VA Awards $8.46M for RT LINAC Systems to Varian Medical Systems, Sole Source

Contract Overview

Contract Amount: $8,456,048 ($8.5M)

Contractor: Varian Medical Systems, Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-09-19

End Date: 2026-04-30

Contract Duration: 588 days

Daily Burn Rate: $14.4K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MODALITY: RT LINAC PURCHASE ORDER: 528B43006/528B43007 STATION: VAMC ALBANY, NY REQUIREMENT: ONLY ONE CAPABLE SOURCE

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $8.5 million to VARIAN MEDICAL SYSTEMS, INC for work described as: MODALITY: RT LINAC PURCHASE ORDER: 528B43006/528B43007 STATION: VAMC ALBANY, NY REQUIREMENT: ONLY ONE CAPABLE SOURCE Key points: 1. Sole-source award to Varian Medical Systems for essential medical equipment. 2. High value contract for critical healthcare infrastructure at VAMC Albany. 3. Lack of competition raises concerns about price discovery and potential overpayment. 4. Irradiation Apparatus Manufacturing sector, specialized and potentially limited competition.

Value Assessment

Rating: questionable

The contract price of $8.46 million for two RT LINAC systems is difficult to benchmark without competitive data. Given the sole-source nature, it's unclear if this represents a fair market price compared to potentially available alternatives or previous procurements.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, citing only one capable source. This significantly limits price discovery and may lead to higher costs for taxpayers as there is no market pressure to offer competitive pricing.

Taxpayer Impact: The lack of competition in this sole-source award means taxpayers may be paying a premium for this essential medical equipment.

Public Impact

Veterans in Albany will benefit from upgraded radiation therapy capabilities. Ensures access to advanced cancer treatment technology at VAMC Albany. Potential for higher costs due to the absence of competitive bidding.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source justification
Lack of price competition
High contract value

Positive Signals

Essential medical equipment for veteran care
Addresses a critical healthcare need

Sector Analysis

This contract falls within the Irradiation Apparatus Manufacturing sector, which often involves highly specialized and technologically advanced equipment. Benchmarks are difficult without comparable competitive procurements, but such systems represent significant capital investments for healthcare facilities.

Small Business Impact

No small business participation is indicated in this sole-source award. The nature of specialized medical equipment manufacturing often favors larger, established companies.

Oversight & Accountability

The sole-source justification requires thorough review by the Department of Veterans Affairs to ensure it is valid and that all avenues for competition were explored. Transparency in pricing is crucial for accountability.

Related Government Programs

Irradiation Apparatus Manufacturing
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Sole-source award lacks competition
Potential for inflated pricing
Limited transparency in price discovery
No small business set-aside considered

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $8.5 million to VARIAN MEDICAL SYSTEMS, INC. MODALITY: RT LINAC PURCHASE ORDER: 528B43006/528B43007 STATION: VAMC ALBANY, NY REQUIREMENT: ONLY ONE CAPABLE SOURCE

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 $8.5 million.

What is the period of performance?

Start: 2024-09-19. End: 2026-04-30.

What specific technical capabilities make Varian Medical Systems the only capable source for these RT LINAC systems?

The justification for a sole-source award typically hinges on unique technical specifications, proprietary technology, or essential interoperability requirements with existing systems. Without further details on the 'only one capable source' claim, it's difficult to assess the validity of this restriction. Further investigation into the technical requirements and market alternatives is warranted.

What is the historical pricing for similar RT LINAC systems procured competitively by the VA or other federal agencies?

Historical competitive pricing data for similar RT LINAC systems is crucial for assessing the fairness of this $8.46 million sole-source award. Without this benchmark, it's impossible to determine if the government is receiving good value. A review of past solicitations and awards for comparable equipment would reveal potential cost savings.

How will the VA ensure effective utilization and maintenance of these new RT LINAC systems to maximize their value?

Effective utilization and maintenance are key to realizing the value of this significant investment. The VA should have robust training programs for medical staff, comprehensive service contracts with Varian (or qualified third parties), and performance monitoring systems in place. Regular audits of system uptime and patient throughput will ensure the equipment is meeting its intended purpose.

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: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 36A79724N0554

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, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $8,456,048

Exercised Options: $8,456,048

Current Obligation: $8,456,048

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36H79724D0005

IDV Type: IDC

Timeline