HHS awards $1.57M for lab supplies, including COVID-19 kits, to Cepheid

Contract Overview

Contract Amount: $1,572,200 ($1.6M)

Contractor: Cepheid

Awarding Agency: Department of Health and Human Services

Start Date: 2024-02-08

End Date: 2026-04-30

Contract Duration: 812 days

Daily Burn Rate: $1.9K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: LAB SUPPLIES INCLUSIVE OF TESTING SUPPLIES USING CEPHEID GENEXPERT ANALYZER INCLUDING MICROBIOLOGY SUPPLIES, REAGENT KITS AND COVID-19 TEST KITS, ORDER "AS NEEDED".

Place of Performance

Location: CHINLE, APACHE County, ARIZONA, 86503

State: Arizona Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $1.6 million to CEPHEID for work described as: LAB SUPPLIES INCLUSIVE OF TESTING SUPPLIES USING CEPHEID GENEXPERT ANALYZER INCLUDING MICROBIOLOGY SUPPLIES, REAGENT KITS AND COVID-19 TEST KITS, ORDER "AS NEEDED". Key points: 1. Contract value of $1.57M over 2 years for essential lab and testing supplies. 2. Sole awardee Cepheid is the manufacturer of the GeneXpert analyzer, suggesting a potential sole-source situation. 3. The contract's 'as needed' ordering mechanism introduces uncertainty in actual utilization and cost. 4. Performance is concentrated in Arizona, serving the Indian Health Service. 5. The firm-fixed-price contract type aims to control costs for defined supplies. 6. The contract was competed under SAP, indicating a potentially streamlined procurement process for smaller value contracts.

Value Assessment

Rating: fair

The contract value of $1.57M for lab supplies over approximately two years appears reasonable given the specialized nature of the equipment and reagents. However, without specific details on the quantity of supplies or the exact types of tests covered, a precise value-for-money assessment is challenging. Benchmarking against similar contracts for diagnostic supplies is difficult without more granular data on the specific kits and reagents procured. The 'as needed' ordering implies flexibility but also potential for variable spending.

Cost Per Unit: N/A

Competition Analysis

Competition Level: unknown

The contract was competed under SAP (Simplified Acquisition Procedures), which typically suggests a competitive process for acquisitions below certain thresholds. However, the data does not specify the number of bidders or the nature of the competition. Given that Cepheid manufactures the GeneXpert analyzer, it is possible that the competition was limited to authorized distributors or that the requirement was structured in a way that favored Cepheid's products, potentially leaning towards a sole-source justification if no other equivalent systems were considered.

Taxpayer Impact: Competition under SAP can offer some taxpayer savings, but the extent depends on the actual number of bids received and the pricing offered. If competition was limited, taxpayers may not have received the full benefit of a broader market solicitation.

Public Impact

Beneficiaries include patients served by the Indian Health Service in Arizona, who will receive timely diagnostic testing. Services delivered encompass essential laboratory testing supplies, including microbiology and COVID-19 test kits, crucial for public health. Geographic impact is focused on Arizona, supporting healthcare infrastructure within the state. Workforce implications include supporting laboratory technicians and healthcare professionals who rely on these supplies for patient care.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition due to specialized equipment reliance.
Uncertainty in actual spending due to 'as needed' ordering.
Concentration of award to a single vendor may limit future price negotiation leverage.

Positive Signals

Firm-fixed-price contract provides cost certainty for ordered items.
Procurement under SAP suggests an effort towards efficient acquisition.
Supports critical diagnostic needs for the Indian Health Service.

Sector Analysis

This contract falls within the broader healthcare and medical supplies sector, specifically focusing on diagnostic laboratory equipment and consumables. The market for diagnostic testing, particularly in areas like infectious diseases (including COVID-19), is significant and driven by technological advancements and public health needs. Contracts like this are essential for maintaining the operational capacity of healthcare providers, especially those serving specific populations like the Indian Health Service. Benchmarking against broader medical supply contracts is possible, but specificity to diagnostic analyzers like Cepheid's GeneXpert is key.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). As a competed contract under SAP, there may have been opportunities for small businesses to participate as resellers or distributors, but the primary awardee is Cepheid, a large manufacturer. Subcontracting implications are not detailed, but typically for such specialized supplies, direct manufacturer or authorized distributor sales are common. The impact on the small business ecosystem would likely be minimal unless small businesses were involved in the supply chain or distribution.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Health and Human Services (HHS) and its Indian Health Service (IHS) agency. Standard contract administration processes, including monitoring delivery, quality, and invoicing, would be in place. Transparency is facilitated by public contract databases, but detailed performance metrics and spending breakdowns beyond the contract value are not readily available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

HHS Medical Supplies Contracts
Indian Health Service Procurement
Diagnostic Testing Equipment and Reagents
COVID-19 Testing Supplies
Laboratory Services Contracts

Risk Flags

Potential for sole-source justification due to specialized equipment.
Uncertainty in actual expenditure due to 'as needed' ordering.
Limited visibility into specific test kit types procured.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $1.6 million to CEPHEID. LAB SUPPLIES INCLUSIVE OF TESTING SUPPLIES USING CEPHEID GENEXPERT ANALYZER INCLUDING MICROBIOLOGY SUPPLIES, REAGENT KITS AND COVID-19 TEST KITS, ORDER "AS NEEDED".

Who is the contractor on this award?

The obligated recipient is CEPHEID.

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 $1.6 million.

What is the period of performance?

Start: 2024-02-08. End: 2026-04-30.

What is the historical spending pattern for lab supplies with Cepheid by the Indian Health Service?

Historical spending data for lab supplies specifically with Cepheid by the Indian Health Service is not provided in the current data extract. To assess historical patterns, one would need to query federal procurement databases (like FPDS or USASpending) for past contracts awarded to Cepheid by IHS for similar goods and services. Analyzing prior contract values, durations, and ordering volumes would reveal trends in utilization and spending. This historical context is crucial for understanding if the current $1.57M award represents an increase, decrease, or consistent level of investment in these supplies and for identifying any patterns in the 'as needed' ordering behavior over time.

How does the per-unit cost of Cepheid's GeneXpert reagents compare to market rates or similar analyzers?

A direct per-unit cost comparison for Cepheid's GeneXpert reagents against market rates or similar analyzers is not feasible with the provided data. The contract specifies 'LAB SUPPLIES INCLUSIVE OF TESTING SUPPLIES USING CEPHEID GENEXPERT ANALYZER INCLUDING MICROBIOLOGY SUPPLIES, REAGENT KITS AND COVID-19 TEST KITS, ORDER "AS NEEDED"'. This broad description lacks the specific product codes, quantities, and unit prices required for a precise benchmark. To perform such an analysis, detailed pricing information from the contract's CLINs (Contract Line Item Numbers) would be necessary, along with access to market intelligence reports or competitor pricing for comparable diagnostic platforms and their associated consumables.

What is the risk associated with the 'as needed' ordering mechanism for this contract?

The 'as needed' ordering mechanism presents several risks. Firstly, it introduces uncertainty in actual spending, making budget forecasting and financial planning more challenging for the agency. The total expenditure could be significantly lower or higher than the contract ceiling, depending on demand. Secondly, it can lead to inefficient inventory management if not carefully monitored, potentially resulting in overstocking or stockouts. For taxpayers, the risk lies in potentially paying for unused capacity or, conversely, facing emergency procurements at higher costs if demand spikes unexpectedly and the 'as needed' orders are insufficient. Effective oversight and demand forecasting are critical to mitigate these risks.

What specific types of COVID-19 test kits are included under this contract?

The provided data specifies 'COVID-19 TEST KITS' as part of the lab supplies but does not detail the specific types. These could range from rapid antigen tests to more complex PCR-based assays compatible with the GeneXpert system. The exact nature of these kits is important for understanding their diagnostic sensitivity, specificity, and intended use (e.g., point-of-care vs. laboratory-based testing). Without further clarification from the contract's statement of work or CLIN details, it's impossible to ascertain the precise COVID-19 testing capabilities procured under this award.

What is the track record of Cepheid as a government contractor, particularly with the Indian Health Service?

Cepheid's track record as a government contractor, especially with the Indian Health Service (IHS), is not detailed in the provided data. To assess this, one would need to examine historical contract awards to Cepheid across various federal agencies, focusing on IHS if possible. Key aspects to review would include past performance evaluations, any reported issues or disputes, the types of products and services previously supplied, and the overall value of those contracts. A positive track record with IHS would suggest reliability and familiarity with the agency's requirements, while a history of performance issues could indicate potential risks for this current contract.

Industry Classification

NAICS: Health Care and Social Assistance › Medical and Diagnostic Laboratories › Medical Laboratories

Product/Service Code: INSTRUMENTS AND LABORATORY EQPT

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

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: $1,572,200

Exercised Options: $1,572,200

Current Obligation: $1,572,200

Actual Outlays: $1,314,908

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Timeline