VA awards $4.6M contract for analytical instruments, with 2937 units delivered

Contract Overview

Contract Amount: $4,607,892 ($4.6M)

Contractor: Abbott Laboratories Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2021-06-14

End Date: 2025-09-30

Contract Duration: 1,569 days

Daily Burn Rate: $2.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: COST PER TEST

Place of Performance

Location: NORTH CHICAGO, LAKE County, ILLINOIS, 60064

State: Illinois Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $4.6 million to ABBOTT LABORATORIES INC. for work described as: COST PER TEST Key points: 1. Contract value appears reasonable given the scale of delivery. 2. Full and open competition suggests potential for competitive pricing. 3. Delivery order structure may indicate flexibility in meeting evolving needs. 4. Contract duration spans over four years, suggesting a long-term requirement. 5. The specific analytical laboratory instrument manufacturing sector is critical for healthcare diagnostics.

Value Assessment

Rating: good

The contract's value of $4.6 million for 2937 units, averaging approximately $1570 per unit, seems within a reasonable range for specialized analytical laboratory instruments. Benchmarking against similar contracts for high-complexity diagnostic equipment would provide a more precise assessment, but the initial indication suggests fair pricing given the technology involved. The firm fixed-price structure also provides cost certainty.

Cost Per Unit: $1570 per unit (estimated)

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. While the data does not specify the number of bids received, this procurement method generally fosters price discovery and encourages competitive offers. The VA's use of this approach suggests a commitment to obtaining the best value through market forces.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically leads to lower prices and better quality goods and services due to the competitive bidding process.

Public Impact

Veterans will benefit from improved diagnostic capabilities through advanced analytical laboratory instruments. The contract supports the delivery of essential laboratory testing services within VA facilities. The primary geographic impact is within Illinois, where the instruments are likely deployed. The contract supports the manufacturing sector for analytical laboratory instruments.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Awarded under full and open competition, indicating a robust bidding process.
Firm fixed-price contract provides cost certainty for the government.
Long contract duration suggests a sustained need and potential for stable supply.

Sector Analysis

The analytical laboratory instrument manufacturing sector is a specialized segment of the broader healthcare technology industry. It encompasses companies that design, produce, and sell instruments used for scientific analysis, particularly in clinical diagnostics, research, and quality control. This contract fits within the VA's broader strategy to modernize its healthcare infrastructure and enhance diagnostic capabilities for veterans. Spending in this sector is driven by technological advancements and the increasing demand for precise and rapid testing.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses, nor does it specify any subcontracting requirements for small businesses. Therefore, the direct impact on the small business ecosystem appears limited unless the prime contractor voluntarily engages small businesses in their supply chain. Further investigation into subcontracting plans would be needed to fully assess the impact.

Oversight & Accountability

The Department of Veterans Affairs (VA) is responsible for overseeing this contract. Oversight mechanisms likely include regular performance reviews, acceptance testing of delivered units, and adherence to the firm fixed-price terms. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Medical Equipment
Laboratory Services
Veterans Health Administration
Diagnostic Instruments

Risk Flags

Potential for vendor lock-in regarding maintenance and consumables.
Risk of technological obsolescence given the duration of the contract.
Need for robust training to ensure effective utilization of instruments.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $4.6 million to ABBOTT LABORATORIES INC.. COST PER TEST

Who is the contractor on this award?

The obligated recipient is ABBOTT LABORATORIES 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 $4.6 million.

What is the period of performance?

Start: 2021-06-14. End: 2025-09-30.

What is the track record of Abbott Laboratories Inc. with the Department of Veterans Affairs?

Abbott Laboratories Inc. has a history of contracts with the Department of Veterans Affairs, primarily for medical devices and laboratory equipment. Reviewing past performance on similar contracts, including delivery timeliness, quality of goods, and adherence to contract terms, would provide insight into their reliability. While this specific contract is for analytical laboratory instruments, Abbott's broader portfolio suggests experience in supplying healthcare-related products to federal agencies. Analyzing past payment histories and any disputes or contract modifications could further illuminate their performance record with the VA.

How does the per-unit cost of $1570 compare to market rates for similar analytical laboratory instruments?

The estimated per-unit cost of approximately $1570 for these analytical laboratory instruments requires detailed comparison with market rates for comparable equipment. Factors such as instrument complexity, throughput capabilities, specific diagnostic tests performed, and included software or support services significantly influence pricing. Instruments used for high-complexity, multi-analyte testing or those with advanced automation features would command higher prices. A thorough market analysis would involve identifying specific instrument models with similar functionalities and obtaining quotes from multiple manufacturers to establish a reliable benchmark. Without this detailed comparison, it is difficult to definitively state if $1570 represents excellent, fair, or concerning value.

What are the primary risks associated with this contract for the VA?

Primary risks for the VA with this contract include potential delays in delivery, which could impact laboratory operations and patient care. Technical risks, such as instrument malfunction, calibration issues, or compatibility problems with existing laboratory systems, could also arise. Furthermore, there's a risk of obsolescence if the technology rapidly advances, making the procured instruments outdated before the contract end date. Ensuring adequate training for VA staff on operating and maintaining the new instruments is also crucial to mitigate usability risks. Finally, reliance on a single supplier for maintenance and consumables, even with full and open competition for the initial purchase, could pose a future risk if not managed proactively.

How effective are analytical laboratory instruments in improving diagnostic accuracy and patient outcomes for veterans?

Analytical laboratory instruments are fundamental to modern healthcare, playing a critical role in improving diagnostic accuracy and, consequently, patient outcomes. These instruments enable precise and rapid testing of blood, tissue, and other bodily fluids, providing essential data for diagnosing diseases, monitoring treatment efficacy, and predicting health risks. For veterans, access to state-of-the-art diagnostic tools can lead to earlier disease detection, more personalized treatment plans, and better management of chronic conditions. The effectiveness is directly tied to the quality and reliability of the instruments, as well as the expertise of the laboratory personnel using them. Investing in advanced analytical instruments is a key component of delivering high-quality healthcare services.

What has been the historical spending trend for analytical laboratory instruments by the Department of Veterans Affairs?

Analyzing the historical spending trend for analytical laboratory instruments by the Department of Veterans Affairs (VA) is crucial for understanding procurement patterns and budget allocation. This involves examining contract data over several fiscal years to identify fluctuations in spending, major contract awards, and the types of instruments procured. Significant increases or decreases in spending could indicate shifts in healthcare priorities, technological adoption rates, or budget constraints. Understanding this trend helps in forecasting future needs and assessing whether current spending levels are consistent with historical patterns or represent a notable change. It also provides context for evaluating the significance of the current $4.6 million award.

What is the potential for vendor lock-in with firm fixed-price contracts for specialized equipment?

Firm fixed-price (FFP) contracts, while offering cost certainty, can sometimes lead to vendor lock-in, particularly for specialized equipment requiring proprietary consumables, maintenance, or software. In this case, even though the initial purchase was competed, the VA might become reliant on Abbott Laboratories Inc. for ongoing support, reagents, or upgrades. This reliance could limit the VA's flexibility to switch to alternative vendors in the future if better pricing or technology becomes available elsewhere. To mitigate this, contracts often include clauses addressing data portability, open system architectures, and the availability of third-party maintenance options. The VA would need to ensure such provisions are in place or actively manage the relationship to prevent undue long-term dependence.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 100 ABBOTT PARK RD DEPT 943 BLDG AP6C-3, NORTH CHICAGO, IL, 60064

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: $7,933,150

Exercised Options: $4,607,892

Current Obligation: $4,607,892

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36F79719D0024

IDV Type: FSS

Timeline