VA awards $31.4M for surgical instrument repair, with 3 bidders competing for a 3-year firm-fixed-price contract

Contract Overview

Contract Amount: $31,438 ($31.4K)

Contractor: Agiliti Health Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-04-01

End Date: 2027-03-31

Contract Duration: 364 days

Daily Burn Rate: $86/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: SURGICAL INSTRUMENTS SERVICE AND REPAIR

Place of Performance

Location: AUGUSTA, KENNEBEC County, MAINE, 04330

State: Maine Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $31,438.13 to AGILITI HEALTH INC for work described as: SURGICAL INSTRUMENTS SERVICE AND REPAIR Key points: 1. Contract value appears reasonable given the 3-year duration and the specialized nature of surgical instrument maintenance. 2. Competition was present, with three bidders participating, suggesting a degree of market interest and potential for price discovery. 3. The firm-fixed-price structure shifts performance risk to the contractor, AGILITI HEALTH INC. 4. This contract supports the Department of Veterans Affairs' mission to provide healthcare services to veterans. 5. The North American Industry Classification System (NAICS) code 811210 indicates a focus on repair and maintenance of electronic and precision equipment. 6. The contract is set to expire in April 2027, with a potential for follow-on work depending on performance and future needs.

Value Assessment

Rating: good

The contract value of $31.4 million over three years for surgical instrument repair services appears to be within a reasonable range for specialized medical equipment maintenance. Benchmarking against similar contracts is challenging without more specific details on the types and volume of instruments serviced. However, the presence of multiple bidders suggests that the pricing is likely competitive. The firm-fixed-price nature of the contract provides cost certainty for the VA.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was competed under the Simplified Acquisition Procedures (SAP), indicating a full and open competition process for acquisitions below a certain threshold. Three bidders participated in this competition, which suggests a healthy level of interest from qualified contractors in providing these specialized services. The competition likely contributed to achieving a fair market price for the services rendered.

Taxpayer Impact: The competitive nature of this award is beneficial for taxpayers, as it helps ensure that the government is not overpaying for essential surgical instrument repair services.

Public Impact

Veterans receiving care at VA facilities will benefit from properly maintained and functional surgical instruments. The contract ensures the continuity of essential surgical services by supporting the maintenance of critical medical equipment. The geographic impact is primarily within the service areas of the Department of Veterans Affairs facilities that utilize these instruments, likely nationwide. The contract supports jobs within the specialized field of medical equipment repair and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for scope creep if not clearly defined in the BPA call.
Dependence on a single contractor for critical repair services could pose a risk if performance issues arise.

Positive Signals

Firm-fixed-price contract shifts cost risk to the contractor.
Multiple bidders indicate a competitive market for these services.
Contract duration provides stability for service provision.

Sector Analysis

The market for medical equipment repair and maintenance is a specialized segment within the broader healthcare services industry. This contract falls under the Electronic and Precision Equipment Repair and Maintenance sector (NAICS 811210). The demand for such services is driven by the continuous need to maintain the functionality and safety of sophisticated medical devices used in healthcare settings. Spending in this area is critical for ensuring patient safety and operational efficiency within healthcare systems, including federal agencies like the VA.

Small Business Impact

The provided data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, AGILITI HEALTH INC, is likely a larger entity. There is no explicit information regarding subcontracting plans for small businesses within this award. The impact on the small business ecosystem would depend on whether AGILITI HEALTH INC engages small businesses as subcontractors, which is not detailed here.

Oversight & Accountability

Oversight for this contract would typically be managed by the contracting officer and the program office within the Department of Veterans Affairs. Accountability is established through the firm-fixed-price contract terms, performance standards, and delivery schedules. Transparency is facilitated through federal procurement databases where contract awards are reported. The Inspector General's office within the VA may conduct audits or investigations if performance concerns or potential fraud are identified.

Related Government Programs

Medical Equipment Maintenance Services
Surgical Supply Chain Management
Veterans Health Administration Operations
Federal Healthcare Procurement

Risk Flags

Potential for performance degradation over contract life.
Dependency on a single contractor for critical services.
Risk of unforeseen cost increases for the contractor impacting service quality.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $31,438.13 to AGILITI HEALTH INC. SURGICAL INSTRUMENTS SERVICE AND REPAIR

Who is the contractor on this award?

The obligated recipient is AGILITI HEALTH 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 $31,438.13.

What is the period of performance?

Start: 2026-04-01. End: 2027-03-31.

What is the historical spending pattern for surgical instrument service and repair by the Department of Veterans Affairs?

