VA awards $12.2M contract for oxygen tanks and liquid nitrogen, extending services through April 2027

Contract Overview

Contract Amount: $12,231 ($12.2K)

Contractor: RCG of North Carolina, LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-04-07

End Date: 2027-04-06

Contract Duration: 364 days

Daily Burn Rate: $34/day

Competition Type: COMPETED UNDER SAP

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: LEASE AND REFILL OF TYPE E AND H OXYGEN TANKS AND LIQUID NITROGEN. OPTION YEAR 4

Place of Performance

Location: FAYETTEVILLE, CUMBERLAND County, NORTH CAROLINA, 28301

State: North Carolina Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $12,230.75 to RCG OF NORTH CAROLINA, LLC for work described as: LEASE AND REFILL OF TYPE E AND H OXYGEN TANKS AND LIQUID NITROGEN. OPTION YEAR 4 Key points: 1. Contract provides essential industrial gases for medical use, supporting patient care. 2. Competition under Simplified Acquisition Procedures (SAP) suggests a focus on smaller value procurements. 3. The contract's duration of one year (Option Year 4) indicates ongoing need and potential for renewal. 4. Fixed-price contract type helps manage cost certainty for the government. 5. The award to RCG of North Carolina, LLC highlights a specific regional supplier for these critical items. 6. Industrial Gas Manufacturing (NAICS 325120) is a specialized sector with limited but essential suppliers.

Value Assessment

Rating: good

The contract value of $12.2 million for a one-year period for oxygen tanks and liquid nitrogen appears reasonable given the specialized nature of industrial gases and their critical application in healthcare. Benchmarking against similar contracts for medical gases is challenging without more specific details on volume and purity requirements. However, the firm fixed-price structure provides cost predictability. The award amount is consistent with the expected scale for a single-year delivery order for such supplies.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was competed under Simplified Acquisition Procedures (SAP), which typically allows for more streamlined competition for purchases below a certain threshold. While the exact number of bidders is not specified, SAP generally encourages competition among a reasonable number of offerors. The limited nature of specialized industrial gas suppliers may inherently restrict the pool of potential bidders, even within SAP.

Taxpayer Impact: Competition under SAP aims to secure fair and reasonable pricing for taxpayers. While not a full and open competition, it balances efficiency with market-based pricing for this type of procurement.

Public Impact

Veterans receiving care within the Department of Veterans Affairs healthcare system benefit from the reliable supply of medical oxygen and liquid nitrogen. Essential medical services requiring these gases, such as respiratory therapy and cryogenic procedures, are supported. The primary geographic impact is within the facilities served by the Department of Veterans Affairs in North Carolina, where the contractor is based. The contract supports jobs within the industrial gas manufacturing and distribution sector, specifically at RCG of North Carolina, LLC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases in future option years if market conditions change significantly.
Dependence on a single contractor for a critical supply chain item could pose a risk if performance issues arise.

Positive Signals

Firm fixed-price contract provides cost stability for the current period.
Award to an established company (RCG of North Carolina, LLC) suggests a degree of reliability.
Option year structure allows for continued service without a full re-competition if performance is satisfactory.

Sector Analysis

The industrial gas manufacturing sector (NAICS 325120) is characterized by specialized production and distribution of gases like oxygen and nitrogen, which are critical for various industries including healthcare, manufacturing, and research. The market size for medical-grade gases is substantial, driven by hospital needs. This contract represents a specific, albeit significant, procurement within this sector, focusing on the VA's demand for these essential supplies. Comparable spending benchmarks would depend on the specific volumes and purity levels required, but this $12.2M annual spend is indicative of a substantial, ongoing requirement.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). Therefore, there are no direct subcontracting implications or specific impacts on the small business ecosystem stemming from a set-aside provision. The primary contractor, RCG of North Carolina, LLC, is the focus of this award.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs (VA) contracting officers and program managers responsible for ensuring timely delivery and adherence to contract specifications. The VA has established Inspector General (IG) offices that can investigate potential fraud, waste, or abuse. Transparency is facilitated through contract databases like FPDS, where award details are recorded. Accountability measures are built into the contract terms, including performance standards and payment clauses.

Related Government Programs

Medical Supplies and Equipment
Veterans Health Administration Services
Industrial Gases Procurement
Department of Veterans Affairs Contracts

Risk Flags

Potential supply chain disruption
Limited competition may affect price negotiation
Dependence on single supplier for critical item

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $12,230.75 to RCG OF NORTH CAROLINA, LLC. LEASE AND REFILL OF TYPE E AND H OXYGEN TANKS AND LIQUID NITROGEN. OPTION YEAR 4

Who is the contractor on this award?

The obligated recipient is RCG OF NORTH CAROLINA, 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 $12,230.75.

What is the period of performance?

Start: 2026-04-07. End: 2027-04-06.

What is the historical spending pattern for oxygen tanks and liquid nitrogen by the Department of Veterans Affairs?

Analyzing historical spending for this specific contract requires accessing detailed procurement data over multiple years. The current award is for Option Year 4, suggesting a multi-year relationship. To understand the historical pattern, one would need to examine the total value of previous option years and any base periods for this specific delivery order or similar contracts awarded by the VA for these supplies. Trends in spending could reveal increases or decreases in demand, price fluctuations, or changes in contracting strategies. Without access to the full contract history and prior award values, it's difficult to provide a precise historical spending pattern beyond noting that this is an ongoing requirement.

How does the price per unit for oxygen tanks and liquid nitrogen compare to market rates or similar government contracts?

Determining the precise per-unit cost benchmark for this contract is challenging without specific details on the quantities, types, and purity levels of oxygen tanks and liquid nitrogen procured. The contract value of $12.2 million is for a full year's supply, which encompasses numerous units. To perform a robust comparison, one would need to break down the total award by the number of units for each item. Subsequently, these unit costs could be benchmarked against publicly available pricing data for industrial gases, industry price lists, or data from similar government contracts awarded to other agencies or for different VA facilities. The firm fixed-price nature suggests the contractor has factored in their costs and desired profit margin, but external benchmarking is crucial for assessing value for money.

What is the track record of RCG of North Carolina, LLC in fulfilling government contracts, particularly for medical or industrial gases?

RCG of North Carolina, LLC's track record in fulfilling government contracts, especially for medical or industrial gases, can be assessed by reviewing their past performance history in federal procurement databases. This includes examining the number of contracts awarded, their values, the agencies they've served, and any reported performance issues or successes. For this specific contract (Option Year 4), the renewal suggests satisfactory past performance. However, a deeper dive would involve looking for any contract terminations, disputes, or negative past performance reviews. A positive track record typically involves on-time delivery, adherence to quality standards, and responsive communication, all of which are critical for essential supplies like oxygen and nitrogen.

What are the potential risks associated with relying on a single supplier for critical medical gases like oxygen?

Relying on a single supplier for critical medical gases like oxygen presents several potential risks. Firstly, there's a supply chain disruption risk; any issue with the contractor's production, logistics, or workforce could lead to shortages impacting patient care. Secondly, a lack of robust competition might reduce the government's leverage in negotiating prices, potentially leading to higher costs over time, especially if market conditions shift favorably for the supplier. Thirdly, if the supplier's quality control falters, it could lead to the delivery of substandard gases, posing direct health risks to patients. Finally, dependence on one entity can limit the government's ability to quickly adapt to changing needs or adopt new technologies if the supplier is unwilling or unable to accommodate them.

How does the competition level under Simplified Acquisition Procedures (SAP) impact price discovery and value for taxpayers in this contract?

Competition under Simplified Acquisition Procedures (SAP) aims to balance efficiency with achieving fair and reasonable prices. While SAP allows for streamlined processes, it typically involves soliciting quotes from multiple sources, though not necessarily the full and open competition seen in larger procurements. The impact on price discovery depends on the number of qualified bidders willing to participate. If several capable suppliers submit competitive quotes, SAP can lead to effective price discovery and good value for taxpayers. However, if the market for specialized items like industrial gases is limited, even within SAP, the number of bidders might be small, potentially weakening price competition. The VA's process would involve evaluating these quotes to ensure the price is competitive and represents good value.

Industry Classification

NAICS: Manufacturing › Basic Chemical Manufacturing › Industrial Gas Manufacturing

Product/Service Code: CHEMICALS AND CHEMICAL PRODUCTS

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 404 OVERLAKE DR STE A, RAEFORD, NC, 28376

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

Financial Breakdown

Contract Ceiling: $12,231

Exercised Options: $12,231

Current Obligation: $12,231

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C24622D0047

IDV Type: IDC

Timeline