VA's May 2025 Medical-Surgical Prime Vendor spending reached $46.6M with Medline Industries, LP

Contract Overview

Contract Amount: $46,587,511 ($46.6M)

Contractor: Medline Industries, LP

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-05-01

End Date: 2025-05-31

Contract Duration: 30 days

Daily Burn Rate: $1.6M/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EXPRESS REPORT: MEDICAL SURGICAL PRIME VENDOR EXPENDITURES FOR THE MONTH OF MAY 2025

Place of Performance

Location: NORTHFIELD, COOK County, ILLINOIS, 60093

State: Illinois Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $46.6 million to MEDLINE INDUSTRIES, LP for work described as: EXPRESS REPORT: MEDICAL SURGICAL PRIME VENDOR EXPENDITURES FOR THE MONTH OF MAY 2025 Key points: 1. The contract represents a significant portion of the VA's medical supply chain, highlighting its critical role. 2. Medline Industries, LP, as the prime vendor, manages a broad catalog of essential medical and surgical items. 3. The firm fixed-price contract type suggests predictable costs for the VA, assuming stable demand. 4. The monthly expenditure of $46.6M indicates substantial and ongoing demand for medical supplies. 5. Competition dynamics for this contract are crucial for ensuring cost-effectiveness and access to a wide range of products. 6. Performance context is vital to understand if the VA is receiving timely deliveries and quality products. 7. Sector positioning shows this contract is a key component of the healthcare supply chain within the federal government.

Value Assessment

Rating: good

The VA's monthly spending of $46.6 million on medical-surgical supplies through its prime vendor program is substantial. Benchmarking this against historical VA spending or similar large-scale healthcare systems would provide a clearer picture of value for money. The firm fixed-price contract type is generally favorable for cost control. However, without specific performance metrics or comparisons to other prime vendor contracts, a definitive value assessment is challenging. The sheer volume suggests potential for economies of scale, but ongoing monitoring of unit prices within the catalog is essential.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 6 bidders suggests a competitive market for medical-surgical prime vendor services. A robust competition level typically drives down prices and encourages innovation. The VA's approach to ensuring broad competition is a positive indicator for achieving favorable pricing and service terms for taxpayers.

Taxpayer Impact: Full and open competition for this significant contract helps ensure that taxpayer dollars are used efficiently by fostering a competitive environment that can lead to better pricing and service quality.

Public Impact

Veterans across the nation benefit from consistent access to necessary medical and surgical supplies. The contract ensures the availability of a wide range of medical, dental, and hospital equipment and supplies. Geographic impact is nationwide, supporting VA medical centers and clinics throughout the United States. Workforce implications include the logistics and distribution personnel required to manage and deliver these supplies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price creep within the catalog over time, despite the fixed-price contract.
Dependence on a single prime vendor could create vulnerabilities in the supply chain.
Ensuring consistent product quality across a vast catalog requires diligent oversight.
The complexity of managing such a large contract necessitates robust administrative resources.
Potential for limited flexibility if new, innovative products are not quickly incorporated.

Positive Signals

Full and open competition at award suggests a strong initial value proposition.
The firm fixed-price contract provides cost predictability for the VA.
A single prime vendor simplifies ordering and logistics for the VA.
The large scale of the contract likely leverages economies of scale.
The contract supports a critical function for veteran healthcare delivery.

Sector Analysis

The medical, dental, and hospital equipment and supplies merchant wholesalers sector is a critical component of the broader healthcare industry. This contract falls within the federal government's significant spending on healthcare supplies, which is essential for maintaining the health and readiness of service members and veterans. Comparable spending benchmarks would involve analyzing other large federal healthcare procurements or prime vendor contracts within civilian healthcare systems to assess efficiency and market competitiveness.

Small Business Impact

While this contract is with a large prime vendor, Medline Industries, LP, the analysis should consider subcontracting opportunities for small businesses. The VA's commitment to small business utilization is often reflected in prime contractor plans. It is important to assess whether the prime vendor actively seeks out and engages small businesses for specialized services or product lines, thereby contributing to the small business ecosystem.

Oversight & Accountability

Oversight for this contract is likely managed by the Department of Veterans Affairs' procurement and program management offices. Accountability measures would include performance metrics, delivery schedules, and quality control standards. Transparency is generally facilitated through contract award databases and reporting requirements. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected within the contract's execution.

