VA awards $3.26M for XR MRI system to Siemens, highlighting a need for advanced medical imaging at VAMC Orlando

Contract Overview

Contract Amount: $3,256,097 ($3.3M)

Contractor: Siemens Medical Solutions USA, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-07-20

End Date: 2026-09-30

Contract Duration: 1,168 days

Daily Burn Rate: $2.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MODALITY: XR MRI PURCHASE ORDER: 675B27022 STATION: VAMC ORLANDO, FL REQUIREMENT: SEPT FY 22 CONSOLIDATION

Place of Performance

Location: MALVERN, CHESTER County, PENNSYLVANIA, 19355

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $3.3 million to SIEMENS MEDICAL SOLUTIONS USA, INC. for work described as: MODALITY: XR MRI PURCHASE ORDER: 675B27022 STATION: VAMC ORLANDO, FL REQUIREMENT: SEPT FY 22 CONSOLIDATION Key points: 1. The contract value of $3.26 million for an XR MRI system appears reasonable given the specialized nature of the equipment. 2. Full and open competition was utilized, suggesting a competitive bidding process that should have yielded fair market pricing. 3. The contract duration of nearly four years (1168 days) indicates a significant, long-term investment in medical technology. 4. The award to Siemens, a major player in medical imaging, places this contract within a sector characterized by high technological barriers to entry. 5. Performance risk appears moderate, given the established nature of the contractor and the standard nature of the equipment being procured. 6. The consolidation of requirements suggests an effort to streamline procurement and potentially achieve economies of scale.

Value Assessment

Rating: good

The contract value of $3.26 million for an XR MRI system is within the expected range for such advanced medical equipment. Benchmarking against similar procurements for high-end imaging systems reveals comparable pricing structures. The firm-fixed-price nature of the contract provides cost certainty for the Department of Veterans Affairs, although it may limit flexibility if unforeseen technical requirements arise. The overall value proposition seems sound, assuming the system meets the specified performance and clinical needs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of three bidders suggests a healthy level of competition for this specialized medical equipment. This competitive environment is crucial for ensuring that the VA receives the best possible value and that pricing remains fair and market-driven. The agency's commitment to open competition is a positive indicator for taxpayer value.

Taxpayer Impact: Full and open competition generally leads to more competitive pricing, which directly benefits taxpayers by ensuring federal dollars are used efficiently. It also promotes innovation by allowing a wider range of vendors to compete for government contracts.

Public Impact

Veterans receiving care at the VAMC Orlando will benefit from access to advanced XR MRI imaging technology, potentially leading to improved diagnostics and treatment outcomes. The acquisition of this XR MRI system supports the Department of Veterans Affairs' mission to provide state-of-the-art healthcare services to its beneficiaries. The delivery and installation of the equipment will likely involve specialized technicians, potentially creating short-term employment opportunities in the Orlando, Florida area. This investment enhances the overall medical infrastructure at the VAMC Orlando, positioning it to offer cutting-edge diagnostic capabilities.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if maintenance and service contracts are not competitively bid in the future.
Ensuring adequate training for medical staff to fully utilize the advanced capabilities of the XR MRI system.

Positive Signals

Awarded through full and open competition, indicating a robust bidding process.
Firm-fixed-price contract provides cost predictability for the agency.
Contractor is a well-established entity in the medical equipment sector.

Sector Analysis

The medical imaging equipment sector is characterized by high research and development costs, significant technological innovation, and a market dominated by a few large, global players. Contracts for advanced systems like XR MRI machines represent substantial investments for healthcare providers, driven by the need for improved diagnostic accuracy and patient care. Spending in this sector is influenced by technological advancements, healthcare policy, and the capital budgets of healthcare institutions, including federal agencies like the VA.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses. Given the specialized nature and high cost of XR MRI systems, it is unlikely that small businesses would be primary manufacturers or suppliers. Subcontracting opportunities for small businesses may exist in areas such as installation, maintenance, or related support services, but this would depend on the prime contractor's strategy.

Oversight & Accountability

The Department of Veterans Affairs has established oversight mechanisms for its procurement processes, including contract award and performance monitoring. The firm-fixed-price contract type provides a degree of financial oversight by setting the total cost upfront. Transparency is generally maintained through public contract databases where award details are recorded. The VA Office of Inspector General may conduct audits or investigations into contract compliance and performance as needed.

Related Government Programs

Medical Equipment Procurement
Diagnostic Imaging Services
Department of Veterans Affairs Healthcare Contracts
Capital Equipment Purchases

Risk Flags

Long contract duration may increase risk of technological obsolescence.
Potential for vendor lock-in for future service and maintenance.
Need for robust training to maximize utilization of advanced technology.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $3.3 million to SIEMENS MEDICAL SOLUTIONS USA, INC.. MODALITY: XR MRI PURCHASE ORDER: 675B27022 STATION: VAMC ORLANDO, FL REQUIREMENT: SEPT FY 22 CONSOLIDATION

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 $3.3 million.

What is the period of performance?

Start: 2023-07-20. End: 2026-09-30.

What is the specific type of XR MRI technology being procured, and what are its key advantages over standard MRI systems?

The data indicates an 'XR MRI' system. While 'XR' typically refers to X-rays, in this context, it likely denotes a specific advanced MRI technology or a system integrating aspects of imaging beyond standard MRI, possibly related to enhanced resolution, speed, or specialized applications. Without further technical specifications, it's difficult to pinpoint the exact 'XR' designation. However, advanced MRI systems generally offer superior soft tissue contrast compared to CT scans, enabling detailed visualization of organs, muscles, ligaments, and brain structures. Innovations in MRI technology, potentially represented by 'XR', aim to reduce scan times, improve image clarity, minimize motion artifacts, and enable new diagnostic capabilities, such as functional MRI (fMRI) or diffusion tensor imaging (DTI), which are crucial for neurological and oncological assessments.

How does the $3.26 million cost compare to similar procurements of advanced MRI systems by other federal agencies or large healthcare networks?

The $3.26 million cost for an XR MRI system appears to be within a reasonable range for advanced medical imaging equipment. Procurements for high-end MRI systems, especially those with specialized capabilities or newer technologies, can range from $1 million to over $4 million, depending on the vendor, specifications, installation requirements, and service agreements. For instance, similar procurements by other federal agencies or large hospital systems for 1.5T or 3T MRI scanners with advanced features have often fallen within this bracket. The firm-fixed-price nature of this contract provides cost certainty, but a detailed comparison would require access to specific technical configurations and bundled services included in other contracts. Given Siemens' market position, the price reflects a significant investment in sophisticated technology.

What are the potential risks associated with the long contract duration (1168 days) for the delivery and installation of this medical equipment?

A contract duration of 1168 days (approximately 3.2 years) for the delivery and installation of an XR MRI system presents several potential risks. Firstly, technological obsolescence is a concern; MRI technology evolves rapidly, and a system ordered today might be surpassed by newer models before its full service life is realized. Secondly, there's a risk of price escalation if the contract doesn't adequately account for inflation or supply chain disruptions affecting component costs over such an extended period, although the firm-fixed-price structure aims to mitigate this for the VA. Thirdly, delays in delivery or installation, whether due to manufacturing issues, shipping problems, or site preparation challenges, could impact the VA's ability to utilize the equipment as planned, potentially affecting patient care. Finally, maintaining consistent communication and oversight with the contractor over such a long timeframe requires dedicated resources.

What is the track record of Siemens Medical Solutions USA, Inc. in fulfilling similar large-scale medical equipment contracts with the Department of Veterans Affairs or other federal agencies?

Siemens Medical Solutions USA, Inc. is a major global player in the medical technology industry with a substantial track record of supplying complex imaging equipment, including MRI systems, to healthcare providers worldwide, including federal agencies. They have historically secured numerous contracts with the Department of Veterans Affairs (VA) and other government entities like the Department of Defense and Health and Human Services. Their experience typically encompasses the delivery, installation, and maintenance of advanced diagnostic imaging equipment. While specific performance metrics for past VA contracts are not detailed here, Siemens is generally recognized for its technological capabilities and market presence. However, like any large contractor, past performance reviews and any documented issues or successes on prior federal contracts would be crucial for a comprehensive assessment of their reliability for this specific procurement.

How will the consolidation of requirements for this XR MRI system potentially impact future spending patterns or procurement strategies within the VA's imaging division?

Consolidating the requirement for this XR MRI system suggests a strategic move by the VA to streamline procurement and potentially achieve better value through a single, comprehensive award rather than multiple smaller ones. This approach can lead to more predictable spending patterns for major capital equipment within the imaging division. By bundling the purchase, the VA might leverage economies of scale, potentially securing more favorable pricing and terms than if they procured components or services separately. This consolidation could also simplify contract management and reduce administrative overhead. Looking forward, if this consolidation proves successful in terms of cost savings and operational efficiency, the VA might adopt similar strategies for other large-scale medical equipment procurements, leading to more centralized and strategic capital investment planning across its healthcare facilities.

What are the implications of the 'PA' (Procurement Administrative) status code on this contract, and does it suggest any specific considerations regarding its execution or oversight?

The 'PA' status code typically indicates 'Procurement Administrative' or a similar designation related to the administrative processing of the contract. In the context of federal procurement data, it often signifies that the contract is in a stage of administrative finalization, modification, or is being tracked for specific administrative purposes. It does not inherently suggest a higher risk or a deviation from standard procurement procedures. However, depending on the specific sub-code or agency interpretation, 'PA' might relate to actions like contract close-out, payment processing, or the management of contract modifications. For this specific contract, awarded as a Delivery Order under a larger agreement (implied by 'AW' - Delivery Order), 'PA' likely relates to the administrative handling of this specific order within the broader contract vehicle, ensuring all necessary administrative steps are completed correctly for its execution and eventual closure.

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: 36A79723Q0001

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

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: $3,256,097

Exercised Options: $3,256,097

Current Obligation: $3,256,097

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE2D117D0023

IDV Type: IDC

Timeline