VA awards $684K contract for C-Arm maintenance, raising questions about competition and value

Contract Overview

Contract Amount: $68,400 ($68.4K)

Contractor: OEC Medical Systems, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-05-30

End Date: 2027-05-12

Contract Duration: 1,077 days

Daily Burn Rate: $64/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MAINTENANCE OF OEC C-ARMS

Place of Performance

Location: FORT WAYNE, ALLEN County, INDIANA, 46805

State: Indiana Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $68,400 to OEC MEDICAL SYSTEMS, INC. for work described as: MAINTENANCE OF OEC C-ARMS Key points: 1. Contract awarded on a non-competitive basis, limiting price discovery. 2. Maintenance services for specialized medical equipment are critical for patient care. 3. The contract duration of nearly three years suggests a need for ongoing support. 4. Fixed-price contract type aims to control costs, but initial pricing is unbenchmarked. 5. Lack of competition may lead to higher costs for taxpayers. 6. OEC Medical Systems, Inc. is the sole provider for this specific equipment maintenance.

Value Assessment

Rating: questionable

The contract value of $684,000 for maintenance of OEC C-Arms over approximately 3 years appears to be a significant investment. Without competitive bidding, it is difficult to benchmark the pricing against market rates or similar contracts. The fixed-price nature of the contract provides some cost certainty, but the absence of competition raises concerns about whether the government is achieving the best possible value for these essential maintenance services. Further analysis would be needed to compare this to industry standards for similar equipment maintenance contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the Simplified Acquisition Procedures (SAP) and was awarded as a sole-source definitive contract. This indicates that the Department of Veterans Affairs identified OEC Medical Systems, Inc. as the only capable provider for the maintenance of their specific C-Arm equipment. The lack of competition means that potential alternative suppliers were not considered, and the government did not benefit from a bidding process that could drive down prices.

Taxpayer Impact: Sole-source awards can result in higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price. This limits the government's ability to negotiate favorable terms and potentially overpays for services.

Public Impact

Veterans receiving care at VA facilities will benefit from the continued operational readiness of C-Arm imaging equipment. Ensures the availability of diagnostic imaging services crucial for various medical procedures. The contract supports specialized maintenance services, contributing to the overall healthcare infrastructure for veterans. Geographic impact is primarily within Indiana, where the contract is being performed. Workforce implications include the need for skilled technicians to perform specialized medical equipment maintenance.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competitive bidding may lead to inflated costs.
Sole-source award limits transparency in pricing and service level agreements.
Dependence on a single contractor for critical equipment maintenance poses a risk.

Positive Signals

Contract ensures continued availability of essential medical equipment.
Fixed-price contract provides cost predictability for the duration.
Awarding to the original equipment manufacturer may ensure specialized expertise.

Sector Analysis

The healthcare equipment maintenance sector is a critical component of the broader healthcare industry, ensuring the functionality of diagnostic and therapeutic devices. This contract falls within the specialized repair and maintenance of electronic and precision equipment (NAICS 811210). The market for medical equipment maintenance can be dominated by original equipment manufacturers (OEMs) due to proprietary knowledge and parts, often leading to sole-source or limited competition scenarios. Benchmarking spending in this area is challenging without specific equipment details and service scope.

Small Business Impact

This contract does not appear to have a small business set-aside. Given the specialized nature of maintaining OEC C-Arms, it is likely that the original equipment manufacturer or authorized service providers are the primary entities capable of performing this work. There is no explicit indication of subcontracting opportunities for small businesses within the provided data.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. As a definitive contract, it is subject to standard federal procurement regulations and oversight. Transparency regarding the justification for the sole-source award and the specific maintenance tasks covered would be important for accountability. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Medical Equipment Maintenance Contracts
Department of Veterans Affairs Healthcare Spending
OEC Medical Systems Contracts
Sole-Source Healthcare Service Contracts

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for overpricing
Limited transparency on pricing justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $68,400 to OEC MEDICAL SYSTEMS, INC.. MAINTENANCE OF OEC C-ARMS

Who is the contractor on this award?

The obligated recipient is OEC 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 $68,400.

What is the period of performance?

Start: 2024-05-30. End: 2027-05-12.

What is the track record of OEC Medical Systems, Inc. in fulfilling federal contracts, particularly for maintenance services?

Information regarding OEC Medical Systems, Inc.'s specific track record with federal contracts, especially for maintenance services, is not detailed in the provided data. A comprehensive review would require accessing federal procurement databases to analyze past performance, contract values, and any reported issues or successes. Understanding their history with the VA or other agencies would provide context for their ability to meet the requirements of this current contract. Without this data, it's difficult to assess their reliability and past performance definitively.

How does the awarded price of $684,000 compare to industry benchmarks for similar C-Arm maintenance contracts?

Directly comparing the $684,000 award to industry benchmarks for similar C-Arm maintenance contracts is challenging without more specific details about the scope of services, the exact C-Arm models, and the contract duration. However, given that this was a sole-source award to OEC Medical Systems, Inc., there is a potential risk that the price may not be as competitive as it would be in a fully competed environment. A thorough benchmark analysis would involve researching pricing from other OEMs or third-party maintenance providers for comparable equipment and service levels, which is not possible with the current data.

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

The primary risks associated with a sole-source award for critical medical equipment maintenance include potential overpricing due to the lack of competition, reduced incentive for the contractor to provide optimal service levels, and a lack of flexibility if the government needs to change service providers or negotiate terms. Furthermore, it creates a dependency on a single vendor, which can be problematic if the vendor experiences financial difficulties, discontinues support for the equipment, or experiences service disruptions. This can impact patient care continuity and increase long-term costs.

What is the historical spending pattern of the VA for OEC C-Arm maintenance or similar equipment?

The provided data does not include historical spending patterns for OEC C-Arm maintenance or similar equipment by the VA. To assess this, one would need to query federal procurement databases for past contracts awarded to OEC Medical Systems, Inc. or other entities for the maintenance of C-Arms or comparable imaging devices. Analyzing trends in contract values, durations, and competition levels over time would reveal whether this $684,000 award is consistent with past spending or represents a significant deviation. Understanding historical spending can help identify potential cost savings or areas of concern.

What specific C-Arm models are covered under this maintenance contract, and what is their age and usage?

The provided data does not specify the exact C-Arm models covered under this maintenance contract, nor does it detail their age or usage. This information is crucial for accurately assessing the maintenance requirements and associated costs. Different models may have varying maintenance needs and associated parts costs. Older or heavily used equipment typically requires more frequent and extensive maintenance. Without these specifics, it is difficult to fully evaluate the appropriateness of the contract's scope and value.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 36C25024Q0543

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 384 N WRIGHT BROTHERS DR, SALT LAKE CITY, UT, 84116

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $114,000

Exercised Options: $68,400

Current Obligation: $68,400

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline