VA awards $52.5M for COVID-19 test kits to Cepheid amidst pandemic

Contract Overview

Contract Amount: $52,469,520 ($52.5M)

Contractor: Cepheid

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-09-01

End Date: 2020-09-30

Contract Duration: 29 days

Daily Burn Rate: $1.8M/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: CONTRACTOR SHALL PROVIDE VA WITH EMERGENCY COVID-19 MOLECULAR TEST KITS.

Place of Performance

Location: INDEPENDENCE, CUYAHOGA County, OHIO, 44131

State: Ohio Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $52.5 million to CEPHEID for work described as: CONTRACTOR SHALL PROVIDE VA WITH EMERGENCY COVID-19 MOLECULAR TEST KITS. Key points: 1. Significant award for critical pandemic supplies. 2. Sole-source award raises questions about competition. 3. High value contract warrants close scrutiny. 4. Focus on medical instrument manufacturing sector.

Value Assessment

Rating: questionable

The contract value of $52.5M for a single delivery order is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar molecular test kits.

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.

Taxpayer Impact: The lack of competition may have resulted in a higher price than could have been achieved through a competitive process, impacting taxpayer funds.

Public Impact

Ensures availability of critical COVID-19 testing supplies for veterans. Addresses urgent public health needs during the pandemic. Highlights reliance on specific manufacturers for essential medical equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Urgent need justification
Sole-source award

Positive Signals

Addresses critical need
Supports public health

Sector Analysis

This contract falls within the Surgical and Medical Instrument Manufacturing sector, which saw increased demand during the COVID-19 pandemic. Benchmarks for similar emergency procurements are difficult to establish due to the unique circumstances.

Small Business Impact

The contract was not awarded to a small business. There is no indication of subcontracting opportunities for small businesses in the provided data.

Oversight & Accountability

The award was made by the Department of Veterans Affairs. Oversight would focus on the justification for the sole-source award and the necessity of the procurement.

Related Government Programs

Surgical and Medical Instrument Manufacturing
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for inflated pricing
Urgent need may bypass standard controls

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $52.5 million to CEPHEID. CONTRACTOR SHALL PROVIDE VA WITH EMERGENCY COVID-19 MOLECULAR TEST KITS.

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 $52.5 million.

What is the period of performance?

Start: 2020-09-01. End: 2020-09-30.

Was the sole-source justification for this contract adequately documented and validated?

The provided data indicates a sole-source award, suggesting an urgent need or lack of viable alternatives. A thorough review would be required to confirm if the justification met federal procurement regulations, ensuring the government obtained necessary supplies without undue cost or delay.

What was the basis for selecting Cepheid as the sole-source provider?

Sole-source awards are typically justified by factors such as unique capabilities, urgent and compelling needs, or lack of adequate competition. Understanding the specific rationale behind choosing Cepheid is crucial for assessing the procurement's fairness and value.

How did the VA ensure the price paid was reasonable given the lack of competition?

Without competition, price reasonableness is assessed through methods like comparison to commercial prices, historical prices, or other government contracts. The VA would need to demonstrate that the firm fixed price was justified based on available market data or cost analysis.

Industry Classification

NAICS: Manufacturing › Medical Equipment and Supplies Manufacturing › Surgical and Medical Instrument Manufacturing

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

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 (UEI: 024744476)

Address: 904 CARIBBEAN DR, 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: $52,469,520

Exercised Options: $52,469,520

Current Obligation: $52,469,520

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C77620D0002

IDV Type: IDC

Timeline