VA awards $2.9M contract for irradiation apparatus upgrade, highlighting need for specialized medical equipment

Contract Overview

Contract Amount: $2,917,315 ($2.9M)

Contractor: Siemens Medical Solutions USA, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-03-07

End Date: 2027-02-28

Contract Duration: 1,088 days

Daily Burn Rate: $2.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: 523B31050 XR CT WEST ROXBURY, MA VAMC SOLE SOURCE UPGRADE

Place of Performance

Location: MALVERN, CHESTER County, PENNSYLVANIA, 19355

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.9 million to SIEMENS MEDICAL SOLUTIONS USA, INC. for work described as: 523B31050 XR CT WEST ROXBURY, MA VAMC SOLE SOURCE UPGRADE Key points: 1. Contract awarded for essential medical equipment upgrade, ensuring continued service delivery. 2. Sole source nature of the award warrants scrutiny of justification and pricing. 3. Long contract duration suggests a need for ongoing maintenance and support. 4. Fixed-price contract type aims to control costs, but requires careful scope management. 5. Awarded by the Department of Veterans Affairs, indicating a focus on veteran healthcare. 6. The specific equipment type points to a niche but critical area within medical technology.

Value Assessment

Rating: fair

The contract value of approximately $2.9 million for an irradiation apparatus upgrade appears within a reasonable range for specialized medical equipment. However, without specific details on the nature of the upgrade, the exact equipment model, and the contractor's historical pricing for similar services, a definitive value-for-money assessment is challenging. Benchmarking against other VA or similar federal agency procurements for comparable irradiation equipment upgrades would provide a clearer picture of whether this price reflects competitive market rates or a premium due to the sole-source nature.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, SIEMENS MEDICAL SOLUTIONS USA, INC., was considered. Sole-source awards typically occur when a specific product or service is required and only one responsible source can provide it. While this can ensure compatibility and specialized expertise, it limits price competition and may result in higher costs for the government compared to a fully competed contract. The justification for this sole-source award would need to be thoroughly reviewed to ensure it meets regulatory requirements.

Taxpayer Impact: Sole-source awards reduce competitive pressure, potentially leading to higher prices for taxpayers. Without a competitive bidding process, there is less assurance that the government is obtaining the best possible value for the funds expended.

Public Impact

Veterans receiving care at the West Roxbury, MA VAMC will benefit from updated and potentially more reliable medical equipment. The contract ensures the continued availability of critical diagnostic or therapeutic services reliant on irradiation apparatus. The upgrade supports the operational capacity of a key VA medical facility. Potential for specialized training or support for VA staff operating the new equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and may not represent the best value.
Lack of competition raises concerns about potential overpricing or lack of innovation.
The specific nature of 'irradiation apparatus' could imply safety or regulatory compliance risks if not managed properly.
Long contract duration (over 3 years) increases the risk of scope creep or unforeseen cost increases.

Positive Signals

Award to a known entity (Siemens) suggests potential for reliable service and product.
Fixed-price contract type provides cost certainty if scope is well-defined.
Focus on upgrading medical equipment directly benefits patient care for veterans.

Sector Analysis

The medical equipment manufacturing sector is highly specialized, with significant R&D investment and stringent regulatory requirements. Irradiation apparatus, used in areas like medical imaging and cancer treatment, represents a critical but niche segment. The market is often dominated by a few key players due to the complexity and capital intensity. Federal agencies, particularly the VA, are significant purchasers of such equipment to maintain and upgrade their healthcare facilities, often seeking specialized solutions that require extensive technical expertise and support.

Small Business Impact

This contract does not appear to involve a small business set-aside. Given the specialized nature of irradiation apparatus and the sole-source award to a large corporation (Siemens), there are likely limited opportunities for small businesses to participate directly as prime contractors. Subcontracting opportunities might exist, but would depend on Siemens' procurement strategy and the specific components or services required for the upgrade.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. The VA's Office of Inspector General (OIG) would have jurisdiction to investigate any allegations of fraud, waste, or abuse. Transparency regarding the justification for the sole-source award and the performance metrics outlined in the contract would be key to assessing accountability.

Related Government Programs

VA Medical Equipment Procurement
Irradiation Equipment Maintenance
Medical Device Upgrades
Sole Source Justification Reviews
Healthcare Technology Contracts

Risk Flags

Sole Source Justification
Potential for Overpricing
Long Contract Duration Risks
Limited Competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.9 million to SIEMENS MEDICAL SOLUTIONS USA, INC.. 523B31050 XR CT WEST ROXBURY, MA VAMC SOLE SOURCE UPGRADE

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 $2.9 million.

What is the period of performance?

Start: 2024-03-07. End: 2027-02-28.

What is the specific justification provided by the VA for awarding this contract on a sole-source basis to Siemens Medical Solutions USA, Inc.?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified under circumstances such as "only one responsible source and no other supplies or services will satisfy the agency requirement" (FAR 6.302-1). For medical equipment, this often relates to proprietary technology, unique compatibility requirements with existing infrastructure, or specialized maintenance needs that only the original equipment manufacturer or an authorized representative can provide. A thorough review of the contract file and associated documentation would be necessary to ascertain the precise rationale and ensure it aligns with federal procurement regulations.

How does the $2.9 million cost compare to similar irradiation apparatus upgrades within the VA or other federal healthcare systems?

Benchmarking the $2.9 million cost requires detailed comparison data that is not fully available in the provided summary. Factors influencing cost include the specific type and model of irradiation apparatus, the scope of the upgrade (e.g., component replacement, software update, full system overhaul), the age and condition of the existing equipment, and the required installation and integration services. Without knowing these specifics, it's difficult to definitively state if the price is high or low. However, given the sole-source nature, there's a potential for the price to be higher than if the contract had been competed. Further analysis would involve identifying comparable contracts for similar equipment upgrades across federal agencies.

What are the key performance indicators (KPIs) or service level agreements (SLAs) associated with this contract to ensure successful delivery and performance?

The provided data does not detail the specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. However, for a contract involving the upgrade of critical medical equipment like an irradiation apparatus, typical KPIs would likely focus on aspects such as: timely completion of the upgrade within the specified schedule (by February 2027), successful system integration and testing, minimal disruption to ongoing patient care during the upgrade process, and adherence to all safety and regulatory standards. SLAs might cover response times for any post-installation support or troubleshooting required.

What is Siemens Medical Solutions USA, Inc.'s track record with the VA for similar equipment upgrades or maintenance contracts?

Siemens Medical Solutions USA, Inc. is a major global player in medical technology and has a significant history of contracting with the Department of Veterans Affairs (VA) and other federal agencies. While the provided data doesn't detail their specific track record for *this particular type* of irradiation apparatus upgrade, their extensive presence in the federal healthcare market suggests they are a common provider of medical equipment, including imaging and therapeutic systems. Past performance information, often available through federal procurement databases or agency records, would be crucial to assess their reliability, quality of work, and adherence to contract terms on previous similar engagements.

What are the potential risks associated with the long duration (1088 days) of this contract, and how are they being mitigated?

The contract duration of approximately 1088 days (roughly 3 years) presents several potential risks. These include the possibility of scope creep, where the project's requirements expand beyond the original agreement, leading to cost overruns. There's also a risk of technological obsolescence if the upgrade is not future-proofed, or if unforeseen issues arise during the extended implementation or support period. Furthermore, maintaining consistent oversight and ensuring continued contractor performance over such a long period can be challenging. Mitigation strategies typically involve robust contract management, clearly defined milestones, regular performance reviews, change control processes to manage any scope adjustments, and contingency planning for potential technical or logistical hurdles.

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: 36A79724F0107

Offers Received: 1

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: $2,917,315

Exercised Options: $2,917,315

Current Obligation: $2,917,315

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE2D117D0023

IDV Type: IDC

Timeline