VA awards $19M tissue machine maintenance contract to Leica Microsystems Inc

Contract Overview

Contract Amount: $19,000 ($19.0K)

Contractor: Leica Microsystems Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-05-01

End Date: 2027-04-30

Contract Duration: 1,094 days

Daily Burn Rate: $17/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: TISSUE MACHINE PM CONTRACT

Place of Performance

Location: TUCSON, PIMA County, ARIZONA, 85723

State: Arizona Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $19,000.07 to LEICA MICROSYSTEMS INC. for work described as: TISSUE MACHINE PM CONTRACT Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract duration of nearly three years suggests a need for consistent, specialized support. 3. The North American Industry Classification System (NAICS) code 811210 indicates a focus on repair and maintenance of electronic and precision equipment. 4. The contract's firm-fixed-price nature aims to provide cost certainty for the government. 5. The award was made to a single bidder, raising questions about potential overpricing or lack of market exploration. 6. The Department of Veterans Affairs is the primary agency involved in this procurement.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without comparable sole-source awards for similar tissue machine maintenance services. The firm-fixed-price structure provides some cost certainty, but the lack of competition means the VA may not have secured the most advantageous pricing. Further analysis would require understanding the specific technical requirements and market availability of qualified service providers.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Leica Microsystems Inc., was solicited. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. The lack of competition limits the government's ability to leverage market forces to drive down prices and ensure the best value.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive pressure. Without competing offers, it's difficult to ascertain if the awarded price reflects fair market value.

Public Impact

Veterans receiving care at VA facilities will benefit from the reliable functioning of essential medical equipment. The contract ensures the maintenance and repair of critical tissue machines used in diagnostic and research settings. The primary geographic impact is within Arizona, where the contract is managed. The contract supports specialized technical jobs related to the maintenance of advanced medical equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially increases costs for taxpayers.
Lack of transparency in the procurement process due to sole-source justification.
Potential for vendor lock-in if alternative service providers are not readily available or qualified.

Positive Signals

Firm-fixed-price contract provides cost certainty for the duration of the award.
Contract ensures continued operational readiness of critical medical equipment for the VA.
Specialized nature of the equipment likely necessitates a single, qualified provider.

Sector Analysis

The market for medical equipment maintenance and repair is a specialized segment within the broader healthcare industry. This contract falls under the Electronic and Precision Equipment Repair and Maintenance sector. The value of this specific contract is $19 million, but the overall market for medical device servicing is significantly larger, driven by the increasing complexity and prevalence of advanced medical technologies in healthcare settings.

Small Business Impact

This contract does not appear to include any small business set-aside provisions. Given the specialized nature of maintaining advanced medical equipment like tissue machines, it is plausible that the primary service provider, Leica Microsystems Inc., is a large business. There is no explicit information regarding subcontracting opportunities for small businesses within this award.

Oversight & Accountability

Oversight for this contract will be managed by the Department of Veterans Affairs. As a definitive contract, it is subject to standard government contracting regulations and oversight mechanisms. Transparency regarding the sole-source justification and performance monitoring will be key to ensuring accountability. The specific Inspector General for the VA would have jurisdiction over any potential fraud, waste, or abuse related to this contract.

Related Government Programs

Medical Equipment Maintenance Contracts
Veterans Health Administration Procurement
Sole-Source Service Contracts
Precision Equipment Repair

Risk Flags

Sole-source award may limit price competition.
Lack of transparency in procurement justification.
Potential for higher costs due to absence of competitive bidding.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $19,000.07 to LEICA MICROSYSTEMS INC.. TISSUE MACHINE PM CONTRACT

Who is the contractor on this award?

The obligated recipient is LEICA MICROSYSTEMS 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 $19,000.07.

What is the period of performance?

Start: 2024-05-01. End: 2027-04-30.

What is the track record of Leica Microsystems Inc. in performing similar maintenance contracts for the federal government?

Leica Microsystems Inc. has a history of providing medical equipment and related services to various government agencies. While specific details on past federal maintenance contracts for tissue machines are not readily available in this dataset, their presence as a manufacturer suggests a capacity to offer maintenance. A deeper dive into federal procurement databases (like FPDS-NG) would be necessary to identify and analyze their past performance, including contract values, durations, and any reported performance issues or successes. This would help establish a baseline for their reliability and expertise in fulfilling government obligations.

How does the awarded price of $19 million compare to market rates for similar tissue machine maintenance services?

Directly comparing the $19 million price tag to market rates is difficult without specific details on the scope of services, the exact models of tissue machines, and the geographic coverage. However, the sole-source nature of this award raises concerns that the price may not be as competitive as it could be in a fully open market. Typically, competitive bidding allows for price discovery and negotiation, leading to potentially lower costs for the government. To assess value, one would need to benchmark against similar sole-source contracts or, ideally, against prices achieved through competitive procurements for comparable equipment and services, considering factors like service level agreements and response times.

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

The primary risks associated with a sole-source award for critical medical equipment maintenance include higher costs due to a lack of competition, potential for reduced service quality if the vendor faces no competitive pressure, and vendor lock-in. Taxpayers may bear a higher financial burden. Furthermore, if the sole-source justification is not robust or if alternative qualified vendors exist but were not considered, it could indicate a flawed procurement process. There's also a risk that the government becomes overly reliant on a single provider, making it difficult to switch vendors even if performance declines or prices increase significantly in the future.

How effective is the firm-fixed-price contract type in managing costs for this type of specialized maintenance service?

The firm-fixed-price (FFP) contract type is generally effective in managing costs for specialized maintenance services when the scope of work is well-defined and risks are understood. It shifts the cost risk to the contractor, providing the government with budget certainty. For routine maintenance and predictable repairs, FFP is often a good choice. However, for highly specialized equipment where unforeseen issues might arise, an FFP contract could incentivize the contractor to cut corners on quality to maintain profitability, or conversely, lead to significant change orders if unexpected complexities emerge. The success of FFP here depends on the thoroughness of the initial scope definition and the contractor's ability to accurately estimate costs.

What is the historical spending pattern for tissue machine maintenance by the Department of Veterans Affairs?

Analyzing the historical spending patterns for tissue machine maintenance by the Department of Veterans Affairs (VA) would require access to comprehensive historical contract data. This single award of $19 million over nearly three years provides a snapshot but doesn't reveal trends. To understand historical spending, one would need to examine prior contracts for similar services, noting their values, durations, competition levels, and awarded contractors. This would help identify if spending has increased or decreased, if reliance on specific vendors has changed, and whether competitive procurements have been consistently utilized. Without this broader context, it's difficult to assess if this current award represents a significant deviation or a continuation of past practices.

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: RESEARCH AND DEVELOPMENT › N – Health R&D Services

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

Parent Company: Danaher Corporation

Address: 10 PARKWAY NORTH, DEERFIELD, IL, 60015

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $30,851

Exercised Options: $19,000

Current Obligation: $19,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline