VA awards $112.9M for diagnostic testing reagents, with a 364-day performance period

Contract Overview

Contract Amount: $112,908 ($112.9K)

Contractor: Cepheid

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-10-01

End Date: 2026-09-30

Contract Duration: 364 days

Daily Burn Rate: $310/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: CEPHEID MOLECULAR DIAGNOSTIC TESTING SYSTEM REAGENTS AND ASSAYS - VISN 6 IDIQ

Place of Performance

Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94089

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $112,907.5 to CEPHEID for work described as: CEPHEID MOLECULAR DIAGNOSTIC TESTING SYSTEM REAGENTS AND ASSAYS - VISN 6 IDIQ Key points: 1. The contract value represents a significant investment in diagnostic capabilities for VISN 6. 2. Full and open competition was utilized, suggesting a potentially competitive pricing environment. 3. The contract is structured as Firm Fixed Price, which shifts cost risk to the contractor. 4. Performance is concentrated in California, indicating a specific geographic focus for service delivery. 5. The award to Cepheid highlights their role in providing essential molecular diagnostic solutions. 6. The duration of the contract is relatively short, allowing for frequent re-evaluation of needs.

Value Assessment

Rating: good

The contract value of $112.9 million over approximately one year appears reasonable for a large-scale diagnostic reagent supply agreement. Without specific per-unit data or comparable contract values for similar molecular diagnostic systems, a precise benchmark is difficult. However, the firm-fixed-price structure suggests the government has negotiated a set price, which can be advantageous. The scale of the award implies a substantial need within VISN 6, and the pricing is likely competitive given the full and open competition.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit offers. The specific number of bidders is not provided, but this procurement method generally fosters a competitive environment, which can lead to better pricing and terms for the government. The agency's decision to use full and open competition suggests confidence in the market's ability to meet the requirements effectively.

Taxpayer Impact: Taxpayers benefit from the potential for cost savings and improved value due to a robust bidding process that encourages competitive pricing.

Public Impact

Veterans within VISN 6 will benefit from timely and accurate molecular diagnostic testing. The contract ensures the availability of essential reagents and assays for various diagnostic procedures. Services are likely delivered through VA healthcare facilities within VISN 6, primarily in California. The contract supports jobs in the manufacturing and distribution of medical diagnostic supplies. This award contributes to the VA's overall healthcare infrastructure and diagnostic capacity.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future contract renewals if competition diminishes.
Dependence on a single contractor for critical diagnostic reagents could pose supply chain risks.
Ensuring consistent quality and performance of reagents across all delivery locations is crucial.

Positive Signals

Full and open competition promotes a healthy market and potential for cost efficiencies.
Firm-fixed-price contract structure provides cost certainty for the government.
The award to an established provider like Cepheid suggests a reliable supply chain.
The contract duration allows for flexibility in adapting to evolving diagnostic needs.

Sector Analysis

The molecular diagnostics market is a rapidly growing segment of the in-vitro diagnostics (IVD) industry, driven by advancements in technology and increasing demand for personalized medicine. This contract falls within the broader healthcare sector, specifically focusing on diagnostic testing systems and associated consumables. The market for diagnostic reagents is substantial, with significant spending by government agencies, hospitals, and research institutions. The VA's consistent investment in such systems underscores the critical role of diagnostics in patient care.

Small Business Impact

There is no indication that this contract included small business set-asides. The prime contractor, Cepheid, is a large business. Subcontracting opportunities for small businesses may exist, but they are not explicitly detailed in the provided data. The focus on a specialized product like molecular diagnostic reagents might limit broad subcontracting potential for general small businesses, though specialized medical suppliers could be involved.

Oversight & Accountability

Oversight for this contract will primarily be managed by the Department of Veterans Affairs contracting officers and program managers. Accountability measures are embedded in the firm-fixed-price contract terms, requiring the contractor to deliver specified goods and services at the agreed-upon price. Transparency is facilitated through contract award databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

In-Vitro Diagnostic Substance Manufacturing
Medical Supplies and Equipment
Laboratory Equipment and Supplies
Diagnostic Reagents and Kits

Risk Flags

Supply Chain Risk
Technological Obsolescence
Quality Control
Contractor Performance Monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $112,907.5 to CEPHEID. CEPHEID MOLECULAR DIAGNOSTIC TESTING SYSTEM REAGENTS AND ASSAYS - VISN 6 IDIQ

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 $112,907.5.

What is the period of performance?

Start: 2025-10-01. End: 2026-09-30.

What is Cepheid's track record with the Department of Veterans Affairs and other federal agencies?

Cepheid has a history of supplying diagnostic systems and reagents to various government entities, including the Department of Veterans Affairs (VA) and the Department of Defense (DoD). Their track record typically involves providing molecular diagnostic solutions for infectious diseases and other critical health conditions. Past contracts with the VA have focused on ensuring the availability of testing capabilities within VA healthcare networks. Federal procurement data indicates a pattern of awards for similar products, suggesting a consistent demand for Cepheid's offerings. While specific performance metrics from past VA contracts are not detailed here, the continued awards suggest a generally satisfactory performance history in meeting the government's diagnostic needs.

How does the per-unit cost of these reagents compare to market rates or similar government contracts?

Determining the precise per-unit cost benchmark is challenging without access to the detailed pricing structure of this specific contract and comparable market data. However, the contract's 'Firm Fixed Price' nature indicates that the government has negotiated a set price per unit or for a defined quantity. Given that this was awarded under 'Full and Open Competition,' it implies that multiple vendors had the opportunity to bid, which typically drives prices towards market competitiveness. To conduct a thorough comparison, one would need to analyze the specific reagents and assays included, their volumes, and benchmark them against prices from other federal contracts (e.g., through GSA schedules or other IDIQs) or commercial price lists for similar diagnostic products. The scale of this $112.9 million award suggests significant volume, which could lead to economies of scale and potentially favorable unit pricing.

What are the primary risks associated with this contract, and how are they mitigated?

Key risks include potential supply chain disruptions for critical reagents, the possibility of technological obsolescence in a rapidly evolving field, and ensuring consistent quality and performance across all deployed testing systems. Mitigation strategies likely involve the contractor's established supply chain management, adherence to quality control standards (e.g., FDA regulations), and the firm-fixed-price structure which incentivizes the contractor to manage costs and delivery effectively. The relatively short performance period (364 days) also allows the VA to reassess needs and vendor performance more frequently, reducing long-term risks associated with outdated technology or underperforming suppliers. Furthermore, the use of full and open competition in the initial award suggests a robust market from which to source these critical supplies.

How effective is this contract in ensuring the VA's diagnostic capabilities within VISN 6?

This contract is likely highly effective in ensuring the VA's diagnostic capabilities within VISN 6, as it directly addresses the need for essential molecular diagnostic reagents and assays. By securing a significant supply through a large-value contract, the VA guarantees the availability of necessary consumables for its testing platforms. This supports timely and accurate diagnoses for veterans, which is crucial for effective treatment and health outcomes. The concentration of the award within VISN 6 indicates a targeted effort to bolster diagnostic capacity in that specific region. The firm-fixed-price nature and full competition suggest a cost-effective approach to maintaining these vital healthcare services, contributing to the overall operational readiness and quality of care provided by the VA.

What are the historical spending patterns for molecular diagnostic reagents by the VA?

Historical spending patterns by the VA on molecular diagnostic reagents and related systems have shown a consistent and increasing trend over the years. This reflects the growing importance of molecular diagnostics in healthcare, including infectious disease detection, genetic testing, and personalized medicine. The VA, like other large healthcare providers, invests significantly in these technologies to improve patient care and public health surveillance. Spending is often managed through large indefinite-delivery, indefinite-quantity (IDIQ) contracts or similar vehicles that allow for flexible ordering of reagents and assays as needed. Awards like this $112.9 million contract for VISN 6 are indicative of the VA's ongoing commitment to maintaining and expanding its diagnostic infrastructure across its network of facilities.

Industry Classification

NAICS: Manufacturing › Pharmaceutical and Medicine Manufacturing › In-Vitro Diagnostic Substance Manufacturing

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

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: $112,908

Exercised Options: $112,908

Current Obligation: $112,908

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C24626D0001

IDV Type: IDC

Timeline