VA awards $2.3M for XR CT equipment to GE Healthcare, highlighting a fixed-price contract with economic adjustments

Contract Overview

Contract Amount: $2,307,776 ($2.3M)

Contractor: GE Precision Healthcare LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-04-14

End Date: 2026-08-17

Contract Duration: 1,221 days

Daily Burn Rate: $1.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 6

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Healthcare

Official Description: MODALITY: XR CT PURCHASE ORDER: 593B30014 STATION: VAMC LAS VEGAS NV REQUIREMENT: JAN FY23 CONSOLIDATION

Place of Performance

Location: WAUKESHA, WAUKESHA County, WISCONSIN, 53188

State: Wisconsin Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.3 million to GE PRECISION HEALTHCARE LLC for work described as: MODALITY: XR CT PURCHASE ORDER: 593B30014 STATION: VAMC LAS VEGAS NV REQUIREMENT: JAN FY23 CONSOLIDATION Key points: 1. The contract value of $2.3 million for XR CT equipment suggests a significant investment in advanced medical imaging capabilities. 2. Competition dynamics indicate a full and open competition, potentially leading to competitive pricing and a wider range of vendor solutions. 3. The fixed-price contract with economic price adjustment introduces a degree of cost certainty while allowing for market fluctuations. 4. The delivery order, awarded in April 2023 and spanning over 1200 days, points to a long-term need for this specialized equipment. 5. The equipment's purpose is likely to enhance diagnostic accuracy and patient care within the Veterans Affairs healthcare system. 6. The specific NAICS code 334517 points to the manufacturing of irradiation apparatus, aligning with the specialized nature of CT scanners.

Value Assessment

Rating: good

The contract value of $2.3 million for XR CT equipment appears reasonable given the specialized nature of such medical devices. Benchmarking against similar large-scale imaging equipment purchases within the federal government or large hospital systems would provide a more precise value assessment. The fixed-price with economic adjustment structure aims to balance cost control with market volatility, which is a common approach for long-lead-time equipment procurements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting that multiple vendors had the opportunity to bid. This process is designed to foster a competitive environment, which typically results in better pricing and a wider selection of qualified suppliers. The presence of six bidders (no) indicates a healthy level of interest and competition for this requirement.

Taxpayer Impact: A full and open competition generally benefits taxpayers by driving down costs through competitive bidding and ensuring that the government procures goods and services at the best possible value.

Public Impact

Veterans receiving care at VAMC Las Vegas will benefit from potentially improved diagnostic imaging services. The acquisition of advanced XR CT equipment enhances the medical capabilities of the Department of Veterans Affairs. The contract supports the healthcare infrastructure in the Las Vegas region by providing state-of-the-art medical technology. The delivery and installation of this equipment may involve specialized technicians, potentially impacting local employment in technical services.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clauses can lead to cost overruns if market prices increase significantly beyond projections.
The long duration of the contract (1221 days) requires careful monitoring to ensure continued performance and value.
Reliance on a single manufacturer (GE Precision Healthcare LLC) for this critical equipment could pose supply chain risks.

Positive Signals

Awarding under full and open competition suggests a robust procurement process that likely secured competitive pricing.
The fixed-price component of the contract provides a baseline cost certainty for the initial agreement.
The specific requirement for XR CT equipment indicates a commitment to modernizing medical technology for patient benefit.

Sector Analysis

The market for medical imaging equipment, particularly advanced systems like XR CT scanners, is characterized by high technological innovation and significant capital investment. This contract falls within the broader 'Irradiation Apparatus Manufacturing' sector, which is a niche but critical part of the healthcare technology industry. Spending in this area is driven by the need for improved diagnostic accuracy, minimally invasive procedures, and enhanced patient outcomes. Comparable spending benchmarks would typically be found in large hospital system capital budgets or other federal agency procurements for similar advanced medical devices.

Small Business Impact

The data provided does not indicate any specific small business set-aside or subcontracting requirements for this contract. As a full and open competition award to a large corporation (GE Precision Healthcare LLC), the direct impact on small businesses is likely minimal unless they are part of the supply chain for the awarded contractor. Further analysis would be needed to determine if subcontracting opportunities were mandated or voluntarily pursued.

Oversight & Accountability

The Department of Veterans Affairs (VA) has established oversight mechanisms for its contracts, including regular performance reviews and financial audits. The Inspector General's office within the VA is responsible for investigating fraud, waste, and abuse. Transparency is generally maintained through contract databases like FPDS, which provide public access to contract details. The fixed-price nature of the contract, with economic adjustments, requires diligent monitoring of price changes to ensure continued value.

Related Government Programs

Medical Equipment Procurement
Diagnostic Imaging Services
Veterans Health Administration
Capital Equipment Purchases
Advanced Medical Technology

Risk Flags

Potential for cost increases due to economic price adjustment.
Long contract duration requires sustained oversight.
Dependence on a single supplier for critical equipment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.3 million to GE PRECISION HEALTHCARE LLC. MODALITY: XR CT PURCHASE ORDER: 593B30014 STATION: VAMC LAS VEGAS NV REQUIREMENT: JAN FY23 CONSOLIDATION

Who is the contractor on this award?

The obligated recipient is GE PRECISION HEALTHCARE LLC.

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 $2.3 million.

What is the period of performance?

Start: 2023-04-14. End: 2026-08-17.

What is the typical lifespan and expected utilization rate for XR CT equipment in a VAMC setting?

The typical lifespan for advanced medical imaging equipment like XR CT scanners can range from 7 to 15 years, depending on usage, maintenance, and technological obsolescence. Utilization rates in a VAMC setting are often high, driven by the need to serve a large patient population with complex health conditions. Factors influencing utilization include the number of radiologists and technicians available, the efficiency of scheduling systems, and the demand for specific imaging procedures. High utilization can lead to faster wear and tear, necessitating robust maintenance contracts and potentially earlier replacement cycles. Understanding these factors helps in assessing the long-term value and operational impact of the purchased equipment.

How does the economic price adjustment clause in this contract typically function and what are its potential impacts on the final cost?

An economic price adjustment (EPA) clause in a fixed-price contract allows for modifications to the contract price based on specified economic factors, such as changes in the cost of labor, materials, or other economic indices. For this contract, the EPA would likely be tied to indices relevant to the manufacturing and components of XR CT equipment. The primary impact is that the final cost could be higher or lower than the initially stated $2.3 million, depending on market fluctuations. While EPA clauses provide some protection against unforeseen cost increases for the contractor, they also introduce uncertainty for the government regarding the final expenditure. Careful negotiation and clear definitions of the triggering indices are crucial to manage this risk and ensure fair pricing.

What specific technological advancements does 'XR CT' represent compared to standard CT scanners, and what are the benefits for patient care?

'XR CT' likely refers to Extended Reality Computed Tomography, which integrates advanced imaging data with virtual or augmented reality technologies. This could allow for more immersive visualization of anatomical structures, improved surgical planning, and enhanced training for medical professionals. Benefits for patient care may include more precise diagnoses, reduced need for invasive procedures through better pre-operative planning, and potentially shorter procedure times. The 'XR' component suggests a move beyond traditional 2D or 3D reconstructions to more interactive and data-rich visualization environments, offering a significant leap in diagnostic and therapeutic capabilities.

What is GE Precision Healthcare LLC's track record with the VA for similar large-scale medical equipment procurements?

GE Precision Healthcare LLC, as a major medical technology provider, likely has a substantial track record with the Department of Veterans Affairs (VA) and other federal healthcare agencies. Assessing this specific track record would involve reviewing past contract awards, performance evaluations, and any reported issues or successes in delivering and maintaining similar large-scale imaging equipment. A history of successful, on-time, and within-budget deliveries, coupled with positive performance reviews, would indicate a lower risk for this current contract. Conversely, past performance issues, such as delays, cost overruns, or equipment malfunctions, would raise concerns and warrant closer scrutiny of the current award and its management.

How does the $2.3 million award compare to historical VA spending on XR CT or similar advanced imaging systems?

Comparing the $2.3 million award to historical VA spending on XR CT or similar advanced imaging systems requires access to historical procurement data. Without specific historical figures, it's difficult to definitively state whether this represents an increase, decrease, or is in line with past investments. However, the trend in medical technology is generally towards increasing sophistication and cost, driven by innovation and demand for better patient outcomes. If XR CT represents a newer or more advanced technology than previously procured systems, a higher price point would be expected. Analyzing VA's capital equipment budgets and specific imaging system procurements over the last 5-10 years would provide the necessary context for a robust comparison.

What are the key performance indicators (KPIs) likely being used to evaluate the success of this contract and the performance of GE Precision Healthcare LLC?

Key performance indicators (KPIs) for this contract would likely focus on several areas. These could include timely delivery and installation of the XR CT equipment, successful integration with existing VAMC IT and imaging systems, adherence to technical specifications and performance standards, and the reliability and uptime of the equipment post-installation. For the contractor, GE Precision Healthcare LLC, KPIs might also encompass the effectiveness of their training programs for VAMC staff and the responsiveness of their maintenance and support services. The VA would likely track equipment utilization rates and patient throughput improvements as indicators of the system's overall value and impact on care delivery.

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: 36A79723Q0004

Offers Received: 6

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: MIM Software Inc.

Address: 3000 NORTH GRANDVIEW BOULEVARD, WAUKESHA, WI, 53188

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $2,307,776

Exercised Options: $2,307,776

Current Obligation: $2,307,776

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA797H17D0024

IDV Type: IDC

Timeline