DoD's $31.8M Contract for Surgical Instruments: Long Duration, Limited Competition Raises Concerns
Contract Overview
Contract Amount: $31,840,278 ($31.8M)
Contractor: Integrated Medical Systems, in
Awarding Agency: Department of Defense
Start Date: 2002-09-30
End Date: 2013-01-29
Contract Duration: 3,774 days
Daily Burn Rate: $8.4K/day
Competition Type: NOT COMPETED
Number of Offers Received: 1
Pricing Type: FIRM FIXED PRICE
Sector: Healthcare
Place of Performance
Location: SIGNAL HILL, LOS ANGELES County, CALIFORNIA, 90755
Plain-Language Summary
Department of Defense obligated $31.8 million to INTEGRATED MEDICAL SYSTEMS, IN for work described as: Key points: 1. Significant spending of $31.8 million over a decade. 2. Limited competition suggests potential for higher costs. 3. Long contract duration (3774 days) may hinder innovation and price adjustments. 4. Sector: Healthcare/Medical Instruments manufacturing.
Value Assessment
Rating: questionable
The total award of $31.8 million over nearly 10 years is substantial. Without clear benchmarks or competitive pricing data, it's difficult to definitively assess value. The lack of competition is a primary driver for this assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: limited
The contract was 'NOT COMPETED,' indicating a limited competition approach. This significantly impacts price discovery, as there was no active bidding process to drive down costs or ensure the best value was obtained.
Taxpayer Impact: The lack of competition likely resulted in taxpayers paying more than they would have under a fully competitive scenario.
Public Impact
Long-term reliance on a single vendor for critical medical supplies. Potential for outdated technology or equipment due to extended contract. Impact on smaller businesses unable to compete for such a large, limited-scope contract.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Lack of competition
- Long contract duration
- Potential for price inflation
Positive Signals
- Consistent supply of medical instruments
Sector Analysis
The contract falls within the Surgical and Medical Instrument Manufacturing sector (NAICS 339112). Spending in this sector is critical for healthcare delivery, but long-term, non-competitive awards can stifle market innovation and lead to suboptimal pricing.
Small Business Impact
The 'NOT COMPETED' status and long duration likely excluded small businesses from participating. This type of award structure does not foster opportunities for small and disadvantaged businesses in the medical instrument manufacturing sector.
Oversight & Accountability
The long duration and lack of competition suggest potential weaknesses in oversight. Regular reviews of contract necessity, performance, and pricing would be crucial to ensure continued value and accountability.
Related Government Programs
- Surgical and Medical Instrument Manufacturing
- Department of Defense Contracting
- Department of the Army Programs
Risk Flags
- Lack of competitive bidding
- Extended contract duration
- Potential for price escalation
- Limited transparency on justification for non-competition
Tags
surgical-and-medical-instrument-manufact, department-of-defense, ca, dca, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $31.8 million to INTEGRATED MEDICAL SYSTEMS, IN. See the official description on USAspending.
Who is the contractor on this award?
The obligated recipient is INTEGRATED MEDICAL SYSTEMS, IN.
Which agency awarded this contract?
Awarding agency: Department of Defense (Department of the Army).
What is the total obligated amount?
The obligated amount is $31.8 million.
What is the period of performance?
Start: 2002-09-30. End: 2013-01-29.
What was the justification for not competing this contract, and were alternative solutions explored?
The justification for not competing this contract is not provided in the data. Typically, sole-source or limited competition is reserved for unique circumstances, such as proprietary technology or urgent needs. Exploring alternative solutions and ensuring robust justification is critical for accountability and value.
How does the unit cost of these instruments compare to market rates, given the lack of competition?
Without competitive bids, it is challenging to establish a precise market rate comparison. The lack of competition inherently limits price discovery, suggesting that the government may not have achieved the most favorable pricing. Benchmarking against similar, competitively procured contracts would be necessary for a valid assessment.
What mechanisms were in place to ensure the quality and effectiveness of the medical instruments over the contract's 10-year span?
The provided data does not detail quality assurance mechanisms. However, for a contract of this duration and criticality, robust quality control, performance monitoring, and adherence to relevant medical device regulations would be essential. The government should have had provisions for inspection and acceptance to ensure effectiveness.
Industry Classification
NAICS: Manufacturing › Medical Equipment and Supplies Manufacturing › Surgical and Medical Instrument Manufacturing
Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP
Competition & Pricing
Extent Competed: NOT COMPETED
Offers Received: 1
Pricing Type: FIRM FIXED PRICE (J)
Contractor Details
Address: 1 SPAR YARD STREET, NEW LONDON, CT, 02
Business Categories: Category Business, Small Business, Special Designations, U.S.-Owned Business
Contract Characteristics
Cost or Pricing Data: YES
Timeline
Start Date: 2002-09-30
Current End Date: 2013-01-29
Potential End Date: 2013-01-29 00:00:00
Last Modified: 2013-10-22
Other Department of Defense Contracts
- Federal Contract — $51.3B (Humana Government Business Inc)
- Lrip LOT 12 Advance Acquisition Contract — $35.1B (Lockheed Martin Corporation)
- SSN 802 and 803 Long Lead Time Material — $34.7B (Electric Boat Corporation)
- 200204!008532!1700!AF600 !naval AIR Systems Command !N0001902C3002 !A!N! !N! !20011026!20120430!008016958!008016958!834951691!n!lockheed Martin Corporation !lockheed Blvd !fort Worth !tx!76108!27000!439!48!fort Worth !tarrant !texas !+000026000000!n!n!018981928201!ac15!rdte/Aircraft-Eng/Manuf Develop !a1a!airframes and Spares !2ama!jast/Jsf !336411!E! !3! ! ! ! ! !99990909!B! ! !A! !a!n!r!2!002!n!1a!a!n!z! ! !N!C!N! ! ! !a!a!a!a!000!a!c!n! ! ! !Y! !N00019!0001! — $34.2B (Lockheed Martin Corporation)
- KC-X Modernization Program — $32.0B (THE Boeing Company)