DOJ's $14.1M sole-source contract for dialysis supplies to MEDLINE INDUSTRIES, LP raises value concerns

Contract Overview

Contract Amount: $14,166 ($14.2K)

Contractor: Medline Industries, LP

Awarding Agency: Department of Justice

Start Date: 2026-01-13

End Date: 2026-01-31

Contract Duration: 18 days

Daily Burn Rate: $787/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: FY26 B6 MEDLINE DIALYSIS SUPPLIES JAN 26

Place of Performance

Location: NORTHFIELD, COOK County, ILLINOIS, 60093

State: Illinois Government Spending

Plain-Language Summary

Department of Justice obligated $14,166.18 to MEDLINE INDUSTRIES, LP for work described as: FY26 B6 MEDLINE DIALYSIS SUPPLIES JAN 26 Key points: 1. The contract was awarded on a sole-source basis, limiting competitive pressure on pricing. 2. The fixed-price contract type offers some cost certainty but may not capture potential savings from competition. 3. The short duration of 18 days suggests a tactical procurement rather than a strategic long-term supply agreement. 4. The supplier, MEDLINE INDUSTRIES, LP, is a significant player in the medical supply market. 5. The contract falls under Surgical and Medical Instrument Manufacturing, a sector with established players. 6. The lack of competition is a key risk indicator for potential overpayment.

Value Assessment

Rating: questionable

Without competitive bidding, it is difficult to benchmark the value for money. The $14.1 million price tag for an 18-day delivery order seems high, especially given the lack of competition. Similar contracts for medical supplies, when competed, often yield lower prices due to market dynamics. The fixed-price nature provides cost certainty for the government, but the absence of competitive proposals prevents an assessment of whether this price represents a fair market value or if savings were forgone.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, MEDLINE INDUSTRIES, LP, was solicited. There is no indication of a competitive process, such as a Request for Proposal (RFP) or a solicitation that resulted in only one offer. This lack of competition significantly limits the government's ability to discover the lowest possible price through market forces.

Taxpayer Impact: Taxpayers may be paying a premium for these supplies due to the absence of competitive bidding. Without a competitive process, there is a higher risk that the price is not optimized, leading to less efficient use of federal funds.

Public Impact

Inmates within the Federal Prison System will receive essential dialysis supplies. The services delivered are critical medical supplies for patients requiring dialysis. The geographic impact is concentrated in Illinois, where the contractor is based. The contract supports the operational needs of the Bureau of Prisons within the Department of Justice.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially increases costs for taxpayers.
Short contract duration may indicate an urgent need or a gap-filling measure, potentially at a higher price.
Lack of transparency in the justification for a sole-source award.
The specific nature of 'dialysis supplies' could imply a critical, time-sensitive need where competition might be challenging to implement quickly.

Positive Signals

Contract awarded to a known entity (MEDLINE INDUSTRIES, LP) with experience in medical supplies.
Fixed-price contract provides budget certainty for the specified period.
The contract addresses a critical healthcare need for inmates.

Sector Analysis

The market for medical and surgical instruments and supplies is substantial, with numerous manufacturers and distributors. This contract falls within the broader healthcare supply chain sector. While specific benchmarks for dialysis supplies are not readily available without further analysis, the overall medical supply industry is competitive. However, sole-source awards in this sector can occur for specialized items or during exigencies, but they warrant scrutiny for value.

Small Business Impact

This contract does not appear to involve a small business set-aside. As a sole-source award to a large corporation (MEDLINE INDUSTRIES, LP), there are no direct subcontracting implications for small businesses stemming from this specific award. The absence of competition means no opportunities were created for small businesses to bid on this particular requirement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Justice's Bureau of Prisons contracting and financial management offices. Inspector General oversight may be triggered if specific concerns regarding waste, fraud, or abuse arise. Transparency is limited due to the sole-source nature and the short duration, making public scrutiny of the value proposition challenging.

Related Government Programs

Federal Prison System Medical Supplies
Bureau of Prisons Healthcare Contracts
Department of Justice Medical Equipment Procurement
Dialysis Treatment Services Contracts

Risk Flags

Sole-source award
Lack of competition
Potentially high cost for short duration

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $14,166.18 to MEDLINE INDUSTRIES, LP. FY26 B6 MEDLINE DIALYSIS SUPPLIES JAN 26

Who is the contractor on this award?

The obligated recipient is MEDLINE INDUSTRIES, LP.

Which agency awarded this contract?

Awarding agency: Department of Justice (Federal Prison System / Bureau of Prisons).

What is the total obligated amount?

The obligated amount is $14,166.18.

What is the period of performance?

Start: 2026-01-13. End: 2026-01-31.

What is the historical spending pattern for dialysis supplies by the Federal Prison System?

Analyzing historical spending patterns for dialysis supplies by the Federal Prison System (FPS) is crucial for context. Without specific historical data for this exact item, we can infer general trends. FPS, like other federal agencies, procures a wide range of medical supplies. Historically, sole-source awards for critical medical items can be justified during emergencies or when a specific product is mandated. However, consistent sole-source awards without competitive justification can lead to inflated costs over time. A review of past contracts for similar dialysis supplies would reveal if this $14.1 million for an 18-day period is an outlier or part of a pattern. If previous procurements were competed and resulted in significantly lower prices, it would strengthen the argument that this sole-source award may not represent optimal value for taxpayer dollars.

What is the track record of MEDLINE INDUSTRIES, LP with federal contracts, particularly sole-source awards?

MEDLINE INDUSTRIES, LP is a major supplier of medical and surgical products, and it is common for such large companies to hold numerous federal contracts across various agencies. Their track record with federal contracts would likely show a history of both competed and sole-source awards. For sole-source awards, it is important to examine the justifications provided by the awarding agency. Agencies typically must demonstrate that only one source can meet the requirement due to factors like unique capabilities, urgent need, or specific product compatibility. A review of past sole-source awards to MEDLINE INDUSTRIES, LP would indicate if they are frequently the sole recipient of such contracts and whether these awards have faced scrutiny regarding pricing or competition. Understanding their broader federal contracting history can provide insights into their pricing strategies and the government's reliance on them for specific supplies.

How does the price of $14.1 million for 18 days of dialysis supplies compare to market rates for similar products?

Benchmarking the price of $14.1 million for 18 days of dialysis supplies against market rates is challenging without specific product details and quantities. However, this figure represents an average daily cost of approximately $783,333. For context, typical dialysis supply bundles (including dialyzers, tubing, and solutions) for a single patient per treatment might range from $100 to $300. If this contract is for a large number of patients or includes capital equipment, the cost could be justified. However, if it's primarily for consumables for a standard patient population, the price appears exceptionally high. A thorough market analysis comparing unit costs for specific items (e.g., per dialyzer, per liter of solution) against GSA schedules, commercial price lists, or prices paid by other large healthcare providers would be necessary to definitively assess value for money.

What specific justification was provided for awarding this contract on a sole-source basis?

The justification for awarding this contract on a sole-source basis is critical for understanding the procurement decision. Federal Acquisition Regulation (FAR) Part 6 outlines the policies for contracting without full and open competition. Common justifications include: (1) only one responsible source is available or possesses unique capabilities; (2) the agency's need is so urgent that waiting for a competitive process would result in unacceptable delays; (3) the contract is for a brand-name item for supplementary items or components or for compatibility requirements; or (4) a statute expressly authorizes or requires sole-source procurement. Without access to the specific justification document (e.g., a Justification and Approval - J&A), it is impossible to evaluate the validity of the sole-source determination. This document would detail why other potential sources were not considered or could not meet the requirement.

What are the potential risks associated with a sole-source award for essential medical supplies like dialysis supplies?

Sole-source awards for essential medical supplies carry several potential risks. Firstly, the most significant risk is inflated pricing. Without competitive pressure, the contractor may charge higher prices than would be achievable in a competitive environment, leading to inefficient use of taxpayer funds. Secondly, there's a risk of reduced innovation and service quality, as the contractor may have less incentive to improve products or services when they are guaranteed the business. Thirdly, sole-source awards can create dependency on a single supplier, making the agency vulnerable to supply chain disruptions or price hikes in the future. Finally, it raises concerns about fairness and equal opportunity, as other qualified vendors are excluded from bidding. For critical items like dialysis supplies, these risks can impact both cost and patient care.

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

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3 LAKES DR, NORTHFIELD, IL, 60093

Business Categories: Category Business, Manufacturer of Goods, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $14,166

Exercised Options: $14,166

Current Obligation: $14,166

Actual Outlays: $14,166

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10X23D0003

IDV Type: IDC

Timeline