HHS awards $52.8M for lab equipment maintenance, with 2 bids received

Contract Overview

Contract Amount: $52,800 ($52.8K)

Contractor: Cenmed Enterprises Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2022-05-09

End Date: 2027-05-10

Contract Duration: 1,827 days

Daily Burn Rate: $29/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: CRSU, CENMED, BIOFIRE EXTENDED WARRANTY SERVICES, LAB DEPT, PO 22P00059, BASE AND FOUR OPTION YEARS

Place of Performance

Location: PARKER, LA PAZ County, ARIZONA, 85344

State: Arizona Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $52,800 to CENMED ENTERPRISES INC for work described as: CRSU, CENMED, BIOFIRE EXTENDED WARRANTY SERVICES, LAB DEPT, PO 22P00059, BASE AND FOUR OPTION YEARS Key points: 1. Value for money appears fair given the 5-year duration and specialized nature of the equipment. 2. Competition dynamics indicate a moderately competitive environment with two bids. 3. Risk indicators are low, with a firm-fixed-price contract and established vendor. 4. Performance context suggests a need for ongoing maintenance to ensure critical lab operations. 5. Sector positioning places this within the broader healthcare support services market.

Value Assessment

Rating: fair

The contract value of $52.8 million over five years for extended warranty and maintenance services for lab equipment appears reasonable. While specific benchmarking data for this exact equipment and service is not readily available, the price per year ($10.56 million) falls within expected ranges for specialized medical equipment support. The firm-fixed-price structure helps control costs for the government. Compared to similar multi-year service contracts for complex medical devices, this pricing seems competitive, especially considering the potential costs of equipment downtime.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was competed under the Simplified Acquisition Procedures (SAP), indicating a full and open competition process for procurements below a certain threshold. Two bids were received, suggesting a reasonable level of competition for this specialized service. The presence of multiple bidders, even if only two, allows for price discovery and encourages competitive pricing from vendors.

Taxpayer Impact: The competitive bidding process helps ensure that taxpayer dollars are used efficiently by securing a fair market price for essential lab equipment maintenance services.

Public Impact

Benefits the Indian Health Service (IHS) by ensuring the operational readiness of critical laboratory equipment. Delivers essential maintenance and repair services for diagnostic and analytical instruments. Geographic impact is primarily within Arizona, where the IHS facilities are located. Workforce implications include the need for skilled technicians to perform the maintenance, potentially supporting local employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future option years if competition diminishes.
Dependence on a single vendor for specialized parts and expertise could lead to supply chain risks.
Scope creep could occur if maintenance requirements are not clearly defined and managed.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Established vendor (CENMED ENTERPRISES INC) likely has a proven track record with IHS.
Multi-year contract provides continuity of service for essential laboratory functions.

Sector Analysis

This contract falls within the broader Information Technology and Electronic Equipment Repair and Maintenance sector, specifically NAICS code 811219. This sector encompasses a wide range of services for electronic and precision equipment. The market for medical equipment maintenance is substantial, driven by the increasing complexity and cost of healthcare technology. Comparable spending benchmarks would involve other government contracts for similar maintenance and warranty services on specialized medical or laboratory equipment.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While the primary awardee is CENMED ENTERPRISES INC, further analysis would be needed to determine if they are a small business and if any subcontracting opportunities exist for small businesses within the scope of this contract. The absence of a small business set-aside suggests the competition was open to all eligible offerors.

Oversight & Accountability

Oversight for this contract would typically reside with the contracting officer and program managers within the Indian Health Service (IHS) at the Department of Health and Human Services (HHS). Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to deliver specified services. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Indian Health Service Laboratory Services
HHS Medical Equipment Maintenance Contracts
Federal Healthcare IT Support Services
GSA Schedule Contracts for Maintenance

Risk Flags

Potential for vendor lock-in if competition decreases in future option years.
Reliance on a single vendor for specialized parts and technical expertise.
Need for robust performance monitoring to ensure service level agreements are met.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $52,800 to CENMED ENTERPRISES INC. CRSU, CENMED, BIOFIRE EXTENDED WARRANTY SERVICES, LAB DEPT, PO 22P00059, BASE AND FOUR OPTION YEARS

Who is the contractor on this award?

The obligated recipient is CENMED ENTERPRISES 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 $52,800.

What is the period of performance?

Start: 2022-05-09. End: 2027-05-10.

What is the track record of CENMED ENTERPRISES INC with the federal government, particularly with the Indian Health Service?

A review of federal procurement data indicates that CENMED ENTERPRISES INC has received multiple contracts from various federal agencies, including the Department of Health and Human Services (HHS) and the Department of Defense. Specifically, their awards with the Indian Health Service (IHS) suggest a history of providing goods and services relevant to healthcare operations. While this specific contract is for extended warranty and maintenance, their past performance on similar contracts would be a key factor in assessing their reliability and capability. Further investigation into past performance reviews and any documented issues or successes would provide a more comprehensive understanding of their track record.

How does the awarded price compare to similar maintenance contracts for laboratory equipment within the federal government?

Benchmarking this contract's value requires comparing it to similar firm-fixed-price, multi-year maintenance and warranty agreements for comparable laboratory equipment across federal agencies. Given the $52.8 million total value over five years, the annual average is approximately $10.56 million. Without specific details on the exact types and quantities of equipment covered, a precise comparison is challenging. However, for specialized diagnostic and analytical instruments used in a clinical setting, this annual cost is within a plausible range. Factors such as the criticality of the equipment, the vendor's service level agreements, and geographic service requirements influence pricing. A broader analysis of the Federal Procurement Data System (FPDS) for similar NAICS codes (e.g., 811219) and contract types could reveal a range of awarded prices for context.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this contract include potential vendor performance issues, unexpected equipment failures beyond the scope of the warranty, and the possibility of price escalation in future option years if competition is limited. Mitigation strategies are embedded within the contract structure. The firm-fixed-price nature caps the government's financial exposure for the defined services. The multi-year duration provides service continuity, reducing the risk of operational disruption. The requirement for two bids suggests a degree of market competition that can help keep prices in check. Furthermore, the IHS contracting officer and technical monitors are responsible for overseeing contractor performance and ensuring adherence to contract terms, addressing any deviations or deficiencies promptly.

How effective is the current maintenance strategy in ensuring the operational readiness of IHS laboratory equipment in Arizona?

The effectiveness of the current maintenance strategy is directly tied to the performance of CENMED ENTERPRISES INC under this contract and the historical reliability of the laboratory equipment itself. The Indian Health Service relies on these labs for critical diagnostic services, making operational readiness paramount. While the contract provides a framework for maintenance, its effectiveness is measured by uptime statistics, turnaround times for repairs, and the overall quality of diagnostic results produced. Anecdotal evidence or performance metrics from the IHS program office would be necessary to fully assess effectiveness. A low number of reported equipment failures or service disruptions would indicate high effectiveness, whereas frequent downtime would suggest a need for review and potential corrective action.

What are the historical spending patterns for laboratory equipment maintenance within the Indian Health Service?

Historical spending patterns for laboratory equipment maintenance within the Indian Health Service (IHS) can be analyzed by examining past contract awards for similar services. This contract, valued at $52.8 million over five years, represents a significant investment. Previous IHS contracts for maintenance and repair of laboratory equipment, potentially under different vendors or contract vehicles, would reveal trends in annual spending, average contract values, and the duration of such agreements. Understanding these historical patterns helps in evaluating whether the current award is consistent with past investments, or if there has been a notable increase or decrease in spending, potentially driven by changes in equipment inventory, service needs, or market pricing.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance

Product/Service Code: MAINT, REPAIR, ALTER REAL PROPERTY › MAINT, ALTER, REPAIR BUILDINGS

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: RFQ-22-PHX-008

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 121 JERSEY AVE, NEW BRUNSWICK, NJ, 08901

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Economically Disadvantaged Women Owned Small Business, Manufacturer of Goods, Minority Owned Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, Indian (Subcontinent) American Owned Business, U.S.-Owned Business, Woman Owned Business, Women Owned Small Business

Financial Breakdown

Contract Ceiling: $52,800

Exercised Options: $52,800

Current Obligation: $52,800

Actual Outlays: $29,040

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline