HHS Awards $155K Delivery Order to Sonova USA for Electromedical Apparatus in Minnesota

Contract Overview

Contract Amount: $155,000 ($155.0K)

Contractor: Sonova USA Inc

Awarding Agency: Department of Health and Human Services

Start Date: 2025-06-03

End Date: 2026-05-31

Contract Duration: 362 days

Daily Burn Rate: $428/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: CASS LAKE, RED LAKE, AND WHITE EARTH SERVICE UNITS

Place of Performance

Location: BEMIDJI, BELTRAMI County, MINNESOTA, 56601

State: Minnesota Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $155,000 to SONOVA USA INC for work described as: CASS LAKE, RED LAKE, AND WHITE EARTH SERVICE UNITS Key points: 1. The contract is for electromedical and electrotherapeutic apparatus, a niche manufacturing sector. 2. Sonova USA Inc. is the sole awardee, raising questions about competition. 3. The award is a delivery order under an unspecified contract, indicating potential for follow-on work. 4. The fixed price contract type aims to control costs, but the lack of competition may inflate the price.

Value Assessment

Rating: fair

The award amount of $155,000 is relatively small. Without a benchmark for similar electromedical apparatus contracts, it's difficult to definitively assess value. The lack of competition suggests potential for overpricing.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. This significantly limits price discovery and may result in a higher price than if multiple vendors had competed.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding for these essential medical devices.

Public Impact

Patients in the Cass Lake, Red Lake, and White Earth Service Units will receive necessary electromedical equipment. The Indian Health Service aims to ensure access to medical technology for underserved communities. The procurement process raises concerns about efficient use of taxpayer funds for healthcare services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for overpricing
Sole-source award

Positive Signals

Addresses a specific healthcare need
Fixed price contract

Sector Analysis

The electromedical and electrotherapeutic apparatus manufacturing sector is specialized. Spending benchmarks are difficult to establish without more specific product details, but this award is a small portion of overall federal healthcare spending.

Small Business Impact

There is no indication that small businesses were considered or involved in this procurement, as it was awarded sole-source to Sonova USA Inc.

Oversight & Accountability

The sole-source nature of this award warrants further review to ensure the government obtained fair and reasonable pricing and that competition was not improperly excluded.

Related Government Programs

Electromedical and Electrotherapeutic Apparatus Manufacturing
Department of Health and Human Services Contracting
Indian Health Service Programs

Risk Flags

Sole-source award limits competition.
Potential for inflated pricing.
Lack of transparency in justification.
No small business participation evident.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $155,000 to SONOVA USA INC. CASS LAKE, RED LAKE, AND WHITE EARTH SERVICE UNITS

Who is the contractor on this award?

The obligated recipient is SONOVA USA INC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Indian Health Service).

What is the total obligated amount?

The obligated amount is $155,000.

What is the period of performance?

Start: 2025-06-03. End: 2026-05-31.

What specific electromedical or electrotherapeutic apparatus are being procured, and what is their criticality to patient care?

The specific apparatus are not detailed in the provided data. However, electromedical and electrotherapeutic devices are crucial for diagnosis, treatment, and rehabilitation across various medical specialties. Their criticality would depend on the exact nature of the devices and the patient populations they serve within the Indian Health Service units.

What is the justification for awarding this contract sole-source, and were alternative competitive strategies explored?

The justification for a sole-source award is not provided. Typically, sole-source contracts are used when only one responsible source can provide the required supplies or services. Agencies must document the rationale and explore competitive options before resorting to sole-source procurement to ensure fair and open competition.

How does the pricing of this delivery order compare to market rates for similar electromedical equipment, given the lack of competition?

Without a competitive bidding process, it is challenging to ascertain if the pricing is aligned with market rates. The absence of competition inherently removes the downward pressure on prices that multiple bids would typically provide, potentially leading to a less favorable price for the government.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Electromedical and Electrotherapeutic Apparatus Manufacturing

Product/Service Code: MEDICAL SERVICES › OTHER MEDICAL SERVICES

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 750 N COMMONS DR STE 200, AURORA, IL, 60504

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: $155,000

Exercised Options: $155,000

Current Obligation: $155,000

Actual Outlays: $75,787

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C79125D0007

IDV Type: IDC

Timeline