receiving care at VA facilities in Illinois will benefit from the continued operational readiness of critical medical equipment. The contract ensures the maintenance and repair services for 67 anesthesia and ventilator machines. The primary geographic impact is within Illinois, serving the specific VA facilities that utilize this equipment. The contract supports the technical workforce responsible for maintaining and repairing specialized medical equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding may lead to inflated prices.
Sole-source award raises concerns about vendor lock-in and limited market options.
The specific maintenance tasks and service level agreements are not detailed, posing a risk to service quality.
The contract's value and duration warrant scrutiny to ensure it aligns with actual needs and market rates.

Positive Signals

The contract ensures the continued functionality of essential medical equipment for patient care.
Draeger Inc. is likely an established provider of such equipment, potentially offering specialized expertise.
The firm fixed-price contract provides cost certainty for the VA.

Sector Analysis

The medical equipment maintenance and repair sector is a critical component of the healthcare industry, ensuring the operational readiness of hospitals and clinics. This contract falls under the broader category of electronic and precision equipment repair and maintenance (NAICS 811210). Spending in this sector is substantial, driven by the continuous need to service and update complex medical devices. Benchmarking this contract's value against the average cost of maintaining similar equipment across the federal government or private sector would provide further insight into its cost-effectiveness.

Small Business Impact

This contract was not awarded as a small business set-aside, nor does it appear to have specific subcontracting requirements for small businesses mentioned. Consequently, the direct impact on the small business ecosystem is likely minimal. The award to Draeger Inc., a presumably larger entity, means that opportunities for small businesses in the maintenance and repair niche may not have been explored or utilized through this specific procurement vehicle.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs (VA) contracting officers and program managers. The VA has an Office of Inspector General (OIG) that investigates fraud, waste, and abuse within the department, which could include reviewing maintenance contracts if concerns arise. Transparency regarding the justification for the sole-source award and the specific performance metrics would be key to effective oversight.

Related Government Programs

VA Medical Equipment Maintenance Contracts
Anesthesia Machine Service Agreements
Ventilator Repair and Maintenance
Federal Healthcare Equipment Procurement
Sole-Source Medical Service Contracts

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Unclear service level agreements

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $69,063.4 to DRAEGER INC. ANESTHESIA AND VENTILATOR MAINTENANCE (67 MACHINES TOTAL)

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 $69,063.4.

What is the period of performance?

Start: 2025-01-01. End: 2026-12-31.

What is Draeger Inc.'s track record with the VA for similar maintenance services?

Information regarding Draeger Inc.'s specific track record with the VA for anesthesia and ventilator maintenance is not detailed in the provided data. However, as a known manufacturer of such equipment, it is plausible they have existing relationships and service contracts with various federal agencies, including the VA. A deeper dive would involve reviewing past performance evaluations, contract history, and any reported issues or successes from previous VA engagements. Understanding their history would help assess reliability, responsiveness, and adherence to service level agreements, which are crucial for critical medical equipment.

How does the annual cost per machine compare to industry benchmarks for anesthesia and ventilator maintenance?

The provided data indicates an award of $69,063.40 for 729 days (approximately 2 years) of maintenance for 67 machines. This equates to roughly $1,030 per machine per year. To assess this against industry benchmarks, one would need to research typical annual maintenance contract costs for anesthesia machines and ventilators from various manufacturers and third-party service providers. These benchmarks can vary significantly based on the age and model of the equipment, the scope of the maintenance (e.g., preventive vs. comprehensive), and the service provider's overhead. Without specific benchmark data, it's challenging to definitively state if this price is high or low, but the lack of competition suggests it might not be at the lowest possible market rate.

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

Sole-source awards for critical medical equipment maintenance carry several risks. Firstly, the absence of competition can lead to inflated pricing, as the vendor faces less pressure to offer competitive rates. Secondly, it can result in a lack of innovation and potentially lower service quality, as the vendor may become complacent without the threat of losing business to competitors. Thirdly, it creates vendor lock-in, making it difficult and potentially costly to switch providers in the future, even if performance is unsatisfactory. Finally, it limits the government's ability to leverage market dynamics for better terms or bundled services.

What performance metrics or service level agreements (SLAs) are included in this contract?

The provided data snippet does not include details on specific performance metrics or Service Level Agreements (SLAs) for this contract. Typically, maintenance contracts for critical medical equipment would outline response times for service calls, uptime guarantees, preventive maintenance schedules, and quality standards for repairs. The absence of this information in the summary suggests that these details are either in the full contract document or were not considered a primary data point for this summary. Understanding these SLAs is crucial for evaluating the effectiveness and value of the maintenance services provided.

What is the historical spending pattern for anesthesia and ventilator maintenance at this VA facility or region?

The provided data does not contain historical spending patterns for anesthesia and ventilator maintenance at this specific VA facility or region. To analyze this, one would need to access historical contract databases (e.g., FPDS-NG) and search for previous awards related to maintenance of similar equipment by the Department of Veterans Affairs, potentially filtering by the specific facility or state (Illinois). Comparing the current $69,063.40 award over two years to previous expenditures would reveal trends in cost, contract duration, and competition levels, helping to determine if spending has increased, decreased, or remained consistent.

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

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 36C25224Q0781

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: $179,425

Exercised Options: $69,063

Current Obligation: $69,063

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline