VA awards $15.5M for XTRA Autotransfusion System service, citing sole-source justification

Contract Overview

Contract Amount: $15,526 ($15.5K)

Contractor: Livanova USA Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-05-02

End Date: 2027-05-01

Contract Duration: 1,460 days

Daily Burn Rate: $11/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: SERVICE COVERAGE FOR XTRA AUTOTRANSFUSION SYSTEM

Place of Performance

Location: TEMPLE, BELL County, TEXAS, 76504

State: Texas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $15,525.9 to LIVANOVA USA INC for work described as: SERVICE COVERAGE FOR XTRA AUTOTRANSFUSION SYSTEM Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price efficiencies. 2. Limited competition may have impacted the final negotiated price. 3. The contract duration of 1460 days suggests a long-term need for this specialized equipment. 4. Service coverage for a critical medical device indicates a focus on patient care continuity. 5. The award falls under the 'Electronic and Precision Equipment Repair and Maintenance' NAICS code. 6. No small business set-aside was utilized for this procurement.

Value Assessment

Rating: fair

Benchmarking the value of this sole-source contract is challenging without competitive bids. The $15.5 million award over approximately four years for service coverage of the XTRA Autotransfusion System appears substantial. Without comparable contracts or market data for this specific system's maintenance, it's difficult to definitively assess if the price represents good value for money. The VA's reliance on a single vendor suggests a potential lack of market competition, which could lead to higher costs than if multiple vendors were considered.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning only one vendor, LIVANOVA USA INC, was solicited. This approach is typically used when only one responsible source is available or when a compelling justification exists for excluding competition. The lack of multiple bidders means there was no direct price comparison or negotiation against alternatives, potentially limiting the government's ability to secure the most favorable terms.

Taxpayer Impact: Taxpayers may not have received the benefit of competitive pricing, as the negotiated price was not tested against other market participants. This could result in a higher overall expenditure compared to a competitively bid contract.

Public Impact

Patients requiring autotransfusion procedures will benefit from the continued availability and maintenance of the XTRA system. The Department of Veterans Affairs healthcare facilities, particularly in Texas, will receive essential maintenance services. Ensuring the functionality of critical medical equipment supports the delivery of quality healthcare to veterans. Medical staff will have reliable access to the autotransfusion system, enabling efficient patient treatment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential savings.
Lack of competition may lead to higher long-term costs for maintenance.
Dependence on a single vendor for critical equipment service could pose supply chain risks.

Positive Signals

Ensures continuity of care for patients requiring autotransfusion.
Maintains critical medical equipment, supporting VA's healthcare mission.
Specific service coverage for a specialized medical device.

Sector Analysis

The healthcare equipment maintenance sector is characterized by specialized services requiring technical expertise. Contracts in this area often involve original equipment manufacturers or authorized service providers due to proprietary technology and warranty requirements. The market size for medical device maintenance is significant, driven by the increasing adoption of advanced medical technologies in hospitals and clinics. This contract fits within the broader category of healthcare services and equipment support, ensuring the operational readiness of vital patient care systems.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements mentioned. The sole-source nature of the award further limits opportunities for small businesses to participate in this specific procurement. The primary contractor, LIVANOVA USA INC, is likely a large business, and the absence of set-asides means that the direct economic benefit to the small business ecosystem from this particular award is minimal.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures would be tied to the performance standards outlined in the purchase order, with potential for review by the VA's Office of Inspector General if performance issues or irregularities arise. Transparency is limited due to the sole-source nature, but contract award details are publicly available.

Related Government Programs

Medical Equipment Maintenance Contracts
Veterans Affairs Healthcare Services
Autotransfusion System Procurement
Sole-Source Medical Device Service

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for higher costs

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $15,525.9 to LIVANOVA USA INC. SERVICE COVERAGE FOR XTRA AUTOTRANSFUSION SYSTEM

Who is the contractor on this award?

The obligated recipient is LIVANOVA USA 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 $15,525.9.

What is the period of performance?

Start: 2023-05-02. End: 2027-05-01.

What is the specific justification provided by the VA for awarding this contract on a sole-source basis to LIVANOVA USA INC?

The provided data does not detail the specific justification for the sole-source award. Typically, sole-source procurements are justified under circumstances such as only one responsible source being available, or when a public exigency requires immediate delivery and only one source can meet the requirement. For medical equipment, justifications often relate to unique technical capabilities, proprietary technology, or the need to maintain compatibility with existing systems. A full justification would likely be documented in the contract file and potentially available through a Freedom of Information Act request.

How does the $15.5 million cost compare to similar service contracts for autotransfusion systems or comparable medical equipment?

Direct comparison of the $15.5 million cost is difficult without access to specific contract data for similar autotransfusion systems or comparable high-value medical equipment maintenance. The value is spread over approximately four years (1460 days), making the annual cost around $3.875 million. Factors influencing cost include the complexity of the system, the scope of services (e.g., preventative maintenance, repairs, parts, software updates), geographic coverage, and the vendor's pricing structure. As this was a sole-source award, there is no direct competitive benchmark to assess if this price is optimal.

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

Sole-source contracts for critical medical equipment maintenance carry several risks. Firstly, the lack of competition can lead to inflated prices, as the vendor faces no pressure to offer the most cost-effective solution. Secondly, it can foster vendor lock-in, making it difficult and costly to switch providers in the future. Thirdly, there's a potential for reduced service quality or responsiveness if the vendor becomes complacent due to the absence of competitive threats. Finally, supply chain disruptions or the vendor's business stability could pose significant risks to the continuity of essential healthcare services.

What is the historical spending pattern of the Department of Veterans Affairs on the XTRA Autotransfusion System or similar equipment?

The provided data does not include historical spending patterns for the XTRA Autotransfusion System or similar equipment by the Department of Veterans Affairs. To assess historical spending, one would need to analyze past contracts awarded for the procurement, maintenance, or service of this specific system or comparable devices. This would involve searching federal procurement databases for previous awards to LIVANOVA USA INC or other vendors providing similar solutions to the VA. Understanding past expenditures would help contextualize the current $15.5 million award and identify any trends in pricing or contract duration.

What performance metrics or service level agreements (SLAs) are likely included in this contract to ensure adequate service delivery?

While specific performance metrics and SLAs are not detailed in the provided data, contracts for critical medical equipment maintenance typically include stringent requirements. These often encompass response times for service calls, equipment uptime guarantees, availability of spare parts, and adherence to manufacturer maintenance schedules. The contract likely specifies penalties for non-compliance or rewards for exceeding performance targets. The VA would monitor these metrics to ensure the effective functioning of the XTRA Autotransfusion System and the quality of service provided by LIVANOVA USA INC.

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: 36C25723Q0152

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Livanova PLC

Address: 100 CYBERONICS BLVD, HOUSTON, TX, 77058

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: $23,682

Exercised Options: $15,526

Current Obligation: $15,526

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline