VA awards $3.5M contract for inventory management system, with 3 bidders competing

Contract Overview

Contract Amount: $3,493,978 ($3.5M)

Contractor: SDV Office Systems LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-08-19

End Date: 2025-11-30

Contract Duration: 1,199 days

Daily Burn Rate: $2.9K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: WEIGHT BASED INVENTORY MANAGEMENT SYSTEM

Place of Performance

Location: FLETCHER, HENDERSON County, NORTH CAROLINA, 28732

State: North Carolina Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $3.5 million to SDV OFFICE SYSTEMS LLC for work described as: WEIGHT BASED INVENTORY MANAGEMENT SYSTEM Key points: 1. The contract value appears reasonable given the duration and scope of an inventory management system. 2. Competition was present, with three bidders participating, suggesting some level of market interest. 3. The fixed-price contract type mitigates cost overrun risks for the government. 4. The system is intended to manage inventory, implying potential improvements in supply chain efficiency. 5. The award was made under Simplified Acquisition Procedures, indicating a focus on smaller procurements. 6. The contractor, SDV OFFICE SYSTEMS LLC, is a Service-Disabled Veteran-Owned Small Business.

Value Assessment

Rating: good

The contract value of approximately $3.5 million over a period of roughly three years (August 2022 to November 2025) for a WEIGHT BASED INVENTORY MANAGEMENT SYSTEM seems within a reasonable range for such a system. Without specific details on the system's capabilities and scale, a direct comparison is difficult. However, the fixed-price nature of the award helps control costs. The number of bidders (3) suggests a moderate level of competition, which typically leads to fair pricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was competed under Simplified Acquisition Procedures (SAP), which allows for a broader range of competition for procurements under the simplified acquisition threshold. Three bidders participated in this competition. While SAP aims for broad competition, the specific number of bidders can vary. The presence of three bidders indicates that the market was responsive to this requirement and that the VA received multiple offers, which is generally positive for price discovery.

Taxpayer Impact: The competition level, while not extensive, suggests that taxpayers received a fair price due to multiple offers being considered. The use of SAP indicates an effort to streamline the acquisition process for this moderate-value contract.

Public Impact

Veterans Affairs medical centers and facilities will benefit from improved inventory management. The system will deliver capabilities for tracking and managing weighted inventory items. The geographic impact is likely nationwide, supporting VA facilities across the country. The contract supports the operational efficiency of the VA's supply chain and logistics workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the system is highly proprietary and difficult to integrate with other systems.
Reliance on a single vendor for maintenance and upgrades could lead to future cost increases.
Effectiveness of the 'WEIGHT BASED' aspect needs to be validated to ensure it meets specific inventory needs.

Positive Signals

The contract is with a Service-Disabled Veteran-Owned Small Business (SDVOSB), aligning with federal procurement goals.
The fixed-price contract type provides cost certainty for the government.
The competition, though under SAP, involved multiple bidders, suggesting a degree of market validation.

Sector Analysis

The market for inventory management systems is diverse, encompassing software solutions, hardware, and integrated services. Federal agencies, particularly large ones like the Department of Veterans Affairs, often require robust and scalable solutions to manage vast inventories of medical supplies, equipment, and general goods. Spending in this sector is driven by the need for efficiency, cost reduction, and compliance. Comparable spending benchmarks would depend heavily on the specific functionalities and scale of the system, but multi-million dollar contracts for comprehensive inventory management solutions are not uncommon within large federal organizations.

Small Business Impact

The awardee, SDV OFFICE SYSTEMS LLC, is a Service-Disabled Veteran-Owned Small Business (SDVOSB). This indicates the contract likely contributes to federal goals for awarding contracts to SDVOSBs. There is no explicit mention of small business set-asides or subcontracting plans in the provided data, but the award itself to an SDVOSB is a positive signal for that segment of the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. As a purchase order issued under SAP, the oversight mechanisms might be less formalized than for larger, sole-source, or complex contracts. Accountability is ensured through the fixed-price terms and delivery schedules. Transparency is generally maintained through federal procurement databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Department of Veterans Affairs Supply Chain Management
Federal Inventory Management Systems
Logistics and Distribution Contracts
Service-Disabled Veteran-Owned Small Business (SDVOSB) Procurement

Risk Flags

Potential for performance issues if system integration is complex.
Risk of cost increases in future years if maintenance/support is not competitively re-procured.
Effectiveness of 'weight-based' inventory management needs validation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $3.5 million to SDV OFFICE SYSTEMS LLC. WEIGHT BASED INVENTORY MANAGEMENT SYSTEM

Who is the contractor on this award?

The obligated recipient is SDV OFFICE SYSTEMS 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 $3.5 million.

What is the period of performance?

Start: 2022-08-19. End: 2025-11-30.

What is the specific functionality and scope of the 'WEIGHT BASED INVENTORY MANAGEMENT SYSTEM' being procured?

The provided data indicates the contract is for a 'WEIGHT BASED INVENTORY MANAGEMENT SYSTEM' (PWS 333997). While the name suggests a focus on managing inventory based on weight, the specific functionalities, such as real-time tracking, automated reordering, integration capabilities with other VA systems (e.g., financial, medical records), reporting features, and the types of items it will manage (e.g., pharmaceuticals, durable medical equipment, general supplies), are not detailed in the summary data. Understanding these specifics is crucial for assessing the system's true value and its impact on VA operations. Without a detailed Performance Work Statement (PWS), it's difficult to ascertain the full scope beyond the general description.

How does the pricing of this contract compare to similar inventory management systems procured by the VA or other federal agencies?

Benchmarking the pricing of this $3.5 million contract for a WEIGHT BASED INVENTORY MANAGEMENT SYSTEM is challenging without more granular data on system features, user licenses, implementation services, and ongoing support costs. However, the contract is a Firm Fixed Price (FFP) Purchase Order awarded under Simplified Acquisition Procedures (SAP) with a duration of approximately three years. FFP contracts generally offer good value by shifting risk to the contractor. The fact that it was competed with three bidders suggests the price was competitive within the SAP framework. To perform a true benchmark, one would need to compare it against other FFP contracts for similar systems of comparable scale and complexity, considering factors like the number of locations supported, the volume of inventory managed, and the sophistication of the software modules included.

What is the track record of SDV OFFICE SYSTEMS LLC in delivering similar inventory management solutions to the federal government?

SDV OFFICE SYSTEMS LLC is identified as the contractor for this WEIGHT BASED INVENTORY MANAGEMENT SYSTEM. As a Service-Disabled Veteran-Owned Small Business (SDVOSB), their primary focus might be on office supplies and related services. Information regarding their specific experience and past performance in delivering complex inventory management systems, particularly those involving specialized 'weight-based' functionalities, is not detailed in the provided summary data. A thorough assessment would require reviewing their contract history, past performance evaluations (if available in systems like the Contractor Performance Assessment Reporting System - CPARS), and any relevant certifications or partnerships they may have in the inventory management technology space. Their success on this contract will be a key indicator of their capabilities in this domain.

What are the potential risks associated with the implementation and long-term use of this inventory management system?

Potential risks include implementation challenges, such as integration issues with existing VA IT infrastructure, data migration complexities, and user adoption hurdles. The 'weight-based' nature of the system might introduce inaccuracies if not calibrated correctly or if the items managed have variable weights. There's also a risk of vendor lock-in, where the VA becomes dependent on SDV OFFICE SYSTEMS LLC for future upgrades, maintenance, and support, potentially leading to escalating costs. Furthermore, the system's effectiveness in improving overall supply chain efficiency and reducing waste needs to be continuously monitored. Cybersecurity risks associated with any new IT system are also a concern, requiring robust security protocols and ongoing vigilance.

How does this contract align with the VA's broader goals for modernizing its supply chain and logistics operations?

This contract for a WEIGHT BASED INVENTORY MANAGEMENT SYSTEM appears to align with the VA's ongoing efforts to modernize its supply chain and logistics. Efficient inventory management is a cornerstone of effective supply chain operations, aiming to reduce costs, minimize stockouts, prevent overstocking, and ensure timely availability of critical supplies. By implementing a system that potentially offers better tracking and control, the VA can improve operational efficiency, reduce waste, and ultimately enhance its ability to serve veterans. The success of this system could contribute to a more resilient and responsive supply chain, which is vital for healthcare delivery.

Industry Classification

NAICS: Manufacturing › Other General Purpose Machinery Manufacturing › Scale and Balance Manufacturing

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 36C24822Q1401

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 26 MACALLAN LN, ASHEVILLE, NC, 28805

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

Financial Breakdown

Contract Ceiling: $3,493,978

Exercised Options: $3,493,978

Current Obligation: $3,493,978

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline