VA Awards $281K Contract for Alinity M System Maintenance to Abbott Laboratories

Contract Overview

Contract Amount: $281,250 ($281.3K)

Contractor: Abbott Laboratories Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-06-01

End Date: 2027-05-31

Contract Duration: 1,825 days

Daily Burn Rate: $154/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: SERVICE AND MAINTENANCE FOR ALINITY M SYSTEM LOCATED AT WEST HAVEN VAMC

Place of Performance

Location: SANTA CLARA, SANTA CLARA County, CALIFORNIA, 95054

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $281,250 to ABBOTT LABORATORIES INC. for work described as: SERVICE AND MAINTENANCE FOR ALINITY M SYSTEM LOCATED AT WEST HAVEN VAMC Key points: 1. Contract awarded for essential maintenance of a critical medical system. 2. Sole source award to the original equipment manufacturer raises cost concerns. 3. Long-term contract duration may limit future competitive opportunities. 4. High-value contract for specialized equipment maintenance.

Value Assessment

Rating: questionable

The contract value of $281,250 over five years for maintenance of a single system appears high, especially given it's a sole-source award. Benchmarking against similar service contracts for complex medical equipment is difficult without more data, but the lack of competition suggests potential for overpayment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award to Abbott Laboratories, the likely original equipment manufacturer. This limits price discovery and potentially leads to higher costs for the government compared to a competitive bidding process.

Taxpayer Impact: The lack of competition in this sole-source award may result in taxpayers paying a premium for the maintenance services, as there was no market pressure to drive down costs.

Public Impact

Ensures continued operation of the Alinity M system at West Haven VAMC, crucial for patient diagnostics. Potential for increased healthcare costs due to sole-source procurement. Veterans may experience service disruptions if maintenance is not adequately performed. Limited transparency in pricing due to non-competitive award.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Long contract duration
Potential for price inflation

Positive Signals

Ensures critical system uptime
Awarded to OEM for specialized knowledge

Sector Analysis

This contract falls under the 'Other Electronic and Precision Equipment Repair and Maintenance' category. Spending in this sector is vital for ensuring the operational readiness of complex medical equipment within federal healthcare facilities, but often involves specialized knowledge that can lead to sole-source awards.

Small Business Impact

The contract was not awarded to a small business. There is no indication that small businesses were considered or had an opportunity to compete for this specialized maintenance service.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny to ensure fair pricing and prevent potential waste. Further oversight is needed to confirm the necessity of a non-competitive approach and the reasonableness of the costs incurred.

Related Government Programs

Other Electronic and Precision Equipment Repair and Maintenance
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Sole-source award limits competition.
Potential for inflated pricing.
Long contract duration may stifle future cost savings.
Lack of transparency in price negotiation.
No small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $281,250 to ABBOTT LABORATORIES INC.. SERVICE AND MAINTENANCE FOR ALINITY M SYSTEM LOCATED AT WEST HAVEN VAMC

Who is the contractor on this award?

The obligated recipient is ABBOTT LABORATORIES INC..

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 $281,250.

What is the period of performance?

Start: 2022-06-01. End: 2027-05-31.

What is the justification for the sole-source award, and what steps were taken to ensure the price is fair and reasonable?

The justification for a sole-source award typically rests on the unique capabilities or proprietary nature of the product or service, often held by the original equipment manufacturer (OEM). Agencies must document extensive market research to prove no other source can meet the requirement. For price reasonableness, agencies compare the proposed price to historical prices, other government contracts, or commercial price lists, though this is more challenging without competition.

What is the risk of system failure or performance degradation given the long-term, non-competitive contract?

The primary risk is that the lack of competition could lead to complacency from the contractor, potentially impacting service quality or response times. While the OEM has inherent knowledge, without competitive pressure, there's a reduced incentive to proactively innovate or offer superior service. Performance metrics and strict adherence to the contract's service level agreements are crucial to mitigate this risk.

How does this contract contribute to the overall value of medical equipment maintenance for the VA, considering the cost and duration?

The value is derived from ensuring the continuous operation of a critical diagnostic system, directly impacting patient care. However, the sole-source nature and five-year duration raise questions about cost-effectiveness. Without competitive benchmarking, it's difficult to ascertain if taxpayers are receiving optimal value, as the price may be inflated compared to what could be achieved through competition.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3200 LAKESIDE DR, SANTA CLARA, CA, 95054

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $307,875

Exercised Options: $281,250

Current Obligation: $281,250

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline