HHS awards $27.1M for LTV 1200 ventilator maintenance, with 4 bids received

Contract Overview

Contract Amount: $27,166,100 ($27.2M)

Contractor: Agiliti Health Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2020-01-24

End Date: 2022-01-23

Contract Duration: 730 days

Daily Burn Rate: $37.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: LTV 1200 VENTILATOR PREVENTIVE MAINTENANCE

Place of Performance

Location: MINNEAPOLIS, HENNEPIN County, MINNESOTA, 55439

State: Minnesota Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $27.2 million to AGILITI HEALTH INC for work described as: LTV 1200 VENTILATOR PREVENTIVE MAINTENANCE Key points: 1. Value for money appears reasonable given the contract duration and scope. 2. Competition dynamics indicate a moderately competitive bidding process. 3. Risk indicators are low, with a firm fixed-price contract type. 4. Performance context is maintenance of critical medical equipment. 5. Sector positioning is within healthcare infrastructure support.

Value Assessment

Rating: good

The contract value of $27.1 million over two years for preventive maintenance of LTV 1200 ventilators suggests a cost of approximately $13.5 million per year. This is within a reasonable range for specialized medical equipment maintenance, especially considering the critical nature of ventilators. Benchmarking against similar contracts for ventilator maintenance would provide a more precise value assessment, but the firm fixed-price structure offers cost certainty.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, with four bids received. This level of competition is generally considered healthy and suggests that multiple vendors were interested and capable of performing the required services. The presence of four bidders likely contributed to price discovery and potentially drove down costs compared to a less competitive scenario.

Taxpayer Impact: A competitive bidding process helps ensure that taxpayer dollars are used efficiently by encouraging vendors to offer their best pricing. The four bids received indicate that the government had options, which is beneficial for achieving a fair market price.

Public Impact

Hospitals and healthcare facilities utilizing LTV 1200 ventilators benefit from ensured operational readiness. The contract ensures the continued availability of critical respiratory support equipment. Geographic impact is likely nationwide, supporting facilities that rely on these ventilators. Workforce implications include the need for skilled technicians to perform maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Firm fixed-price contract provides cost certainty.
Full and open competition with multiple bidders.
Contract awarded to Agiliti Health Inc., a known provider in the healthcare equipment space.

Sector Analysis

The healthcare sector relies heavily on specialized equipment maintenance to ensure patient care continuity. Contracts for medical equipment maintenance, such as ventilators, are crucial for hospital operations. The market for such services is competitive, with established players and specialized service providers. Spending benchmarks for similar maintenance contracts can vary significantly based on equipment type, age, and service level agreements.

Small Business Impact

This contract was awarded under full and open competition and does not indicate any specific small business set-aside. While the prime contractor, Agiliti Health Inc., is a large business, there is potential for subcontracting opportunities for small businesses that provide specialized parts or services related to ventilator maintenance. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The contract is subject to standard federal procurement oversight. The firm fixed-price nature of the contract simplifies financial oversight. Accountability measures are tied to the performance of maintenance services as per the contract terms. Transparency is facilitated by the public nature of federal contract awards.

Related Government Programs

Medical Equipment Maintenance Contracts
Respiratory Support Devices
Healthcare Infrastructure Support
Department of Health and Human Services Contracts

Risk Flags

Potential for increased demand impacting maintenance schedules.
Risk of critical component failure despite preventive maintenance.
Dependence on a single contractor for essential equipment maintenance.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $27.2 million to AGILITI HEALTH INC. LTV 1200 VENTILATOR PREVENTIVE MAINTENANCE

Who is the contractor on this award?

The obligated recipient is AGILITI HEALTH INC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Office of Assistant Secretary for Preparedness and Response).

What is the total obligated amount?

The obligated amount is $27.2 million.

What is the period of performance?

Start: 2020-01-24. End: 2022-01-23.

What is the track record of Agiliti Health Inc. in performing similar federal contracts?

Agiliti Health Inc. has a history of performing contracts related to medical equipment maintenance and services for federal agencies. Their experience likely includes managing preventive maintenance schedules, providing repair services, and ensuring compliance with regulatory standards. A review of their past performance on similar government contracts would reveal their reliability, quality of service, and ability to meet delivery timelines. This specific contract with HHS for LTV 1200 ventilator maintenance builds upon their established presence in the healthcare services market, suggesting a degree of confidence in their capabilities by the awarding agency.

How does the per-unit cost of this maintenance contract compare to market rates for similar services?

The total contract value is $27.1 million over 730 days, averaging approximately $37,145 per day for the maintenance of an unspecified number of LTV 1200 ventilators. Without knowing the exact number of ventilators covered, a precise per-unit cost is difficult to calculate. However, if we assume a significant number of ventilators are covered, the daily cost per unit would likely be in the range of tens to hundreds of dollars. This needs to be benchmarked against industry standards for specialized medical equipment maintenance, which can vary based on the complexity of the equipment, the scope of services (e.g., parts included, response time), and the geographic location of the facilities.

What are the primary risks associated with this contract, and how are they mitigated?

The primary risks associated with this contract include potential equipment obsolescence, unexpected major component failures, and contractor performance issues. Mitigation strategies are embedded in the contract structure. The firm fixed-price nature helps mitigate cost overruns for the government. The requirement for preventive maintenance aims to reduce the likelihood of major failures. The selection of Agiliti Health Inc., presumably based on past performance and capability assessments, also serves as a risk mitigation factor. Furthermore, the contract duration of two years allows for reassessment and potential re-competition if performance is unsatisfactory.

How effective is the preventive maintenance program in ensuring the long-term operational readiness of the LTV 1200 ventilators?

The effectiveness of the preventive maintenance program is crucial for ensuring the long-term operational readiness of LTV 1200 ventilators, which are critical life-support devices. A well-executed preventive maintenance schedule, as stipulated in this contract, should significantly reduce the incidence of unexpected breakdowns and extend the useful life of the equipment. The program's success depends on adherence to manufacturer specifications, the skill of the technicians performing the maintenance, and the timely replacement of worn parts. The contract's performance metrics and oversight mechanisms would be key indicators of its effectiveness in practice.

What has been the historical spending pattern for LTV 1200 ventilator maintenance by the Department of Health and Human Services?

Analyzing historical spending patterns for LTV 1200 ventilator maintenance by HHS would provide valuable context for this $27.1 million award. This includes examining previous contract values, durations, and the number of bids received for similar services. Understanding whether spending has been consistent, increasing, or decreasing can indicate trends in equipment utilization, maintenance needs, and market pricing. Significant deviations from historical spending could warrant further investigation into the reasons behind the change, such as increased demand, new technological requirements, or shifts in the competitive landscape.

Industry Classification

NAICS: Retail Trade › Building Material and Supplies Dealers › Other Building Material Dealers

Product/Service Code: MAINT/REPAIR SHOP EQPT

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Solicitation ID: 75A50119R00041

Offers Received: 4

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Sizewise Rentals L.L.C. (UEI: 118040777)

Address: 6625 W 78TH ST STE 300, MINNEAPOLIS, MN, 55439

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

Financial Breakdown

Contract Ceiling: $42,506,600

Exercised Options: $27,166,100

Current Obligation: $27,166,100

Actual Outlays: $12,549,525

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: NO

Timeline