HHS Leases Clinical Chemistry Analyzers for $3.18M, Competed Under SAP

Contract Overview

Contract Amount: $2,740,520 ($2.7M)

Contractor: Siemens Healthcare Diagnostics Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2021-09-28

End Date: 2026-09-27

Contract Duration: 1,825 days

Daily Burn Rate: $1.5K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: BILLINGS AREA CLINICAL CHEMISTRY ANALYZERS CPT LEASING; BASE + (4) 1-YEAR OPTIONS; TOTAL EST. AMT. $3,182,198; BASE YEAR AMT. $636,439.60

Place of Performance

Location: BILLINGS, YELLOWSTONE County, MONTANA, 59101

State: Montana Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $2.7 million to SIEMENS HEALTHCARE DIAGNOSTICS INC. for work described as: BILLINGS AREA CLINICAL CHEMISTRY ANALYZERS CPT LEASING; BASE + (4) 1-YEAR OPTIONS; TOTAL EST. AMT. $3,182,198; BASE YEAR AMT. $636,439.60 Key points: 1. Lease agreement for clinical chemistry analyzers with a total estimated value of $3.18 million. 2. Competition was conducted under the Simplified Acquisition Procedures (SAP), suggesting a focus on smaller procurements. 3. The contract is a firm fixed price, providing cost certainty for the government. 4. The primary vendor is Siemens Healthcare Diagnostics Inc., indicating potential vendor concentration.

Value Assessment

Rating: good

The base year cost of $636,439.60 for clinical chemistry analyzers appears reasonable when considering the total contract value and the inclusion of four one-year options. Benchmarking against similar lease agreements for this type of equipment would provide a more definitive assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was competed under SAP, which typically involves a limited number of vendors or a streamlined process. While competition occurred, the specific method and its impact on price discovery are not fully detailed, but SAP aims for fair and reasonable pricing for smaller acquisitions.

Taxpayer Impact: Taxpayers are impacted through the funding of essential healthcare equipment for the Indian Health Service, with the lease structure aiming for cost-effectiveness over the contract period.

Public Impact

Ensures access to critical diagnostic equipment for healthcare services provided by the Indian Health Service. Supports patient care by providing necessary tools for clinical chemistry analysis. The lease agreement allows for equipment upgrades or replacements over the contract term. Potential for cost savings compared to outright purchase, depending on equipment lifespan and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition under SAP may not yield the best possible pricing.
Reliance on a single vendor could lead to future pricing power.
Leasing costs over the long term could exceed purchase price.

Positive Signals

Firm fixed price provides budget certainty.
Includes options for flexibility and extended use.
Addresses a critical need for diagnostic equipment.

Sector Analysis

This procurement falls within the broader category of medical equipment leasing, a sector characterized by technological advancements and ongoing service needs. Benchmarks for similar equipment leases vary widely based on technology, volume, and contract terms.

Small Business Impact

The contract was competed under SAP, which is often used for procurements accessible to small businesses. However, the data does not indicate if small businesses participated or benefited from this specific contract, nor if subcontracting opportunities were pursued.

Oversight & Accountability

The contract was awarded by the Department of Health and Human Services (Indian Health Service). Oversight would involve monitoring equipment performance, service delivery, and adherence to lease terms. The firm fixed price structure offers some level of financial oversight.

Related Government Programs

Other Commercial and Industrial Machinery and Equipment Rental and Leasing
Department of Health and Human Services Contracting
Indian Health Service Programs

Risk Flags

Potential for higher long-term cost compared to purchase.
Limited competition under SAP.
Vendor lock-in possibility.
Dependence on vendor for maintenance and service.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $2.7 million to SIEMENS HEALTHCARE DIAGNOSTICS INC.. BILLINGS AREA CLINICAL CHEMISTRY ANALYZERS CPT LEASING; BASE + (4) 1-YEAR OPTIONS; TOTAL EST. AMT. $3,182,198; BASE YEAR AMT. $636,439.60

Who is the contractor on this award?

The obligated recipient is SIEMENS HEALTHCARE DIAGNOSTICS INC..

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Indian Health Service).

What is the total obligated amount?

The obligated amount is $2.7 million.

What is the period of performance?

Start: 2021-09-28. End: 2026-09-27.

What is the total cost of ownership over the full 5-year term, including potential maintenance and service fees not explicitly detailed in the base lease?

The total estimated amount is $3,182,198 over five years. Without explicit details on maintenance and service fees, it's challenging to determine the full cost of ownership. However, the firm fixed price for the lease itself provides a clear baseline. A comprehensive analysis would require reviewing the contract's service level agreements and any associated operational costs.

How does the per-unit cost of these leased analyzers compare to purchasing similar equipment outright, considering depreciation and technological obsolescence?

A direct comparison is difficult without knowing the purchase price and expected lifespan of comparable analyzers. Leasing can offer flexibility and access to newer technology, potentially mitigating obsolescence risk. However, over the full term, leasing costs might exceed the purchase price, especially if the equipment is retained long-term. A detailed cost-benefit analysis comparing lease payments to amortized purchase costs is needed.

What is the process for evaluating equipment performance and ensuring it meets the clinical needs of the Indian Health Service facilities throughout the lease term?

The contract likely includes performance standards and service level agreements (SLAs) that the vendor must meet. The Department of Health and Human Services would be responsible for monitoring these SLAs, conducting regular performance reviews, and addressing any deficiencies. User feedback from the clinical staff at the facilities would also be crucial in assessing whether the equipment effectively meets their diagnostic needs.

Industry Classification

NAICS: Real Estate and Rental and Leasing › Commercial and Industrial Machinery and Equipment Rental and Leasing › Other Commercial and Industrial Machinery and Equipment Rental and Leasing

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: RFQ1506982

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Altair Engineering Inc.

Address: 511 BENEDICT AVE, TARRYTOWN, NY, 10591

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $3,376,960

Exercised Options: $3,376,960

Current Obligation: $2,740,520

Actual Outlays: $2,419,520

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline