VA awards $3.5M for PET CT systems, with 3 orders placed under a fixed-price contract

Contract Overview

Contract Amount: $3,495,159 ($3.5M)

Contractor: Siemens Medical Solutions USA, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2021-09-03

End Date: 2026-09-30

Contract Duration: 1,853 days

Daily Burn Rate: $1.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Healthcare

Official Description: PET CT

Place of Performance

Location: MALVERN, CHESTER County, PENNSYLVANIA, 19355

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $3.5 million to SIEMENS MEDICAL SOLUTIONS USA, INC. for work described as: PET CT Key points: 1. Contract value of $3.5 million for PET CT systems indicates significant investment in medical imaging. 2. The contract was awarded through full and open competition, suggesting a competitive bidding process. 3. Multiple delivery orders have been issued, demonstrating ongoing need and utilization of the equipment. 4. The fixed-price with economic price adjustment structure aims to balance cost stability with market fluctuations. 5. The primary contractor, SIEMENS MEDICAL SOLUTIONS USA, INC., is a major player in the medical equipment market. 6. The contract duration of over 1800 days points to a long-term deployment and support strategy.

Value Assessment

Rating: good

The contract value of $3.5 million for PET CT systems appears reasonable given the nature of advanced medical equipment. Benchmarking against similar federal contracts for PET CT scanners would provide a more precise value-for-money assessment. The fixed-price with economic price adjustment (EPA) clause suggests an attempt to manage cost volatility, which is common in long-term equipment contracts. Without specific per-unit cost data or comparisons to commercial pricing for comparable Siemens models, a definitive value assessment is challenging, but the overall award size is within expected ranges for such technology.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION,' indicating that all responsible sources were permitted to submit a bid. The presence of 3 delivery orders suggests that the initial competition was robust enough to secure multiple phases of work or equipment acquisition. A full and open competition generally fosters price discovery and encourages competitive pricing, as multiple vendors vie for the contract. The specific number of bidders is not provided, but the category implies a healthy level of market engagement.

Taxpayer Impact: Taxpayers benefit from a competitive process that is designed to yield the best possible pricing and value for the government's investment in critical medical equipment.

Public Impact

Veterans receiving care from the Department of Veterans Affairs will benefit from access to advanced PET CT imaging technology. The contract supports the delivery of diagnostic imaging services, crucial for disease detection, staging, and treatment monitoring. The geographic impact is likely centered around VA facilities in Pennsylvania, where the contract is registered. The contract supports jobs within the medical equipment manufacturing and service sectors, particularly related to Siemens.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clauses can lead to cost increases beyond initial projections if market prices rise significantly.
Reliance on a single primary contractor for advanced medical equipment may pose supply chain risks if not managed proactively.
The long contract duration requires continuous monitoring to ensure performance standards are met throughout the period.

Positive Signals

Awarding through full and open competition suggests a commitment to achieving competitive pricing.
The issuance of multiple delivery orders indicates successful implementation and ongoing need for the equipment.
Siemens is a well-established provider of medical imaging solutions, suggesting a degree of reliability and expertise.

Sector Analysis

The market for medical imaging equipment, including PET CT scanners, is dominated by a few large global manufacturers. This contract falls within the broader healthcare technology sector, specifically focusing on diagnostic imaging apparatus. Spending in this area is driven by the need for advanced diagnostic capabilities in healthcare institutions. Comparable spending benchmarks would involve analyzing other federal or large healthcare system procurements of similar PET CT systems, considering factors like system specifications, service agreements, and installation costs.

Small Business Impact

The data indicates that small business participation was not a primary focus for this contract, as the 'sb' (small business) flag is false and the 'ss' (small business set-aside) flag is also false. This suggests the contract was not specifically set aside for small businesses. Subcontracting opportunities for small businesses may exist within the broader scope of work, but they are not explicitly detailed in the provided data. The impact on the small business ecosystem is likely minimal unless Siemens engages small businesses for specific support services or components.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs contracting officers and program managers. Accountability measures are embedded in the contract terms, including performance standards and delivery schedules. Transparency is facilitated through federal procurement databases like FPDS, where contract awards are recorded. Inspector General jurisdiction may apply if any allegations of fraud, waste, or abuse arise concerning the contract's execution.

Related Government Programs

Medical Equipment Procurement
Diagnostic Imaging Services
Department of Veterans Affairs Healthcare
Advanced Technology Acquisition
Fixed-Price Contracts with EPA

Risk Flags

Economic Price Adjustment Clause
Long-Term Contract Duration
Technological Obsolescence Risk

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $3.5 million to SIEMENS MEDICAL SOLUTIONS USA, INC.. PET CT

Who is the contractor on this award?

The obligated recipient is SIEMENS MEDICAL SOLUTIONS USA, INC..

Which agency awarded this contract?

Awarding agency: Department of Veterans Affairs (Department of Veterans Affairs).

What is the total obligated amount?

The obligated amount is $3.5 million.

What is the period of performance?

Start: 2021-09-03. End: 2026-09-30.

What is the specific model of PET CT system procured and its key technical specifications?

The provided data does not specify the exact model of the PET CT system procured or its detailed technical specifications. It only identifies the general product service code (PSC) as 'Irradiation Apparatus Manufacturing' and the National Item Identification Number (NIIN) as '334517'. To ascertain the specific model and its capabilities, one would need to consult the detailed contract award documents, including any attached technical specifications or statements of work. This information is crucial for understanding the system's intended use, performance capabilities, and for accurate benchmarking against other procurements.

How does the awarded price compare to market rates for similar PET CT systems from Siemens or competitors?

A direct comparison of the awarded price ($3.5 million total) to current market rates for similar PET CT systems is challenging without knowing the specific model, configuration, and included services (e.g., installation, training, maintenance). However, PET CT systems are high-cost capital equipment, with prices often ranging from hundreds of thousands to over a million dollars per unit, depending on features and manufacturer. The contract's fixed-price with economic price adjustment (EPA) structure also introduces variability. A thorough benchmark would require accessing commercial price lists, consulting industry reports, or analyzing recent comparable government procurements with detailed pricing breakdowns.

What are the primary risks associated with this contract, and how are they being mitigated?

Primary risks include potential cost overruns due to the economic price adjustment (EPA) clause, especially if inflation is high. Technological obsolescence is another risk, as PET CT technology evolves rapidly; however, the contract duration (over 4 years) suggests a focus on current capabilities. Performance risk exists if the equipment or service does not meet VA's needs. Mitigation strategies likely include robust contract oversight by the VA, clear performance metrics, and potentially phased procurements to allow for technology refreshes. The use of a reputable supplier like Siemens may also mitigate some performance and reliability risks.

What is the historical spending pattern for PET CT systems by the Department of Veterans Affairs?

The provided data focuses on a single contract award. To understand historical spending patterns for PET CT systems by the VA, a broader analysis of federal procurement data (e.g., FPDS) would be necessary. This would involve querying for similar product service codes or keywords related to PET CT scanners awarded by the VA over several fiscal years. Analyzing this historical data would reveal trends in contract values, awardees, competition levels, and contract types, providing context for the current $3.5 million award and indicating whether this represents a typical or outlier level of investment.

What is the track record of SIEMENS MEDICAL SOLUTIONS USA, INC. in fulfilling federal contracts for medical equipment?

SIEMENS MEDICAL SOLUTIONS USA, INC. is a major global provider of healthcare technology, including diagnostic imaging equipment. Their track record in fulfilling federal contracts is generally extensive, given their market position. While this specific contract data doesn't detail past performance on this particular item, Siemens frequently secures contracts with agencies like the Department of Defense and the Department of Veterans Affairs for various medical imaging and equipment needs. A comprehensive assessment would involve reviewing their past performance ratings on similar federal contracts, looking for any history of disputes, contract terminations, or significant performance issues.

How does the competition level (full and open) impact the value proposition for taxpayers in this specific procurement?

A 'full and open competition' process is designed to maximize taxpayer value by encouraging multiple vendors to submit bids, thereby driving down prices and fostering innovation. For this $3.5 million PET CT system procurement, this means that the Department of Veterans Affairs likely received proposals from several qualified companies, forcing them to offer their best pricing and terms to win the contract. While the exact number of bidders isn't specified, the category itself implies a competitive environment that should, in theory, lead to a more cost-effective acquisition compared to sole-source or limited competition scenarios. This process helps ensure that taxpayer funds are used efficiently for essential medical technology.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 36A79721Q0012

Offers Received: 3

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: Altair Engineering Inc.

Address: 40 LIBERTY BLVD, MALVERN, PA, 19355

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $3,495,159

Exercised Options: $3,495,159

Current Obligation: $3,495,159

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE2D117D0023

IDV Type: IDC

Timeline