VA Awards $19.5M Medical Systems Maintenance Contract to Varian Medical Systems, Inc

Contract Overview

Contract Amount: $19,468,068 ($19.5M)

Contractor: Varian Medical Systems, Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2018-10-01

End Date: 2023-09-30

Contract Duration: 1,825 days

Daily Burn Rate: $10.7K/day

Competition Type: NOT AVAILABLE FOR COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: IGF::CT::IGT CRITICAL FUNCTION BASE YEAR-VARIAN MEDICAL SYSTEMS MAINTENANCE/REPAIR CONTRACT

Place of Performance

Location: TAMPA, HILLSBOROUGH County, FLORIDA, 33612

State: Florida Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $19.5 million to VARIAN MEDICAL SYSTEMS, INC for work described as: IGF::CT::IGT CRITICAL FUNCTION BASE YEAR-VARIAN MEDICAL SYSTEMS MAINTENANCE/REPAIR CONTRACT Key points: 1. Contract awarded to incumbent Varian Medical Systems, Inc. for critical medical equipment maintenance. 2. Limited competition due to the nature of specialized repair and maintenance services. 3. Potential risk of higher costs due to lack of competitive bidding. 4. Spending falls within the 'Other Electronic and Precision Equipment Repair and Maintenance' sector.

Value Assessment

Rating: fair

The contract's value of $19.5M over five years for specialized medical equipment maintenance appears reasonable given the lack of readily available comparable contracts. However, without competitive pricing, it's difficult to definitively assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract was not available for competition, likely due to the specialized nature of Varian's medical systems. This limits price discovery and may result in less favorable pricing for the government.

Taxpayer Impact: Taxpayers may be paying a premium due to the absence of competitive bidding, potentially impacting the overall efficiency of healthcare spending.

Public Impact

Ensures continued operation of critical medical equipment for veterans. Potential for increased costs to taxpayers due to sole-source nature. Reliability of essential healthcare services for beneficiaries is maintained.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition
Potential for cost overruns
Reliance on a single vendor

Positive Signals

Ensures continuity of critical medical services
Incumbent vendor likely has specialized knowledge

Sector Analysis

This contract falls under the 'Other Electronic and Precision Equipment Repair and Maintenance' sector. Spending in this area is crucial for maintaining complex medical infrastructure, but often involves specialized, high-cost services.

Small Business Impact

The contract does not indicate any specific provisions or set-asides for small businesses. Given the specialized nature of the equipment, it is unlikely that small businesses would be primary competitors for this type of maintenance.

Oversight & Accountability

The Department of Veterans Affairs is the awarding and overseeing agency. Oversight would focus on ensuring service delivery meets contractual requirements and that Varian adheres to agreed-upon maintenance schedules and response times.

Related Government Programs

Other Electronic and Precision Equipment Repair and Maintenance
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for price escalation
No small business participation noted

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $19.5 million to VARIAN MEDICAL SYSTEMS, INC. IGF::CT::IGT CRITICAL FUNCTION BASE YEAR-VARIAN MEDICAL SYSTEMS MAINTENANCE/REPAIR CONTRACT

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 $19.5 million.

What is the period of performance?

Start: 2018-10-01. End: 2023-09-30.

What is the justification for not competing this contract, and what steps are being taken to ensure fair pricing?

The justification for not competing this contract likely stems from the proprietary nature of Varian's medical systems, requiring specialized knowledge and parts only available from the original manufacturer. To ensure fair pricing, the VA should conduct thorough market research, benchmark against similar sole-source contracts, and negotiate aggressively based on historical data and cost-plus elements if applicable.

What are the risks associated with a sole-source contract for critical medical equipment maintenance?

The primary risks include potential price inflation due to the lack of competitive pressure, vendor lock-in, and reduced incentive for the vendor to innovate or improve service quality. There's also a risk if the vendor experiences financial instability or decides to discontinue support for the specific equipment models.

How does this contract contribute to the overall effectiveness of VA healthcare delivery?

This contract is vital for the effective delivery of VA healthcare by ensuring that critical medical equipment, such as diagnostic imaging and treatment machines, remains operational and reliable. Downtime of such equipment can directly impact patient care, delay diagnoses, and disrupt treatment plans, thus affecting the overall quality and efficiency of services provided to veterans.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Other Electronic and Precision Equipment Repair and Maintenance

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT AVAILABLE FOR COMPETITION

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 36C24818R0772

Offers Received: 1

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, Self-Certified Small Disadvantaged Business, Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $19,468,068

Exercised Options: $19,468,068

Current Obligation: $19,468,068

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline