VA awards $58.5M for audiology equipment maintenance, raising questions about competition and value

Contract Overview

Contract Amount: $58,509 ($58.5K)

Contractor: E3 Diagnostics, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-05-01

End Date: 2027-04-30

Contract Duration: 1,094 days

Daily Burn Rate: $53/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: AUDIOLOGY EQUIPMENT PREVENTATIVE AND CORRECTIVE MAINTENANCE

Place of Performance

Location: CHEYENNE, LARAMIE County, WYOMING, 82001

State: Wyoming Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $58,508.98 to E3 DIAGNOSTICS, INC. for work described as: AUDIOLOGY EQUIPMENT PREVENTATIVE AND CORRECTIVE MAINTENANCE Key points: 1. The contract's value appears high relative to the duration and scope, warranting a closer look at pricing. 2. Lack of competition suggests potential for inflated costs and reduced incentive for contractor efficiency. 3. The sole-source nature of this award is a significant risk indicator for taxpayer value. 4. Performance context is limited due to the absence of competitive benchmarks. 5. This contract falls within the broader category of medical equipment maintenance services.

Value Assessment

Rating: questionable

Benchmarking this contract's value is challenging due to the lack of competitive data. The $58.5 million award over three years for preventative and corrective maintenance of audiology equipment, without a competitive process, raises concerns about whether the government secured the best possible price. Without comparable contracts or market analysis, it's difficult to definitively assess value for money. The firm-fixed-price structure offers some cost certainty, but the absence of competition limits the government's leverage.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning E3 Diagnostics, Inc. was the only vendor considered. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. The lack of competition means there was no opportunity for price discovery through market forces, potentially leading to higher costs for the government.

Taxpayer Impact: Sole-source awards limit taxpayer savings by preventing the government from benefiting from competitive pricing and innovation that typically arises from a bidding process.

Public Impact

Veterans will benefit from the continued availability of functional audiology equipment, ensuring access to hearing health services. The contract ensures the maintenance of critical medical equipment used in audiology clinics. The geographic impact is primarily within Wyoming, where the services are being delivered. The contract supports a specialized maintenance workforce, likely including technicians with expertise in audiology equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding may lead to overpayment.
Sole-source awards can stifle innovation and reduce service quality over time.
Limited transparency into pricing justification due to non-competitive nature.
Potential for vendor lock-in, making future contract transitions difficult and costly.

Positive Signals

Firm-fixed-price contract provides cost certainty for the government.
Ensures continued operational readiness of essential audiology equipment for veterans.
Specific vendor may possess unique expertise required for this equipment.

Sector Analysis

The healthcare equipment maintenance sector is a critical component of the healthcare industry, ensuring the operational readiness of medical devices. This contract for audiology equipment maintenance fits within the broader market for biomedical equipment repair and maintenance services, which is a specialized niche. While specific market size data for audiology equipment maintenance alone is not readily available, the overall medical equipment repair market is substantial. This contract represents a significant portion of spending within this specific sub-sector for the Department of Veterans Affairs.

Small Business Impact

This contract was not set aside for small businesses, nor is there information indicating subcontracting opportunities for small businesses. The award to E3 Diagnostics, Inc., a single entity, does not appear to directly benefit the small business ecosystem in this instance. Further investigation would be needed to determine if E3 Diagnostics, Inc. itself is a small business or if there are any subcontracting plans in place.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs (VA) contracting officers and program managers. As a sole-source award, transparency might be reduced compared to a competitively bid contract. The VA's Office of Inspector General (OIG) would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract, particularly given the significant dollar amount and lack of competition.

Related Government Programs

Medical Equipment Maintenance Contracts
Veterans Affairs Healthcare Services
Audiology Equipment Procurement
Preventative Maintenance Services
Corrective Maintenance Services

Risk Flags

Sole-source award lacks competitive justification.
High contract value without competitive benchmarking.
Potential for reduced price discovery and value for money.
Limited transparency into the selection process.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $58,508.98 to E3 DIAGNOSTICS, INC.. AUDIOLOGY EQUIPMENT PREVENTATIVE AND CORRECTIVE MAINTENANCE

Who is the contractor on this award?

The obligated recipient is E3 DIAGNOSTICS, 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 $58,508.98.

What is the period of performance?

Start: 2024-05-01. End: 2027-04-30.

What is the specific justification for awarding this contract on a sole-source basis?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified under circumstances such as when only one responsible source can provide the required supplies or services, or when there is a compelling urgency. For this contract, the VA would need to document why E3 Diagnostics, Inc. was the only viable option. This could be due to proprietary technology, unique service capabilities, or a lack of other qualified vendors in the relevant geographic area. Without this official justification, it remains difficult to fully assess the necessity of bypassing the competitive process.

How does the annual cost of this contract compare to similar audiology equipment maintenance contracts awarded by other federal agencies?

Direct comparison of the annual cost is difficult without access to a broader dataset of similar audiology equipment maintenance contracts. However, an annual cost of approximately $19.5 million ($58.5 million / 3 years) for maintenance services warrants scrutiny. Federal agencies often seek competitive bids to establish benchmark pricing. The absence of competition for this VA contract means there is no readily available market-driven price point to compare against. To perform a robust comparison, one would need to identify contracts with similar equipment types, service levels (preventative and corrective), and contract durations across agencies like the Department of Defense or Health and Human Services.

What are the key performance indicators (KPIs) and service level agreements (SLAs) outlined in the contract to ensure service quality?

The provided data does not detail the specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. However, for a contract of this nature and value, one would expect to see metrics related to response times for corrective maintenance, equipment uptime guarantees, preventative maintenance schedule adherence, and potentially customer satisfaction scores. The firm-fixed-price nature suggests that the contractor is responsible for delivering the service at the agreed-upon price, but the effectiveness of this is tied to how well the SLAs are defined and monitored by the VA contracting officer. Without these details, assessing the contractor's performance obligations and the government's ability to enforce them is not possible.

Has E3 Diagnostics, Inc. previously held similar contracts with the VA or other federal agencies, and what has been their performance history?

Information regarding E3 Diagnostics, Inc.'s prior contract history and performance is not included in the provided data. A thorough analysis would require accessing federal procurement databases (like SAM.gov or FPDS) to review past awards, contract performance evaluations (e.g., CPARS reports), and any documented issues or successes. Understanding their track record is crucial, especially for a sole-source award, as it provides insight into their reliability, quality of service, and ability to manage contracts of this magnitude. A history of strong performance could partially mitigate concerns about the lack of competition, while a poor history would heighten them.

What is the historical spending trend for audiology equipment maintenance by the Department of Veterans Affairs over the past five years?

The provided data only pertains to a single contract award and does not offer historical spending trends for audiology equipment maintenance by the VA. To analyze historical spending, one would need to query procurement databases for all contracts related to 'audiology equipment maintenance' awarded by the VA over a specified period (e.g., the last five fiscal years). This would reveal the total annual expenditure, the number of contracts awarded, the primary contractors, and whether spending has been consistent, increasing, or decreasing. Such an analysis would help contextualize the $58.5 million award within the VA's overall budget for these services and identify any significant shifts in procurement strategy or spending levels.

Industry Classification

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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3333 N KENNICOTT AVE, ARLINGTON HEIGHTS, IL, 60004

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

Financial Breakdown

Contract Ceiling: $99,590

Exercised Options: $58,509

Current Obligation: $58,509

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline