VA awards $3.2M for PET-CT scanner, exceeding benchmark by 7% for irradiation apparatus manufacturing

Contract Overview

Contract Amount: $3,206,258 ($3.2M)

Contractor: Siemens Medical Solutions USA, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-06-28

End Date: 2026-05-31

Contract Duration: 1,068 days

Daily Burn Rate: $3.0K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MODALITY: NM PET-CT PURCHASE ORDER: 523B21037 STATION: VAMC JAMAICA PLAIN REQUIREMENT: NEW EQUIPMENT REQUIRED BY STATION

Place of Performance

Location: MALVERN, CHESTER County, PENNSYLVANIA, 19355

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $3.2 million to SIEMENS MEDICAL SOLUTIONS USA, INC. for work described as: MODALITY: NM PET-CT PURCHASE ORDER: 523B21037 STATION: VAMC JAMAICA PLAIN REQUIREMENT: NEW EQUIPMENT REQUIRED BY STATION Key points: 1. The contract value of $3.2 million for a PET-CT scanner appears slightly above the estimated benchmark, suggesting potential for cost optimization. 2. Full and open competition was utilized, indicating a healthy market for this medical equipment and potentially driving competitive pricing. 3. The contract duration of over 3 years suggests a significant investment in upgrading or acquiring critical medical imaging technology. 4. The award to Siemens Medical Solutions USA, Inc. places this contract within the broader context of major medical equipment suppliers to the federal government. 5. The primary risk indicator is the slight cost overrun compared to benchmarks, warranting further investigation into the specific equipment features and market conditions. 6. The Department of Veterans Affairs is the contracting and funding agency, highlighting its commitment to enhancing healthcare services for veterans.

Value Assessment

Rating: fair

The contract value of $3.2 million for a new PET-CT scanner is noted. While specific benchmark data for this exact modality and configuration is not provided, the reported value is approximately 7% above a general benchmark for irradiation apparatus manufacturing. This suggests that while the price is within a reasonable range for advanced medical equipment, there may be opportunities for negotiation or exploring alternative suppliers to achieve better value. Further analysis would require detailed specifications of the scanner and comparison with recent similar procurements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors were likely solicited and had the opportunity to bid. This method is generally preferred as it maximizes the pool of potential offerors and fosters a competitive environment. The presence of 3 bids suggests a reasonable level of competition for this specialized medical equipment, which should contribute to price discovery and potentially lead to a more favorable outcome for the government.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it increases the likelihood of obtaining the best possible price and quality for the required equipment, preventing potential overspending associated with less competitive procurement methods.

Public Impact

Veterans receiving care at the VAMC Jamaica Plain will benefit from access to advanced diagnostic imaging capabilities. The new PET-CT scanner will enhance the diagnostic accuracy and treatment planning for various medical conditions, including cancer and neurological disorders. The acquisition supports the Department of Veterans Affairs' mission to provide comprehensive healthcare services to its beneficiaries. The installation and maintenance of the equipment may involve local technical support and training, potentially impacting the local healthcare workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

The contract value is slightly above the benchmark, indicating a potential for cost savings if further negotiation or competitive bidding were pursued.
The specific model and features of the PET-CT scanner are not detailed, making it difficult to fully assess if the price reflects the true market value for the capabilities offered.

Positive Signals

The use of full and open competition is a strong positive signal, ensuring a broad market reach and competitive pricing.
The award is to a known entity in the medical equipment sector, suggesting a level of established performance and reliability.
The contract duration allows for a phased implementation and potential for long-term support and training.

Sector Analysis

The procurement falls within the broader medical equipment manufacturing sector, specifically focusing on advanced diagnostic imaging technology like PET-CT scanners. This market is characterized by high technological innovation, significant capital investment, and a relatively concentrated number of major global suppliers. Federal agencies, particularly the Department of Defense and the Department of Veterans Affairs, are significant purchasers of such equipment to maintain healthcare facilities and support medical research. Benchmarking against similar procurements for advanced imaging equipment is crucial for assessing value, though specific pricing can vary widely based on features, service contracts, and volume discounts.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned. The primary contractor, Siemens Medical Solutions USA, Inc., is a large corporation. This suggests that the focus of this procurement was on obtaining specialized, high-value medical equipment from established manufacturers, rather than on fostering small business participation. Future procurements in this category might benefit from exploring opportunities for small business involvement in ancillary services or component supply.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of Veterans Affairs' contracting officers and program managers responsible for medical equipment acquisition. The contract type (Firm Fixed Price) helps control costs, and the delivery order structure allows for phased funding and delivery. Transparency is facilitated by public contract databases where award details are recorded. While no specific Inspector General (IG) jurisdiction is mentioned for this particular award, the VA OIG generally has oversight over VA spending and operations, including major equipment procurements, to ensure efficiency and prevent fraud.

Related Government Programs

Medical Equipment Procurement
Diagnostic Imaging Services
Department of Veterans Affairs Healthcare
Irradiation Apparatus Manufacturing
Advanced Medical Technology

Risk Flags

Potential cost overrun compared to benchmark
Need for detailed feature comparison to justify price
Long-term maintenance and support cost assessment

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $3.2 million to SIEMENS MEDICAL SOLUTIONS USA, INC.. MODALITY: NM PET-CT PURCHASE ORDER: 523B21037 STATION: VAMC JAMAICA PLAIN REQUIREMENT: NEW EQUIPMENT REQUIRED BY STATION

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 $3.2 million.

What is the period of performance?

Start: 2023-06-28. End: 2026-05-31.

What is the typical lifespan and expected utilization rate for a new PET-CT scanner procured by the VA?

The typical lifespan for a modern PET-CT scanner can range from 7 to 10 years, depending on usage, maintenance, and technological advancements. Utilization rates are generally high in facilities like VAMC Jamaica Plain, as PET-CT scans are critical for diagnosing and staging various cancers, assessing neurological conditions, and evaluating cardiac health. High utilization necessitates robust maintenance schedules and potentially upgrades to software or hardware over the scanner's life. The VA aims to maximize the return on investment by ensuring the equipment is well-maintained and utilized efficiently to serve a high volume of veteran patients, thereby supporting the agency's mission of providing timely and effective healthcare.

How does the price of this PET-CT scanner compare to similar models purchased by other federal agencies or large healthcare systems in the past year?

Comparing the $3.2 million award for this PET-CT scanner requires access to detailed specifications and recent procurement data. However, the reported value is approximately 7% above a general benchmark for irradiation apparatus manufacturing. Similar PET-CT systems from major manufacturers like Siemens, GE Healthcare, and Philips can range from $2 million to over $4 million, heavily influenced by specific technological features (e.g., detector technology, reconstruction algorithms, field of view), service contracts, and installation costs. Federal agencies often leverage bulk purchasing power, but the VA's specific needs and the competitive landscape at the time of award dictate the final price. A comprehensive comparison would involve analyzing data from GSA schedules, other agency contract awards, and industry reports to ascertain if this price represents optimal value for the capabilities acquired.

What are the key performance indicators (KPIs) used by the VA to evaluate the success of this PET-CT scanner acquisition post-installation?

The VA likely employs several Key Performance Indicators (KPIs) to evaluate the success of this PET-CT scanner acquisition. These typically include operational uptime and availability (aiming for >95%), scan times and throughput (measuring efficiency in patient processing), image quality metrics (ensuring diagnostic accuracy), and patient/physician satisfaction surveys. Furthermore, cost-effectiveness KPIs, such as cost per scan and adherence to maintenance budgets, are crucial. The VA also monitors the impact on patient wait times for diagnostic imaging and the successful integration of the scanner's data into the electronic health record system. Regular performance reviews and adherence to service level agreements with the vendor are essential for ensuring the long-term value and effectiveness of the investment.

What is Siemens Medical Solutions USA, Inc.'s track record with the VA for similar medical equipment procurements?

Siemens Medical Solutions USA, Inc. has a significant and established track record of supplying medical equipment, including advanced imaging systems like PET-CT scanners, to the Department of Veterans Affairs and other federal healthcare providers. They are a major player in the medical technology market, consistently awarded contracts for various diagnostic imaging modalities. Past performance data available through federal procurement databases (like FPDS or SAM.gov) would detail the types of equipment supplied, contract values, and performance history. Generally, large established vendors like Siemens are expected to meet performance standards, but the VA would have conducted a review of their past performance as part of the source selection process for this specific award to ensure reliability and capability.

Are there any known risks associated with the maintenance and long-term support of Siemens PET-CT scanners within the VA system?

Risks associated with the maintenance and long-term support of Siemens PET-CT scanners within the VA system are generally managed through comprehensive service contracts and the vendor's established support network. Potential risks include the cost of service contracts escalating over time, availability of spare parts, and the need for specialized technicians. Technological obsolescence is another factor, as newer models emerge, potentially impacting the long-term viability of older systems. However, Siemens, as a major manufacturer, typically offers multi-year service agreements and has a widespread support infrastructure. The VA mitigates these risks by carefully negotiating service level agreements, ensuring competitive pricing for maintenance, and planning for eventual replacement cycles. Monitoring vendor performance and market trends is key to managing these long-term support risks effectively.

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: $3,206,258

Exercised Options: $3,206,258

Current Obligation: $3,206,258

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE2D117D0023

IDV Type: IDC

Timeline