VA awards $3.18M contract for analytical instruments, with a high cost per reportable result

Contract Overview

Contract Amount: $5,799,258 ($5.8M)

Contractor: Abbott Molecular Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-12-01

End Date: 2025-11-30

Contract Duration: 1,825 days

Daily Burn Rate: $3.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: COST PER REPORTABLE RESULT VA PUGET SOUND HEALTH CARE SYSTEM

Place of Performance

Location: DES PLAINES, COOK County, ILLINOIS, 60018

State: Illinois Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $5.8 million to ABBOTT MOLECULAR INC. for work described as: COST PER REPORTABLE RESULT VA PUGET SOUND HEALTH CARE SYSTEM Key points: 1. The contract value of $3.18 million for analytical laboratory instruments appears to be a significant investment. 2. The competition level was 'FULL AND OPEN COMPETITION', suggesting a robust market for these goods. 3. The contract duration of 1825 days (5 years) indicates a long-term need for these instruments. 4. The fixed-price contract type suggests that the price is set regardless of the contractor's costs. 5. The contract was awarded to ABBOTT MOLECULAR INC., a known entity in the medical device sector. 6. The high cost per reportable result of $5.8 million warrants further investigation into performance metrics and efficiency.

Value Assessment

Rating: questionable

The contract value of $3.18 million for analytical laboratory instruments is substantial. However, the reported cost per reportable result of $5.8 million is exceptionally high and raises concerns about value for money. Without knowing the definition of a 'reportable result' or the expected volume of such results, it is difficult to benchmark effectively. Compared to typical procurements for laboratory equipment, this cost per result seems disproportionate, suggesting potential inefficiencies or a very niche, high-cost application.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'FULL AND OPEN COMPETITION', indicating that all responsible sources were permitted to submit a bid. The data does not specify the number of bids received, but this procurement method generally fosters price discovery and encourages competitive pricing among vendors. The fact that a full and open competition was conducted suggests that the VA sought the best possible value from the market.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it is expected to drive down prices through market forces, ensuring that the government obtains goods and services at competitive rates.

Public Impact

Veterans receiving healthcare services at VA Puget Sound Health Care System will benefit from the use of these advanced analytical instruments. The contract supports the delivery of diagnostic and analytical services within the healthcare system. The geographic impact is primarily focused on the facilities served by the VA Puget Sound Health Care System in Illinois. The procurement supports jobs within the analytical laboratory instrument manufacturing sector, benefiting the contractor and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The extremely high cost per reportable result ($5.8M) suggests potential inefficiencies or a lack of clear performance metrics tied to cost.
The contract value is significant, and the long duration could lead to cost overruns if not managed effectively.
Lack of detail on the number of bidders in the full and open competition makes it hard to assess the true level of competition achieved.

Positive Signals

The use of 'FULL AND OPEN COMPETITION' indicates an effort to leverage market competition for better pricing.
The 'FIRM FIXED PRICE' contract type provides cost certainty for the government, assuming the scope is well-defined.
The contract is awarded to a known entity (ABBOTT MOLECULAR INC.), potentially reducing execution risk.

Sector Analysis

This contract falls within the broader 'Analytical Laboratory Instrument Manufacturing' sector, which is a critical component of the healthcare and life sciences industries. This sector is characterized by high research and development costs, stringent regulatory requirements, and a need for continuous innovation. Spending in this area supports advancements in medical diagnostics, research, and patient care. Comparable spending benchmarks would typically focus on the total market size for such instruments and the average contract values for similar government procurements.

Small Business Impact

The data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from set-aside requirements. However, the prime contractor, ABBOTT MOLECULAR INC., may engage small businesses in its supply chain, though this is not explicitly detailed in the provided data.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' procurement and program management offices. Accountability measures are inherent in the firm-fixed-price structure, requiring the contractor to deliver specified goods. Transparency is facilitated by contract databases like FPDS, which record award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Medical Equipment Procurement
Laboratory Services Contracts
Healthcare Technology Acquisition
VA Medical Supplies

Risk Flags

High Cost Per Reportable Result
Lack of Performance Metric Clarity
Potential for Inefficiency

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $5.8 million to ABBOTT MOLECULAR INC.. COST PER REPORTABLE RESULT VA PUGET SOUND HEALTH CARE SYSTEM

Who is the contractor on this award?

The obligated recipient is ABBOTT MOLECULAR 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 $5.8 million.

What is the period of performance?

Start: 2020-12-01. End: 2025-11-30.

What is the definition of a 'reportable result' for this contract, and how was the cost per reportable result calculated?

The definition of a 'reportable result' and the methodology for calculating the cost per reportable result are crucial for understanding the value proposition of this contract. Without this specific information, the reported figure of $5,799,257.62 per reportable result appears exceptionally high and potentially misleading. Typically, a 'reportable result' would refer to a specific diagnostic outcome, a completed test, or a data point generated by the analytical instrument. The calculation would involve dividing the total contract cost (or a prorated portion thereof) by the number of these defined results achieved over the contract period. The VA or Abbott Molecular Inc. would need to provide clarification on these metrics to assess the true cost-effectiveness and performance of the instruments.

How many bids were received in response to the 'FULL AND OPEN COMPETITION' for this contract?

While the contract was awarded under 'FULL AND OPEN COMPETITION', the provided data does not specify the number of bids received. This information is critical for a comprehensive assessment of the competition's effectiveness. A high number of bids typically indicates strong market interest and can lead to more competitive pricing. Conversely, a low number of bids, even in a full and open competition, might suggest limited market availability, high barriers to entry, or a lack of awareness among potential vendors. Understanding the number of bidders would help determine if the competition truly drove down costs and ensured the best value for the Department of Veterans Affairs.

What is the expected lifespan and performance benchmark for the analytical laboratory instruments procured under this contract?

The expected lifespan and performance benchmarks for the analytical laboratory instruments are essential for evaluating the long-term value and return on investment for this $3.18 million contract. The contract duration is 1825 days (5 years), suggesting the instruments are expected to function reliably throughout this period. Performance benchmarks would typically include metrics such as accuracy, precision, throughput, uptime, and maintenance requirements. Without these defined benchmarks, it is difficult to assess whether the instruments are meeting operational needs and justifying their cost, especially in light of the high cost per reportable result.

Are there any specific performance metrics or Key Performance Indicators (KPIs) tied to the $3.18 million award value?

The provided data does not explicitly detail specific performance metrics or Key Performance Indicators (KPIs) directly tied to the $3.18 million award value. While the contract is firm-fixed-price, implying delivery of specified goods, the effectiveness and value are often further assessed through performance standards. The high cost per reportable result suggests a potential disconnect or a need for clearer KPIs related to output and efficiency. Future analysis should seek to identify any performance clauses, service level agreements, or quality assurance plans associated with this contract to better gauge contractor performance and value.

How does the cost per reportable result for this contract compare to similar procurements for analytical laboratory instruments within the VA or other federal agencies?

The reported cost per reportable result of $5,799,257.62 is exceptionally high and likely deviates significantly from typical benchmarks for analytical laboratory instruments. Without specific definitions and context for 'reportable result,' direct comparison is challenging. However, in most healthcare and laboratory settings, costs per test or per analytical output are usually in the thousands or tens of thousands of dollars, not millions. This suggests that either the 'reportable result' is a very high-level or complex outcome, or there are significant inefficiencies, or the data point itself requires further clarification and context from the awarding agency (VA) and the contractor (Abbott Molecular Inc.).

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Analytical Laboratory Instrument Manufacturing

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1300 E TOUHY AVE, DES PLAINES, IL, 60018

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: $12,016,780

Exercised Options: $10,130,840

Current Obligation: $5,799,258

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: V797P7323A

IDV Type: FSS

Timeline