VA's June 2022 Medical Surgical Prime Vendor Spending Reached $27.8M, Primarily with Medline Industries, LP

Contract Overview

Contract Amount: $27,762,951 ($27.8M)

Contractor: Medline Industries, LP

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-06-01

End Date: 2022-06-30

Contract Duration: 29 days

Daily Burn Rate: $957.3K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT:MEDICAL SURGICAL PRIME VENDOR EXPENDITURES FOR THE MONTH OF JUNE 2022..

Place of Performance

Location: NORTHFIELD, COOK County, ILLINOIS, 60093

State: Illinois Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $27.8 million to MEDLINE INDUSTRIES, LP for work described as: EXPRESS REPORT:MEDICAL SURGICAL PRIME VENDOR EXPENDITURES FOR THE MONTH OF JUNE 2022.. Key points: 1. The contract focuses on medical and surgical supplies, a critical area for healthcare delivery. 2. Medline Industries, LP is the primary contractor, indicating a significant relationship with the VA. 3. The contract type is 'Full and Open Competition After Exclusion of Sources', suggesting a specific procurement history. 4. Spending for this period was substantial, highlighting the ongoing need for these supplies. 5. The fixed-price nature of the contract provides cost predictability for the VA. 6. Geographic focus is Illinois, where the vendor is based.

Value Assessment

Rating: good

The reported spending of $27.8 million for June 2022 represents a significant monthly expenditure for medical and surgical supplies. Benchmarking this against similar prime vendor contracts would provide a clearer picture of value for money. However, the firm fixed-price contract type suggests that costs were determined upfront, which can be advantageous for budget management. The absence of specific performance metrics in the provided data makes a detailed assessment of efficiency challenging, but the consistent need for these supplies implies a baseline level of effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded under 'Full and Open Competition After Exclusion of Sources'. This indicates that while the competition was intended to be broad, there were specific reasons for excluding certain potential sources. The exact number of bidders is not provided, making it difficult to fully assess the level of competition. This procurement approach might suggest a specialized need or a history with specific vendors that led to the exclusion of others, potentially impacting price discovery.

Taxpayer Impact: The 'limited' competition level, stemming from the exclusion of sources, could mean that taxpayers did not benefit from the broadest possible price competition. This might result in higher costs than if all potential suppliers had been allowed to bid.

Public Impact

Veterans are the primary beneficiaries, receiving essential medical and surgical supplies. The contract ensures the availability of a wide range of medical and surgical products for VA facilities. The geographic impact is centered around Illinois, the state of the primary contractor, Medline Industries, LP. The contract supports jobs within the medical supply chain, including manufacturing, logistics, and distribution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of detailed performance metrics makes it hard to assess efficiency.
The 'exclusion of sources' in competition could limit price competitiveness.
Reliance on a single prime vendor for a month's supply raises questions about supply chain resilience if issues arise with Medline.

Positive Signals

Firm fixed-price contract provides cost certainty.
Ensures consistent availability of critical medical supplies for veterans.
Medline Industries, LP is a well-established supplier in the healthcare market.

Sector Analysis

The medical surgical supply industry is a large and critical sector within healthcare. This contract falls under the 'Surgical and Medical Instrument Manufacturing' (NAICS 339112) category. The market is characterized by numerous manufacturers and distributors, with prime vendor contracts being a common method for large healthcare systems, like the VA, to procure a broad range of supplies efficiently. Spending in this sector is consistently high due to the ongoing demand for healthcare services.

Small Business Impact

The provided data does not indicate if this contract included small business set-asides or subcontracting goals. As a prime vendor contract, it's possible that Medline Industries, LP utilizes a network of suppliers, which could include small businesses. However, without specific details on subcontracting plans or set-aside provisions, the direct impact on the small business ecosystem remains unclear.

Oversight & Accountability

Oversight for VA contracts typically involves program managers within the VA, contract officers, and potentially the VA Office of Inspector General (OIG) for audits and investigations. Transparency is generally maintained through contract databases like FPDS. The firm fixed-price nature of this award simplifies some aspects of oversight by focusing on delivery and adherence to the agreed price, rather than cost justification.

Related Government Programs

VA Medical Equipment and Supplies Contracts
Prime Vendor Contracts
Medical Supply Chain Management
Federal Healthcare Procurement

Risk Flags

Competition level may be limited due to 'exclusion of sources'.
Lack of detailed performance metrics hinders full value assessment.
Potential single point of failure if supply chain issues arise with the prime vendor.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $27.8 million to MEDLINE INDUSTRIES, LP. EXPRESS REPORT:MEDICAL SURGICAL PRIME VENDOR EXPENDITURES FOR THE MONTH OF JUNE 2022..

Who is the contractor on this award?

The obligated recipient is MEDLINE INDUSTRIES, LP.

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $27.8 million.

What is the period of performance?

Start: 2022-06-01. End: 2022-06-30.

What is the historical spending trend for this specific prime vendor contract with the VA?

To assess the historical spending trend, one would need to analyze expenditure data for this contract over multiple periods (e.g., fiscal years, previous months). The provided data is a snapshot for June 2022 ($27.8 million). A trend analysis would involve comparing this figure to spending in prior months and years to identify patterns of increase, decrease, or stability. This would help determine if the current spending level is typical, an anomaly, or indicative of a growing/shrinking need for these supplies. Factors such as changes in VA patient volume, new medical technologies, or shifts in procurement strategies could influence historical spending.

How does Medline Industries, LP's pricing compare to other major medical surgical prime vendors serving the federal government?

A direct price comparison requires access to detailed pricing data for similar contracts awarded to other prime vendors (e.g., Cardinal Health, McKesson) by the VA or other federal agencies. This would involve benchmarking the unit prices of common medical and surgical items procured under this contract against those in comparable contracts. Factors such as contract volume, delivery terms, and specific product formulations can influence price variations. Without this comparative data, it's difficult to definitively state whether Medline's pricing represents superior or inferior value for money. The 'Full and Open Competition After Exclusion of Sources' clause also complicates direct comparisons, as it suggests unique circumstances surrounding this award.

What are the key performance indicators (KPIs) used to evaluate Medline Industries, LP's performance under this contract?

The provided data summary does not include specific Key Performance Indicators (KPIs) for this contract. Typically, for medical surgical prime vendor contracts, KPIs might include on-time delivery rates, order accuracy, fill rates (percentage of items available from stock), product quality compliance, and responsiveness to urgent requests. The VA would have established these KPIs during the contract negotiation phase. Evaluating Medline's performance would involve tracking these metrics over time and comparing them against the contractual requirements. Consistent achievement of these KPIs is crucial for ensuring the uninterrupted supply of critical medical items to veterans.

What is the total annual spending by the VA on medical surgical prime vendors, and how does this contract contribute to it?

Determining the total annual VA spending on medical surgical prime vendors requires aggregating data from all such contracts across the entire fiscal year. The $27.8 million reported for June 2022 represents one month's expenditure for what appears to be a significant prime vendor relationship, likely Medline Industries, LP. If this monthly spending is representative of a full year (factoring in potential seasonal variations), it could suggest an annual spend in the range of $330+ million for this single contract. The VA likely has multiple prime vendor contracts to cover diverse geographic regions and supply needs, meaning total annual spending could be substantially higher, potentially in the billions, depending on the scope and number of contracts.

What specific types of medical and surgical supplies are covered under this prime vendor contract?

The contract designation 'MEDICAL SURGICAL PRIME VENDOR EXPENDITURES' and the NAICS code '339112' (Surgical and Medical Instrument Manufacturing) indicate a broad scope of supplies. This typically encompasses a wide array of items including, but not limited to, surgical instruments, disposable medical supplies (gloves, masks, syringes), diagnostic equipment, implants, hospital furniture, and potentially pharmaceuticals or related consumables. Prime vendor contracts are designed to be comprehensive, acting as a one-stop shop for healthcare facilities. The exact catalog of items would be detailed in the contract's Statement of Work (SOW) or associated product lists.

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: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

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: $27,762,951

Exercised Options: $27,762,951

Current Obligation: $27,762,951

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10X22D0003

IDV Type: IDC

Timeline