VA awards $1.56M for ISTAT analyzers and cartridges, with limited competition

Contract Overview

Contract Amount: $1,558,414 ($1.6M)

Contractor: Abbott Laboratories Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2021-01-01

End Date: 2025-12-31

Contract Duration: 1,825 days

Daily Burn Rate: $854/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: ISTAT ANALYZERS & CARTRIDGES

Place of Performance

Location: NORTH CHICAGO, LAKE County, ILLINOIS, 60064

State: Illinois Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $1.6 million to ABBOTT LABORATORIES INC. for work described as: ISTAT ANALYZERS & CARTRIDGES Key points: 1. The contract value of $1.56 million over five years suggests a moderate annual spend. 2. Limited competition for this contract may impact price competitiveness. 3. The fixed-price contract type offers cost certainty for the government. 4. The duration of five years indicates a long-term need for these critical diagnostic supplies. 5. The sole awardee, Abbott Laboratories Inc., suggests a specialized market or existing relationship. 6. The contract supports essential diagnostic services within the Department of Veterans Affairs.

Value Assessment

Rating: fair

The total contract value of $1.56 million over five years equates to approximately $311,000 annually. Without specific benchmark data for ISTAT analyzers and cartridges, a direct value-for-money assessment is challenging. However, the limited competition (NOT COMPETED) raises concerns about whether the VA secured the most competitive pricing. Comparing this to similar contracts for in-vitro diagnostic substances, if available, would provide a clearer picture of whether the pricing is aligned with market rates or if there's potential for cost savings through broader competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Abbott Laboratories Inc., was solicited. This approach is typically used when a product or service is unique, or when there is a compelling justification for not seeking competition. The lack of multiple bidders means there was no opportunity for price discovery through a competitive bidding process, potentially leading to higher costs for the government compared to a fully competed contract.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to drive down prices, potentially resulting in higher expenditures for taxpayers. This contract's value could have been reduced if multiple vendors had the opportunity to bid.

Public Impact

Veterans receiving care within the VA healthcare system will benefit from the availability of these diagnostic tools. The contract ensures the continued supply of ISTAT analyzers and cartridges, crucial for rapid blood gas and electrolyte analysis. This contract supports diagnostic services primarily within VA facilities in Illinois, where the contractor is located. The availability of these diagnostic tools supports the work of medical professionals within the VA, enabling timely patient care decisions.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing.
Sole-source award raises questions about market availability and potential vendor lock-in.
Long-term contract duration without competitive re-evaluation could miss cost-saving opportunities.

Positive Signals

Ensures continuity of critical diagnostic services for veterans.
Fixed-price contract provides budget certainty.
Award to an established provider suggests reliability in supply.

Sector Analysis

The market for in-vitro diagnostic substances and equipment is a significant segment of the broader healthcare industry. This contract falls within the 'Medical Equipment and Supplies' sub-sector. The global in-vitro diagnostics market is valued in the tens of billions of dollars, driven by advancements in technology and increasing demand for early disease detection. Federal agencies, particularly the Department of Defense and the Department of Veterans Affairs, are substantial purchasers of these types of supplies to support their healthcare missions. Benchmarking this contract's value would require comparing it to similar sole-source or limited-competition awards for point-of-care diagnostic devices within the federal government or large healthcare systems.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. The award was made directly to Abbott Laboratories Inc., a large corporation. There is no explicit information regarding subcontracting opportunities for small businesses within this award. Therefore, the direct impact on the small business ecosystem appears minimal, and there is no indication of specific efforts to engage small businesses in fulfilling this requirement.

Oversight & Accountability

The Department of Veterans Affairs (VA) is responsible for overseeing this contract. As a purchase order, it falls under the VA's standard procurement and contract management procedures. Oversight would typically involve monitoring delivery schedules, ensuring compliance with contract terms, and processing payments. Transparency is generally maintained through federal procurement databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected in the procurement or execution of this contract.

Related Government Programs

Department of Veterans Affairs Medical Supplies
In-Vitro Diagnostic Substance Contracts
Point-of-Care Testing Equipment
Federal Healthcare Procurement

Risk Flags

Sole-source award lacks competitive pricing pressure.
Potential for vendor lock-in due to specialized equipment.
Long-term contract duration without competitive re-evaluation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $1.6 million to ABBOTT LABORATORIES INC.. ISTAT ANALYZERS & CARTRIDGES

Who is the contractor on this award?

The obligated recipient is ABBOTT LABORATORIES 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 $1.6 million.

What is the period of performance?

Start: 2021-01-01. End: 2025-12-31.

What is the track record of Abbott Laboratories Inc. with the Department of Veterans Affairs for similar products?

Abbott Laboratories Inc. has a history of supplying medical products and services to the Department of Veterans Affairs. While this specific contract is for ISTAT analyzers and cartridges, Abbott is a major player in the diagnostics market and likely has other contracts with the VA for various laboratory equipment and consumables. A review of historical contract data would reveal the extent and nature of their past dealings with the VA, including performance history, any past issues or disputes, and the overall value of previous awards. This information is crucial for assessing the contractor's reliability and suitability for this long-term sole-source award.

How does the annual cost of this contract compare to market rates for similar diagnostic systems?

The annual cost for this contract is approximately $311,000 ($1.56 million / 5 years). To compare this to market rates, one would need to research the pricing of comparable point-of-care diagnostic systems, such as those used for blood gas analysis, from other manufacturers. This would involve looking at publicly available pricing, industry reports, or data from other large healthcare systems that procure similar equipment. Given that this is a sole-source award, it is difficult to definitively state if the price is competitive without a benchmark. However, if similar systems from other vendors are available at a significantly lower cost, it would indicate potential overpayment.

What are the specific risks associated with a sole-source award for critical diagnostic supplies?

Sole-source awards for critical supplies like ISTAT analyzers and cartridges carry several risks. Firstly, the lack of competition can lead to inflated prices, as the government does not benefit from the price pressures that arise from multiple bidders. Secondly, it can create vendor lock-in, making it difficult and costly to switch to a different supplier in the future, even if better alternatives emerge. Thirdly, there's a risk of complacency from the sole provider, potentially impacting service levels or innovation. Finally, if the sole provider experiences supply chain disruptions or business issues, the VA could face significant challenges in maintaining continuity of care.

What is the expected impact of these ISTAT analyzers and cartridges on patient care within the VA?

ISTAT analyzers are point-of-care diagnostic tools that provide rapid results for critical tests such as blood gases, electrolytes, and chemistries. For the VA, these analyzers are expected to significantly improve patient care by enabling faster clinical decision-making at the patient's bedside. This is particularly important in emergency departments, intensive care units, and operating rooms where timely results can be life-saving. The contract ensures a consistent supply of the necessary cartridges, meaning these critical diagnostic capabilities will be readily available to VA healthcare providers, supporting efficient and effective treatment of veterans.

Has the VA previously procured ISTAT analyzers and cartridges, and what were the terms?

To determine the VA's previous procurement history for ISTAT analyzers and cartridges, a detailed search of federal procurement databases (like FPDS) would be necessary. This would involve looking for contracts awarded to Abbott Laboratories Inc. or other vendors for these specific products. Analyzing past contracts would reveal whether this is a new requirement, a renewal of an existing contract, or a transition from a previously competed award. Understanding historical spending patterns, contract durations, and competition levels for these items can provide valuable context for assessing the current award's justification and value.

What are the performance metrics or service level agreements associated with this contract?

The provided data does not detail specific performance metrics or service level agreements (SLAs) for this contract. However, for a purchase order of this nature, typical performance expectations would include timely delivery of analyzers and cartridges, adherence to quality standards for the consumables, and potentially response times for technical support or maintenance. The VA would likely have internal procedures for monitoring contractor performance against these implicit or explicit expectations. Formal SLAs, if included, would specify quantifiable targets and potential remedies for non-performance.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › In-Vitro Diagnostic Substance Manufacturing

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 200 ABBOTT PARK RD, ABBOTT PARK, IL, 60064

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: $1,935,164

Exercised Options: $1,558,414

Current Obligation: $1,558,414

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline