Zimmer Holdings, Inc. has been awarded a $69.2 million contract to supply the Department of Defense with orthopedic products.
Zimmer’s $150 Million Defense Department Order
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The award was a modification of the second option year of an existing contract and is a fixed-price with economic-price-adjustment. The contract is an indefinite-delivery/indefinite-quantity contract capped at $69.2 million for hips, knees, spine, and extremity “procedural packages, instrumentation sets and auxiliary products needed for implantation.” The completion date is March 24, 2014.
Fool.com reported that the award “illustrates the high but hidden cost of America’s wars in Iraq and Afghanistan” in that the Zimmer award was the second highest contract out of 18 contracts awarded on March 18, 2013.
The contract was issued through Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania.
The instant contract is the second of four potential one-year “options” exercisable after the expiration of an initial one-year supply contract for the devices. That original contract, awarded in March 2011, was for $13.5 million. The first-year option, awarded last year, added $71.2 million in payments for Zimmer. The current award brings the total to just under $154 million with two option years to go.
Surprisingly, there was originally one proposal solicited with one response, according to the Defense Department.
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This is a fascinating development. In my practice we've seen similar outcomes with the revised protocol. The key differentiator seems to be patient selection criteria. Has anyone else noticed the correlation with BMI thresholds?
Great point. I'd push back slightly on the conclusion, the sample size in the cited study is too small to draw population-level inferences. That said, the directional signal is compelling and worth a larger RCT.
We implemented a similar approach last year. Early results are promising but we're still gathering 12-month follow-up data. Happy to share our protocol if anyone is interested.
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