VA awards $32.3M for lab supplies, with no competition and a single vendor

Contract Overview

Contract Amount: $32,325 ($32.3K)

Contractor: Cepheid

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-10-01

End Date: 2025-09-30

Contract Duration: 364 days

Daily Burn Rate: $89/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: LAB SUPPLIES

Place of Performance

Location: SUNNYVALE, SANTA CLARA County, CALIFORNIA, 94089

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $32,325.48 to CEPHEID for work described as: LAB SUPPLIES Key points: 1. The contract's value is significant, but the lack of competition raises concerns about potential overspending. 2. Sole-source awards can limit opportunities for innovative solutions and potentially higher quality products from other vendors. 3. The fixed-price contract type offers some cost certainty, but the absence of competition hinders true price discovery. 4. Performance is scheduled over one year, suggesting a need for ongoing supply rather than a one-time acquisition. 5. The award falls within the Analytical Laboratory Instrument Manufacturing sector, indicating specialized equipment or consumables. 6. The Department of Veterans Affairs is the primary agency involved, highlighting its commitment to supporting healthcare services.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to the sole-source nature and lack of publicly available comparable pricing for these specific lab supplies. Without competitive bids, it's difficult to ascertain if the $32.3 million represents a fair market price. The fixed-price contract type provides some cost control, but the absence of competition means the VA may not be achieving the best possible value for these essential supplies.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, CEPHEID, was considered. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. While sole-source awards can be justified in specific circumstances (e.g., unique capabilities, urgent needs), they limit the government's ability to explore a wider range of options and potentially secure better pricing through competition.

Taxpayer Impact: The lack of competition means taxpayers may be paying a premium, as the government did not benefit from the price reductions typically driven by a competitive bidding environment.

Public Impact

Veterans receiving healthcare services through the VA will benefit from the availability of necessary laboratory supplies. The contract supports diagnostic testing and medical analysis, crucial components of patient care. The geographic impact is primarily within California, where the VA facilities receiving these supplies are located. The contract supports the operational needs of VA laboratories, ensuring continuity of essential medical services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to inflated prices.
Sole-source awards can stifle innovation by excluding potential alternative suppliers.
Transparency in pricing is reduced without competitive benchmarks.

Positive Signals

Fixed-price contract provides cost certainty for the awarded amount.
The contract ensures a continuous supply of critical lab materials for VA operations.
The vendor, CEPHEID, is likely a specialized provider in this niche market.

Sector Analysis

The Analytical Laboratory Instrument Manufacturing sector encompasses companies that produce instruments and related supplies used in laboratory analysis. This is a critical sector supporting healthcare, research, and quality control across various industries. The VA's spending in this area is indicative of its investment in diagnostic capabilities. Comparable spending benchmarks are difficult to establish without knowing the specific nature of the lab supplies, but significant investments in laboratory infrastructure are common within large healthcare systems.

Small Business Impact

There is no indication that this contract included a small business set-aside. The sole-source nature of the award further suggests that opportunities for small businesses to participate, either as prime contractors or through subcontracting, were likely limited or non-existent in this specific procurement.

Oversight & Accountability

Oversight for this contract would fall under the Department of Veterans Affairs. Accountability measures are typically managed through contract performance reviews and adherence to the terms of the fixed-price delivery order. Transparency is somewhat limited due to the sole-source award, but contract details are generally available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Medical Supplies
Laboratory Equipment
Diagnostic Testing Services
Veterans Health Administration Procurement

Risk Flags

Sole-source award lacks competition.
Potential for overpayment due to lack of competitive bidding.
Limited transparency on specific product details and pricing justification.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $32,325.48 to CEPHEID. LAB SUPPLIES

Who is the contractor on this award?

The obligated recipient is CEPHEID.

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 $32,325.48.

What is the period of performance?

Start: 2024-10-01. End: 2025-09-30.

What specific types of lab supplies are being procured under this contract?

The provided data indicates the contract is for 'LAB SUPPLIES' and falls under the NAICS code 334516, 'Analytical Laboratory Instrument Manufacturing.' This suggests the supplies are likely related to the operation, maintenance, or consumables for analytical laboratory instruments. Examples could include reagents, calibration standards, specific testing kits, or components for analytical devices. Without more detailed line-item information, the exact nature of the supplies remains general, but the classification points towards specialized items used in scientific analysis rather than general office or cleaning supplies.

Why was this contract awarded on a sole-source basis instead of being competed?

The data explicitly states the contract type as 'NOT COMPETED' and the contract listing as 'sole-source.' This implies that the Department of Veterans Affairs determined that competition was not feasible or practical for this specific procurement. Common justifications for sole-source awards include situations where only one vendor possesses the necessary unique capabilities, technology, or proprietary products required. It could also be due to urgent and compelling circumstances where a lengthy competitive process would be detrimental. However, without further documentation from the VA, the precise rationale for bypassing competition remains undisclosed in the provided data.

How does the $32.3 million award compare to historical VA spending on similar lab supplies?

The provided data does not include historical spending figures for similar lab supplies by the VA, making a direct comparison impossible. To assess this, one would need to analyze past contracts for 'LAB SUPPLIES' or items within NAICS code 334516 awarded by the VA over several fiscal years. Such an analysis would reveal trends in spending volume, pricing, and whether this $32.3 million award represents an increase, decrease, or consistent level of investment in these types of materials. The current data point only provides the value of this single delivery order.

What are the potential risks associated with a sole-source award for essential lab supplies?

The primary risk associated with a sole-source award for essential lab supplies is the potential for inflated pricing. Without competitive pressure, the vendor may not be incentivized to offer the lowest possible price, leading to increased costs for the government and, by extension, taxpayers. Another risk is the lack of access to potentially superior or more cost-effective alternatives that other vendors might offer. Furthermore, sole-source awards can reduce transparency in the procurement process and may limit opportunities for small businesses or innovative new entrants into the market. Dependence on a single supplier can also create supply chain vulnerabilities if that supplier experiences disruptions.

What is the track record of CEPHEID as a government contractor, particularly with the VA?

The provided data identifies CEPHEID as the contractor but does not offer details on their track record, past performance, or previous contract history with the VA or other government agencies. To assess CEPHEID's track record, one would need to consult government contract databases (like SAM.gov or FPDS) to review their past awards, performance evaluations (if available), and any history of disputes or issues. A positive track record would involve consistent on-time delivery, adherence to quality standards, and competitive pricing on previous contracts, whereas a negative one might include performance failures or contract terminations.

What is the significance of the contract duration (364 days) in relation to the total award value?

The contract has a duration of 364 days, which is just under one year, and the total award value is $32.3 million. This translates to an average monthly expenditure of approximately $2.8 million ($32.3M / 12 months). The duration suggests this is an ongoing requirement for laboratory supplies rather than a one-time purchase. The relatively short duration (less than a year) for such a substantial amount might indicate that this is a recurring need that will be re-procured, or it could be a base period for a larger contract with options. The fixed-price nature means the VA is committed to paying up to $32.3 million for supplies delivered within this period.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Danaher Corporation

Address: 904, EAST CARIBBEAN DRIVE, SUNNYVALE, CA, 94089

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: $32,325

Exercised Options: $32,325

Current Obligation: $32,325

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C26325D0005

IDV Type: IDC

Timeline