VA awards $5.89M sole-source contract for electrosurgical unit maintenance, raising value concerns

Contract Overview

Contract Amount: $5,890 ($5.9K)

Contractor: Proaim Americas, LLC.

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-04-02

End Date: 2027-04-07

Contract Duration: 370 days

Daily Burn Rate: $16/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: ERBE VIO3 - ELECTROSURGICAL UNIT FULL SERVICE COVERAGE ERBE APC3 - ARGON PLASMA COAGULATION FULL SERVICE

Place of Performance

Location: ELLISVILLE, SAINT LOUIS County, MISSOURI, 63011

State: Missouri Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $5,890 to PROAIM AMERICAS, LLC. for work described as: ERBE VIO3 - ELECTROSURGICAL UNIT FULL SERVICE COVERAGE ERBE APC3 - ARGON PLASMA COAGULATION FULL SERVICE Key points: 1. Contract awarded on a sole-source basis, limiting price competition and potentially increasing costs. 2. The contract duration of over one year suggests a need for ongoing critical equipment support. 3. Maintenance services for specialized medical equipment are essential for patient care continuity. 4. The fixed-price contract type aims to provide cost certainty for the government. 5. Lack of competition indicates potential risks related to contractor performance and pricing. 6. The Department of Veterans Affairs relies on such services to maintain its medical infrastructure.

Value Assessment

Rating: questionable

The contract value of $5.89 million for a 370-day period for electrosurgical unit maintenance appears high given the sole-source nature. Without competitive bids, it is difficult to benchmark the pricing against market rates or similar contracts. The absence of competition suggests that the government may not be achieving the best possible value for this service. Further analysis would be needed to determine if the pricing is justified by the specialized nature of the equipment and the contractor's expertise.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the simplified acquisition procedures, indicating it was awarded directly to PROAIM AMERICAS, LLC. The sole-source award means there was no opportunity for other vendors to bid on this requirement. This lack of competition can lead to higher prices and reduced innovation, as the contractor faces no pressure to offer competitive terms. It also raises questions about whether the government adequately explored all available sources.

Taxpayer Impact: Taxpayers may be paying a premium for these services due to the absence of competitive bidding. The government did not leverage market forces to secure the most cost-effective solution.

Public Impact

Veterans receiving care at VA facilities will benefit from the continued operational status of critical electrosurgical equipment. The contract ensures the full service coverage for ERBE VIO3 and ERBE APC3 electrosurgical units. Services are likely to be delivered across VA facilities within the contractor's service area, potentially impacting Missouri. The contract supports the maintenance of advanced medical technology, indirectly supporting healthcare professionals.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potentially leads to overpayment.
Lack of competition raises concerns about contractor performance incentives.
High contract value without competitive benchmarking warrants scrutiny.
Limited transparency into the justification for sole-source award.

Positive Signals

Contract ensures critical medical equipment remains operational for veteran care.
Fixed-price contract provides cost certainty for the awarded period.
Contractor is responsible for full service coverage, reducing VA's internal maintenance burden.

Sector Analysis

The market for medical equipment maintenance and repair is specialized, often requiring certified technicians and specific manufacturer knowledge. Contracts for such services are crucial for healthcare providers, including the Department of Veterans Affairs, to ensure the reliability and longevity of expensive, critical equipment. The size of this contract, at $5.89 million, indicates a significant need for ongoing support for a specific type of electrosurgical unit, suggesting a substantial installed base or high utilization within the VA system.

Small Business Impact

This contract was awarded as a sole-source purchase order and does not appear to include specific small business set-aside provisions. The lack of competition means there is no direct subcontracting opportunity for small businesses through a competitive bidding process. The impact on the small business ecosystem is minimal in terms of direct award, but it highlights a reliance on a single, potentially larger, entity for specialized maintenance services.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting officers and program managers. As a sole-source award, the justification and necessity for the procurement would be subject to internal VA review and potentially audits by the VA Office of Inspector General. Transparency is limited due to the non-competitive nature, making public oversight more challenging. Accountability rests on the contractor's adherence to the fixed-price terms and service level agreements.

Related Government Programs

Medical Equipment Maintenance Services
Electrosurgical Unit Support
Veterans Affairs Healthcare Procurement
Sole-Source Medical Contracts
Precision Equipment Repair

Risk Flags

Sole-source award lacks competitive justification.
Potential for overpayment due to lack of competition.
Dependence on a single contractor for critical equipment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $5,890 to PROAIM AMERICAS, LLC.. ERBE VIO3 - ELECTROSURGICAL UNIT FULL SERVICE COVERAGE ERBE APC3 - ARGON PLASMA COAGULATION FULL SERVICE

Who is the contractor on this award?

The obligated recipient is PROAIM AMERICAS, LLC..

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 $5,890.

What is the period of performance?

Start: 2026-04-02. End: 2027-04-07.

What is the specific justification provided by the VA for awarding this contract on a sole-source basis?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified when only one responsible source can provide the required supplies or services, such as when the equipment is highly specialized, proprietary, or requires unique expertise only available from a single contractor. The Department of Veterans Affairs would have documented this justification, likely citing the specific nature of the ERBE VIO3 and ERBE APC3 electrosurgical units and the need for manufacturer-authorized or highly specialized maintenance. Without access to the full contract file or justification documentation, it is impossible to verify the validity of the sole-source determination.

How does the $5.89 million contract value compare to historical spending on similar maintenance services by the VA or other federal agencies?

Comparing the $5.89 million contract value requires access to historical spending data for similar electrosurgical unit maintenance services across the federal government. The provided data indicates this is a 370-day contract, suggesting an annual cost of approximately $5.75 million (calculated as $5.89M / 370 days * 365 days). Without benchmark data for the maintenance of ERBE VIO3 and APC3 units, or comparable high-end electrosurgical equipment, it's difficult to definitively state if this value is high or low. However, given the sole-source nature, there is an inherent risk that the price may not be as competitive as it could be if the contract were competed. Further research into similar sole-source awards for specialized medical equipment maintenance would be necessary for a robust comparison.

What are the key performance indicators (KPIs) or service level agreements (SLAs) included in this contract to ensure contractor performance?

The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) for this contract. However, for a full service coverage contract of critical medical equipment, typical SLAs would likely include response times for service calls, equipment uptime guarantees, preventative maintenance schedules, and turnaround times for repairs. The fixed-price nature of the contract suggests that PROAIM AMERICAS, LLC is responsible for delivering these services within the agreed-upon scope and quality standards. The Department of Veterans Affairs would monitor adherence to these SLAs to ensure the electrosurgical units remain operational and that the value proposition of the contract is met.

What is the track record of PROAIM AMERICAS, LLC in performing similar maintenance contracts for the federal government?

Information regarding PROAIM AMERICAS, LLC's specific track record with federal maintenance contracts is not detailed in the provided data. To assess their performance history, one would typically review past contract awards, performance evaluations (such as Contractor Performance Assessment Reporting System - CPARS), and any history of disputes or contract terminations. Given this is a sole-source award, it might imply a pre-existing relationship or a demonstrated capability that the VA deemed essential. A thorough review of federal procurement databases and performance records would be necessary to fully understand their past performance and suitability for this critical role.

What is the potential risk associated with relying on a single contractor for the maintenance of critical electrosurgical equipment?

The primary risk associated with relying on a single contractor, as in this sole-source award, is the potential for reduced competition leading to inflated prices and diminished incentives for the contractor to provide exceptional service or innovate. If PROAIM AMERICAS, LLC experiences financial difficulties, operational issues, or decides to exit the market, the Department of Veterans Affairs could face significant disruption in maintaining its critical electrosurgical equipment. This could lead to extended downtime, impacting patient care and potentially requiring an emergency, costly procurement process to find an alternative provider. The lack of alternative options also weakens the VA's negotiating position for future contracts.

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: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Proaim Americas LLC.

Address: 16024 MANCHESTER RD STE 200, ELLISVILLE, MO, 63011

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Minority Owned Business, Other Minority Owned Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $16,570

Exercised Options: $5,890

Current Obligation: $5,890

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline