HHS awarded $21M for medical supplies, with TrustSolutions LLC securing the contract

Contract Overview

Contract Amount: $20,990,119 ($21.0M)

Contractor: Trustsolutions, LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2005-12-01

End Date: 2010-02-28

Contract Duration: 1,550 days

Daily Burn Rate: $13.5K/day

Competition Type: COMPETITIVE DELIVERY ORDER

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Healthcare

Official Description: MED & SURGICAL INSTRUMENTS,EQ & SUP

Place of Performance

Location: MILWAUKEE, MILWAUKEE County, WISCONSIN, 53214

State: Wisconsin Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $21.0 million to TRUSTSOLUTIONS, LLC for work described as: MED & SURGICAL INSTRUMENTS,EQ & SUP Key points: 1. Value for money appears fair given the contract type and duration. 2. Competition dynamics were limited, suggesting potential for price overruns. 3. Risk indicators are moderate, with a cost-plus award fee structure. 4. Performance context shows a long-term contract for essential supplies. 5. Sector positioning is within healthcare procurement for medical equipment.

Value Assessment

Rating: fair

The contract's total value of $20.99 million over approximately 1550 days (roughly 4.2 years) suggests an average annual spend of around $5 million. Without specific unit cost data or comparable contracts for similar medical and surgical instruments and equipment, a precise value-for-money assessment is challenging. The 'Cost Plus Award Fee' (CPAF) structure means the contractor is reimbursed for allowable costs plus a fee that is contingent on meeting performance objectives. This can incentivize performance but also carries a risk of higher costs if not managed tightly.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was awarded as a 'Competitive Delivery Order' with 2 offers received. While competitive, the term 'delivery order' often implies it was placed against a pre-existing indefinite-delivery indefinite-quantity (IDIQ) contract or similar vehicle. The limited number of offers (2) suggests that the competition, while present, may not have been as broad as a full and open competition, potentially impacting the government's ability to secure the lowest possible prices.

Taxpayer Impact: A limited competition means taxpayers may not have benefited from the full range of pricing options that a wider field of bidders could have offered.

Public Impact

Beneficiaries include healthcare providers and ultimately patients relying on the availability of medical and surgical instruments and equipment. Services delivered encompass the provision and supply of essential medical and surgical goods. Geographic impact is likely nationwide, supporting federal healthcare facilities or programs. Workforce implications may involve logistics, supply chain management, and administrative roles related to contract execution.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Cost-plus award fee contracts can lead to cost overruns if performance metrics are not strictly defined and monitored.
Limited competition (2 offers) may result in less favorable pricing for the government.
The long duration of the contract (1550 days) increases the risk of price escalation due to market fluctuations over time.

Positive Signals

The contract was awarded competitively, indicating some level of market engagement.
The award fee structure incentivizes contractor performance, potentially leading to better service delivery.
The contract addresses a critical need for medical and surgical supplies within the federal healthcare system.

Sector Analysis

This contract falls within the broader healthcare sector, specifically focusing on the procurement of medical and surgical instruments and equipment. The federal government is a significant purchaser in this market, often leveraging large-scale contracts to ensure supply chain stability and cost-effectiveness for its healthcare programs. Market size for medical supplies is substantial, with numerous manufacturers and distributors vying for government contracts. This specific award represents a portion of the government's overall spending on healthcare consumables and equipment.

Small Business Impact

Information regarding small business set-asides or subcontracting plans is not explicitly provided in the data. As the contract was awarded to TrustSolutions, LLC, further investigation would be needed to determine if this entity is a small business or if subcontracting opportunities were mandated for small businesses. Without this information, the direct impact on the small business ecosystem remains unclear.

Oversight & Accountability

Oversight for this contract would typically fall under the Centers for Medicare and Medicaid Services (CMS), a division of HHS. The 'Cost Plus Award Fee' structure implies performance metrics and evaluation criteria that CMS would monitor. Transparency would be enhanced through contract award databases and reporting requirements. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse related to the contract.

Related Government Programs

Medical Equipment and Supplies Procurement
Federal Supply Schedule (FSS) Contracts
Department of Veterans Affairs Medical Procurement
Defense Logistics Agency Medical Supplies

Risk Flags

Cost-Plus Award Fee structure carries inherent cost risk.
Limited number of bidders (2) may indicate suboptimal price competition.
Long contract duration increases risk of price escalation and obsolescence.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $21.0 million to TRUSTSOLUTIONS, LLC. MED & SURGICAL INSTRUMENTS,EQ & SUP

Who is the contractor on this award?

The obligated recipient is TRUSTSOLUTIONS, LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (Centers for Medicare and Medicaid Services).

What is the total obligated amount?

The obligated amount is $21.0 million.

What is the period of performance?

Start: 2005-12-01. End: 2010-02-28.

What is the track record of TrustSolutions, LLC in fulfilling federal contracts, particularly within the healthcare sector?

Analyzing the track record of TrustSolutions, LLC requires accessing federal procurement databases like SAM.gov or FPDS. Such a review would look at past performance on similar contracts, including contract values, durations, types (e.g., fixed-price, cost-plus), and any reported issues such as contract modifications, disputes, or terminations. For this specific contract, understanding their performance history with CMS or other agencies for medical and surgical instruments would provide context on their reliability and capability. A history of successful, on-time, and within-budget contract completions would be a positive indicator, while a pattern of issues might raise concerns about future performance.

How does the pricing structure (Cost Plus Award Fee) compare to other contract types for similar medical supplies?

Cost Plus Award Fee (CPAF) contracts are generally used when the scope of work is not precisely defined, or when performance incentives are crucial. Compared to fixed-price contracts, CPAF can lead to higher overall costs for the government because it reimburses allowable costs plus a fee. However, the award fee component aims to motivate superior performance. For routine, well-defined procurements of medical supplies, fixed-price contracts often offer better price certainty and value. CPAF might be justified if the contract involves complex logistics, research, or development aspects where performance outcomes are paramount and difficult to pre-define. Benchmarking against similar CPAF contracts for medical supplies would reveal if the fee structure and cost reimbursements were competitive.

What are the primary risks associated with a 1550-day contract for medical and surgical instruments?

A significant risk with a long-duration contract like this (1550 days, approx. 4.2 years) is price escalation. Market prices for medical supplies can fluctuate due to inflation, supply chain disruptions, changes in manufacturing costs, or new product introductions. Without mechanisms for price adjustments or caps, the government could end up paying significantly more than initially anticipated. Another risk is obsolescence; medical technology evolves rapidly, and older instruments or equipment might become outdated during the contract's term, potentially impacting usability and value. Furthermore, contractor performance degradation over a long period is a risk, as is the potential for the government's needs to change, requiring costly modifications or contract termination.

What is the typical annual spending for medical and surgical instruments and equipment by the Centers for Medicare and Medicaid Services (CMS)?

Determining the typical annual spending for medical and surgical instruments and equipment by CMS requires analyzing historical procurement data. CMS's primary role is administering Medicare and Medicaid, which involves significant healthcare service provision and reimbursement. While CMS itself may not directly procure vast quantities of instruments for its own operations, it oversees programs that do. Spending data would likely be aggregated across various federal healthcare facilities (like VA hospitals, military treatment centers) and potentially through grants or specific program procurements. General federal spending on medical supplies is in the billions annually, distributed across agencies like HHS, DoD, and VA. This $21 million contract represents a specific, albeit substantial, allocation within that larger federal expenditure.

How does the 'Competitive Delivery Order' designation impact the transparency and cost-effectiveness of this award?

A 'Competitive Delivery Order' implies that the order was placed through a competitive process, likely against a pre-existing contract vehicle (like an IDIQ). This suggests that multiple vendors had an opportunity to bid on this specific order, which is generally positive for transparency and cost-effectiveness compared to a sole-source award. However, the number of bids received (2 in this case) is crucial. If only two vendors participated, the competition might have been limited, potentially leading to less aggressive pricing than if a larger pool of bidders had been involved. Transparency is enhanced because the award is typically documented and publicly accessible, but the underlying details of the competition (e.g., the specific IDIQ contract, the full list of eligible vendors) might require further digging.

Competition & Pricing

Extent Competed: COMPETITIVE DELIVERY ORDER

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: Federal Government Solutions, LLC (UEI: 828151584)

Address: 401 W MICHIGAN ST, MILWAUKEE, WI, 04

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $56,130,505

Exercised Options: $20,990,119

Current Obligation: $20,990,119

Parent Contract

Parent Award PIID: 500990020

IDV Type: IDC

Timeline