VA awards $2.3M maintenance contract for proprietary software to Baxter Healthcare Corporation

Contract Overview

Contract Amount: $234,598 ($234.6K)

Contractor: Baxter Healthcare Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-04-05

End Date: 2025-04-04

Contract Duration: 1,825 days

Daily Burn Rate: $129/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MAINTENANCE SERVICE AGREEMENT WITH PROPRIETARY SOFTWARE

Place of Performance

Location: DALLAS, DALLAS County, TEXAS, 75216

State: Texas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $234,597.91 to BAXTER HEALTHCARE CORPORATION for work described as: MAINTENANCE SERVICE AGREEMENT WITH PROPRIETARY SOFTWARE Key points: 1. The contract is for maintenance services of proprietary software. 2. Baxter Healthcare Corporation is the sole awardee. 3. The contract value is $2,345,979.10 over five years. 4. The NAICS code suggests a focus on electronic equipment repair and maintenance.

Value Assessment

Rating: questionable

The contract is a firm-fixed-price agreement. Without competitive bidding, it's difficult to assess if the $2.35M price is optimal or if it represents fair market value compared to similar maintenance agreements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This limits price discovery and potentially leads to higher costs for taxpayers as there was no opportunity for other vendors to offer competitive pricing.

Taxpayer Impact: The lack of competition may result in the government paying a premium for these maintenance services, impacting taxpayer funds.

Public Impact

Veterans may experience service disruptions if software maintenance is inadequate. The VA relies on this proprietary software for critical operations. The sole-source nature raises concerns about long-term cost-effectiveness for taxpayers.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award
Lack of competition
Potential for overpricing

Positive Signals

Firm-fixed-price contract provides cost certainty
Long-term agreement ensures continuous support

Sector Analysis

This contract falls under the IT and Healthcare sectors, specifically for maintenance of proprietary software. Benchmarks for IT maintenance can vary widely, but sole-source agreements often exceed competitive pricing.

Small Business Impact

There is no indication that small businesses were involved in this sole-source award, which is a missed opportunity for small business participation.

Oversight & Accountability

The sole-source nature of this award warrants scrutiny to ensure the VA obtained fair pricing and that the necessity for a non-competitive award was properly justified.

Related Government Programs

Other Electronic and Precision Equipment Repair and Maintenance
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Sole-source award limits competition.
Potential for inflated pricing due to lack of competition.
Dependency on a single vendor for critical software.
No clear benefit to small businesses.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $234,597.91 to BAXTER HEALTHCARE CORPORATION. MAINTENANCE SERVICE AGREEMENT WITH PROPRIETARY SOFTWARE

Who is the contractor on this award?

The obligated recipient is BAXTER HEALTHCARE CORPORATION.

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 $234,597.91.

What is the period of performance?

Start: 2020-04-05. End: 2025-04-04.

What is the justification for awarding this contract on a sole-source basis, and what steps were taken to ensure the price is fair and reasonable?

The justification for a sole-source award typically involves unique capabilities or proprietary technology that only one vendor can provide. The VA should have conducted a price analysis, potentially using historical data or market research for similar services, to ensure the $2.35M price was fair and reasonable. Without this documentation, the award raises concerns about value for taxpayer money.

What are the risks associated with relying on a single vendor for critical proprietary software maintenance, especially in the healthcare sector?

The primary risks include vendor lock-in, potential price escalations in future renewals, and a lack of incentive for the vendor to innovate or provide superior service. If Baxter Healthcare Corporation experiences financial difficulties or decides to discontinue support, the VA could face significant operational disruptions and costly transitions to alternative solutions.

How does the cost of this sole-source maintenance agreement compare to industry benchmarks for similar proprietary software support?

Without specific details on the software and the scope of maintenance, a direct comparison is challenging. However, sole-source contracts are generally expected to be more expensive than competitively awarded ones. Industry benchmarks often show a premium for proprietary software maintenance, but the extent of this premium in a non-competitive scenario can be substantial and warrants detailed analysis.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 36C25720Q0177

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1 BAXTER PKWY, DEERFIELD, IL, 60015

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: $234,598

Exercised Options: $234,598

Current Obligation: $234,598

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline