HHS awards $1.2M for medical gas services to Airgas USA, LLC, with 2 bidders

Contract Overview

Contract Amount: $122,877 ($122.9K)

Contractor: Airgas USA, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2023-03-17

End Date: 2027-03-31

Contract Duration: 1,475 days

Daily Burn Rate: $83/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: PARKER AND PEACH SPRINGS MEDICAL GAS SERVICES

Place of Performance

Location: PARKER, LA PAZ County, ARIZONA, 85344

State: Arizona Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $122,877.41 to AIRGAS USA, LLC for work described as: PARKER AND PEACH SPRINGS MEDICAL GAS SERVICES Key points: 1. Value for money appears reasonable given the firm fixed-price structure and duration. 2. Competition dynamics indicate a moderately competitive environment with two bidders. 3. Risk indicators are low, with a firm fixed-price contract and established vendor. 4. Performance context suggests a need for reliable medical gas supply to IHS facilities. 5. Sector positioning places this contract within the broader healthcare services and industrial gas supply chain.

Value Assessment

Rating: good

The contract value of $1.23 million over approximately 4 years for medical gas services seems within a reasonable range for the scope. Benchmarking against similar contracts for industrial gas supply to federal facilities would provide a more precise value-for-money assessment. The firm fixed-price nature of the contract helps control costs for the government.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with two bids received. While two bidders suggest some level of competition, it is on the lower end. A higher number of bidders typically leads to more competitive pricing and better value for the government.

Taxpayer Impact: The presence of two bidders indicates that taxpayers likely received a competitive price, though further competition could have potentially yielded greater savings.

Public Impact

Patients receiving care at Indian Health Service (IHS) facilities in Arizona will benefit from a reliable supply of medical gases. Essential medical gas services, including delivery and maintenance, are being provided. The geographic impact is focused on Arizona, serving IHS facilities within the state. The contract supports the operational needs of healthcare providers within the IHS system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract renewals if competition remains limited.
Dependence on a single vendor for critical medical gas supply could pose a risk if not managed effectively.

Positive Signals

Firm fixed-price contract provides cost certainty for the government.
Established vendor with likely experience in government contracting.
Long-term contract duration (approx. 4 years) suggests a stable supply chain.

Sector Analysis

This contract falls within the healthcare sector, specifically concerning the supply of industrial gases essential for medical operations. The industrial gas market is mature, with several large national suppliers. Federal agencies often procure such services through competitive bidding to ensure reliable and cost-effective supply to their facilities, including those operated by the Indian Health Service.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information on subcontracting plans. The award went to Airgas USA, LLC, a large corporation, suggesting limited direct impact on the small business ecosystem for this specific contract.

Oversight & Accountability

The contract is a purchase order, which is a standard procurement instrument. Oversight would typically be managed by the contracting officer at the Indian Health Service. Transparency is provided through federal procurement databases. Inspector General jurisdiction would apply if any fraud or mismanagement were suspected.

Related Government Programs

Medical Supplies and Equipment
Industrial Gas Manufacturing
Healthcare Services Contracts
Indian Health Service Procurement

Risk Flags

Limited competition (2 bidders)
Potential for price increases in future renewals

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $122,877.41 to AIRGAS USA, LLC. PARKER AND PEACH SPRINGS MEDICAL GAS SERVICES

Who is the contractor on this award?

The obligated recipient is AIRGAS USA, LLC.

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 $122,877.41.

What is the period of performance?

Start: 2023-03-17. End: 2027-03-31.

What is the historical spending pattern for medical gas services by the Indian Health Service in Arizona?

Analyzing historical spending data for the IHS in Arizona for similar medical gas services would provide crucial context for this $1.23 million award. Without specific historical data, it's difficult to determine if this contract represents an increase, decrease, or stable level of spending. Understanding past contract values, durations, and awarded vendors can reveal trends in pricing, competition, and vendor performance. For instance, if previous contracts were significantly lower in value or awarded to different vendors, it might warrant further investigation into the reasons for the current award's value and vendor selection. Conversely, if spending has been consistent, it suggests a stable demand and market.

How does the per-unit cost of medical gas under this contract compare to market rates for similar services in Arizona?

A detailed comparison of the per-unit cost of medical gases (e.g., per cubic foot or cylinder) under this contract against prevailing market rates in Arizona is essential for a thorough value assessment. This requires access to the specific pricing details within the contract and current market data from industrial gas suppliers operating in the region. Factors such as delivery frequency, volume commitments, and service level agreements can influence per-unit costs. If the contract's per-unit pricing is significantly higher than market benchmarks, it could indicate a potential issue with price negotiation or competition. Conversely, pricing below market rates might suggest favorable terms for the government.

What is Airgas USA, LLC's track record with federal contracts, particularly for medical gas supply?

Investigating Airgas USA, LLC's performance history on federal contracts, especially those involving medical gas supply, is critical. This includes reviewing past contract awards, performance evaluations (e.g., Contractor Performance Assessment Reporting System - CPARS), and any documented issues or disputes. A strong track record with successful past performance suggests reliability and competence. Conversely, a history of performance problems, missed deadlines, or quality issues could indicate a higher risk for this current contract. Understanding their experience with government procurement processes and compliance requirements is also important.

What are the specific types and quantities of medical gases covered under this contract?

The contract specifies 'medical gas services,' but the exact types and quantities of gases procured are not detailed in the provided summary. Understanding this specificity is important for assessing the contract's scope and value. For example, the contract might cover oxygen, nitrous oxide, medical air, and various specialty gases. The quantities required will directly influence the total cost and the vendor's ability to meet demand. A breakdown of the anticipated volumes for each gas type allows for a more accurate comparison with industry standards and historical usage patterns, helping to validate the $1.23 million award amount.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract?

The summary does not detail the specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) governing this medical gas supply contract. These are crucial for ensuring the contractor meets performance expectations and for holding them accountable. Typical KPIs for such services might include on-time delivery rates, purity standards for gases, response times for emergency needs, and equipment maintenance schedules. SLAs define the minimum acceptable performance levels. Without these, it is challenging to objectively assess the contractor's performance and the overall effectiveness of the contract in meeting the IHS's needs.

Industry Classification

NAICS: Manufacturing › Basic Chemical Manufacturing › Industrial Gas Manufacturing

Product/Service Code: MEDICAL SERVICES › OTHER MEDICAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 75H71223R00014

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: L'air Liquide Societe Anonyme Pour L'etude ET L'exploitation DES Procedes Georges Claude

Address: 3737 WORSHAM AVE, LONG BEACH, CA, 90808

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

Financial Breakdown

Contract Ceiling: $155,695

Exercised Options: $122,877

Current Obligation: $122,877

Actual Outlays: $75,818

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline