VA awards $4.5M for administrative corrections at New Orleans VAMC, with Varian Medical Systems as sole provider

Contract Overview

Contract Amount: $4,506,540 ($4.5M)

Contractor: Varian Medical Systems, Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-12-01

End Date: 2027-06-30

Contract Duration: 941 days

Daily Burn Rate: $4.8K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MODALITY: WORKSTATION STATION: VAMC NEW ORLEANS, LA PURCHASE ORDER: 36A79725N0081, 629B30005A REQUIREMENT: ADMINISTRATIVE CORRECTIONS

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $4.5 million to VARIAN MEDICAL SYSTEMS, INC for work described as: MODALITY: WORKSTATION STATION: VAMC NEW ORLEANS, LA PURCHASE ORDER: 36A79725N0081, 629B30005A REQUIREMENT: ADMINISTRATIVE CORRECTIONS Key points: 1. Contract awarded to a single vendor, raising questions about price competitiveness. 2. The requirement for administrative corrections suggests a need for specialized support. 3. Long contract duration of over 2.5 years may indicate complex or ongoing needs. 4. The award is a delivery order against an unspecified contract vehicle. 5. No small business set-aside was utilized for this procurement. 6. The North American Industry Classification System (NAICS) code points to irradiation apparatus manufacturing, which may not directly align with administrative corrections.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging without knowing the specific services provided under 'administrative corrections' and the underlying contract vehicle. Given the sole-source nature, it's difficult to assess if the $4.5 million represents a competitive price. Comparisons to similar administrative support contracts within the VA or other federal agencies would be necessary to determine fair market value. The lack of competition inherently limits the ability to ensure optimal value for taxpayer dollars.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed, indicating a sole-source award. The specific justification for this approach is not provided in the data. Typically, sole-source awards occur when only one vendor can meet the requirement due to unique capabilities, urgent needs, or specific circumstances. The absence of a competitive bidding process means that multiple potential suppliers were not evaluated, which can limit price discovery and potentially lead to higher costs.

Taxpayer Impact: A sole-source award means taxpayers did not benefit from the potential cost savings that can arise from a competitive bidding process, where multiple vendors vie for the contract.

Public Impact

Veterans receiving services at the VAMC New Orleans will benefit from improved administrative processes. The contract supports the operational efficiency of a Department of Veterans Affairs medical facility. The geographic impact is localized to New Orleans, Louisiana. The contract may involve a workforce of administrative support personnel, potentially impacting local employment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potential cost savings.
NAICS code (334517 - Irradiation Apparatus Manufacturing) appears mismatched with the stated requirement (Administrative Corrections).
Lack of transparency regarding the justification for a sole-source award.
Contract duration of over two years without clear performance metrics or competitive re-evaluation.

Positive Signals

Addresses a specific administrative need for the VAMC New Orleans.
Awarded to Varian Medical Systems, Inc., a known entity in the medical technology space.
Firm Fixed Price contract type can provide cost certainty for the government.

Sector Analysis

The healthcare sector, particularly within the federal government, relies heavily on administrative support to ensure the smooth operation of medical facilities and patient services. This contract falls under the broader category of healthcare support services. While the NAICS code suggests manufacturing of irradiation apparatus, the stated requirement is for administrative corrections. This discrepancy warrants further investigation into how Varian Medical Systems, Inc. is fulfilling administrative needs, or if there's a misunderstanding in the provided data categorization. Comparable spending on administrative support services within the VA can vary widely based on facility size and specific needs.

Small Business Impact

This contract was not set aside for small businesses, nor does it indicate any subcontracting requirements for small businesses. The award to Varian Medical Systems, Inc., a large corporation, suggests that small businesses were not involved in the primary fulfillment of this requirement. This could mean missed opportunities for small business participation and a lack of contribution to the small business ecosystem for this specific procurement.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs (VA) contracting officers and program managers. The VA has an Office of Inspector General (OIG) that conducts audits and investigations into VA programs and contracts to ensure accountability and prevent fraud, waste, and abuse. Transparency regarding the justification for the sole-source award and the specific deliverables would be key to effective oversight.

Related Government Programs

Department of Veterans Affairs Medical Services
Federal Administrative Support Services
Healthcare Facility Operations
Sole-Source Contract Awards

Risk Flags

Potential mismatch between NAICS code and contract requirement.
Sole-source award lacks competitive justification.
Unclear scope of 'administrative corrections' services.
Contractor's primary expertise may not align with stated requirement.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $4.5 million to VARIAN MEDICAL SYSTEMS, INC. MODALITY: WORKSTATION STATION: VAMC NEW ORLEANS, LA PURCHASE ORDER: 36A79725N0081, 629B30005A REQUIREMENT: ADMINISTRATIVE CORRECTIONS

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 $4.5 million.

What is the period of performance?

Start: 2024-12-01. End: 2027-06-30.

What is the specific nature of the 'administrative corrections' being provided by Varian Medical Systems, Inc. under this contract, and how does it relate to their core business of irradiation apparat

The provided data indicates the requirement is for 'administrative corrections' but lists the NAICS code as '334517 - Irradiation Apparatus Manufacturing.' This presents a significant discrepancy. Varian Medical Systems is primarily known for developing and manufacturing medical devices, including linear accelerators for radiation therapy. It is unclear how their expertise directly translates to providing administrative corrections. It's possible that 'administrative corrections' refers to data management, record-keeping, or process improvements related to their existing medical equipment contracts, or it could indicate a broader scope of services not immediately apparent from the NAICS code. Further clarification from the VA or the contractor would be needed to understand the precise services rendered and the rationale for awarding this to a company primarily in manufacturing.

What was the justification for awarding this contract on a sole-source basis, and were any alternative solutions considered?

The data explicitly states this contract was 'NOT COMPETED,' signifying a sole-source award. However, the specific justification for this sole-source determination is not provided. Federal procurement regulations allow for sole-source awards under specific circumstances, such as when only one responsible source can provide the required supplies or services, or in cases of urgent and compelling need. Without the official justification document (e.g., a Justification and Approval for Other Than Full and Open Competition), it is impossible to assess whether this award was appropriate or if alternative solutions, such as a competitive bidding process or a different contracting vehicle, were adequately explored. The lack of competition raises concerns about potential overpricing and missed opportunities for better value.

How does the $4.5 million contract value compare to similar administrative support contracts within the Department of Veterans Affairs or other federal agencies?

Directly comparing the $4.5 million value is difficult without more specific details on the scope and duration of the 'administrative corrections' services. However, for context, federal agencies often procure a wide range of administrative support services. The duration of this contract is 941 days (approximately 2.5 years), making the annual value roughly $1.8 million. This figure needs to be benchmarked against contracts for similar services, considering factors like the size and complexity of the facility (VAMC New Orleans), the specific tasks involved (e.g., data entry, process optimization, record management), and the labor categories required. A sole-source award makes external benchmarking even more critical to ensure fair pricing, as there's no internal competitive pressure to drive costs down.

What are the potential risks associated with awarding a contract for administrative corrections to a company primarily known for manufacturing irradiation apparatus?

The primary risk lies in the potential misalignment of expertise and service delivery. Varian Medical Systems, Inc.'s core competency is in designing and manufacturing complex medical equipment like linear accelerators. If the 'administrative corrections' require specialized knowledge in healthcare administration, regulatory compliance, or patient data management, the contractor may lack the necessary in-house skills or experience. This could lead to suboptimal service delivery, delays, or the need for the VA to provide extensive oversight and guidance. Furthermore, the sole-source nature exacerbates this risk, as the VA has pre-selected a vendor whose primary expertise may not align with the stated requirement, potentially leading to inefficiencies or unmet needs.

What is the historical spending pattern for administrative support services at the VAMC New Orleans, and does this contract represent an increase or decrease in spending?

The provided data does not include historical spending patterns for administrative support services at the VAMC New Orleans. To assess this, one would need to analyze previous contract awards for similar services at this specific facility or within the broader VA New Orleans Health Care System. Understanding historical spending would allow for a comparison to determine if the $4.5 million award is consistent with past investments, represents an escalation in costs, or signifies a shift in the type or volume of administrative support being procured. Without this historical context, it's challenging to evaluate the long-term financial implications or identify trends in resource allocation for administrative functions at the facility.

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: 36A79724Q0011

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: $4,506,540

Exercised Options: $4,506,540

Current Obligation: $4,506,540

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36H79724D0005

IDV Type: IDC

Timeline