HHS/ASPR awards $136M contract to Agiliti Health for ventilator maintenance

Contract Overview

Contract Amount: $135,986,016 ($136.0M)

Contractor: Agiliti Health Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2020-07-28

End Date: 2021-07-27

Contract Duration: 364 days

Daily Burn Rate: $373.6K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: THIS IS A CONTRACT BETWEEN THE DEPARTMENT OF HEALTH AND HUMAN SERVICES/THE ASSISTANT SECRETARY FOR PREPAREDNESS AND RESPONSE (HHS/ASPR) AND AGILITI HEALTH, INC. FOR THE COMPREHENSIVE MAINTENANCE AND MANAGEMENT SERVICES OF MEDICAL VENTILATOR EQUIPMENT

Place of Performance

Location: CUMMING, FORSYTH County, GEORGIA, 30041

State: Georgia Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $136.0 million to AGILITI HEALTH INC for work described as: THIS IS A CONTRACT BETWEEN THE DEPARTMENT OF HEALTH AND HUMAN SERVICES/THE ASSISTANT SECRETARY FOR PREPAREDNESS AND RESPONSE (HHS/ASPR) AND AGILITI HEALTH, INC. FOR THE COMPREHENSIVE MAINTENANCE AND MANAGEMENT SERVICES OF MEDICAL VENTILATOR EQUIPMENT Key points: 1. The contract focuses on essential maintenance and management of medical ventilators. 2. Agiliti Health Inc. is the sole provider for these services. 3. The contract value is substantial, indicating a significant need for these services. 4. The sector is healthcare, specifically preparedness and response equipment.

Value Assessment

Rating: questionable

The contract value of $136 million for a one-year period for ventilator maintenance is high. Without specific details on the number of ventilators or the scope of services, it's difficult to benchmark against similar contracts. The pricing structure is firm fixed price, which can offer cost certainty but may not reflect the most economical approach if services are not fully utilized.

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. The justification for a sole-source award in this critical area needs careful scrutiny to ensure no viable alternatives were overlooked.

Taxpayer Impact: The lack of competition for a contract of this magnitude raises concerns about potential overspending and inefficient use of taxpayer funds.

Public Impact

Ensures critical medical equipment like ventilators are operational during health emergencies. Supports the nation's preparedness for public health crises. Potential for increased costs due to sole-source nature of the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
High contract value for maintenance services.
Potential for cost overruns if not managed effectively.

Positive Signals

Ensures availability of critical medical equipment.
Supports national health security preparedness.

Sector Analysis

This contract falls within the healthcare sector, specifically focusing on the maintenance of critical medical equipment. Spending benchmarks for such specialized maintenance services can vary widely based on the type and quantity of equipment, as well as the provider's expertise and geographic coverage.

Small Business Impact

The contract was awarded to Agiliti Health, Inc., a single entity. There is no indication of subcontracting opportunities for small businesses within this sole-source award, which limits their participation.

Oversight & Accountability

The sole-source nature of this contract warrants close oversight to ensure the services provided are necessary, performed effectively, and priced reasonably. Accountability for the maintenance and readiness of vital medical equipment rests with both the contractor and HHS/ASPR.

Related Government Programs

Other Electronic and Precision Equipment Repair and Maintenance
Department of Health and Human Services Contracting
Office of Assistant Secretary for Preparedness and Response Programs

Risk Flags

Sole-source award.
Lack of competition.
High contract value.
Potential for inefficient pricing.
Limited small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $136.0 million to AGILITI HEALTH INC. THIS IS A CONTRACT BETWEEN THE DEPARTMENT OF HEALTH AND HUMAN SERVICES/THE ASSISTANT SECRETARY FOR PREPAREDNESS AND RESPONSE (HHS/ASPR) AND AGILITI HEALTH, INC. FOR THE COMPREHENSIVE MAINTENANCE AND MANAGEMENT SERVICES OF MEDICAL VENTILATOR EQUIPMENT

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 $136.0 million.

What is the period of performance?

Start: 2020-07-28. End: 2021-07-27.

What was the justification for awarding this contract on a sole-source basis, and were alternative providers considered?

The justification for a sole-source award typically involves unique capabilities, critical urgency, or lack of adequate competition. For this contract, the specific rationale needs to be documented by HHS/ASPR. Without this documentation, it's difficult to assess if taxpayer funds were used efficiently or if a more competitive process could have yielded better pricing and value.

How does the per-unit cost of ventilator maintenance compare to industry standards or previous contracts?

Benchmarking the per-unit cost is challenging without knowing the exact services included and the number of ventilators covered. However, given the $136 million value for a one-year contract, the cost per ventilator appears high. A detailed cost analysis comparing this contract to similar agreements, considering the scope of work and equipment type, is necessary to determine if it represents fair value.

What mechanisms are in place to ensure the effectiveness and quality of the maintenance services provided by Agiliti Health?

Effectiveness and quality are typically ensured through performance metrics, service level agreements (SLAs), and regular reporting requirements outlined in the contract. HHS/ASPR should have a robust system for monitoring Agiliti Health's performance, including response times, repair success rates, and adherence to maintenance schedules, to guarantee the readiness of critical ventilator equipment.

Industry Classification

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

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

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

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: $135,986,016

Exercised Options: $135,986,016

Current Obligation: $135,986,016

Actual Outlays: $135,986,016

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Cost or Pricing Data: YES

Timeline