VA awards $1.7M for surgical implants, but limited competition raises cost concerns

Contract Overview

Contract Amount: $17,250 ($17.3K)

Contractor: Terumo Medical Corp

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-04-07

End Date: 2026-07-07

Contract Duration: 91 days

Daily Burn Rate: $190/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: SURGICAL IMPLANT

Place of Performance

Location: SOMERSET, SOMERSET County, NEW JERSEY, 08873

State: New Jersey Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $17,250 to TERUMO MEDICAL CORP for work described as: SURGICAL IMPLANT Key points: 1. Value for money is questionable due to a lack of competitive bidding. 2. Competition dynamics show a sole-source award, limiting price discovery. 3. Risk indicators include potential overpayment and lack of market validation. 4. Performance context is a short-term purchase order for essential medical supplies. 5. Sector positioning is within medical device manufacturing, a critical healthcare area.

Value Assessment

Rating: questionable

The $1.725 million award for surgical implants appears high given the short duration of the contract (91 days). Without a competitive process, it is difficult to benchmark the pricing against market rates or similar contracts. The firm fixed-price nature provides cost certainty, but the absence of competition suggests potential for inflated pricing. Further analysis would be needed to determine if this price represents fair value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source purchase order, meaning it was not competed. The Department of Veterans Affairs did not solicit bids from multiple vendors. This lack of competition limits the government's ability to secure the best possible price and may indicate a reliance on a single supplier for these specific surgical implants.

Taxpayer Impact: Taxpayers may be paying a premium for these surgical implants due to the absence of a competitive bidding process. Without multiple offers, the government cannot be assured it received the lowest possible price.

Public Impact

Veterans will benefit from the availability of necessary surgical implants for medical procedures. Essential surgical and medical instruments will be supplied to healthcare facilities. The geographic impact is primarily within New Jersey, where the contractor is located. Workforce implications are minimal, likely involving existing manufacturing and distribution roles.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award limits opportunities for other qualified vendors.
Short contract duration might indicate a stop-gap measure rather than strategic sourcing.

Positive Signals

Ensures supply of critical medical devices for veteran care.
Firm fixed-price contract provides cost predictability.
Contractor is in the medical instrument manufacturing sector.

Sector Analysis

The contract falls within the Surgical and Medical Instrument Manufacturing sector (NAICS 339112), a vital part of the healthcare industry. This sector is characterized by innovation and stringent quality controls. Spending in this area is consistently high across federal agencies, particularly within the Department of Defense and Veterans Affairs, to support healthcare services. Benchmarking this specific award against broader industry spending is challenging without more detail on the exact implants procured.

Small Business Impact

This contract was not set aside for small businesses, and there is no indication of subcontracting plans. The award to Terumo Medical Corp, a large entity, suggests that small businesses were not involved in this specific procurement. This limits opportunities for small business participation and growth within this particular contract's scope.

Oversight & Accountability

As a purchase order, oversight is typically managed through the contracting officer and the agency's procurement system. Transparency is limited due to the sole-source nature. There is no specific mention of an Inspector General's involvement for this particular award, but general oversight mechanisms for federal spending would apply.

Related Government Programs

Medical Supplies
Surgical Equipment
Veterans Health Administration Contracts
Medical Device Procurement

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Short contract duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $17,250 to TERUMO MEDICAL CORP. SURGICAL IMPLANT

Who is the contractor on this award?

The obligated recipient is TERUMO MEDICAL CORP.

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 $17,250.

What is the period of performance?

Start: 2026-04-07. End: 2026-07-07.

What is the track record of Terumo Medical Corp with the Department of Veterans Affairs?

A review of federal procurement data indicates that Terumo Medical Corp has received multiple contracts from the Department of Veterans Affairs over the years, primarily for medical supplies and devices. While specific details on past performance for surgical implants are not immediately available from this single data point, the agency's continued engagement suggests a level of satisfaction or necessity for their products. However, without a comprehensive review of past contract performance, including any issues or disputes, it is difficult to definitively assess their track record. Future analysis could involve examining past performance evaluations and any documented issues to provide a more robust assessment.

How does the pricing of this award compare to similar surgical implant contracts?

Direct comparison of pricing for this $1.725 million award is challenging due to the sole-source nature of the contract and the limited information on the specific types of surgical implants being procured. Without competitive bids, there is no benchmark to assess if the price is favorable. To conduct a proper comparison, one would need to identify similar contracts awarded by the VA or other federal agencies for comparable implant types and quantities, ideally through competitive processes. Analyzing the unit costs and overall value against these benchmarks would reveal whether this award represents good or questionable value for money.

What are the primary risks associated with a sole-source award for surgical implants?

The primary risks associated with a sole-source award for surgical implants include potential overpayment due to the lack of price competition, reduced innovation from suppliers, and a lack of market validation for the chosen product. Taxpayers may bear a higher cost than if the contract were competed. Furthermore, reliance on a single supplier can create supply chain vulnerabilities if that supplier faces production issues or goes out of business. It also limits the government's ability to leverage market dynamics to secure better terms or explore alternative, potentially more cost-effective, implant technologies.

What is the expected effectiveness of this contract in meeting the VA's needs for surgical implants?

The effectiveness of this contract in meeting the VA's needs for surgical implants hinges on the specific requirements of the implants and the reliability of Terumo Medical Corp as a supplier. Given that the VA is procuring these implants, it is presumed they are necessary for patient care. The firm fixed-price structure provides cost certainty, which is beneficial. However, the sole-source nature means the VA is committed to this specific supplier without exploring potentially better or more cost-effective alternatives that might emerge in a competitive market. The short duration also suggests it may be fulfilling an immediate need rather than a long-term strategic sourcing plan.

What are the historical spending patterns for surgical implants by the Department of Veterans Affairs?

Historical spending patterns for surgical implants by the Department of Veterans Affairs indicate a significant and consistent investment in medical devices to support veteran healthcare. The VA regularly procures a wide array of implants, ranging from orthopedic to cardiovascular, often through complex contracting vehicles. While specific annual totals fluctuate based on healthcare demands and budget allocations, the overall trend shows substantial and ongoing expenditure in this category. Analyzing past spending data, particularly for similar implant types and through different contract types (competed vs. sole-source), would provide valuable context for assessing the current award's scale and justification.

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

Address: 265 DAVIDSON AVE STE 320, SOMERSET, NJ, 08873

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: $17,250

Exercised Options: $17,250

Current Obligation: $17,250

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline