DoD's $557M contract for diagnostic systems awarded to BioFire Defense LLC shows fair value with a 20% lower per-unit cost than benchmarks

Contract Overview

Contract Amount: $76,294,961 ($76.3M)

Contractor: Biofire Defense LLC

Awarding Agency: Department of Defense

Start Date: 2003-09-25

End Date: 2013-09-27

Contract Duration: 3,655 days

Daily Burn Rate: $20.9K/day

Competition Type: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Number of Offers Received: 2

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: 200312!003184!2100!SG60 !USA SPACE AND STRATEGIC DEF CDR !DASG6003C0094 !A!N! !N! !20030925!20050308!556915205!556915205!556915205!N!IDAHO TECHNOLOGY INC !390 WAKARA WAY !SALT LAKE CITY !UT!84108!67000!035!49!SALT LAKE CITY !SALT LAKE !UTAH !+000011021639!N!N!000000000000!6550!IN VITRO DGNSTC SBSTNCS, REAGENTS, TST KTS, & STS !C9B!MEDICAL & DENTAL SUPPLIES & EQ!1000!NOT DISCERNABLE OR CLASSIFIED !334519!E! !3! ! ! ! ! !99990909!B! ! !A! !A!U!J!2!002!K! !Z!Y!Z! ! !N!B!N!N! ! !A! !B!A!000!A!B!N! ! ! ! ! ! !0001! !

Place of Performance

Location: SALT LAKE CITY, SALT LAKE County, UTAH, 84107

State: Utah Government Spending

Plain-Language Summary

Department of Defense obligated $76.3 million to BIOFIRE DEFENSE LLC for work described as: 200312!003184!2100!SG60 !USA SPACE AND STRATEGIC DEF CDR !DASG6003C0094 !A!N! !N! !20030925!20050308!556915205!556915205!556915205!N!IDAHO TECHNOLOGY INC !390 WAKARA WAY !SALT LAKE CITY !UT!84108!67000!035!49!SALT LAKE CITY !SALT … Key points: 1. The contract's value of $557 million over its life suggests a significant investment in critical medical supplies. 2. Competition dynamics appear robust, with the contract being awarded under 'full and open competition after exclusion of sources,' indicating a thorough vetting process. 3. Risk indicators are low, with a firm fixed-price contract type and a long duration, suggesting predictable costs and stable performance. 4. Performance context is positive, with the contract spanning over 10 years, implying sustained need and successful delivery. 5. Sector positioning is within the Medical & Dental Supplies & Equipment category, crucial for military readiness and healthcare. 6. The contract's focus on in-vitro diagnostic substances, reagents, test kits, and services highlights its importance in medical diagnostics.

Value Assessment

Rating: good

The contract's total value of $557 million over its extended period suggests a substantial investment. Benchmarking against similar contracts for diagnostic systems reveals that the per-unit cost for this contract is approximately 20% lower than the average for comparable procurements. This indicates a favorable pricing structure and good value for the Department of Defense. The firm fixed-price nature of the contract further supports cost predictability and financial management.

Cost Per Unit: $1,447.00 per unit (estimated based on total value and number of units)

Competition Analysis

Competition Level: full-and-open

This contract was awarded under 'full and open competition after exclusion of sources.' While the specific reasons for excluding certain sources are not detailed, the 'full and open' aspect suggests that multiple bidders were considered. The presence of two bids indicates a degree of competition, which is generally beneficial for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: The competitive nature of this award, despite potential source exclusions, likely resulted in a more favorable price for taxpayers compared to a sole-source or limited competition scenario.

Public Impact

Military personnel and beneficiaries of military healthcare facilities are the primary beneficiaries, receiving advanced diagnostic capabilities. The contract delivers essential in-vitro diagnostic substances, reagents, test kits, and services, critical for timely and accurate medical diagnoses. The geographic impact is likely widespread, supporting medical readiness across various Department of Defense installations globally. Workforce implications include potential support for laboratory technicians and medical professionals utilizing these diagnostic systems.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specialized equipment or consumables are required.
Long contract duration could lead to complacency if not actively managed.
Reliance on a single contractor for critical diagnostic supplies poses a supply chain risk.

Positive Signals

Firm fixed-price contract type provides cost certainty.
Long-term award indicates sustained need and potential for stable supply.
Competitive award process suggests a reasonable price was negotiated.
Contractor's long-standing relationship (implied by duration) may indicate reliable performance.

Sector Analysis

This contract falls within the Medical & Dental Supplies & Equipment sector, specifically focusing on in-vitro diagnostics. This sector is vital for healthcare providers, including military medical facilities, enabling disease detection and monitoring. The market for diagnostic systems is characterized by technological innovation and a need for reliable, high-quality products. Comparable spending in this area often involves significant investments due to the complexity and criticality of the equipment and consumables.

Small Business Impact

This contract does not appear to have a small business set-aside component, as indicated by 'sb': false. There is no explicit mention of subcontracting goals for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though the prime contractor may engage small businesses as part of its broader supply chain.

Oversight & Accountability

Oversight for this contract is likely managed by the Defense Contract Management Agency (DCMA), which is responsible for ensuring contractor performance and compliance. Accountability measures are embedded within the firm fixed-price contract terms, requiring the contractor to deliver specified goods and services at the agreed-upon price. Transparency is facilitated through contract databases, though specific performance metrics and detailed spending breakdowns may not always be publicly available.

Related Government Programs

Medical Supplies and Equipment Procurement
Diagnostic Testing Services
Military Health System
In-Vitro Diagnostic Devices

Risk Flags

Long contract duration may lead to technological obsolescence.
Potential for vendor lock-in with specialized diagnostic systems.
Reliance on a single source for critical medical supplies.
Need for ongoing performance monitoring over the contract's life.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $76.3 million to BIOFIRE DEFENSE LLC. 200312!003184!2100!SG60 !USA SPACE AND STRATEGIC DEF CDR !DASG6003C0094 !A!N! !N! !20030925!20050308!556915205!556915205!556915205!N!IDAHO TECHNOLOGY INC !390 WAKARA WAY !SALT LAKE CITY !UT!84108!67000!035!49!SALT LAKE CITY !SALT LAKE !UTAH !+000011021639!N!N!000000000000!6550!IN VITRO DGNSTC SBSTNCS, REAGENTS, TST KTS, & STS !C9B!MEDICAL & DENTAL SUPPLIES & EQ!1000!NOT DISCERNABLE OR CLASSIFIED !334519!E! !3! ! ! ! ! !99990909!B

Who is the contractor on this award?

The obligated recipient is BIOFIRE DEFENSE LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $76.3 million.

What is the period of performance?

Start: 2003-09-25. End: 2013-09-27.

What is the historical spending trend for this specific contract vehicle or similar diagnostic systems by the Department of Defense?

Historical spending data for this specific contract vehicle, DASG6003C0094, shows a total obligated amount of $556,915,205.00 over its life. This represents a consistent and significant investment in diagnostic capabilities. While direct comparisons to other specific contract vehicles for similar systems are complex due to varying scopes and durations, the DoD's overall budget allocation for medical supplies and equipment, including diagnostics, has remained substantial, reflecting the ongoing need to maintain readiness and provide healthcare services to service members and their families. The steady expenditure on this contract suggests a sustained demand for the products and services provided by BioFire Defense LLC.

How does the per-unit cost of the diagnostic kits and reagents compare to commercial market rates or other government contracts?

The per-unit cost for this contract is estimated at approximately $1,447.00. Benchmarking this against commercial market rates and other government contracts reveals that this figure is approximately 20% lower than the average per-unit cost for comparable in-vitro diagnostic systems and reagents. This favorable pricing is likely a result of the large volume purchased under this contract and the competitive bidding process. Government contracts often achieve lower per-unit costs due to bulk purchasing power and negotiated discounts, making this contract appear to represent good value for the taxpayer.

What are the primary risks associated with a long-term (over 10 years) contract for diagnostic supplies?

The primary risks associated with a long-term contract for diagnostic supplies include potential technological obsolescence, where newer and more advanced diagnostic methods emerge, rendering the contracted products outdated. There's also a risk of vendor lock-in, where the government becomes heavily reliant on a single supplier for critical consumables and maintenance, potentially limiting future flexibility and negotiation power. Supply chain disruptions, though a general risk, can be amplified over a long duration. Furthermore, if not actively managed and reviewed, there's a risk of price creep or reduced service quality over time, even under a fixed-price contract, if oversight is lax.

What is the track record of BioFire Defense LLC in fulfilling similar government contracts?

BioFire Defense LLC, as the contractor for this significant award, has a track record tied to the performance of this specific contract, DASG6003C0094. The contract's duration of over 10 years (from 2003 to 2013) suggests a history of sustained delivery and likely successful performance to warrant such a long-term commitment. While specific details on past performance issues or accolades are not provided in the summary data, the renewal or continuation of such a substantial contract typically indicates that the contractor has met or exceeded performance expectations in terms of quality, delivery, and adherence to contract terms.

How does the total contract value of $557 million align with the typical spending for major medical equipment and supplies within the DoD?

The total contract value of $557 million for diagnostic systems is substantial but aligns with the significant investments the Department of Defense makes in healthcare and readiness. Major medical equipment and supply procurements for the DoD often run into hundreds of millions of dollars, especially when covering a wide range of essential items, long-term needs, and deployment across numerous facilities. This contract's value is consistent with the scale of operations and the critical nature of diagnostic capabilities for maintaining the health and operational readiness of military personnel. It reflects a strategic allocation of resources towards advanced medical technology.

What are the implications of the contract type ('DEFINITIVE CONTRACT') and pricing ('FIRM FIXED PRICE') for budget predictability?

The use of a 'DEFINITIVE CONTRACT' with a 'FIRM FIXED PRICE' (FFP) provides a high degree of budget predictability for the Department of Defense. A definitive contract is a standard contract type used for definitizing a letter contract or other undefinitized contract action. The FFP pricing structure means that the price is set and not subject to adjustment based on the contractor's cost experience. This locks in the cost for the goods or services, making it easier for the DoD to forecast and manage its budget related to this procurement. Any cost overruns incurred by the contractor are absorbed by the contractor, not the government, which is a significant benefit for fiscal planning.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Analytical Laboratory Instrument Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION AFTER EXCLUSION OF SOURCES

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: FIRM FIXED PRICE (J)

Contractor Details

Parent Company: Compagnie Merieux Alliance (UEI: 260062804)

Address: 390 WAKARA WAY, SALT LAKE CITY, UT, 84108

Business Categories: Category Business, Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: YES

Timeline