VA's $2.59M Immuno Analyzer Reagent Contract: Cost Per Test Analysis

Contract Overview

Contract Amount: $2,585,132 ($2.6M)

Contractor: Abbott Laboratories Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-08-28

End Date: 2025-08-27

Contract Duration: 1,825 days

Daily Burn Rate: $1.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: IMMUNO ANALYZER REAGENT (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 $2.6 million to ABBOTT LABORATORIES INC. for work described as: IMMUNO ANALYZER REAGENT (COST PER TEST) Key points: 1. Value for money assessed through cost per test benchmarking. 2. Competition dynamics indicate a full and open approach. 3. Risk indicators include contract duration and fixed pricing. 4. Performance context is within analytical laboratory instrument manufacturing. 5. Sector positioning is within the broader healthcare diagnostics market.

Value Assessment

Rating: good

The contract's value is primarily assessed by its cost per test for immuno analyzer reagents. While specific benchmark data for this exact reagent type is not provided, the total award of $2,585,132.23 over 1825 days suggests a significant volume of testing. The firm fixed-price structure provides cost certainty for the VA. Further analysis would require comparing this cost per test against similar reagents used in other federal agencies or large healthcare systems to confirm optimal value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. The presence of 3 bids indicates a reasonable level of competition for this specific requirement. A higher number of bidders typically leads to more competitive pricing and a wider range of solutions, but the specific details of the bids are not available here. The VA's choice of a full and open competition is generally a positive sign for price discovery.

Taxpayer Impact: Taxpayers benefit from the competitive bidding process, which aims to secure the best possible pricing for essential medical supplies. Full and open competition increases the likelihood that the government is not overpaying for these reagents.

Public Impact

Veterans Affairs (VA) medical facilities benefit from access to necessary immuno analyzer reagents. The contract supports diagnostic testing services for patient care within the VA system. Geographic impact is concentrated in Illinois, where the contractor is located. Workforce implications include support for laboratory technicians and medical professionals utilizing these reagents.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract duration of 5 years (1825 days) may limit flexibility to adopt newer technologies or pricing if market conditions change rapidly.
Firm fixed-price contracts can sometimes lead to higher initial costs if the contractor assumes significant risk, though this is mitigated by competition.

Positive Signals

Full and open competition suggests a robust bidding process, likely leading to competitive pricing.
The contract is awarded to a single vendor, simplifying management and ensuring consistent supply.
The award is for delivery orders against a basic contract, indicating a structured procurement approach.

Sector Analysis

This contract falls within the Analytical Laboratory Instrument Manufacturing sector, specifically focusing on reagents used in immunoanalyzers. This is a critical sub-sector of the broader healthcare diagnostics market, which is characterized by continuous innovation and significant investment in research and development. The market size for diagnostic reagents is substantial, driven by increasing demand for accurate and timely disease detection. Comparable spending benchmarks would involve analyzing the total federal expenditure on diagnostic reagents across agencies like HHS and DoD, as well as private sector healthcare systems.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, the primary contractor, Abbott Laboratories Inc., is likely a large business. There is no explicit information regarding subcontracting plans for small businesses within this award. The impact on the small business ecosystem would depend on whether Abbott engages small businesses for supplies or services related to fulfilling this contract, which is not detailed here.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs contracting officers and program managers. Accountability measures are embedded in the contract terms, including delivery schedules and quality specifications. Transparency is facilitated through contract award databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to this contract were suspected or reported.

Related Government Programs

Department of Veterans Affairs Medical Supplies Contracts
Federal Laboratory Equipment and Reagent Procurement
Healthcare Diagnostics and Testing Services
Immunoassay Analyzer Systems

Risk Flags

Long contract duration may limit flexibility.
Potential for price escalation or de-escalation not captured.
Risk of technological obsolescence over 5 years.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.6 million to ABBOTT LABORATORIES INC.. IMMUNO ANALYZER REAGENT (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 $2.6 million.

What is the period of performance?

Start: 2020-08-28. End: 2025-08-27.

What is the historical spending trend for immuno analyzer reagents by the Department of Veterans Affairs?

Analyzing historical spending for immuno analyzer reagents by the VA is crucial for understanding long-term demand and potential cost fluctuations. Without specific historical data for this contract or category, we can infer trends from overall VA medical supply expenditures. The VA's budget for medical care has generally increased over the years, driven by an expanding veteran population and evolving healthcare needs. Procurement of diagnostic reagents is a consistent requirement. A detailed analysis would involve examining VA contract databases over the past 5-10 years to identify the volume, types, and costs of immunoanalyzer reagents procured, looking for patterns of increasing or decreasing costs per unit, shifts in awarded vendors, and changes in contract types. This historical context helps in evaluating whether the current $2.59M award represents a significant increase, decrease, or stable level of spending for this category.

How does the cost per test for this Abbott Laboratories contract compare to other federal agencies or the private sector?

Benchmarking the cost per test for Abbott Laboratories' immuno analyzer reagents against other federal agencies and the private sector is essential for assessing value for money. While the provided data does not include the specific cost per test figure, it does give the total award amount and contract duration. To perform this comparison, one would need to: 1. Calculate the cost per test from the total award if the total number of tests or units is known or can be reasonably estimated based on reagent usage rates. 2. Access public contract databases (e.g., FPDS, GSA Advantage) to find similar contracts for immunoanalyzer reagents awarded by other agencies like HHS, DoD, or civilian agencies. 3. Research market research reports or industry publications that provide average costs per test for common immunoassays in the private healthcare market. A significantly higher cost per test compared to benchmarks would raise concerns about pricing and potentially indicate a need for renegotiation or exploring alternative vendors. Conversely, a cost per test at or below market rates would suggest good value.

What is Abbott Laboratories' track record with the VA and other federal agencies for similar contracts?

Abbott Laboratories is a major player in the diagnostics market, and their track record with the VA and other federal agencies for similar contracts is likely extensive. To assess this, one would review Abbott's contract history in federal procurement databases. Key aspects to examine include: the number and value of past contracts awarded to Abbott for diagnostic reagents and instruments, the agencies involved (VA, DoD, HHS, etc.), contract performance ratings (if available), any past performance issues, disputes, or terminations, and the types of competition under which they were awarded (sole-source vs. full and open). A history of successful contract performance, timely delivery, and competitive pricing would indicate reliability. Conversely, a pattern of performance issues, overpricing, or frequent sole-source awards might warrant closer scrutiny of future contracts.

What are the potential risks associated with a 5-year firm fixed-price contract for diagnostic reagents?

A 5-year firm fixed-price (FFP) contract for diagnostic reagents presents several potential risks. Firstly, price escalation: the market price for reagents can fluctuate due to raw material costs, manufacturing efficiencies, or new product introductions. An FFP contract locks in the price, meaning the VA might overpay if market prices decrease significantly over the contract period, or conversely, the contractor might face reduced margins if costs rise unexpectedly. Secondly, technological obsolescence: diagnostic technology evolves rapidly. A 5-year commitment might lock the VA into using reagents for older technology, potentially missing out on more advanced, accurate, or cost-effective newer systems. Thirdly, vendor lock-in: if the reagents are specific to certain analyzer platforms, extending the contract for a long period can create a strong dependency on the incumbent vendor, making it difficult to switch to competitors or different technologies later. Finally, contractor performance risk: while FFP shifts some risk to the contractor, poor quality or delivery issues can still disrupt critical laboratory operations, impacting patient care.

How does the 'Analytical Laboratory Instrument Manufacturing' NAICS code relate to the specific product 'IMMUNO ANALYZER REAGENT'?

The North American Industry Classification System (NAICS) code 334516, 'Analytical Laboratory Instrument Manufacturing,' is a broad category that encompasses companies involved in producing scientific and technical instruments for laboratory analysis. While the primary focus of this code is on the manufacturing of the instruments themselves (like the immunoanalyzers), it often extends to the production and supply of associated consumables and reagents necessary for the instruments' operation. Immunoanalyzer reagents are critical chemical or biological substances used by these instruments to detect and quantify specific analytes in biological samples (e.g., hormones, antibodies, proteins). Therefore, companies manufacturing these specialized reagents are closely linked to the instrument manufacturers and often fall under or are closely associated with this NAICS code, especially if they are producing them for their own instrument platforms or as part of a comprehensive diagnostic solution.

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: 3

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: $2,585,132

Exercised Options: $2,585,132

Current Obligation: $2,585,132

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36F79719D0024

IDV Type: FSS

Timeline