VA awards $1.06M bridge contract for bed rentals, highlighting potential supply chain gaps

Contract Overview

Contract Amount: $1,061,953 ($1.1M)

Contractor: Agiliti Health Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-01-01

End Date: 2026-03-31

Contract Duration: 89 days

Daily Burn Rate: $11.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: 3 MONTH BRIDGE CONTACT BED RENTAL

Place of Performance

Location: EDEN PRAIRIE, HENNEPIN County, MINNESOTA, 55344

State: Minnesota Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $1.1 million to AGILITI HEALTH INC for work described as: 3 MONTH BRIDGE CONTACT BED RENTAL Key points: 1. The contract's short duration suggests a temporary solution to an immediate need. 2. Limited competition may indicate a lack of readily available alternatives or urgent requirements. 3. The firm-fixed-price structure aims to control costs, but the need for a bridge contract warrants scrutiny. 4. This award falls within the Surgical Appliance and Supplies Manufacturing sector. 5. The contract's value is relatively small compared to larger federal healthcare procurements. 6. The absence of small business set-asides is noted.

Value Assessment

Rating: fair

This $1.06 million contract for a 3-month bed rental period appears to be a bridge to a more permanent solution. While the firm-fixed-price structure is generally favorable for cost control, the need for a bridge contract itself can sometimes indicate a lack of preparedness or unforeseen circumstances in the original procurement strategy. Benchmarking against similar short-term rental contracts for medical equipment would be necessary for a more precise value assessment, but the price seems reasonable for the duration and service type.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. However, the fact that it is a bridge contract awarded to a single vendor (Agiliti Health Inc.) might imply that only one vendor could meet the urgent requirements within the specified timeframe, or that the scope was narrowly defined. Further details on the number of bids received would clarify the extent of competition.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it encourages competitive pricing. However, the necessity of a bridge contract could indicate that the government did not secure the best long-term pricing due to urgency.

Public Impact

Veterans in Minnesota will benefit from continued access to necessary medical beds. The contract ensures continuity of care for patients requiring specialized bed equipment. This award supports the Department of Veterans Affairs' healthcare mission in the region. The contract likely supports a small number of jobs related to equipment delivery and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The need for a bridge contract suggests potential planning or execution issues with the original procurement strategy.
Limited duration may lead to recurring administrative costs for future contract renewals or replacements.
Reliance on a single vendor for a critical need, even temporarily, could pose supply chain risks if not managed proactively.

Positive Signals

The award was made under full and open competition, indicating an effort to find the best value.
The firm-fixed-price contract type provides cost certainty for the government.
The contract ensures immediate continuity of essential medical equipment for veterans.

Sector Analysis

This contract falls within the broader healthcare services and medical equipment sector. The Surgical Appliance and Supplies Manufacturing (NAICS 339113) classification indicates a focus on the production and distribution of medical devices. The federal government is a significant purchaser of such goods and services, with spending often driven by the needs of agencies like the Department of Veterans Affairs and the Department of Defense. Bridge contracts like this are common when there's an urgent need or a gap in existing contracts, often preceding a larger, more comprehensive award.

Small Business Impact

This contract was not awarded as a small business set-aside, nor is there an indication of subcontracting requirements for small businesses. The primary contractor, Agiliti Health Inc., is a large entity. This means that the direct economic benefit to the small business ecosystem from this specific award is likely minimal, unless Agiliti Health Inc. utilizes small businesses for ancillary services not detailed in the award notice.

Oversight & Accountability

The Department of Veterans Affairs is responsible for the oversight of this contract. As a delivery order under a larger contract vehicle (implied by 'delivery order'), oversight may be managed through established procedures for that vehicle. Transparency is provided through public contract databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

VA Medical Equipment Procurement
Healthcare Services Contracts
Medical Supplies and Equipment
Federal Supply Schedule Contracts

Risk Flags

Potential for inflated pricing due to urgency.
Lack of long-term solution indicated by bridge contract.
Limited competition may suggest market constraints or urgent need.
No small business subcontracting requirements noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $1.1 million to AGILITI HEALTH INC. 3 MONTH BRIDGE CONTACT BED RENTAL

Who is the contractor on this award?

The obligated recipient is AGILITI HEALTH 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 $1.1 million.

What is the period of performance?

Start: 2026-01-01. End: 2026-03-31.

What is the typical duration and value of bridge contracts for medical bed rentals within the VA?

Bridge contracts for medical bed rentals within the VA can vary significantly in duration and value, depending on the specific need and the urgency. Typically, they are intended to be short-term, ranging from a few weeks to several months, to cover immediate gaps while a more permanent solution is procured. Values can range from tens of thousands to millions of dollars. This $1.06 million contract for an 89-day period is on the higher end for a short-term bridge, suggesting a substantial number of beds or specialized equipment were required. Without access to historical VA data on similar bridge contracts, it's difficult to definitively benchmark this specific award, but its necessity implies a critical, immediate requirement that could not be met through standard procurement channels in time.

How does the firm-fixed-price (FFP) structure impact the value for money in this bridge contract?

The firm-fixed-price (FFP) structure is generally advantageous for the government in a bridge contract scenario like this one. It establishes a ceiling on the total cost, providing budget certainty and shifting the risk of cost overruns to the contractor, Agiliti Health Inc. This means the VA knows the maximum expenditure upfront for the 3-month period. For value for money, the FFP is beneficial if the initial price negotiated reflects a fair market rate for the specified rental period and equipment. However, the 'value' is also tied to the necessity of the bridge contract itself; if the bridge could have been avoided with better planning, the overall program value is diminished. The key is whether the FFP amount is competitive compared to what other vendors would charge for similar short-term rentals.

What are the potential risks associated with awarding a bridge contract for essential medical equipment?

Awarding a bridge contract for essential medical equipment like beds carries several potential risks. Firstly, there's the risk of inflated pricing due to the urgency; contractors may charge a premium knowing the government has limited alternatives in the short term. Secondly, bridge contracts can sometimes signal underlying issues in procurement planning or execution, potentially leading to recurring costs if permanent solutions are repeatedly delayed. Thirdly, there's a risk of vendor lock-in, where the incumbent bridge provider might gain an advantage in the subsequent full-and-open competition. Finally, if the equipment provided under the bridge contract is not fully compatible with future systems or standards, it could lead to integration challenges or the need for additional investment down the line. The VA must actively manage these risks through diligent oversight and by ensuring the subsequent procurement is robust.

What does the 'Surgical Appliance and Supplies Manufacturing' (NAICS 339113) classification imply for this contract?

The classification of 'Surgical Appliance and Supplies Manufacturing' (NAICS 339113) indicates that the primary business activity of the contractor, Agiliti Health Inc., is related to the manufacturing of medical and surgical equipment and supplies. While this contract is for a rental service, the classification suggests that Agiliti Health Inc. either manufactures the beds themselves or is a primary distributor/provider of such manufactured goods. This classification is important for understanding the contractor's core competencies and the industry segment the contract falls into. It implies that the equipment being rented is likely specialized and falls under the category of durable medical equipment, which requires specific manufacturing standards and regulatory compliance.

Given this is a delivery order, what does it suggest about the parent contract vehicle?

The designation 'DELIVERY ORDER' indicates that this contract is a task order or delivery order issued against a pre-existing indefinite-delivery, indefinite-quantity (IDIQ) contract, a blanket purchase agreement (BPA), or a similar contract vehicle. This implies that the foundational terms, conditions, pricing structure, and potentially some level of competition or pre-qualification were already established under the parent contract. The parent contract likely allows for the efficient procurement of various medical equipment and supplies across different locations or for specific needs, such as this bed rental requirement. The existence of a parent vehicle suggests a strategic sourcing approach by the VA, aiming to streamline future procurements and potentially achieve better pricing through established relationships and volume commitments.

Industry Classification

NAICS: Manufacturing › Medical Equipment and Supplies Manufacturing › Surgical Appliance and Supplies Manufacturing

Product/Service Code: LEASE/RENT EQUIPMENT › LEASE OR RENTAL OF EQUIPMENT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 6625 W 78TH ST STE 300, MINNEAPOLIS, MN, 55439

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $1,061,953

Exercised Options: $1,061,953

Current Obligation: $1,061,953

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: V797D50583

IDV Type: FSS

Timeline