VA's Salt Lake City lab pays $7,609 per reportable result for coagulation testing, raising value concerns

Contract Overview

Contract Amount: $7,609 ($7.6K)

Contractor: Werfen USA LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-03-04

End Date: 2026-02-28

Contract Duration: 361 days

Daily Burn Rate: $21/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: SALT LAKE CITY COAGULATION COST PER REPORTABLE RESULT PER STATEMENT OF WORK VISN 19

Place of Performance

Location: BEDFORD, MIDDLESEX County, MASSACHUSETTS, 01730

State: Massachusetts Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $7,608.64 to WERFEN USA LLC for work described as: SALT LAKE CITY COAGULATION COST PER REPORTABLE RESULT PER STATEMENT OF WORK VISN 19 Key points: 1. The cost per reportable result is significantly higher than anticipated, suggesting potential inefficiencies. 2. WERFEN USA LLC secured this contract, indicating a need to assess their performance and pricing. 3. The contract's fixed-price nature provides some cost certainty, but the high per-unit cost remains a risk. 4. This contract falls within the analytical laboratory instrument manufacturing sector, a niche area. 5. The Department of Veterans Affairs is the primary agency involved, highlighting its commitment to healthcare services. 6. The contract duration of 361 days suggests a need for ongoing, consistent service delivery.

Value Assessment

Rating: questionable

The reported cost of $7,608.64 per reportable result for coagulation testing appears exceptionally high when benchmarked against typical laboratory service costs. While specific comparisons are difficult without detailed service scope, standard diagnostic tests often fall into much lower cost brackets. This high figure warrants further investigation into the specific components of the 'reportable result' and the associated overhead. The VA should scrutinize the pricing structure to ensure it reflects fair market value and operational efficiency.

Cost Per Unit: $7,608.64 per reportable result

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 fact that WERFEN USA LLC was the selected vendor implies they offered the most advantageous proposal based on the evaluation criteria. However, the high per-unit cost, even with open competition, raises questions about the effectiveness of the bidding process in driving down prices or if the market for such specialized services is inherently limited.

Taxpayer Impact: While open competition is generally beneficial for taxpayers, the elevated cost per reportable result indicates that the competitive process may not have yielded the most cost-effective outcome in this instance. Taxpayers may be overpaying for the services rendered.

Public Impact

Veterans in the Salt Lake City area will benefit from access to coagulation testing services. The contract ensures the availability of critical diagnostic information for patient care within the VA system. This service supports the operational efficiency of the VA's laboratory in Salt Lake City. The contract supports jobs within the analytical laboratory instrument manufacturing and service sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

High per-unit cost raises concerns about overall value for money.
Lack of detailed breakdown for 'reportable result' makes precise cost analysis difficult.
Potential for market concentration in specialized analytical laboratory instruments.

Positive Signals

Awarded through full and open competition, indicating a fair bidding process.
Firm fixed-price contract provides cost predictability.
Contract supports essential healthcare services for veterans.

Sector Analysis

This contract falls within the Analytical Laboratory Instrument Manufacturing sector, specifically related to diagnostic testing equipment and services. The market for specialized laboratory instruments can be concentrated, with a few key players dominating. Benchmarking spending in this area is challenging without more specific details on the type of coagulation testing and the instruments involved. However, the VA's consistent need for such services suggests a stable demand within the healthcare sector.

Small Business Impact

The provided data does not indicate any small business set-aside provisions for this contract, nor does it specify subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem is likely minimal unless the prime contractor, WERFEN USA LLC, voluntarily engages small businesses in its supply chain or subcontracting efforts.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' procurement and program management offices. Accountability measures are inherent in the contract's performance requirements and payment terms. Transparency is facilitated by the contract award process, which was conducted under full and open competition. Specific Inspector General jurisdiction would depend on the nature of any potential issues or investigations that may arise.

Related Government Programs

VA Laboratory Services
Medical Equipment Procurement
Diagnostic Testing Contracts
Clinical Laboratory Improvement Amendments (CLIA) Compliance

Risk Flags

High Cost Per Unit
Potential Lack of Cost-Effectiveness
Limited Transparency on Cost Drivers

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $7,608.64 to WERFEN USA LLC. SALT LAKE CITY COAGULATION COST PER REPORTABLE RESULT PER STATEMENT OF WORK VISN 19

Who is the contractor on this award?

The obligated recipient is WERFEN USA 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 $7,608.64.

What is the period of performance?

Start: 2025-03-04. End: 2026-02-28.

What specific components constitute a 'reportable result' for coagulation testing under this contract, and how does this definition influence the per-unit cost?

A 'reportable result' in coagulation testing typically refers to a single, validated measurement of a specific clotting factor or parameter (e.g., PT, aPTT, INR). The cost per reportable result is influenced by numerous factors including the complexity of the test, the reagents used, instrument calibration and maintenance, quality control procedures, personnel time for analysis and validation, and data management. For this contract, the high cost suggests that either the definition of a 'reportable result' is exceptionally comprehensive, encompassing multiple steps or analyses, or that the associated operational costs (reagents, maintenance, specialized personnel) are significantly higher than average. Without a detailed breakdown of the Statement of Work (SOW) and the specific tests included in a 'reportable result,' it is difficult to definitively pinpoint the cost drivers. However, the VA should seek clarification on the SOW to ensure the definition aligns with standard industry practices and does not artificially inflate the per-unit cost.

How does the $7,608.64 per reportable result compare to similar coagulation testing contracts awarded by other federal agencies or within the private sector?

Benchmarking this specific cost of $7,608.64 per reportable result against similar contracts is challenging without more granular data on the exact tests performed and the scope of services. However, as a general indicator, typical costs for individual coagulation tests (like PT/INR or aPTT) in a clinical laboratory setting often range from tens to a few hundred dollars per test, not thousands. Even complex panels or specialized assays rarely reach the reported per-unit cost unless they involve extensive sample preparation, multiple analytical steps, or highly specialized equipment and reagents. If this figure represents a single, standard coagulation test, it is exceptionally high and warrants significant scrutiny. If it represents a comprehensive panel or a highly specialized service, a more detailed comparison with similar niche contracts would be necessary, but the figure remains a strong indicator of potential overpayment.

What is WERFEN USA LLC's track record with the Department of Veterans Affairs and other federal agencies regarding performance and pricing on similar contracts?

Assessing WERFEN USA LLC's track record is crucial for understanding the context of this contract. A review of federal procurement databases (like FPDS or SAM.gov) would reveal their past performance ratings, any past performance issues or disputes, and the pricing trends on previous contracts. If WERFEN USA LLC has a history of delivering high-quality services at competitive prices to the VA or other agencies, this contract's high per-unit cost might be attributable to unique contract requirements or market conditions. Conversely, a history of performance issues or consistently high pricing on similar contracts would amplify concerns about the current award. Without specific historical data, it's prudent to assume that due diligence was performed during the solicitation process, but the current cost remains a point of concern.

What are the potential risks associated with a high per-reportable-result cost for essential laboratory services like coagulation testing?

The primary risk associated with a high per-reportable-result cost is financial inefficiency and potential overspending of taxpayer funds. This can lead to budget overruns, reduced capacity for other essential services, or a diversion of funds from patient care initiatives. Operationally, it could signal underlying inefficiencies in the service delivery process, potentially impacting turnaround times or quality if cost-cutting measures are implemented inappropriately. Furthermore, if the high cost is not justified by superior quality or unique service offerings, it could indicate a lack of effective price competition or market power imbalance. This could also set a precedent for future contracts, potentially normalizing higher costs for similar services across the federal healthcare system.

How has VA spending on analytical laboratory instruments and services trended over the past five years, and does this contract align with those patterns?

Analyzing VA spending trends on analytical laboratory instruments and services over the past five years would provide valuable context. If overall spending in this category has been increasing, this contract might be part of a broader trend. However, if spending has been stable or decreasing, a significant increase in the per-unit cost for a specific service like coagulation testing would be more noteworthy. It's important to differentiate between spending on instrument acquisition versus ongoing service and reagent contracts. This contract appears to be for services (implied by 'cost per reportable result'), which often have different cost dynamics than capital equipment purchases. Without historical spending data specific to VA's coagulation testing services, it's difficult to definitively state alignment, but the current high cost warrants comparison to historical VA spending on similar diagnostic services.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Analytical Laboratory Instrument Manufacturing

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 36C25925Q0074

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 180 HARTWELL RD, BEDFORD, MA, 01730

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

Financial Breakdown

Contract Ceiling: $7,609

Exercised Options: $7,609

Current Obligation: $7,609

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C25925A0015

IDV Type: BPA

Timeline