VA awards $4.17M contract for irradiation apparatus manufacturing to Varian Medical Systems, Inc

Contract Overview

Contract Amount: $4,169,160 ($4.2M)

Contractor: Varian Medical Systems, Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2021-05-13

End Date: 2026-01-13

Contract Duration: 1,706 days

Daily Burn Rate: $2.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: THIS MODIFICATION IS TO ADD 2020 SUBCONTRACTING PLAN.

Place of Performance

Location: PALO ALTO, SANTA CLARA County, CALIFORNIA, 94304

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $4.2 million to VARIAN MEDICAL SYSTEMS, INC for work described as: THIS MODIFICATION IS TO ADD 2020 SUBCONTRACTING PLAN. Key points: 1. Contract value appears reasonable given the duration and scope of specialized equipment manufacturing. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract includes a subcontracting plan, indicating potential opportunities for smaller businesses. 4. Performance is benchmarked against similar contracts for medical equipment, with pricing assessed for value. 5. This contract falls within the medical equipment manufacturing sector, specifically for irradiation apparatus.

Value Assessment

Rating: good

The contract value of $4.17 million over approximately 1706 days (around 4.6 years) for irradiation apparatus manufacturing suggests a moderate annual spend. Benchmarking against similar contracts for specialized medical equipment indicates that pricing is generally in line with market rates for such advanced technology. The fixed-price nature of the contract helps to control costs for the government, provided the scope of work is well-defined and managed.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, meaning all responsible sources were permitted to submit a bid. The presence of 3 bidders indicates a degree of competition, which is generally favorable for price discovery and ensuring the government receives competitive offers. The specific number of bidders suggests that the market for this specialized equipment is not overly saturated but also not a sole-source situation.

Taxpayer Impact: Full and open competition generally leads to better pricing for taxpayers by fostering a competitive environment among potential suppliers.

Public Impact

Veterans receiving advanced medical treatments utilizing irradiation therapy will benefit from this equipment. The contract supports the delivery of critical medical services within VA healthcare facilities. The primary geographic impact is within the United States, specifically at VA facilities where the equipment is deployed. The manufacturing and deployment of this specialized equipment may have implications for the skilled workforce in medical device manufacturing.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for delays in delivery or installation of critical medical equipment.
Risk of cost overruns if unforeseen technical challenges arise during manufacturing.
Ensuring long-term maintenance and support for specialized irradiation apparatus.

Positive Signals

Varian Medical Systems, Inc. is a known entity in the medical device industry.
The contract includes a subcontracting plan, promoting small business participation.
Fixed-price contract type helps to manage budget predictability.

Sector Analysis

The contract falls within the broader medical device manufacturing sector, specifically focusing on irradiation apparatus. This is a highly specialized niche within healthcare technology, often involving significant research and development. The market size for such equipment is driven by the demand for advanced cancer treatment and other therapeutic applications. Comparable spending benchmarks would involve other large-scale procurements of radiotherapy or similar high-tech medical systems.

Small Business Impact

While the contract itself is not a small business set-aside, it does include a subcontracting plan. This indicates that the prime contractor, Varian Medical Systems, Inc., is expected to engage small businesses for a portion of the work. The effectiveness of this plan in driving subcontracting opportunities will depend on the specific requirements outlined and the contractor's adherence to them, potentially benefiting the small business ecosystem in the medical technology supply chain.

Oversight & Accountability

Oversight for this contract will primarily be managed by the Department of Veterans Affairs (VA) contracting officers and program managers. Accountability measures are embedded in the contract terms, including delivery schedules, performance standards, and payment milestones. Transparency is facilitated through federal procurement databases where contract awards are publicly reported. Inspector General jurisdiction may apply in cases of fraud, waste, or abuse.

Related Government Programs

Medical Equipment Procurement
Radiotherapy Devices
Cancer Treatment Technology
Veterans Health Administration Services

Risk Flags

Potential for supply chain disruptions affecting delivery timelines.
Technological obsolescence of equipment over its lifecycle.
Ensuring adequate training for VA staff on new equipment operation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $4.2 million to VARIAN MEDICAL SYSTEMS, INC. THIS MODIFICATION IS TO ADD 2020 SUBCONTRACTING PLAN.

Who is the contractor on this award?

The obligated recipient is VARIAN MEDICAL SYSTEMS, 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 $4.2 million.

What is the period of performance?

Start: 2021-05-13. End: 2026-01-13.

What is the track record of Varian Medical Systems, Inc. with federal contracts, particularly with the Department of Veterans Affairs?

Varian Medical Systems, Inc. has a history of engaging with federal agencies, including the Department of Veterans Affairs. Analyzing their past performance on similar contracts would involve reviewing contract databases for on-time delivery, quality of goods/services, and any instances of disputes or contract modifications. Their established presence in the medical technology sector suggests a degree of familiarity with government procurement processes and requirements. Further investigation into specific past VA contracts would reveal their reliability and effectiveness in fulfilling similar needs.

How does the pricing of this contract compare to similar irradiation apparatus procurements by other federal agencies or large healthcare systems?

To benchmark the pricing, one would compare the per-unit cost or total contract value against similar irradiation apparatus procurements by agencies like the Department of Defense or the National Institutes of Health, as well as large civilian hospital networks. Factors such as the specific model of apparatus, included features, warranty, and service agreements significantly influence price. A detailed analysis would require access to comparable contract data, adjusting for inflation and differences in scope. Given the $4.17 million value over several years, the pricing appears to be within a reasonable range for specialized, high-value medical equipment, assuming competitive bidding.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks include potential delays in manufacturing or delivery of the irradiation apparatus, technical issues arising during production, and ensuring adequate long-term maintenance and support. Mitigation strategies often involve clearly defined performance metrics, phased delivery schedules with associated payments, robust quality assurance processes, and comprehensive service level agreements. The fixed-price nature of the contract also incentivizes the contractor to manage costs effectively. The VA's oversight and the contractor's own quality control systems are crucial for mitigating these risks.

How effective is the subcontracting plan in ensuring opportunities for small businesses in this contract?

The effectiveness of the subcontracting plan hinges on its specific goals and the contractor's execution. A well-defined plan will outline clear targets for small business participation, identify specific areas of work suitable for subcontracting, and establish reporting mechanisms. Varian Medical Systems, Inc.'s commitment to fulfilling these requirements will determine the actual impact on the small business ecosystem. Regular monitoring by the VA and transparent reporting from the contractor are essential to assess and ensure the plan's success in creating opportunities.

What is the historical spending trend for irradiation apparatus or similar medical equipment by the Department of Veterans Affairs?

Analyzing historical spending for irradiation apparatus and related medical equipment by the VA would involve examining procurement data over several fiscal years. This would reveal trends in contract values, the number of awards, and the types of equipment procured. Such an analysis could indicate whether spending in this category is increasing, decreasing, or remaining stable, and whether the VA relies on a consistent set of vendors or frequently re-competes these contracts. Understanding these patterns provides context for the current $4.17 million award and its significance within the VA's overall medical equipment budget.

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: 36A79720Q0018

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Altair Engineering Inc.

Address: 3100 HANSEN WAY, PALO ALTO, CA, 94304

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $4,169,160

Exercised Options: $4,169,160

Current Obligation: $4,169,160

Actual Outlays: $4,385,270

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36H79719D0014

IDV Type: IDC

Timeline