NINDS awards $117.5K for Leica confocal microscope maintenance, raising questions on competition and value

Contract Overview

Contract Amount: $117,532 ($117.5K)

Contractor: Leica Microsystems Inc.

Awarding Agency: Department of Health and Human Services

Start Date: 2024-02-22

End Date: 2027-02-21

Contract Duration: 1,095 days

Daily Burn Rate: $107/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: PREVENTATIVE MAINTENANCE AND SERVICE AGREEMENT FOR A NINDS LEICA STELLARIS 8 CONFOCAL MICROSCOPY SYSTEM (SERIAL NUMBER 8300000413)

Place of Performance

Location: ROCKVILLE, MONTGOMERY County, MARYLAND, 20852

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $117,532.22 to LEICA MICROSYSTEMS INC. for work described as: PREVENTATIVE MAINTENANCE AND SERVICE AGREEMENT FOR A NINDS LEICA STELLARIS 8 CONFOCAL MICROSCOPY SYSTEM (SERIAL NUMBER 8300000413) Key points: 1. The contract value appears reasonable for a specialized microscopy system maintenance agreement. 2. Limited competition raises concerns about potential overpricing and reduced value for taxpayer funds. 3. The firm-fixed-price structure mitigates some cost overrun risks. 4. This contract supports critical research infrastructure at the National Institutes of Health. 5. The duration of the agreement aligns with typical service contracts for high-value scientific equipment. 6. The vendor is the original equipment manufacturer, suggesting specialized knowledge but also potential for a lack of competitive pricing.

Value Assessment

Rating: fair

The contract value of $117,532.22 for a three-year preventative maintenance agreement for a specialized confocal microscope appears within a reasonable range for such high-tech scientific equipment. However, without more specific benchmarks for this particular model and service level, a definitive value assessment is challenging. The lack of competition is a significant factor that prevents a robust comparison to market rates and could indicate that the government is not achieving the best possible price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the simplified acquisition procedures, indicating a sole-source award to Leica Microsystems Inc. This approach is often taken when a single vendor possesses the unique expertise, proprietary knowledge, or necessary parts to service specialized equipment. However, it significantly limits price discovery and may result in higher costs for the government compared to a competitively bid scenario.

Taxpayer Impact: Sole-source awards mean taxpayers may be paying a premium, as there was no opportunity for multiple vendors to bid and drive down the price through competition.

Public Impact

Researchers at the National Institutes of Health (NIH) benefit from uninterrupted access to advanced microscopy capabilities. The contract ensures the continued operation of a Leica Stellaris 8 Confocal Microscopy System, vital for biomedical research. This supports ongoing scientific investigations within the National Institute of Neurological Disorders and Stroke (NINDS). The maintenance agreement helps maintain the integrity and accuracy of research data generated using the equipment. The primary beneficiaries are the scientific community and patients who stand to gain from research advancements.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated pricing.
Sole-source award limits opportunities for alternative service providers.
Potential for vendor lock-in with specialized equipment maintenance.

Positive Signals

Firm-fixed-price contract provides cost certainty.
Agreement ensures availability of critical research equipment.
Vendor is the original equipment manufacturer, implying specialized expertise.

Sector Analysis

The contract falls within the scientific and medical equipment repair and maintenance sector. This sector is characterized by high-value, specialized equipment requiring manufacturer-specific knowledge and parts. Spending in this area is driven by the need for advanced research tools in government agencies like NIH. Benchmarks for such specialized maintenance can vary widely based on equipment complexity and vendor pricing strategies, but manufacturer-provided service agreements are common.

Small Business Impact

This contract does not appear to involve a small business set-aside. As a sole-source award to a large manufacturer, there are no direct subcontracting opportunities for small businesses indicated within this specific award. The focus is on specialized maintenance provided by the original equipment manufacturer.

Oversight & Accountability

The contract is a purchase order issued by the Department of Health and Human Services, National Institutes of Health. Oversight would typically involve contract officers ensuring adherence to terms and conditions, and potentially program managers verifying service delivery. Transparency is limited due to the sole-source nature of the award, with details primarily available through federal procurement databases.

Related Government Programs

NIH Equipment Maintenance Contracts
Confocal Microscopy Service Agreements
Scientific Instrument Maintenance
Federal Purchase Orders for Equipment Services

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $117,532.22 to LEICA MICROSYSTEMS INC.. PREVENTATIVE MAINTENANCE AND SERVICE AGREEMENT FOR A NINDS LEICA STELLARIS 8 CONFOCAL MICROSCOPY SYSTEM (SERIAL NUMBER 8300000413)

Who is the contractor on this award?

The obligated recipient is LEICA MICROSYSTEMS INC..

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 $117,532.22.

What is the period of performance?

Start: 2024-02-22. End: 2027-02-21.

What is the track record of Leica Microsystems Inc. in providing maintenance services for similar microscopy systems to federal agencies?

Leica Microsystems Inc. is the original equipment manufacturer (OEM) for the Stellaris 8 Confocal Microscopy System. As an OEM, they possess the proprietary knowledge, specialized tools, and genuine replacement parts necessary for servicing their equipment. Federal agencies frequently engage OEMs for maintenance of high-value, complex scientific instruments to ensure optimal performance and minimize downtime. While specific contract details for other agencies are not provided here, it is common practice for agencies like NIH, NSF, and various research laboratories within the Department of Defense and Department of Energy to contract with OEMs for such services. The primary concern with OEM-provided maintenance, especially when sole-sourced, is the potential for higher costs compared to third-party service providers, though the latter may not always possess the same level of specialized expertise or warranty coverage.

How does the annual cost of this maintenance agreement compare to similar contracts for advanced confocal microscopes?

The annual cost for this preventative maintenance agreement is approximately $39,177 ($117,532.22 / 3 years). Benchmarking this cost accurately is challenging without access to a comprehensive database of similar contracts for the Leica Stellaris 8 model or comparable high-end confocal microscopes. However, advanced scientific instrumentation maintenance contracts, especially those from OEMs, can range significantly. Factors influencing cost include the specific service level agreement (e.g., response time, parts coverage, number of service visits), the age and complexity of the instrument, and the vendor's pricing structure. Given the specialized nature of this equipment and the sole-source award, it is plausible that this cost is within the expected range for OEM service, but without competitive bids, it's difficult to ascertain if it represents the best value for taxpayer dollars.

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

The primary risks associated with a sole-source award for specialized equipment maintenance include: 1. **Higher Costs:** Without competition, the vendor has less incentive to offer the lowest possible price, potentially leading to inflated costs for the government. 2. **Limited Innovation/Service Options:** The government is tied to the single provider's service offerings, potentially missing out on more innovative or cost-effective solutions from other vendors. 3. **Vendor Lock-in:** This can create dependency on the sole provider for future maintenance, upgrades, and parts, making it difficult and costly to switch providers later. 4. **Reduced Accountability:** While the contract still has terms, the lack of competitive pressure might subtly reduce the vendor's urgency to provide exceptional service compared to a competitive environment. For this specific contract, the risk is that NIH may be paying more than necessary for the maintenance of the Leica Stellaris 8 system.

What is the expected impact of this contract on the research capabilities of NINDS?

This contract is crucial for maintaining the operational readiness and optimal performance of the Leica Stellaris 8 Confocal Microscopy System at NINDS. Confocal microscopy is a vital tool for neurobiological research, enabling scientists to visualize cellular structures and processes in high resolution. By ensuring preventative maintenance and timely service, this agreement helps to minimize unexpected equipment failures and downtime. This continuity is essential for the progress of ongoing research projects, allowing scientists to collect reliable data without significant interruptions. Ultimately, the contract directly supports NINDS's mission to advance the understanding, diagnosis, and treatment of neurological disorders.

Are there any historical spending patterns with Leica Microsystems Inc. for similar services at NIH or other agencies?

Without access to specific historical spending data for Leica Microsystems Inc. at NIH or other federal agencies for similar microscopy maintenance, a detailed analysis of spending patterns is not possible. However, it is a common practice for federal research institutions like NIH to procure maintenance and service agreements for high-value scientific equipment directly from the original equipment manufacturers (OEMs), such as Leica Microsystems. These agreements are often sole-source due to the specialized nature of the equipment. Historical spending would likely show a pattern of such awards for complex instruments. The key analytical question would be whether these historical sole-source awards have consistently represented good value or if competitive bidding on similar items has yielded better pricing in the past, which would highlight the potential risk in this current sole-source award.

Industry Classification

NAICS: Other Services (except Public Administration) › Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) Repair and Maintenance › Commercial and Industrial Machinery and Equipment (except Automotive and Electronic) 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: 75N95024Q00139

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Danaher Corporation

Address: 10 PARKWAY NORTH, DEERFIELD, IL, 60015

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

Financial Breakdown

Contract Ceiling: $205,053

Exercised Options: $117,532

Current Obligation: $117,532

Actual Outlays: $76,280

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline