VA awards $2.3M sole-source contract for Terumo cardiovascular systems maintenance

Contract Overview

Contract Amount: $23,320 ($23.3K)

Contractor: Terumo Cardiovascular Systems Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-04-07

End Date: 2027-04-06

Contract Duration: 364 days

Daily Burn Rate: $64/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: TERUMO SYSTEM SERVICE

Place of Performance

Location: DALLAS, DALLAS County, TEXAS, 75216

State: Texas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $23,320 to TERUMO CARDIOVASCULAR SYSTEMS CORPORATION for work described as: TERUMO SYSTEM SERVICE Key points: 1. Contract awarded on a sole-source basis, raising questions about competition and potential cost savings. 2. The duration of the contract (364 days) suggests a need for ongoing, specialized support. 3. The North American Industry Classification System (NAICS) code 339112 points to a specialized manufacturing sector. 4. The contract is a firm-fixed-price purchase order, providing cost certainty for the VA. 5. The awardee, Terumo Cardiovascular Systems Corporation, is likely the original equipment manufacturer or a highly specialized provider. 6. The contract's value is relatively modest, indicating a focused scope of services.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the services provided and the equipment covered. However, a sole-source award for maintenance often carries a premium compared to competitively bid contracts. The $2.3 million value over one year for specialized medical equipment maintenance appears within a reasonable range for such services, but a lack of competitive bidding prevents a definitive value-for-money assessment. Further analysis would require comparing pricing against similar maintenance contracts for comparable equipment or against the manufacturer's standard service rates.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was solicited. This typically occurs when the vendor is the only one capable of providing the required goods or services, often due to proprietary technology, specialized expertise, or existing infrastructure. In this case, Terumo Cardiovascular Systems Corporation is likely the sole provider of maintenance for their specific cardiovascular systems. The lack of competition means the VA did not benefit from a bidding process that could drive down prices through market forces.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price. The VA may be paying a premium for specialized maintenance that could potentially be reduced if other qualified vendors were allowed to bid.

Public Impact

The Department of Veterans Affairs (VA) benefits from ensuring the continued operational readiness of critical cardiovascular medical equipment. Veterans receiving care at VA facilities will have access to services supported by well-maintained cardiovascular systems. The contract supports specialized technical services within the healthcare sector. The geographic impact is primarily within the VA facilities served by this contract, likely concentrated in Texas given the 'ST' and 'SN' codes.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Lack of transparency in the sole-source justification could mask inefficiencies or higher-than-market costs.
Dependence on a single vendor for critical maintenance could pose supply chain or service disruption risks.

Positive Signals

Ensures specialized maintenance for critical cardiovascular equipment, supporting veteran healthcare.
Firm-fixed-price contract provides budget certainty for the VA.
Award to Terumo Cardiovascular Systems Corporation likely ensures manufacturer-specific expertise and parts availability.

Sector Analysis

The contract falls within the Medical Equipment and Supplies manufacturing and maintenance sector, specifically related to cardiovascular systems. This is a highly specialized niche within the broader healthcare industry. The market for such maintenance services is often dominated by original equipment manufacturers (OEMs) due to the proprietary nature of the technology and the need for specialized training and parts. Comparable spending benchmarks would involve analyzing other federal contracts for the maintenance of similar high-value, specialized medical devices, which are typically significant investments for healthcare providers.

Small Business Impact

This contract does not appear to involve a small business set-aside, as indicated by 'ss': false and 'sb': false. The awardee, Terumo Cardiovascular Systems Corporation, is likely a large business. There is no explicit mention of subcontracting requirements for small businesses. Therefore, this contract is unlikely to have a direct positive impact on the small business ecosystem; rather, it represents a direct award to a specialized, potentially large, manufacturer.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs contracting and program management officials. As a purchase order, it is a less complex instrument than a large prime contract, but still subject to VA procurement regulations and oversight. Accountability measures would include performance monitoring against the terms of the purchase order and ensuring timely and effective maintenance services. Transparency is limited due to the sole-source nature, but the contract award itself is publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

VA Medical Equipment Maintenance Contracts
Cardiovascular Device Service Agreements
Federal Healthcare Technology Support
Sole-Source Medical Device Procurement

Risk Flags

Sole-source award may limit cost-effectiveness.
Lack of competitive bidding prevents price discovery.
Potential for vendor lock-in with specialized equipment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $23,320 to TERUMO CARDIOVASCULAR SYSTEMS CORPORATION. TERUMO SYSTEM SERVICE

Who is the contractor on this award?

The obligated recipient is TERUMO CARDIOVASCULAR SYSTEMS CORPORATION.

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 $23,320.

What is the period of performance?

Start: 2026-04-07. End: 2027-04-06.

What specific cardiovascular systems does this maintenance contract cover, and what is the age and condition of this equipment?

The provided data does not specify the exact Terumo cardiovascular systems covered by this maintenance contract, nor does it detail the age or current condition of the equipment. This information is crucial for a comprehensive assessment of the contract's necessity and value. Knowing the specific systems (e.g., heart-lung machines, ventricular assist devices) and their operational status would help determine if the maintenance is routine, preventative, or reactive due to aging or performance issues. Without this context, it's difficult to fully evaluate the $2.3 million expenditure and its alignment with the actual needs of the VA's cardiovascular care units.

What is the justification for the sole-source award, and has the VA explored alternative maintenance providers or solutions?

The data indicates this contract was awarded on a 'NOT COMPETED' basis, signifying a sole-source procurement. The specific justification for this sole-source award is not detailed in the provided data. Typically, sole-source awards are justified when the product or service is available only from a single source, often due to proprietary technology, unique expertise, or when the contractor is the original equipment manufacturer (OEM) and possesses exclusive knowledge, parts, or tools necessary for maintenance. The VA would have had to document this justification, likely citing Terumo Cardiovascular Systems Corporation's unique ability to service their own specialized equipment. It is presumed the VA determined that competition was not feasible or would not result in a better value, but the absence of a competitive process limits transparency regarding this determination.

How does the annual cost of this maintenance contract compare to industry benchmarks for similar cardiovascular equipment maintenance?

Comparing the annual cost of $2.3 million for Terumo system maintenance to industry benchmarks is challenging without more granular data on the specific systems and the scope of services included. However, maintenance for high-value, specialized medical equipment like cardiovascular systems can be substantial. Industry benchmarks often show that annual service contracts can range from 5% to 15% of the initial equipment cost, depending on the technology's complexity and criticality. Given that this is a sole-source award, it is possible that the price reflects a premium. A thorough benchmark would require comparing this contract's price against other VA or federal agency contracts for similar Terumo equipment, or against the published service rates from Terumo Cardiovascular Systems Corporation itself, if available.

What is the track record of Terumo Cardiovascular Systems Corporation in fulfilling federal contracts, particularly for maintenance services?

The provided data identifies Terumo Cardiovascular Systems Corporation as the awardee but does not offer details on their historical performance or track record with federal contracts. To assess their reliability, one would need to examine past contract awards, performance evaluations (such as Contractor Performance Assessment Reporting System - CPARS), and any history of contract disputes or issues. A positive track record with the federal government, especially with the Department of Veterans Affairs, would provide greater confidence in their ability to deliver the required maintenance services effectively and efficiently. Conversely, a history of poor performance could indicate potential risks associated with this sole-source award.

What are the potential risks associated with a sole-source contract for critical medical equipment maintenance, and what mitigation strategies are in place?

The primary risks associated with a sole-source contract for critical medical equipment maintenance include higher costs due to lack of competition, potential for vendor lock-in, and reduced flexibility in service delivery. If Terumo Cardiovascular Systems Corporation is the only entity capable of servicing this equipment, the VA is dependent on their pricing, availability, and service quality. Mitigation strategies could include negotiating strong contract terms, establishing clear performance metrics and service level agreements (SLAs), and potentially exploring options for in-house training or alternative service providers in the future, although this may be difficult with proprietary systems. The VA should also maintain open communication with the contractor to ensure proactive issue resolution and continuous service improvement.

Industry Classification

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

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: 36C25726P0384

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Terumo Corporation

Address: 6200 JACKSON RD, ANN ARBOR, MI, 48103

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: $116,600

Exercised Options: $23,320

Current Obligation: $23,320

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline