VA awards $3.9M contract for RT-LINAC to Varian Medical Systems, Inc. for irradiation apparatus manufacturing

Contract Overview

Contract Amount: $3,895,646 ($3.9M)

Contractor: Varian Medical Systems, Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-04-14

End Date: 2026-08-31

Contract Duration: 1,600 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: RT-LINAC PURCHASED FOR THE VA MEDICAL CENTER IN DURHAM, NC

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $3.9 million to VARIAN MEDICAL SYSTEMS, INC for work described as: RT-LINAC PURCHASED FOR THE VA MEDICAL CENTER IN DURHAM, NC Key points: 1. Contract value appears reasonable given the specialized nature of irradiation apparatus. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract duration of 1600 days indicates a long-term need for the equipment. 4. The fixed-price contract type shifts risk to the contractor. 5. This purchase supports advanced medical treatment capabilities at a VA facility.

Value Assessment

Rating: good

The contract value of $3,895,646 for an RT-LINAC (Linear Accelerator) is within a typical range for such sophisticated medical equipment. Benchmarking against similar procurements for radiotherapy machines reveals that pricing can vary significantly based on specific features, manufacturer, and included services. Without detailed specifications, a precise value-for-money assessment is challenging, but the fixed-price nature of this contract suggests the agency has negotiated a set cost for the delivery and potentially installation.

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 bids. With 3 bidders participating, this suggests a healthy level of competition for this specialized equipment. A competitive process generally leads to better price discovery and potentially more favorable terms for the government.

Taxpayer Impact: Taxpayers benefit from a competitive process that aims to secure the best possible price for essential medical equipment, ensuring funds are used efficiently.

Public Impact

Veterans receiving care at the Durham, NC VA Medical Center will benefit from access to advanced radiation therapy. The contract facilitates the delivery of critical cancer treatment services. The geographic impact is localized to the Durham, North Carolina region, serving the veteran population there. This procurement supports specialized roles within the healthcare sector, potentially requiring skilled technicians for operation and maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for long lead times and supply chain disruptions impacting delivery schedules.
Ensuring adequate training and maintenance support for the new equipment is crucial for operational effectiveness.

Positive Signals

The use of a firm fixed-price contract transfers cost overrun risk to the contractor.
Full and open competition suggests a robust market exists for this type of equipment.
The extended delivery period allows for phased implementation and integration into existing workflows.

Sector Analysis

The procurement falls within the medical equipment manufacturing sector, specifically for irradiation apparatus used in radiotherapy. This is a highly specialized niche within the broader healthcare technology market. The market is characterized by a few dominant manufacturers and significant research and development investment. Comparable spending benchmarks are difficult to establish without specific technical requirements, but large medical centers often invest millions in such systems.

Small Business Impact

There is no indication that this contract included a small business set-aside. Given the specialized nature and high value of an RT-LINAC, it is unlikely that small businesses would be primary manufacturers or prime contractors for such equipment. Subcontracting opportunities for smaller firms might exist in areas like installation, maintenance, or component supply, but this is not explicitly detailed in the award information.

Oversight & Accountability

The Department of Veterans Affairs is responsible for oversight of this contract. As a delivery order under a larger contract vehicle, it likely falls under the existing oversight framework of that vehicle. Transparency is generally maintained through contract award databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

Radiotherapy Equipment Procurement
Medical Imaging and Diagnostic Equipment
Veterans Health Administration Medical Supplies

Risk Flags

Potential for long lead times impacting patient care timelines.
Risk of technological obsolescence given the extended contract duration.
Dependence on a single supplier for critical medical equipment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $3.9 million to VARIAN MEDICAL SYSTEMS, INC. RT-LINAC PURCHASED FOR THE VA MEDICAL CENTER IN DURHAM, NC

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 $3.9 million.

What is the period of performance?

Start: 2022-04-14. End: 2026-08-31.

What is the specific model of the RT-LINAC being procured and what are its key technical specifications?

The provided data does not specify the exact model of the RT-LINAC or its detailed technical specifications. The award notice only identifies the item as an 'RT-LINAC PURCHASED FOR THE VA MEDICAL CENTER IN DURHAM, NC' and the North American Industry Classification System (NAICS) code '334517' for Irradiation Apparatus Manufacturing. To understand the specific capabilities, one would need to consult the original solicitation documents (e.g., Request for Proposal - RFP) which would contain the detailed technical requirements, performance standards, and feature lists that Varian Medical Systems, Inc. agreed to meet. This information is crucial for assessing the suitability of the equipment for the VA's intended use and for comparing its capabilities against other available technologies.

How does the awarded price of $3.9 million compare to the average price of similar RT-LINAC systems purchased by other federal agencies or large healthcare providers?

The awarded price of approximately $3.9 million for the RT-LINAC is within the expected range for such advanced medical equipment. However, a precise comparison requires detailed knowledge of the system's specifications, included services (installation, training, maintenance contracts), and the specific time of purchase, as prices fluctuate with technological advancements and market conditions. Generally, linear accelerators for radiotherapy can range from $1 million to over $4 million, with higher-end models featuring more advanced treatment capabilities (e.g., intensity-modulated radiation therapy - IMRT, volumetric modulated arc therapy - VMAT) and integrated imaging costing more. The fact that this was a full and open competition with three bidders suggests the price was subject to market forces, but without access to the solicitation and bid details, it's difficult to definitively state if it represents exceptional value or is on the higher end of the spectrum.

What are the potential risks associated with the long contract duration (1600 days) and the firm fixed-price contract type?

The long contract duration of 1600 days (approximately 4.4 years) for the delivery and potential installation of an RT-LINAC presents several potential risks. Firstly, technological obsolescence is a concern; medical technology evolves rapidly, and a system procured today might be surpassed by newer, more effective models within its operational lifespan. Secondly, there's a risk of contractor performance degradation over such an extended period, potentially impacting service quality or responsiveness. For the firm fixed-price (FFP) contract type, the primary risk is borne by the contractor (Varian Medical Systems, Inc.). If their costs escalate beyond projections due to inflation, supply chain issues, or unforeseen technical challenges, their profit margin will shrink, potentially leading to pressure to cut corners on quality or service. Conversely, the government is protected from cost overruns, but if the contractor underbids or faces significant issues, it could lead to delays or disputes.

What is the track record of Varian Medical Systems, Inc. in supplying similar equipment to the Department of Veterans Affairs or other federal healthcare agencies?

Varian Medical Systems, Inc. is a well-established and recognized leader in the field of radiation oncology technology, including linear accelerators. They have a significant history of supplying these systems to healthcare providers globally, including numerous hospitals and cancer treatment centers within the United States. While specific contract history with the VA for RT-LINACs isn't detailed here, Varian is a known entity in this market. Federal procurement databases often show awards to major medical equipment manufacturers like Varian for various medical devices. Their long-standing presence and market share suggest a substantial track record. However, a deeper dive into past performance reviews, any documented issues with previous VA contracts, or specific delivery performance metrics would be necessary for a comprehensive assessment of their track record for this particular type of procurement.

How will the new RT-LINAC system contribute to the overall effectiveness and efficiency of cancer treatment services at the Durham VA Medical Center?

The acquisition of a new RT-LINAC is expected to significantly enhance the cancer treatment capabilities at the Durham VA Medical Center. Modern linear accelerators offer advanced treatment techniques such as Intensity-Modulated Radiation Therapy (IMRT) and Volumetric Modulated Arc Therapy (VMAT), which allow for more precise targeting of tumors while minimizing radiation exposure to surrounding healthy tissues. This can lead to improved treatment outcomes, reduced side effects, and potentially shorter treatment courses for patients. Furthermore, newer systems often incorporate faster treatment delivery times and improved imaging capabilities for accurate patient positioning, contributing to greater operational efficiency within the radiation oncology department. This upgrade ensures that veterans served by the Durham VA have access to state-of-the-art radiotherapy, aligning with the VA's mission to provide high-quality healthcare.

What are the historical spending patterns for irradiation apparatus or similar medical equipment by the Department of Veterans Affairs over the past five years?

Historical spending data for irradiation apparatus by the Department of Veterans Affairs (VA) over the past five years would likely show consistent investment in radiotherapy equipment, reflecting the ongoing need to maintain and upgrade cancer treatment capabilities across its network of medical centers. While the specific dollar amount for 'irradiation apparatus' as a distinct category can fluctuate annually based on replacement cycles and new facility construction or expansion, the VA generally allocates substantial funds to medical equipment procurement. This $3.9 million award for a single RT-LINAC is a significant but not unusual expenditure for such a critical piece of technology. Analyzing broader spending trends within medical equipment categories, such as diagnostic imaging, surgical equipment, and therapeutic devices, would provide context. It's probable that the VA's spending in this area remains relatively stable, punctuated by major capital investments like this RT-LINAC purchase.

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: 36A79722Q0004

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: $3,895,646

Exercised Options: $3,895,646

Current Obligation: $3,895,646

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