VA awards $7.28M contract for RT-LINAC to Varian Medical Systems, Inc. for irradiation apparatus manufacturing

Contract Overview

Contract Amount: $7,284,145 ($7.3M)

Contractor: Varian Medical Systems, Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-11-21

End Date: 2026-06-30

Contract Duration: 1,317 days

Daily Burn Rate: $5.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: RT-LINAC FOR SAN JUAN PR

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $7.3 million to VARIAN MEDICAL SYSTEMS, INC for work described as: RT-LINAC FOR SAN JUAN PR Key points: 1. The contract value of $7.28 million appears reasonable for specialized medical equipment. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. The contract duration of over three years allows for phased delivery and support. 4. The fixed-price contract type shifts risk to the contractor. 5. This procurement supports critical healthcare services for veterans. 6. The contractor, Varian Medical Systems, Inc., is a known entity in the medical device sector.

Value Assessment

Rating: good

The contract value of $7.28 million for an RT-LINAC (Linear Accelerator) is within a typical range for such sophisticated medical equipment. Benchmarking against similar procurements for radiotherapy equipment would provide a more precise value-for-money assessment. However, given the specialized nature and high cost of these systems, the awarded amount does not immediately raise concerns about overpricing without further comparative data.

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. This method generally promotes a competitive environment, which can lead to better pricing and quality. The number of bidders is not specified, but the use of full and open competition suggests a robust process aimed at achieving the best value for the government.

Taxpayer Impact: Full and open competition is the most advantageous for taxpayers as it maximizes the potential for cost savings through a wide range of bids and encourages contractors to offer their best pricing and terms.

Public Impact

Veterans requiring radiation therapy will benefit from access to advanced medical equipment. The contract ensures the provision of essential radiotherapy services at VA facilities. The geographic impact is primarily within the San Juan, Puerto Rico area where the equipment will be deployed. This contract supports specialized roles within the healthcare workforce, including technicians and medical physicists.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for extended delivery timelines if supply chain issues arise for specialized components.
Dependence on a single contractor for a critical piece of medical infrastructure.

Positive Signals

Contract awarded through full and open competition, suggesting a competitive process.
Firm fixed-price contract type provides cost certainty for the government.
Contractor is an established player in the medical device market.

Sector Analysis

The market for medical imaging and radiotherapy equipment, including Linear Accelerators (LINACs), is a specialized segment within the broader healthcare industry. This sector is characterized by high research and development costs, stringent regulatory requirements, and a limited number of key manufacturers. Spending in this area is driven by the need for advanced diagnostic and therapeutic capabilities in healthcare facilities. Comparable spending benchmarks would involve looking at other procurements of similar radiotherapy equipment by government agencies or large healthcare systems.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). As a large, specialized equipment procurement, it is unlikely that small businesses would be primary bidders for the entire contract. However, opportunities for subcontracting to small businesses for installation, maintenance, or specific components may exist, though this is not explicitly detailed in the award information.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs (VA) contracting officers and program managers. Accountability measures are embedded in the firm fixed-price contract terms, requiring delivery of specified equipment and services. Transparency is generally maintained through federal procurement databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

VA Medical Equipment Procurement
Radiotherapy Equipment Contracts
Medical Device Manufacturing
Federal Healthcare Spending

Risk Flags

Potential for supply chain disruptions impacting delivery timelines.
Reliance on specialized technology requires skilled maintenance and operation.
Long-term obsolescence of technology requires future investment planning.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $7.3 million to VARIAN MEDICAL SYSTEMS, INC. RT-LINAC FOR SAN JUAN PR

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 $7.3 million.

What is the period of performance?

Start: 2022-11-21. End: 2026-06-30.

What is the track record of Varian Medical Systems, Inc. with the Department of Veterans Affairs and other federal agencies?

Varian Medical Systems, Inc. has a history of contracts with the Department of Veterans Affairs and other federal agencies, primarily for medical equipment, including linear accelerators and related services. A review of federal procurement data (e.g., FPDS) would reveal the volume and nature of past awards. Their track record generally indicates experience in supplying advanced medical technology to government healthcare providers. Assessing past performance, including on-time delivery, quality of goods/services, and adherence to contract terms, is crucial for understanding their reliability in fulfilling this current award.

How does the awarded price of $7.28 million compare to similar RT-LINAC procurements?

The awarded price of $7.28 million for an RT-LINAC needs to be benchmarked against similar procurements to assess value for money. Factors influencing price include the specific model of the LINAC, included software and hardware, warranty period, installation services, and training. Without access to a detailed breakdown of what this specific contract covers and comparative data from other VA or DoD procurements of similar systems, a definitive value assessment is challenging. However, LINAC systems are high-cost capital equipment, and this figure falls within a plausible range for such technology.

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

Key risks include potential delays in delivery or installation due to supply chain disruptions for specialized components, technical issues with the equipment, or contractor performance failures. The firm fixed-price contract structure mitigates financial risk for the VA by establishing a ceiling cost. Mitigation for performance risks relies on the VA's contract management, oversight, and the contractor's established reputation. The contract duration allows for phased implementation, potentially reducing the impact of any single point of failure. Ensuring robust acceptance testing and clear performance standards are critical.

How effective is the RT-LINAC system expected to be in improving cancer treatment for veterans?

The effectiveness of the RT-LINAC system hinges on its technical specifications, integration into the VA's treatment protocols, and the skill of the medical staff utilizing it. RT-LINACs are state-of-the-art tools for delivering precise radiation therapy, crucial for treating various forms of cancer while minimizing damage to surrounding healthy tissue. Its successful deployment is expected to enhance the VA's capacity to offer advanced cancer care, potentially leading to improved patient outcomes, reduced treatment side effects, and greater efficiency in radiation oncology services for veterans. The VA's clinical validation and ongoing monitoring will determine its ultimate effectiveness.

What are the historical spending patterns for irradiation apparatus or similar medical equipment by the VA?

Historical spending patterns by the VA for irradiation apparatus and similar high-cost medical equipment typically show significant investments in advanced diagnostic and therapeutic technologies. The VA frequently procures linear accelerators, CT scanners, MRI machines, and other sophisticated devices to maintain its healthcare infrastructure. Spending in this category can fluctuate based on capital equipment replacement cycles, technological advancements, and specific healthcare needs identified within the veteran population. Analyzing past VA budgets and contract awards for radiotherapy equipment would provide context on the scale and frequency of such procurements.

What is the significance of the contract being a 'Delivery Order' under a larger contract vehicle?

The notation 'AW: DELIVERY ORDER' suggests this award is a specific task order issued under a pre-existing Indefinite Delivery/Indefinite Quantity (IDIQ) contract or a similar contract vehicle. This implies that the foundational contract terms, including pricing structures, legal clauses, and potentially competition requirements, were established previously. Delivery orders allow agencies to procure specific quantities of goods or services over a period, offering flexibility. The $7.28 million represents the value of this particular order, not necessarily the total value of the underlying contract vehicle.

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: 36A79722Q0010

Offers Received: 1

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: $7,284,145

Exercised Options: $7,284,145

Current Obligation: $7,284,145

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