HHS Indian Health Service Awards $20.1M for Cepheid Equipment Maintenance, Lacking Competition

Contract Overview

Contract Amount: $20,059 ($20.1K)

Contractor: Cepheid

Awarding Agency: Department of Health and Human Services

Start Date: 2025-09-03

End Date: 2027-01-31

Contract Duration: 515 days

Daily Burn Rate: $39/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: COMBINED CEPHEID SERVICE - SN 837600 - SN 1110004400

Place of Performance

Location: FORT DUCHESNE, UINTAH County, UTAH, 84026

State: Utah Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $20,058.71 to CEPHEID for work described as: COMBINED CEPHEID SERVICE - SN 837600 - SN 1110004400 Key points: 1. Significant contract value of $20.1 million for essential equipment maintenance. 2. Sole reliance on Cepheid raises concerns about potential overpricing and lack of innovation. 3. The extended contract duration (over 2 years) increases long-term financial risk. 4. Maintenance services for electronic and precision equipment are critical for healthcare operations.

Value Assessment

Rating: questionable

The contract value of $20.1 million for 515 days of service appears high given the lack of competition. Without market benchmarks or competing bids, it's difficult to ascertain if this pricing is fair or inflated compared to similar maintenance contracts for specialized medical equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded sole-source, indicating no competitive bidding process. This significantly limits price discovery and potentially leads to higher costs for taxpayers as the incumbent provider dictates terms.

Taxpayer Impact: The lack of competition in this sole-source award likely results in a higher cost to taxpayers than a competitively bid contract would yield.

Public Impact

Patients relying on Indian Health Service facilities may experience service disruptions if equipment maintenance is not cost-effective. Taxpayer funds are allocated without the assurance of receiving the best value due to the absence of competition. The long-term reliance on a single vendor could stifle technological advancements in diagnostic equipment maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpricing
Extended contract duration

Positive Signals

Essential service provision
Firm fixed price contract

Sector Analysis

The healthcare sector, particularly specialized medical equipment maintenance, often faces challenges with sole-source contracts due to proprietary technology. Benchmarks for such niche services are difficult to establish without competitive data.

Small Business Impact

The absence of small business participation is noted, as the contract was awarded directly to Cepheid. This limits opportunities for smaller service providers in the maintenance sector.

Oversight & Accountability

The sole-source nature of this award warrants closer oversight to ensure the pricing remains reasonable throughout the contract period and that the government explores competitive options for future needs.

Related Government Programs

Electronic and Precision Equipment Repair and Maintenance
Department of Health and Human Services Contracting
Indian Health Service Programs

Risk Flags

Sole-source award lacks competition
Potential for inflated pricing
Limited transparency in price justification
No small business participation
Extended contract duration increases risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $20,058.71 to CEPHEID. COMBINED CEPHEID SERVICE - SN 837600 - SN 1110004400

Who is the contractor on this award?

The obligated recipient is CEPHEID.

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 $20,058.71.

What is the period of performance?

Start: 2025-09-03. End: 2027-01-31.

What is the justification for awarding this contract sole-source to Cepheid, and were alternative maintenance providers or solutions considered?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or lack of viable alternatives. For this contract, the agency likely cited Cepheid's exclusive rights to service their specific equipment. However, a thorough review should confirm if independent service organizations or alternative maintenance strategies were evaluated before concluding that only Cepheid could fulfill the requirement.

How does the $20.1 million price compare to industry benchmarks for similar equipment maintenance contracts, especially considering the lack of competition?

Without competitive bids, establishing a precise benchmark is challenging. However, the $20.1 million for approximately 17 months of service (515 days) for electronic and precision equipment maintenance appears substantial. Industry averages for specialized medical equipment maintenance can vary widely, but a lack of competition often inflates costs by 15-30% compared to market rates. Further analysis comparing specific service components and equipment types is needed.

What measures are in place to ensure the effectiveness and value of the maintenance services provided by Cepheid under this sole-source contract?

Effectiveness is typically monitored through performance metrics outlined in the contract, such as response times, repair completion rates, and equipment uptime. Value is harder to guarantee without competition. The agency should implement rigorous performance reviews, track service level agreement adherence, and potentially conduct post-award market research to assess if future procurements can be competed to ensure better value.

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: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

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: 904, EAST CARIBBEAN DRIVE, SUNNYVALE, CA, 94089

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: $59,236

Exercised Options: $20,059

Current Obligation: $20,059

Actual Outlays: $7,000

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline