VA's October 2024 Medical Surgical Prime Vendor Spending Reaches $29.6M with Medline Industries

Contract Overview

Contract Amount: $29,554,767 ($29.6M)

Contractor: Medline Industries, LP

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-10-01

End Date: 2024-10-31

Contract Duration: 30 days

Daily Burn Rate: $985.2K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT: MEDICAL SURGICAL PRIME VENDOR EXPENDITURES FOR THE MONTH OF OCTOBER 2024

Place of Performance

Location: NORTHFIELD, COOK County, ILLINOIS, 60093

State: Illinois Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $29.6 million to MEDLINE INDUSTRIES, LP for work described as: EXPRESS REPORT: MEDICAL SURGICAL PRIME VENDOR EXPENDITURES FOR THE MONTH OF OCTOBER 2024 Key points: 1. Significant monthly expenditure on medical surgical supplies. 2. Sole vendor, Medline Industries, LP, dominates this contract. 3. Potential for cost savings through competitive bidding. 4. Focus on surgical and medical instrument manufacturing sector.

Value Assessment

Rating: fair

The $29.6 million expenditure in October represents a substantial outlay. Without competitive benchmarks, assessing the pricing fairness is difficult, but the lack of competition raises concerns.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers compared to a competitive environment.

Taxpayer Impact: The lack of competition in this sole-source contract may result in higher prices, impacting taxpayer funds negatively.

Public Impact

Veterans receive essential medical supplies through this contract. The VA relies on a single vendor for critical medical equipment. Taxpayers fund a significant monthly expenditure without competitive pricing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Sole-source award
High monthly expenditure

Positive Signals

Ensures supply chain for critical medical items
Consistent vendor for medical surgical needs

Sector Analysis

The Department of Veterans Affairs is a major purchaser in the medical surgical instrument manufacturing sector. Benchmarks for similar contracts are difficult to ascertain due to the sole-source nature of this award.

Small Business Impact

There is no indication of small business participation in this specific contract award, as it is a sole-source agreement with a large corporation.

Oversight & Accountability

The VA's procurement process for this sole-source contract warrants oversight to ensure the government is receiving fair value and to explore future competitive opportunities.

Related Government Programs

Surgical and Medical Instrument Manufacturing
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Sole-source award limits competition.
Potential for inflated pricing due to lack of competition.
High monthly expenditure requires careful monitoring.
Lack of transparency in pricing justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $29.6 million to MEDLINE INDUSTRIES, LP. EXPRESS REPORT: MEDICAL SURGICAL PRIME VENDOR EXPENDITURES FOR THE MONTH OF OCTOBER 2024

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 $29.6 million.

What is the period of performance?

Start: 2024-10-01. End: 2024-10-31.

What is the historical pricing trend for this sole-source contract, and how does it compare to market rates for similar supplies?

Without competitive bidding data, assessing historical pricing trends and comparing them to market rates is challenging. A review of past contract modifications and internal cost analyses would be necessary to determine if prices have escalated unreasonably over time or if they align with industry standards for comparable medical surgical supplies.

What steps has the VA taken to justify the sole-source award and ensure it is the most cost-effective solution for taxpayers?

The VA must have documented justification for not competing this contract, likely citing reasons such as urgency, unique capabilities, or lack of viable alternatives. An audit of this justification and a review of market research conducted would be essential to confirm that the sole-source award was indeed the most cost-effective approach and that taxpayer funds are being used responsibly.

Are there opportunities to introduce competition for future contract periods to potentially lower costs and increase vendor options?

Yes, exploring opportunities to introduce competition for future contract periods is crucial. The VA should conduct thorough market research to identify potential alternative vendors and assess the feasibility of breaking down the requirement into smaller, more competitive contracts to foster a more robust and cost-effective procurement environment.

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: $29,554,767

Exercised Options: $29,554,767

Current Obligation: $29,554,767

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10X23D0003

IDV Type: IDC

Timeline