Related Government Programs

VA Medical Care Programs
Federal Supply Schedule (FSS) Contracts
Defense Health Agency (DHA) Medical Supplies
General Services Administration (GSA) Schedules

Risk Flags

Potential for supply chain disruption
Ensuring consistent product quality
Price competitiveness over contract life

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $46.6 million to MEDLINE INDUSTRIES, LP. EXPRESS REPORT: MEDICAL SURGICAL PRIME VENDOR EXPENDITURES FOR THE MONTH OF MAY 2025

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 $46.6 million.

What is the period of performance?

Start: 2025-05-01. End: 2025-05-31.

What is the historical spending trend for this specific medical-surgical prime vendor contract over the past three fiscal years?

Analyzing historical spending data for this contract over the past three fiscal years is crucial for understanding expenditure trends and identifying any significant fluctuations. For instance, if spending has steadily increased, it could indicate growing demand, contract modifications, or potential price inflation. Conversely, a decrease might suggest shifts in VA's healthcare delivery models or successful cost-containment efforts. Without specific historical data, it's difficult to contextualize the $46.6 million expenditure for May 2025. A comprehensive review would involve examining monthly or quarterly spending reports, contract modifications, and any associated performance metrics to provide a complete picture of the contract's financial trajectory and its alignment with VA's overall budget.

How does the unit cost of commonly procured items under this contract compare to market rates or other federal contracts?

Comparing unit costs for frequently purchased items under this prime vendor contract against market rates and other federal contracts is essential for assessing value for money. For example, if standard items like gloves, syringes, or basic surgical instruments are consistently priced higher than through other federal channels (like GSA Schedules) or commercial benchmarks, it could indicate a lack of competitive pricing within the prime vendor's catalog. The VA should regularly benchmark prices for a basket of goods to ensure cost-effectiveness. Discrepancies could signal opportunities for renegotiation, seeking alternative sources, or refining the competition strategy for future contract awards to ensure taxpayers receive the best possible value.

What are the key performance indicators (KPIs) used to evaluate Medline Industries, LP's performance under this contract, and what has been their recent performance against these KPIs?

Key Performance Indicators (KPIs) for a medical-surgical prime vendor contract typically include on-time delivery rates, order fill rates, product quality compliance, and responsiveness to inquiries. Evaluating Medline Industries, LP's recent performance against these KPIs is critical to understanding the operational effectiveness of the contract. For instance, consistently high fill rates and on-time deliveries suggest a well-functioning supply chain that supports veteran care. Conversely, declining performance in these areas could signal potential risks, such as stockouts or delays, which could negatively impact patient care and increase overall healthcare costs for the VA. Access to performance reports and audits would provide concrete data on their track record.

What is the total value and duration of the base contract and any exercised options, and how does this compare to the initial solicitation?

Understanding the total value and duration of the base contract, along with any exercised options, provides insight into the long-term commitment and potential financial exposure for the VA. Comparing this to the initial solicitation helps determine if the contract has significantly expanded beyond its original scope, which could be due to increased needs or scope creep. For example, if the contract has seen multiple option periods exercised, extending its duration substantially, it's important to ensure that the pricing remains competitive and that the VA continues to receive good value. This analysis helps in assessing the contract's lifecycle management and its alignment with strategic procurement goals.

Are there any identified risks or challenges associated with Medline Industries, LP's performance or the overall management of this prime vendor contract?

Identifying risks and challenges associated with Medline Industries, LP's performance and the contract's management is crucial for proactive mitigation. Potential risks could include supply chain disruptions (as seen globally in recent years), quality control issues with a vast product catalog, or cybersecurity vulnerabilities if electronic ordering systems are involved. Challenges might also arise from contract administration complexities, ensuring compliance with all regulations, or managing vendor relationships effectively. A thorough risk assessment would involve reviewing past performance reports, audit findings, and any documented issues to ensure the VA has contingency plans in place to maintain uninterrupted access to essential medical supplies.

Industry Classification

NAICS: Wholesale Trade › Professional and Commercial Equipment and Supplies Merchant Wholesalers › Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 36C10X23R0007

Offers Received: 6

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: $46,587,511

Exercised Options: $46,587,511

Current Obligation: $46,587,511

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C10X23D0032

IDV Type: IDC

Timeline