VA awards $16.5M inventory management contract to SDV OFFICE SYSTEMS LLC, a sole-source purchase order

Contract Overview

Contract Amount: $16,540,412 ($16.5M)

Contractor: SDV Office Systems LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-09-29

End Date: 2025-03-31

Contract Duration: 914 days

Daily Burn Rate: $18.1K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Other

Official Description: PAR EXCELLENCE - WEIGHT BASED INVENTORY MGMT

Place of Performance

Location: NASHVILLE, DAVIDSON County, TENNESSEE, 37212

State: Tennessee Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $16.5 million to SDV OFFICE SYSTEMS LLC for work described as: PAR EXCELLENCE - WEIGHT BASED INVENTORY MGMT Key points: 1. The contract's value of $16.5 million over its period of performance suggests a significant investment in inventory management capabilities. 2. As a sole-source award, the absence of a competitive bidding process raises questions about potential price efficiencies and market responsiveness. 3. The contract's duration of 914 days (approximately 2.5 years) indicates a medium-term commitment, allowing for sustained service delivery. 4. The use of a Firm Fixed Price contract type aims to provide cost certainty for the government, shifting cost overrun risks to the contractor. 5. The contractor, SDV OFFICE SYSTEMS LLC, is identified as a Service-Disabled Veteran-Owned Small Business (SDVOSB), aligning with federal procurement goals. 6. The contract is categorized under 'Scale and Balance Manufacturing' (NAICS 333997), suggesting a focus on specific types of equipment or systems. 7. The award was made by the Department of Veterans Affairs (VA) to support its internal operations, likely within its healthcare or administrative functions.

Value Assessment

Rating: fair

Benchmarking the value of this $16.5 million contract is challenging without more specific details on the scope of 'weight-based inventory management' and the exact services provided. However, the sole-source nature of the award means direct price comparisons to similar competitive contracts are not feasible. The firm fixed price structure provides cost certainty, but the absence of competition may have led to a higher price than could have been achieved through a bidding process. Further analysis would require understanding the market rates for comparable inventory management solutions tailored to the VA's specific needs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This approach is typically used when only one vendor can provide the required goods or services, or in specific circumstances like set-asides for certain business types. The lack of competition limits the government's ability to leverage market forces to drive down prices and ensure the best possible value. It also means that the government did not receive proposals from a range of potential suppliers, potentially missing out on innovative solutions or more cost-effective alternatives.

Taxpayer Impact: For taxpayers, a sole-source award means there is a reduced likelihood of achieving the lowest possible price, as the usual competitive pressure to offer better terms is absent. This can result in higher overall spending for the government compared to a competitively awarded contract.

Public Impact

The primary beneficiaries of this contract are the Department of Veterans Affairs (VA) and its various facilities, which will receive enhanced inventory management services. The contract aims to improve the efficiency and accuracy of inventory tracking, potentially leading to better resource allocation and reduced waste within the VA. The services delivered will likely involve the implementation and maintenance of systems for managing medical supplies, equipment, or other critical assets. The geographic impact is concentrated within the VA's operational footprint, primarily in Tennessee where the contractor is located, but potentially extending to other VA facilities served by the company. Workforce implications may include the creation or sustainment of jobs at SDV OFFICE SYSTEMS LLC, particularly in areas related to logistics, IT support, and inventory management.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price discovery and potential savings.
Lack of competition may reduce incentive for contractor to offer best value.
Scope of 'weight-based inventory management' is broad and requires further definition for precise value assessment.
Contract performance data is not yet available to assess effectiveness.
Reliance on a single vendor for critical inventory management could pose a risk if performance issues arise.

Positive Signals

Contract awarded to a Service-Disabled Veteran-Owned Small Business (SDVOSB), supporting federal small business goals.
Firm Fixed Price contract type provides cost certainty for the government.
Contract duration allows for sustained service delivery and potential for long-term improvements.
Contractor is located in Tennessee, potentially supporting local economy.
The contract addresses a specific need for inventory management within the VA.

Sector Analysis

The market for inventory management systems and services is diverse, encompassing software solutions, hardware (like scales and scanners), and specialized consulting. This contract, focusing on 'weight-based inventory management,' likely falls within the broader industrial machinery and equipment manufacturing (NAICS 333997) or IT services sectors, depending on the specific solution. The federal government is a significant purchaser of such services, with spending spread across various agencies to manage vast inventories of supplies, equipment, and assets. Comparable spending benchmarks are difficult to establish without knowing the precise technological and service components, but the $16.5 million over 2.5 years suggests a substantial, potentially customized, solution for the VA.

Small Business Impact

This contract is awarded to SDV OFFICE SYSTEMS LLC, which is identified as a Service-Disabled Veteran-Owned Small Business (SDVOSB). This aligns with federal procurement mandates to award a certain percentage of government contracts to small businesses, particularly those owned by service-disabled veterans. As a sole-source award to an SDVOSB, it directly contributes to meeting these set-aside goals. The implications for the broader small business ecosystem are positive in that it provides a significant contract to a specific category of small business. There is no explicit mention of subcontracting requirements in the provided data, but large contracts often include provisions for small business subcontracting, which could further benefit other small businesses.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of Veterans Affairs (VA) contracting officers and program managers responsible for inventory management. As a purchase order, it falls under the general procurement regulations and oversight mechanisms of the VA. Transparency is facilitated by the contract award notice, which provides basic details about the contractor, value, and period of performance. However, detailed operational oversight and performance monitoring data are typically internal to the agency. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected or identified.

Related Government Programs

VA Supply Chain Management
Federal Inventory Management Systems
Service-Disabled Veteran-Owned Small Business (SDVOSB) Procurement
Purchase Order Awards
Firm Fixed Price Contracts
NAICS 333997 - Scale and Balance Manufacturing

Risk Flags

Sole-source award
Lack of competition
Limited performance data available

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $16.5 million to SDV OFFICE SYSTEMS LLC. PAR EXCELLENCE - WEIGHT BASED INVENTORY MGMT

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 $16.5 million.

What is the period of performance?

Start: 2022-09-29. End: 2025-03-31.

What is the specific nature of the 'weight-based inventory management' system being provided, and how does it differ from standard inventory tracking methods?

The provided data does not detail the specific functionalities of the 'weight-based inventory management' system. Typically, weight-based systems are used for managing bulk items, raw materials, or products where individual item counting is impractical or inefficient. This could involve using industrial scales integrated with inventory software to track quantities based on weight, automatically updating stock levels as items are added or removed. Such systems are crucial in industries dealing with liquids, powders, grains, or large quantities of similar items. The difference from standard methods lies in the primary measurement unit (weight vs. count) and the automation potential through integrated weighing technology, aiming for greater accuracy and efficiency in specific inventory contexts.

How does the $16.5 million contract value compare to similar inventory management solutions procured by the federal government or the VA?

Direct comparison of the $16.5 million contract value is difficult without knowing the precise scope, duration, and technological sophistication of the 'weight-based inventory management' solution. However, federal spending on inventory management systems and services can range widely, from tens of thousands for software licenses to millions for large-scale implementations and ongoing support. For the VA, which manages a vast array of medical supplies and equipment, significant investments in inventory control are common. The sole-source nature of this award prevents a direct benchmark against competitive bids. Generally, contracts of this magnitude suggest a comprehensive solution, potentially including hardware, software, integration, and ongoing maintenance, tailored to the VA's specific needs.

What are the potential risks associated with awarding this contract on a sole-source basis, particularly concerning cost and performance?

The primary risk of a sole-source award is the potential for inflated pricing due to the absence of competitive pressure. Without multiple bidders vying for the contract, the contractor may not feel compelled to offer the lowest possible price or the most innovative solution. This can lead to taxpayers paying more than necessary. Performance risks also exist; while the contractor is obligated to perform, the lack of direct comparison with other potential providers means the government has less data to assess the contractor's capabilities relative to the market. If performance issues arise, the government's options for remediation or replacement might be more limited compared to a competitively sourced contract.

What is the track record of SDV OFFICE SYSTEMS LLC in performing federal contracts, particularly those of similar size and scope?

Information regarding the specific track record of SDV OFFICE SYSTEMS LLC in performing federal contracts of similar size and scope is not detailed in the provided data. As a Service-Disabled Veteran-Owned Small Business (SDVOSB), it is likely that the company has experience fulfilling government requirements, potentially including inventory management or related services. However, without access to past performance evaluations or a history of awarded contracts, it is difficult to assess their reliability, efficiency, and success rate on previous projects. Further investigation into federal procurement databases (like SAM.gov) or agency performance records would be necessary to establish a comprehensive track record.

How does this contract align with the Department of Veterans Affairs' broader goals for supply chain efficiency and modernization?

This contract aligns with the VA's broader goals by addressing a critical component of its operations: inventory management. Efficient and accurate inventory control is fundamental to ensuring that medical supplies, equipment, and other essential resources are available when and where they are needed, particularly within the healthcare setting. Modernizing inventory systems, potentially through the implementation of advanced technologies like weight-based tracking, can lead to reduced waste, better cost control, and improved patient care. By investing in such a system, the VA aims to enhance its supply chain resilience and operational effectiveness, contributing to its mission of serving veterans.

What is the historical spending pattern of the VA on inventory management solutions, and how does this contract fit into that trend?

The provided data does not include historical spending patterns for the VA on inventory management solutions. To assess this, one would need to analyze past contracts awarded by the VA for similar services or systems over several fiscal years. Such an analysis would reveal trends in contract types, values, durations, and the types of technologies or services procured. This $16.5 million contract, awarded as a sole-source purchase order, represents a specific investment in a 'weight-based inventory management' system. Without historical context, it's difficult to determine if this represents an increase or decrease in spending, a shift in strategy, or a continuation of existing procurement practices for inventory management within the VA.

Industry Classification

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

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 36C24922Q0693

Offers Received: 1

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: $16,540,412

Exercised Options: $16,540,412

Current Obligation: $16,540,412

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline