HHS awards $129K sole-source contract for medical equipment maintenance to Cepheid

Contract Overview

Contract Amount: $129,033 ($129.0K)

Contractor: Cepheid

Awarding Agency: Department of Health and Human Services

Start Date: 2026-05-04

End Date: 2026-05-04

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: CEPHEID PREMIUM SERVICE AGREEMENT

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85016

State: Arizona Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $129,032.8 to CEPHEID for work described as: CEPHEID PREMIUM SERVICE AGREEMENT Key points: 1. Contract awarded on a sole-source basis, raising questions about potential lack of competition. 2. The contract value is relatively small, suggesting a focused scope of services. 3. Maintenance services for electronic and precision equipment are critical for healthcare operations. 4. The duration of the contract is one year, indicating a need for ongoing support. 5. The award was a purchase order, a common mechanism for smaller value acquisitions. 6. The contractor, Cepheid, is likely the original equipment manufacturer or a specialized provider.

Value Assessment

Rating: fair

The contract value of $129,032.80 for one year of maintenance is difficult to benchmark without specific details on the equipment covered and the scope of services. Given the sole-source nature, it's challenging to assess if this represents competitive pricing. However, for specialized medical equipment maintenance, this amount could be within a reasonable range if it covers critical, high-value instruments. Further analysis would require understanding the specific services provided and comparing them to industry standards for similar equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source is available or when the agency determines that it is in the public interest to award without competition. The lack of competition means there were no other bidders, and the agency did not have the benefit of price discovery through a competitive bidding process. This approach can sometimes lead to higher prices than would be achieved in a competitive environment.

Taxpayer Impact: Taxpayers may not be receiving the best possible value due to the absence of competitive bidding. The agency did not explore options that could have potentially secured lower pricing or more favorable terms.

Public Impact

The Indian Health Service (IHS) will benefit from this contract by ensuring the continued operational readiness of essential medical equipment. Services include maintenance for electronic and precision equipment, crucial for accurate diagnostics and patient care within IHS facilities. The geographic impact is focused on Arizona, where the contract is administered. This contract supports the healthcare workforce by ensuring the tools they rely on are functional and maintained.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potentially increases costs for taxpayers.
Lack of transparency in the justification for sole-source award.
Dependence on a single contractor for critical maintenance services.

Positive Signals

Ensures continuity of essential medical equipment maintenance for IHS.
Contract awarded to Cepheid, a known entity in the medical device market.
Clear end date for the contract provides a defined period of service.

Sector Analysis

This contract falls within the broader healthcare sector, specifically focusing on the maintenance of medical equipment. The market for medical equipment maintenance is diverse, ranging from original equipment manufacturers (OEMs) like Cepheid to third-party service providers. The size of this specific contract is relatively small, indicating it likely covers a limited number of devices or a specific type of service within an IHS facility in Arizona. Comparable spending benchmarks for such services can vary widely based on the complexity and criticality of the equipment.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the sole-source nature and the specialized services likely required for medical equipment maintenance, it is unlikely that subcontracting opportunities for small businesses would be significant unless Cepheid voluntarily engages them. The primary focus is on ensuring the functionality of specific medical devices rather than broad service delivery that might typically involve a larger small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Indian Health Service contracting officers and program managers within the Department of Health and Human Services. As a purchase order, it is subject to standard procurement regulations and agency internal controls. Transparency is limited due to the sole-source award, and there is no explicit mention of an Inspector General's jurisdiction beyond the standard oversight applicable to all federal contracts.

Related Government Programs

Indian Health Service Medical Equipment Maintenance
Department of Health and Human Services Healthcare Services
Federal Purchase Orders for Maintenance Services
Sole-Source Medical Device Support Contracts

Risk Flags

Sole-source award may indicate limited competition.
Lack of detailed justification for sole-source award.
Potential for higher costs due to lack of competition.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $129,032.8 to CEPHEID. CEPHEID PREMIUM SERVICE AGREEMENT

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 $129,032.8.

What is the period of performance?

Start: 2026-05-04. End: 2026-05-04.

What specific medical equipment does this contract cover, and what is the criticality of this equipment to IHS operations in Arizona?

The provided data indicates the contract covers 'Electronic and Precision Equipment Repair and Maintenance' under NAICS code 811210. However, the specific types of medical equipment are not detailed. Given that the contract is with Cepheid, a company known for molecular diagnostic instruments (e.g., GeneXpert systems), it is highly probable that this agreement pertains to the maintenance and repair of such diagnostic devices. The criticality of this equipment to IHS operations in Arizona would be substantial, as diagnostic tools are fundamental for timely and accurate patient care, disease detection, and treatment planning within healthcare facilities.

What is the justification for awarding this contract on a sole-source basis to Cepheid?

The data explicitly states the contract was 'NOT COMPETED,' indicating a sole-source award. The justification for such an award typically falls under specific exceptions to full and open competition outlined in the Federal Acquisition Regulation (FAR). Common reasons include that only one responsible source is available (e.g., the original equipment manufacturer with unique expertise or proprietary rights), or that it is in the best interest of the government to award without competition due to urgency, specific technical requirements, or limited availability of other sources. Without further documentation from the agency, the precise justification remains unstated but likely relates to Cepheid's unique position as the manufacturer or sole authorized service provider for their specific diagnostic equipment.

How does the $129,032.80 contract value compare to historical spending on similar maintenance services by the Indian Health Service?

Comparing this $129,032.80 contract value to historical spending requires access to detailed historical procurement data for the Indian Health Service (IHS) specifically for Cepheid equipment maintenance. The provided data does not include this historical context. However, as a sole-source contract for a single year, this amount is likely representative of the cost associated with maintaining specialized diagnostic equipment. Without comparative data on previous contracts for similar services or equipment from IHS or other federal healthcare providers, it is difficult to definitively state whether this represents an increase, decrease, or consistent level of spending. Further research into IHS's procurement history for maintenance services would be necessary for a robust comparison.

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

The primary risk associated with a sole-source contract for critical medical equipment maintenance is the potential for inflated costs due to the lack of competitive pressure. The government may end up paying more than it would in a competitive scenario. Another risk is vendor lock-in, where the agency becomes overly reliant on a single provider, potentially limiting flexibility in service levels or future technology adoption. Furthermore, if the sole-source provider experiences financial difficulties or operational issues, it could lead to disruptions in essential maintenance services, impacting patient care. Finally, the absence of competition can sometimes lead to complacency in service quality, although this is mitigated by contract performance monitoring.

What performance metrics or oversight mechanisms are in place to ensure Cepheid delivers adequate maintenance services under this contract?

The provided data does not specify the performance metrics or detailed oversight mechanisms for this particular contract. However, standard federal procurement practices dictate that purchase orders are subject to contract administration by the agency's contracting officer and technical points of contact. These individuals are responsible for monitoring performance, ensuring compliance with contract terms, and approving payments. For a service contract like this, performance might be evaluated based on response times for service calls, successful repair rates, adherence to maintenance schedules, and overall equipment uptime. Any deficiencies would typically be addressed through contract modifications, cure notices, or potentially termination if performance is severely lacking.

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: $129,033

Exercised Options: $129,033

Current Obligation: $129,033

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline