VA awards $13.16M for BIOFIRE reagents and warranties, with no competition

Contract Overview

Contract Amount: $13,158,605 ($13.2M)

Contractor: Biomerieux Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-01-01

End Date: 2026-12-31

Contract Duration: 1,460 days

Daily Burn Rate: $9.0K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: BIOFIRE REAGENTS AND WARRANTIES

Place of Performance

Location: TUCKER, GWINNETT County, GEORGIA, 30084

State: Georgia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $13.2 million to BIOMERIEUX INC for work described as: BIOFIRE REAGENTS AND WARRANTIES Key points: 1. Contract awarded on a sole-source basis, raising questions about price competitiveness. 2. Long-term contract duration (4 years) may not reflect evolving market prices. 3. Focus on a single vendor could limit access to innovative or lower-cost alternatives. 4. High reliance on one supplier for critical laboratory reagents presents supply chain risk. 5. Contract value is substantial, warranting close scrutiny of value for money. 6. The specific product category (Analytical Laboratory Instrument Manufacturing) suggests specialized needs.

Value Assessment

Rating: questionable

Benchmarking the value for money on this sole-source contract is challenging without competitive data. The fixed price structure provides some cost certainty, but the absence of competition means the VA may not be achieving the best possible pricing. Without comparable contracts or market analysis, it's difficult to definitively assess if the $13.16 million represents a fair price for the BIOFIRE reagents and warranties over the four-year period. Further analysis would require understanding the specific technical requirements and the availability of alternative solutions.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded using a sole-source justification, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services due to unique capabilities, proprietary technology, or urgent needs. The lack of competition limits the VA's ability to leverage market forces to drive down prices and ensure the most cost-effective solution. It also means that potential savings from a competitive bidding process are foregone.

Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competitive pressure. Without a bidding process, there is less assurance that the price reflects true market value, potentially leading to less efficient use of federal funds.

Public Impact

Veterans Affairs medical facilities will receive essential BIOFIRE reagents for diagnostic testing. Improved laboratory diagnostic capabilities can lead to faster and more accurate patient care. The contract supports the operational needs of analytical laboratories within the VA system. Geographic impact is nationwide, covering all VA facilities requiring these reagents. Workforce implications include ensuring laboratory technicians have the necessary supplies to perform their duties.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential cost savings.
Long contract duration may not adapt to market price fluctuations.
Dependency on a single supplier creates potential supply chain vulnerabilities.
Lack of transparency in the sole-source justification process.

Positive Signals

Ensures continuity of critical diagnostic reagent supply for VA healthcare.
Fixed price contract provides budget predictability for the VA.
Specific product focus suggests a tailored solution for identified needs.

Sector Analysis

The contract falls within the Analytical Laboratory Instrument Manufacturing sector, specifically concerning reagents and associated warranties. This sector is critical for healthcare diagnostics, providing essential tools for disease detection and monitoring. The market for such reagents is often specialized, with a few key players dominating specific technologies like the BIOFIRE system. The VA's spending here reflects a commitment to maintaining advanced diagnostic capabilities within its healthcare network, aligning with broader trends in medical technology adoption.

Small Business Impact

This contract does not appear to involve small business set-asides. As a sole-source award to a specific manufacturer (BIOMERIEUX INC), it is unlikely to create subcontracting opportunities for small businesses unless BIOMERIEUX INC voluntarily engages them. The focus on a specialized product from a potentially large manufacturer suggests limited direct impact on the broader small business ecosystem within this specific procurement.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs contracting officers and program managers. Accountability measures are embedded in the contract terms, including delivery schedules and quality specifications. Transparency is limited due to the sole-source nature of the award, making public scrutiny of the justification and pricing more difficult. The Inspector General's office within the VA may conduct audits or investigations if concerns regarding waste, fraud, or abuse arise.

Related Government Programs

Department of Veterans Affairs Medical Supplies Contracts
Clinical Diagnostic Reagents Procurement
Laboratory Equipment and Services
Federal Healthcare Technology Spending

Risk Flags

Sole-source award
Potential for overpricing due to lack of competition
Supply chain risk due to single vendor dependency
Limited transparency in procurement process

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $13.2 million to BIOMERIEUX INC. BIOFIRE REAGENTS AND WARRANTIES

Who is the contractor on this award?

The obligated recipient is BIOMERIEUX 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 $13.2 million.

What is the period of performance?

Start: 2023-01-01. End: 2026-12-31.

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

The provided data indicates the contract was 'NOT COMPETED' and awarded as a 'SOLE SOURCE'. Typically, sole-source justifications are based on factors such as the unique capability of a single responsible source, the need for compatibility with existing systems, or urgent and compelling requirements where competition is not feasible. For BIOFIRE reagents, this often relates to proprietary technology or specific instrument compatibility. A detailed review of the official sole-source justification document filed with the contract award would provide the precise rationale, including any market research conducted to confirm the lack of alternatives and the necessity of this specific procurement approach.

How does the $13.16 million contract value compare to historical spending on similar BIOFIRE reagents by the VA or other agencies?

Without access to a comprehensive database of historical spending on BIOFIRE reagents, a direct comparison is difficult. However, the contract value of $13.16 million over four years averages approximately $3.29 million annually. This figure should be benchmarked against prior VA procurements for the same or similar reagents, considering factors like quantity, specific reagent types, and warranty coverage. If this represents a significant increase or decrease, it warrants further investigation into market trends, inflation, or changes in VA's utilization patterns. Comparing this annual average to similar procurements by other federal agencies or large healthcare systems could also provide valuable context on pricing and value.

What are the potential risks associated with a sole-source award for critical laboratory reagents?

A sole-source award for critical laboratory reagents like those for BIOFIRE systems presents several risks. Firstly, the absence of competition can lead to inflated prices, meaning the VA may be overpaying compared to what could be achieved through a competitive process. Secondly, it creates a dependency on a single supplier, increasing vulnerability to supply chain disruptions, price hikes, or changes in the supplier's business strategy. Thirdly, it limits the agency's ability to benefit from technological advancements or alternative products that might emerge from a competitive market. Finally, it reduces transparency and makes it harder to ensure the government is receiving the best value for taxpayer money.

What performance metrics or service level agreements are included in the contract to ensure quality and reliability?

The provided data does not detail specific performance metrics or service level agreements (SLAs). However, standard federal contracting practice for such items would typically include clauses related to delivery timelines, product quality standards (e.g., meeting specified performance characteristics), and warranty terms. The 'warranties' mentioned in the contract title suggest that the supplier is obligated to repair or replace defective reagents or components. The VA's contracting officers are responsible for monitoring contractor performance against these terms. Formal performance evaluations and potential remedies for non-performance would be outlined in the full contract document.

What is the typical duration for contracts of this nature, and does the 4-year term (1460 days) seem standard?

Federal contracts for consumables like reagents, especially those tied to specific instrumentation, can vary in duration. A 4-year term (1460 days) is not uncommon, particularly for firm-fixed-price contracts where the government seeks budget stability and the contractor requires a longer commitment to justify investment or secure supply chains. However, shorter durations (e.g., 1-3 years) are often preferred to allow for more frequent re-evaluation of pricing and market conditions, especially in rapidly evolving technological fields. The appropriateness of this 4-year term depends on the specific nature of the BIOFIRE system, the stability of the reagent market, and the VA's strategic planning horizon for its laboratory services.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 515 S COLOROW DR, SALT LAKE CITY, UT, 84108

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $13,969,240

Exercised Options: $13,478,687

Current Obligation: $13,158,605

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline