HHS awards $172.5K for equipment maintenance, highlighting a sole-source procurement

Contract Overview

Contract Amount: $172,532 ($172.5K)

Contractor: Thermo Fisher Scientific (asheville) LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2020-03-25

End Date: 2025-03-31

Contract Duration: 1,832 days

Daily Burn Rate: $94/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: THERMO FISHER SCIENTIFIC (ASHVILLE) LLC:1107294 [20-005847]

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20892

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $172,531.73 to THERMO FISHER SCIENTIFIC (ASHEVILLE) LLC for work described as: THERMO FISHER SCIENTIFIC (ASHVILLE) LLC:1107294 [20-005847] Key points: 1. Value for money appears fair given the fixed-price nature and duration, but lacks competitive benchmarking. 2. Sole-source procurement limits price discovery and potentially increases costs for taxpayers. 3. Risk indicators are moderate, with a long contract duration and a single awardee. 4. Performance context is limited due to the nature of the service (maintenance). 5. Sector positioning is within the broader healthcare support services, specifically equipment maintenance. 6. The contract's value is relatively small in the context of overall federal spending.

Value Assessment

Rating: fair

The contract value of $172,531.73 over approximately 5 years (March 2020 - March 2025) suggests an average annual cost of around $34,500. Without comparable contracts or detailed service scope, a precise value-for-money assessment is difficult. However, the firm-fixed-price structure provides cost certainty for the government. Benchmarking against similar maintenance contracts for specialized equipment would be necessary for a more robust evaluation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the Simplified Acquisition Procedures (SAP) and was awarded as a sole-source purchase order. This indicates that the agency likely identified a single source capable of providing the required maintenance services, possibly due to proprietary technology, specialized expertise, or existing infrastructure. The lack of competition means there was no opportunity for multiple vendors to bid, which could limit price negotiation and potentially lead to higher costs than a competitive process.

Taxpayer Impact: Sole-source awards mean taxpayers do not benefit from the cost savings that can arise from competitive bidding. The government may pay a premium when competition is absent.

Public Impact

The National Institutes of Health (NIH) benefits from the continued maintenance of critical equipment. Services delivered include the repair and maintenance of specialized electronic and precision equipment. The geographic impact is primarily within Maryland, where the contract is managed. Workforce implications are minimal, likely involving a small team from the contractor for maintenance tasks.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing.
Long contract duration without re-competition could reduce incentive for contractor efficiency.
Reliance on a single source can create vendor lock-in.

Positive Signals

Firm-fixed-price contract provides cost predictability.
Contract awarded to a known entity, potentially Thermo Fisher Scientific, suggesting familiarity.
Long-term maintenance agreement ensures operational continuity for essential equipment.

Sector Analysis

This contract falls within the broader healthcare and scientific equipment sector, specifically focusing on maintenance and repair services for precision electronic equipment. The market for such services is often specialized, with a few key players possessing the necessary technical expertise and certifications. Federal spending in this area supports the operational readiness of research institutions and healthcare facilities.

Small Business Impact

The contract was not set aside for small businesses, and there is no indication of subcontracting requirements for small businesses. This award does not appear to directly benefit the small business ecosystem.

Oversight & Accountability

As a purchase order, oversight is managed through the contracting officer at NIH. Transparency is limited due to the sole-source nature. There is no explicit mention of specific Inspector General jurisdiction for this particular award, though general HHS OIG oversight would apply.

Related Government Programs

Federal IT and equipment maintenance contracts
National Institutes of Health procurement
Sole-source procurements

Risk Flags

Sole-source award limits competition and price discovery.
Long contract duration without re-competition.
Lack of detailed service scope and performance metrics in provided data.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $172,531.73 to THERMO FISHER SCIENTIFIC (ASHEVILLE) LLC. THERMO FISHER SCIENTIFIC (ASHVILLE) LLC:1107294 [20-005847]

Who is the contractor on this award?

The obligated recipient is THERMO FISHER SCIENTIFIC (ASHEVILLE) LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $172,531.73.

What is the period of performance?

Start: 2020-03-25. End: 2025-03-31.

What is the specific type of equipment being maintained under this contract?

The contract's North American Industry Classification System (NAICS) code is 811219, which covers 'Other Electronic and Precision Equipment Repair and Maintenance.' While the specific equipment is not detailed in the provided data, this code suggests services related to a wide range of electronic devices, scientific instruments, and precision machinery. Given the awarding agency is the National Institutes of Health (NIH), it is highly probable that the equipment pertains to laboratory instruments, diagnostic tools, or research-specific electronic apparatus critical for medical and biological research conducted by the NIH.

How does the annual cost of this contract compare to industry benchmarks for similar maintenance services?

The annual cost for this contract averages approximately $34,500 ($172,531.73 / 5 years). Benchmarking this against industry standards is challenging without knowing the exact type and complexity of the equipment. However, for specialized scientific or medical equipment, annual maintenance contracts can range significantly, often from 5% to 20% of the equipment's acquisition cost. If the equipment is high-value, this annual cost might be considered reasonable. A more precise comparison would require details on the equipment's original price and the specific maintenance tasks included (e.g., preventative vs. corrective maintenance, response times, parts included).

What are the potential risks associated with a sole-source award for equipment maintenance?

Sole-source awards for equipment maintenance carry several risks. Primarily, the absence of competition can lead to inflated prices, as the contractor faces no pressure to offer the most cost-effective solution. It also reduces the government's leverage in negotiating terms and service levels. Furthermore, reliance on a single provider can create vendor lock-in, making it difficult and potentially costly to switch providers in the future, especially if the contractor holds proprietary knowledge or parts. This can also impact service quality if the contractor becomes complacent due to the lack of competitive threat.

What is Thermo Fisher Scientific's track record with federal government contracts, particularly with NIH?

Thermo Fisher Scientific is a major global supplier of scientific instrumentation, reagents, and consumables, and has a significant history of contracting with the U.S. federal government, including the NIH. While specific details of their past performance on federal contracts are not provided here, their established presence suggests a substantial portfolio of awards. Companies of this size typically have extensive experience fulfilling government requirements across various agencies. A deeper analysis would involve reviewing their contract history for performance ratings, past disputes, and the types of goods and services previously provided to federal entities.

Could this maintenance contract have been fulfilled by a small business, and were small business considerations explored?

The data indicates this contract was awarded as a sole-source purchase order and was not set aside for small businesses (ss: false, sb: false). While Thermo Fisher Scientific is a large corporation, the nature of specialized equipment maintenance can sometimes be performed by small, niche businesses. However, given the sole-source determination, it implies that the agency identified Thermo Fisher Scientific as the only viable option, potentially due to specific technical requirements, existing equipment compatibility, or unique service capabilities that smaller businesses may not have possessed or been able to demonstrate for this particular need. A review of the justification for the sole-source award would clarify if small business capabilities were assessed.

What is the historical spending trend for similar equipment maintenance services at NIH?

Analyzing historical spending trends for similar equipment maintenance services at NIH requires access to broader federal procurement data beyond this single contract. However, generally, spending on maintenance and repair for scientific and medical equipment is a consistent requirement for research institutions like NIH. Factors influencing these trends include the growth of research initiatives, the acquisition of new technologies, and budget allocations. It's common for agencies to maintain long-term relationships with key equipment vendors for maintenance to ensure operational continuity and leverage specialized knowledge, which can lead to consistent, albeit potentially increasing, spending in this category over time.

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, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 20-005847

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Thermo Fisher Scientific Inc.

Address: 28 SCHENCK PKWY STE 400, ASHEVILLE, NC, 28803

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: $172,532

Exercised Options: $172,532

Current Obligation: $172,532

Actual Outlays: $131,135

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline