VA awards $4.79M contract for blood products to American National Red Cross, citing sole-source justification

Contract Overview

Contract Amount: $4,792,619 ($4.8M)

Contractor: American National RED Cross, the

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-07-01

End Date: 2027-06-30

Contract Duration: 1,460 days

Daily Burn Rate: $3.3K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: BLOOD PRODUCTS

Place of Performance

Location: DECATUR, DEKALB County, GEORGIA, 30033

State: Georgia Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $4.8 million to AMERICAN NATIONAL RED CROSS, THE for work described as: BLOOD PRODUCTS Key points: 1. Contract awarded on a sole-source basis, limiting price competition. 2. The contract duration of 1460 days suggests a long-term need for blood products. 3. The fixed-price structure aims to control costs, but the lack of competition raises value concerns. 4. The specific product code is not detailed, making direct benchmarking difficult. 5. The award is managed by the VA, indicating a focus on healthcare services for veterans. 6. The contract is a definitive contract, suggesting a clear scope of work.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging due to the lack of detailed product specifications and the sole-source nature of the award. However, the $4.79 million total value over four years for blood products, while substantial, needs to be assessed against the specific types and quantities of blood products procured. Without competitive bids, it's difficult to ascertain if the pricing is optimal. The VA's reliance on a single provider for such a critical resource warrants scrutiny to ensure fair pricing and consistent supply.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis to the American National Red Cross. The justification for not competing the award is not provided in the data. Sole-source awards typically occur when only one responsible source can provide the required supplies or services. This lack of competition means that the government did not receive multiple price proposals, potentially leading to higher costs than if the contract had been competed.

Taxpayer Impact: Taxpayers may be paying a premium for blood products due to the absence of competitive bidding. The government's ability to negotiate the best possible price is diminished in a sole-source scenario.

Public Impact

Veterans receiving healthcare services from the Department of Veterans Affairs will benefit from the consistent supply of blood products. The contract ensures the availability of essential blood products for medical treatments and procedures. The geographic impact is primarily within the United States, supporting VA facilities nationwide. The contract supports the operational capacity of the VA's healthcare system.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to suboptimal pricing.
Sole-source award raises questions about the availability of alternative suppliers or potential for cost savings through competition.
Limited transparency into the justification for sole-source award.

Positive Signals

Award to a well-established organization (American National Red Cross) for a critical supply.
Firm fixed-price contract provides cost certainty for the duration of the award.
Long-term contract (4 years) ensures supply chain stability for essential blood products.

Sector Analysis

The healthcare sector, particularly blood and organ banking, is a critical component of the national health infrastructure. This contract falls within the 'Blood and Organ Banks' industry classification. The market for blood products is unique, often involving non-profit organizations and stringent regulatory requirements. The VA's spending on blood products is a significant part of its healthcare procurement, aimed at supporting its mission to provide comprehensive medical care to veterans.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the nature of blood product procurement and the sole-source award to a large, established organization, there are likely no subcontracting opportunities for small businesses directly related to this specific award. The focus is on securing a critical supply from a known entity.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures would include performance monitoring against the contract terms and ensuring the quality and timely delivery of blood products. Transparency is limited by the sole-source nature of the award and the lack of publicly available justification. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Defense Blood Program
National Institutes of Health Research Grants
Federal Supply Schedule (FSS) for Medical Supplies

Risk Flags

Sole-source award lacks competitive justification.
Potential for above-market pricing due to lack of competition.
Supply chain risk associated with single-source provider.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $4.8 million to AMERICAN NATIONAL RED CROSS, THE. BLOOD PRODUCTS

Who is the contractor on this award?

The obligated recipient is AMERICAN NATIONAL RED CROSS, THE.

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 $4.8 million.

What is the period of performance?

Start: 2023-07-01. End: 2027-06-30.

What is the specific justification for awarding this contract on a sole-source basis to the American National Red Cross?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are awarded when only one responsible source is available to provide the required product or service, or in cases of urgent and compelling need. For blood products, this could be due to specialized collection, processing, or distribution capabilities, or established relationships and infrastructure that make it impractical or impossible to switch suppliers without significant disruption or cost. A detailed justification would normally be documented by the agency and may be subject to review.

How does the pricing of this contract compare to similar blood product procurements by other federal agencies or the private sector?

Direct comparison is difficult without knowing the specific types and quantities of blood products included in this $4.79 million contract. The sole-source nature of the award also complicates price benchmarking, as competitive market forces were not applied. To assess value, one would need to compare the unit prices for specific blood products (e.g., red blood cells, plasma, platelets) against publicly available pricing from other government contracts (if competed) or industry benchmarks. The absence of competition suggests potential for higher-than-market pricing, which would need verification through detailed product-level analysis.

What are the potential risks associated with relying on a single supplier for critical blood products?

The primary risk of a sole-source contract for critical supplies like blood products is the lack of competitive pressure, which can lead to inflated prices and reduced incentives for the supplier to innovate or improve efficiency. There's also a risk of supply chain disruption if the sole provider faces operational issues, natural disasters, or other unforeseen events. Furthermore, the government has limited leverage to negotiate favorable terms or pricing. Dependence on a single entity can also create a vulnerability if that entity's strategic direction or financial stability changes.

What is the historical spending pattern of the VA on blood products, and how does this contract fit within that trend?

The provided data only includes details for this specific contract (2023-2027). To assess historical spending patterns, one would need to analyze VA procurement data for blood products over previous years. This would involve identifying all contracts for 'BLOOD PRODUCTS' (PSC 621991) awarded by the VA, their values, durations, and award types. Understanding past spending would reveal whether this $4.79 million award is consistent with previous levels, represents an increase or decrease, and whether the VA has historically relied on sole-source awards for these products or has utilized competitive bidding.

What are the performance metrics and quality assurance measures in place for this contract to ensure the reliability and safety of the blood products?

The provided data does not detail the specific performance metrics or quality assurance measures for this contract. However, for any contract involving medical supplies, especially blood products, stringent quality control and assurance protocols are expected. These would typically include adherence to FDA regulations, specific testing requirements for donated blood, proper storage and handling procedures, and delivery timelines. The VA would likely have clauses in the contract requiring the American National Red Cross to meet established quality standards and potentially conduct regular audits or provide compliance documentation.

Industry Classification

NAICS: Health Care and Social Assistance › Other Ambulatory Health Care Services › Blood and Organ Banks

Product/Service Code: MEDICAL SERVICES › MEDICAL, DENTAL, AND SURGICAL SVCS

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 36C24723Q0686

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 13500 S POINT BLVD STE L, CHARLOTTE, NC, 28273

Business Categories: Category Business, Community Development Corporation, Corporate Entity Tax Exempt, Domestic Shelter, Manufacturer of Goods, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $10,020,157

Exercised Options: $4,792,619

Current Obligation: $4,792,619

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline