VA awards $4.9M for RT-LINAC therapy system to Varian Medical Systems, Inc

Contract Overview

Contract Amount: $4,934,026 ($4.9M)

Contractor: Varian Medical Systems, Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-01-14

End Date: 2026-05-25

Contract Duration: 496 days

Daily Burn Rate: $9.9K/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MODALITY: RT-LINAC DELIVERY ORDER: 36A79725N0138 LOCATION: VAMC OKLAHOMA CITY, OK REQUIREMENT: ETHOS THERAPY FOCUS

Place of Performance

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

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $4.9 million to VARIAN MEDICAL SYSTEMS, INC for work described as: MODALITY: RT-LINAC DELIVERY ORDER: 36A79725N0138 LOCATION: VAMC OKLAHOMA CITY, OK REQUIREMENT: ETHOS THERAPY FOCUS Key points: 1. Contract awarded on a sole-source basis, raising questions about price discovery and potential for overpayment. 2. The contract is a delivery order under an existing contract, suggesting a pre-established relationship with the vendor. 3. The duration of the contract (496 days) is relatively short, indicating a focused need for the therapy system. 4. The specific requirement for 'ETHOS THERAPY FOCUS' suggests a specialized medical technology acquisition. 5. The absence of small business involvement raises concerns about equitable distribution of federal contracting opportunities.

Value Assessment

Rating: fair

The contract value of $4.9 million for an RT-LINAC therapy system appears within a reasonable range for such specialized medical equipment. However, without direct comparable contract data for the specific 'ETHOS THERAPY FOCUS' model and given the sole-source nature of this award, a definitive value-for-money assessment is challenging. Benchmarking against similar irradiation apparatus manufacturing contracts would be necessary for a more robust evaluation. The fixed-price nature of the contract shifts some risk to the contractor.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning Varian Medical Systems, Inc. was the only vendor considered. This approach bypasses the competitive bidding process, which typically leads to better price discovery and potentially lower costs for the government. The lack of competition here means taxpayers may not have benefited from the most advantageous pricing available in the market.

Taxpayer Impact: Sole-source awards limit the government's ability to secure competitive pricing, potentially leading to higher costs for taxpayers compared to a fully competed procurement.

Public Impact

Veterans receiving care at VAMC Oklahoma City will benefit from access to advanced RT-LINAC therapy. The contract supports the delivery of advanced radiation therapy services, improving treatment options for cancer patients. The geographic impact is localized to Oklahoma City, serving the veteran population in that region. The acquisition of this technology may indirectly support specialized healthcare jobs within the VAMC.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potential cost savings.
Lack of small business participation may not fully leverage the small business industrial base.

Positive Signals

Acquisition of advanced medical technology to improve patient care.
Fixed-price contract provides cost certainty for this delivery order.

Sector Analysis

The acquisition falls within the broader medical equipment manufacturing sector, specifically focusing on advanced radiotherapy devices. The market for RT-LINAC systems is specialized, with a limited number of manufacturers capable of producing such sophisticated technology. Varian Medical Systems is a known entity in this space. Comparable spending benchmarks for similar high-end medical equipment can vary significantly based on features and capabilities, but this contract appears to be for a specific, advanced modality.

Small Business Impact

This contract does not appear to have a small business set-aside. The sole-source nature of the award further limits opportunities for small businesses to participate, either as prime contractors or potentially as subcontractors, unless specifically included by the prime. This could represent a missed opportunity to engage the small business ecosystem in providing critical healthcare technology.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' procurement and program management offices. As a delivery order under an existing contract, the initial oversight was likely conducted during the parent contract's award. Transparency is moderate, as contract details are publicly available, but the lack of competition limits the depth of scrutiny regarding pricing. Inspector General jurisdiction would apply if any fraud or mismanagement is suspected.

Related Government Programs

Medical Equipment Procurement
Radiotherapy Systems
Department of Veterans Affairs Healthcare Services

Risk Flags

Sole-source award
Lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $4.9 million to VARIAN MEDICAL SYSTEMS, INC. MODALITY: RT-LINAC DELIVERY ORDER: 36A79725N0138 LOCATION: VAMC OKLAHOMA CITY, OK REQUIREMENT: ETHOS THERAPY FOCUS

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 $4.9 million.

What is the period of performance?

Start: 2025-01-14. End: 2026-05-25.

What is the track record of Varian Medical Systems, Inc. in supplying similar RT-LINAC systems to the federal government?

Varian Medical Systems, Inc. is a well-established provider of medical devices, including radiation therapy equipment. While specific data on their track record for RT-LINAC systems within the federal government is not detailed in this summary, their presence in the market suggests prior experience. A deeper analysis would involve reviewing past federal contracts awarded to Varian for similar equipment, examining performance reviews, and assessing any reported issues or successes. This would help determine their reliability and capability in fulfilling this specific requirement for the Department of Veterans Affairs.

How does the $4.9 million cost compare to similar RT-LINAC therapy system procurements by other federal agencies or the private sector?

A direct comparison of the $4.9 million cost for this RT-LINAC therapy system is challenging without more specific details on the exact model, its configuration, and included services. The 'ETHOS THERAPY FOCUS' designation suggests a particular capability. Generally, advanced radiotherapy systems can range from several hundred thousand to several million dollars. Given the sole-source nature of this award, it's difficult to ascertain if this price represents optimal market value. Benchmarking against recent procurements by agencies like the Department of Defense or large healthcare networks for comparable systems would be necessary to assess value for money.

What are the primary risks associated with a sole-source award for critical medical equipment like an RT-LINAC system?

The primary risks associated with a sole-source award for critical medical equipment include a lack of competitive pricing, potentially leading to higher costs for the government and taxpayers. Without competition, there is less incentive for the sole provider to offer the most favorable terms or the lowest price. Additionally, it can limit the government's ability to explore alternative technologies or vendors that might offer better value, innovation, or service. There's also a potential risk of vendor lock-in, making future procurements or upgrades more expensive and less flexible. Ensuring fair market price and robust contract terms becomes more critical in sole-source situations.

What is the expected program effectiveness and impact on veteran healthcare services at VAMC Oklahoma City?

The acquisition of an RT-LINAC therapy system is expected to significantly enhance the capabilities of VAMC Oklahoma City in providing advanced cancer treatment. RT-LINAC (Real-Time Linear Accelerator) technology allows for precise radiation delivery, potentially improving treatment outcomes, reducing side effects, and enabling more complex treatment plans. This directly impacts veteran healthcare services by offering state-of-the-art oncology care closer to home, reducing the need for veterans to travel for specialized treatments. The effectiveness will ultimately depend on the proper integration of the system into clinical workflows, staff training, and ongoing maintenance.

What are the historical spending patterns for irradiation apparatus manufacturing by the Department of Veterans Affairs?

Historical spending patterns for irradiation apparatus manufacturing by the Department of Veterans Affairs (VA) would reveal the frequency and value of past procurements of similar equipment. Analyzing this data could indicate whether the VA has a consistent need for such technologies, the typical contract vehicles used (e.g., sole-source vs. competitive), and the average price points. This information is crucial for understanding the VA's investment in radiotherapy infrastructure and for contextualizing the current $4.9 million award. Without specific historical data, it's difficult to determine if this contract represents an increase, decrease, or typical level of spending in this category.

Are there any specific performance metrics or service level agreements tied to this contract to ensure optimal system performance and uptime?

The provided data does not specify performance metrics or service level agreements (SLAs) for this contract. However, for critical medical equipment like an RT-LINAC system, robust performance metrics and SLAs are essential. These typically cover aspects such as system availability (uptime), response times for maintenance and repairs, and potentially treatment delivery accuracy. The Department of Veterans Affairs would ideally include such clauses in the contract to ensure the system operates reliably and effectively, minimizing disruptions to patient care and holding the contractor accountable for performance. Further review of the full contract document would be needed to confirm the presence and details of any such agreements.

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: URGENT

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: $4,934,026

Exercised Options: $4,934,026

Current Obligation: $4,934,026

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36H79724D0005

IDV Type: IDC

Timeline