Analyzing historical spending for surgical instrument service and repair by the VA is crucial for understanding trends and ensuring current contract value. Without access to specific historical contract data for this exact service, a comprehensive analysis is difficult. However, general trends in federal healthcare spending indicate a consistent need for maintenance and repair of medical equipment to ensure operational readiness and patient safety. The VA, as a large healthcare provider, would likely have recurring expenditures in this area. Comparing the current $31.4 million award over three years to previous contract values for similar services, if available, would reveal whether spending has increased, decreased, or remained stable. Factors such as inflation, changes in the volume or complexity of surgical procedures, and technological advancements in surgical instruments could influence these spending patterns over time. A detailed review of past solicitations and awards for surgical instrument repair would provide a clearer picture of the VA's historical investment in this critical support function.

How does the number of bidders (3) compare to typical competition levels for similar specialized repair services within the federal government?

A competition level of three bidders for specialized repair services like surgical instruments can be considered moderate. For highly niche or technically demanding services, fewer bidders might be expected due to specialized expertise, certifications, or equipment requirements. Conversely, for more common or less complex services, a higher number of bidders would be typical. The federal government often aims for full and open competition, ideally with multiple responsive bidders to foster price competition and ensure the best value. Three bidders suggest that the market is sufficiently interested and capable of providing the service, preventing a sole-source situation. However, it is less competitive than a scenario with five or more bidders, which might drive prices down further. The specific nature of surgical instrument repair, requiring precision and adherence to strict standards, could naturally limit the pool of qualified contractors, making three bidders a reasonable outcome in this context.

What are the key performance indicators (KPIs) likely included in this contract to measure contractor performance?

Key Performance Indicators (KPIs) for a contract involving surgical instrument service and repair would focus on ensuring the reliability, safety, and timely return of critical medical equipment. Likely KPIs would include: 1. **Turnaround Time:** The average time taken to repair instruments from the point of receipt to return to service. This is critical for minimizing disruption to surgical schedules. 2. **Quality of Repair:** Measured by defect rates or callbacks (instruments returned for the same issue shortly after repair), ensuring repairs are effective and lasting. 3. **Compliance:** Adherence to manufacturer specifications, regulatory standards (e.g., FDA requirements for medical device servicing), and infection control protocols. 4. **Customer Satisfaction:** Feedback from VA medical staff regarding the service provided, responsiveness, and overall experience. 5. **On-Time Delivery:** Ensuring instruments are returned within the agreed-upon timeframe. Failure to meet these KPIs could result in contractually defined remedies, such as service level credits or, in severe cases, termination.

What is the potential risk associated with relying on AGILITI HEALTH INC for surgical instrument repair, given this is a single award BPA call?

The primary risk associated with a single award BPA call, even if competed, is contractor dependency. If AGILITI HEALTH INC experiences financial difficulties, operational disruptions (e.g., natural disasters affecting their facilities), or significant performance issues, the VA could face a critical gap in surgical instrument repair services. This could lead to delays in surgeries, increased costs if emergency repairs are needed from less competitive sources, or the use of suboptimal equipment. While the contract is firm-fixed-price, mitigating some financial risk for the VA, performance failures remain a concern. The VA's mitigation strategies would include robust contract surveillance, clear performance standards, and contingency planning. However, the inherent risk of relying on one entity for a vital service remains a key consideration throughout the contract's life.

How does the firm-fixed-price (FFP) contract type influence the risk and cost management for both the VA and AGILITI HEALTH INC?

The Firm-Fixed-Price (FFP) contract type places the majority of the cost risk on the contractor, AGILITI HEALTH INC. This means that the contractor is obligated to perform the work for the agreed-upon price, regardless of their actual costs incurred. If their costs exceed the fixed price (due to unforeseen issues, inefficiencies, or rising material costs), their profit margin will decrease, or they could incur a loss. Conversely, if their costs are lower than anticipated, their profit margin increases. For the VA, the FFP contract provides significant cost certainty. The total cost of the service is known upfront, simplifying budgeting and financial planning. This structure incentivizes the contractor to manage their costs efficiently and perform the work effectively to maximize their profit. However, the VA assumes the risk that the initial price might be too high if the contractor is overly conservative in their pricing or if market conditions change unfavorably for the VA after the price is set.

Industry Classification

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

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

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 36C24125Q0206

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 11095 VIKING DR, EDEN PRAIRIE, MN, 55344

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

Financial Breakdown

Contract Ceiling: $31,438

Exercised Options: $31,438

Current Obligation: $31,438

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C24125A0041

IDV Type: BPA

Timeline