VA awards $1.13M for PCR molecular testing, bypassing competition for critical lab instruments

Contract Overview

Contract Amount: $1,133,350 ($1.1M)

Contractor: Cepheid

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-04-02

End Date: 2026-09-30

Contract Duration: 181 days

Daily Burn Rate: $6.3K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: PCR MOLECULAR TESTING 6-MONTH

Place of Performance

Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94089

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $1.1 million to CEPHEID for work described as: PCR MOLECULAR TESTING 6-MONTH Key points: 1. The contract's value appears reasonable given the specialized nature of laboratory instruments. 2. Sole-source procurement limits price discovery and potentially increases costs for taxpayers. 3. The short duration suggests a need for immediate or interim supply of testing equipment. 4. Performance is tied to a specific instrument model, indicating potential vendor lock-in. 5. This spending falls within the broader category of medical equipment and laboratory services. 6. The absence of small business participation is noted, with no set-aside or subcontracting mentioned.

Value Assessment

Rating: fair

The $1.13 million award for a 6-month period for PCR molecular testing equipment is difficult to benchmark without more specific details on the instruments. However, the price per day is approximately $6,262. Given the specialized nature of analytical laboratory instruments, this figure may be within a reasonable range, but the lack of competition prevents a definitive value assessment. Without comparable bids or market analysis, it's challenging to ascertain if this represents excellent value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under simplified acquisition procedures (SAP), indicating a sole-source award. The specific justification for this approach is not provided, but it implies that only one vendor, Cepheid, was deemed capable of meeting the requirement. This lack of competition means that the Department of Veterans Affairs did not explore alternative suppliers or negotiate based on multiple offers, potentially leading to a higher price than if the contract had been open to a wider range of bidders.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage competition to secure the best possible pricing, which can result in taxpayers paying more for goods and services than necessary.

Public Impact

Veterans receiving medical care will benefit from the availability of molecular testing capabilities. The contract supports diagnostic services within the Department of Veterans Affairs healthcare system. The primary geographic impact is within the VA facilities in California, where the contract is managed. This procurement supports the operational needs of clinical laboratory staff.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs.
Potential for vendor lock-in with a specific instrument model.
Limited transparency on the justification for sole-source award.

Positive Signals

Addresses a critical need for molecular testing in healthcare.
Procurement is managed by the Department of Veterans Affairs, a major federal agency.
Contract has a defined end date, allowing for future re-evaluation of procurement strategy.

Sector Analysis

The procurement of PCR molecular testing equipment falls under the broader medical device and laboratory instrument manufacturing sector. This sector is characterized by high research and development costs, stringent regulatory requirements, and often, specialized proprietary technologies. The market size for diagnostic testing equipment is substantial, driven by increasing demand for accurate and rapid disease detection. This contract represents a specific instance of federal spending within this vital healthcare sub-sector, supporting diagnostic capabilities.

Small Business Impact

This contract was not awarded to a small business, nor does it appear to include any small business subcontracting requirements. The sole-source nature of the award further limits opportunities for small businesses to participate. This suggests that the primary focus was on acquiring a specific product from an established supplier, rather than leveraging the small business ecosystem for this particular procurement.

Oversight & Accountability

Oversight for this purchase order would typically fall under the Department of Veterans Affairs' internal procurement and financial management systems. The specific justification for the sole-source award would be subject to internal review and potentially audits by the VA Office of Inspector General. Transparency is limited due to the lack of a competitive bidding process and public justification for the sole-source decision.

Related Government Programs

Department of Veterans Affairs Medical Equipment Purchases
Federal Laboratory and Diagnostic Equipment Spending
Molecular Diagnostic Testing Contracts
Sole-Source Federal Procurements

Risk Flags

Sole-source award lacks competitive pricing.
Potential for vendor lock-in.
Limited transparency on procurement justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $1.1 million to CEPHEID. PCR MOLECULAR TESTING 6-MONTH

Who is the contractor on this award?

The obligated recipient is CEPHEID.

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 $1.1 million.

What is the period of performance?

Start: 2026-04-02. End: 2026-09-30.

What is the specific type of PCR molecular testing instrument being procured, and what are its key capabilities?

The provided data indicates the procurement is for 'PCR MOLECULAR TESTING 6-MONTH' with the contractor being 'CEPHEID'. Cepheid is known for its GeneXpert systems, which are widely used for rapid molecular diagnostics. These systems can perform various tests, including those for infectious diseases, by automating nucleic acid extraction, amplification, and detection. The specific model and its full suite of capabilities are not detailed in the provided data, but it is understood to be an analytical laboratory instrument crucial for diagnostic testing within the VA healthcare system.

What is the justification for awarding this contract on a sole-source basis?

The data explicitly states the contract was 'NOT COMPETED UNDER SAP' (Simplified Acquisition Procedures) and is categorized as 'sole-source'. While the specific justification is not provided, common reasons for sole-source awards include unique capabilities of a single vendor, urgent and compelling needs where competition is not feasible, or when only one responsible source is available. For specialized laboratory equipment like that likely provided by Cepheid, the justification might stem from proprietary technology, existing infrastructure compatibility, or specific performance requirements that only one manufacturer can meet. A formal Justification for Other Than Full and Open Competition (JOFOC) would typically be required and documented internally by the VA.

How does the $1.13 million cost compare to similar PCR molecular testing equipment procurements by the federal government?

Benchmarking this $1.13 million award for a 6-month period is challenging without knowing the exact instrument model, quantity, and included services. However, the daily cost averages around $6,262. Federal procurement databases (like FPDS) would need to be queried for comparable sole-source or competed awards for similar Cepheid GeneXpert systems or equivalent diagnostic platforms. Given the specialized nature and potential proprietary technology of molecular diagnostic instruments, prices can vary significantly. The absence of competition here prevents a direct value-for-money comparison against potentially lower bids from other vendors.

What is the expected impact of this contract on the VA's diagnostic capabilities and patient care in California?

This contract is expected to enhance or maintain the VA's molecular diagnostic capabilities, particularly in California, by ensuring the availability of critical PCR testing equipment. Such testing is vital for the rapid and accurate diagnosis of infectious diseases and other conditions, enabling timely treatment decisions and improving patient outcomes. The 6-month duration suggests this might be to cover an immediate need, supplement existing capacity, or bridge a gap until a longer-term solution is in place. Enhanced diagnostic capacity directly supports the VA's mission to provide comprehensive healthcare services to veterans.

Are there any performance risks associated with this sole-source contract for laboratory instruments?

Performance risks for this sole-source contract primarily revolve around the vendor's ability to deliver and maintain the specified equipment and services as agreed. Since competition was bypassed, there's less external pressure on the contractor to excel beyond contractual minimums. Potential risks include delays in delivery, equipment malfunctions, inadequate technical support, or the instrument not performing to the VA's expectations. The VA's internal quality assurance and acceptance testing processes are crucial for mitigating these risks. Furthermore, reliance on a single vendor for critical diagnostic tools can create a dependency that might be difficult to break if performance issues arise.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Analytical Laboratory Instrument Manufacturing

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 36C24226Q0379

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Danaher Corporation

Address: 904, EAST CARIBBEAN DRIVE, SUNNYVALE, CA, 94089

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: $1,133,350

Exercised Options: $1,133,350

Current Obligation: $1,133,350

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline