VA awards $2M for sterile services equipment, raising questions about competition and value

Contract Overview

Contract Amount: $2,032,691 ($2.0M)

Contractor: Steris Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-03-10

End Date: 2027-03-09

Contract Duration: 729 days

Daily Burn Rate: $2.8K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MOBILE CENTRAL STERILE SERVICES 689, BASE PLUS (4)

Place of Performance

Location: WEST HAVEN, NEW HAVEN County, CONNECTICUT, 06516

State: Connecticut Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.0 million to STERIS CORPORATION for work described as: MOBILE CENTRAL STERILE SERVICES 689, BASE PLUS (4) Key points: 1. The contract was awarded on a sole-source basis, limiting potential cost savings. 2. Pricing appears to be at market rate, but a lack of competition hinders definitive value assessment. 3. The duration of the contract (729 days) suggests a long-term need for the equipment. 4. This award falls within the broader category of medical equipment rental and leasing. 5. The Department of Veterans Affairs is the sole agency involved in this procurement. 6. No small business set-aside was utilized for this procurement.

Value Assessment

Rating: fair

The total award amount of $2,032,691.16 for sterile services equipment over approximately two years appears to be within a reasonable range for such specialized machinery. However, without competitive bids, it is difficult to definitively benchmark the value for money. The pricing is assumed to be fair market value, but the lack of comparison data due to the sole-source nature of the award prevents a robust assessment against alternative offerings or potential discounts achievable through a competitive process.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a 'NOT COMPETED' method, indicating a sole-source procurement. This means that only one vendor, STERIS CORPORATION, was solicited for this requirement. The lack of competition means that the Department of Veterans Affairs did not explore offers from other potential suppliers, which could lead to higher prices than might be achieved in an open market. The absence of multiple bids limits the agency's ability to ensure the most cost-effective solution.

Taxpayer Impact: Taxpayers may have paid a premium due to the absence of competitive bidding. Without a competitive process, there is less pressure on the contractor to offer the lowest possible price, potentially leading to less efficient use of federal funds.

Public Impact

Veterans receiving care at facilities managed by the Department of Veterans Affairs will benefit from the availability of sterile medical equipment. The contract ensures the provision of essential sterile processing services, critical for patient safety and infection control. The geographic impact is primarily within the facilities served by the Department of Veterans Affairs, likely across various locations in Connecticut. The contract supports the operational needs of healthcare professionals within the VA system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in higher costs for taxpayers.
Sole-source awards can limit innovation by excluding potential new entrants to the market.
Reliance on a single vendor for critical equipment could pose supply chain risks.

Positive Signals

Ensures availability of essential sterile services equipment for veteran healthcare.
The selected vendor, STERIS CORPORATION, is a known entity in the medical equipment sector.
The contract is for a fixed price, providing cost certainty for the duration.

Sector Analysis

The market for sterile processing equipment and services is a specialized segment within the broader healthcare industry. This contract falls under the 'Other Commercial and Industrial Machinery and Equipment Rental and Leasing' category, specifically focusing on medical applications. The healthcare equipment sector is characterized by high technological standards, regulatory compliance, and significant capital investment. Comparable spending benchmarks are difficult to establish without more specific details on the equipment type and service level, but the overall market for medical equipment leasing and maintenance is substantial.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to include specific subcontracting requirements for small businesses. The award to STERIS CORPORATION, a large entity, suggests that the procurement was focused on specialized capabilities rather than small business participation. This means that opportunities for small businesses to participate in this specific contract are limited, potentially impacting the small business ecosystem in this niche market.

Oversight & Accountability

Oversight for this contract will be managed by the Department of Veterans Affairs. Accountability measures are typically embedded within the contract terms, including performance standards and delivery schedules. Transparency is facilitated through public contract databases where award details are recorded. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to this contract were identified.

Related Government Programs

Department of Veterans Affairs Medical Equipment Procurement
Healthcare Equipment Leasing
Sterile Processing Services Contracts
Sole-Source Medical Supply Awards

Risk Flags

Sole-source award
Lack of competition
Potential for overpayment

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.0 million to STERIS CORPORATION. MOBILE CENTRAL STERILE SERVICES 689, BASE PLUS (4)

Who is the contractor on this award?

The obligated recipient is STERIS CORPORATION.

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 $2.0 million.

What is the period of performance?

Start: 2025-03-10. End: 2027-03-09.

What is the track record of STERIS CORPORATION in fulfilling similar contracts with the Department of Veterans Affairs or other federal agencies?

STERIS CORPORATION is a well-established provider of sterile processing solutions and medical devices. A review of federal procurement data indicates that STERIS has a history of receiving contracts from various federal agencies, including the Department of Veterans Affairs, for similar equipment and services. While specific performance metrics for past contracts are not detailed here, their continued presence in the federal marketplace suggests a generally satisfactory performance history. However, a deeper dive into past contract performance, including any reported issues or successes, would be necessary for a comprehensive assessment of their track record.

How does the awarded price compare to similar sterile services equipment contracts awarded by the VA or other agencies in the past year?

Direct price comparison is challenging due to the sole-source nature of this award and the lack of specific equipment details. Typically, competitive solicitations allow for benchmarking against multiple bids. Without such a comparison, it's difficult to ascertain if $2,032,691.16 represents a competitive price. However, the absence of competition means that the potential for cost savings that would arise from a bidding process has not been realized. Future analysis could involve comparing this award to other VA contracts for similar equipment categories, adjusting for contract duration and service scope.

What are the primary risks associated with awarding this contract on a sole-source basis?

The primary risks associated with this sole-source award include potential overpayment due to the lack of competitive pressure, limited access to potentially more innovative solutions from other vendors, and increased reliance on a single supplier which could create supply chain vulnerabilities. If STERIS CORPORATION experiences operational issues, it could directly impact the VA's ability to provide essential sterile services. Furthermore, the lack of competition may disincentivize the contractor from offering the most cost-effective terms.

What is the expected effectiveness of the sterile services provided under this contract in supporting VA healthcare operations?

The effectiveness of the sterile services provided under this contract is expected to be high, given the critical nature of sterile processing in healthcare. STERIS CORPORATION is a specialized provider, and the contract's purpose is to ensure the availability of essential equipment for maintaining sterile environments. This directly supports patient safety by preventing infections and ensuring that medical instruments are safe for use. The contract's duration suggests a commitment to sustained operational effectiveness for the VA's healthcare facilities.

How does this contract's spending compare to historical VA spending on sterile services equipment or similar machinery rentals?

Historical spending data for the VA on sterile services equipment or similar machinery rentals would provide valuable context. Without access to that specific historical data, it is difficult to make a direct comparison. However, the $2.03 million award over approximately two years suggests a significant investment. If historical spending patterns show similar investments for comparable needs, it might indicate consistent resource allocation. Conversely, a substantial increase or decrease compared to past trends could warrant further investigation into the reasons behind the shift.

Industry Classification

NAICS: Real Estate and Rental and Leasing › Commercial and Industrial Machinery and Equipment Rental and Leasing › Other Commercial and Industrial Machinery and Equipment Rental and Leasing

Product/Service Code: LEASE/RENT EQUIPMENT › LEASE OR RENTAL OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 36C24125Q0273

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 5960, HEISLEY ROAD, MENTOR, OH, 44060

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

Financial Breakdown

Contract Ceiling: $6,563,752

Exercised Options: $2,032,691

Current Obligation: $2,032,691

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline