VA awards $18.1M for medical equipment maintenance, with Siemens as primary contractor

Contract Overview

Contract Amount: $18,139,358 ($18.1M)

Contractor: Siemens Medical Solutions USA, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2019-10-28

End Date: 2025-03-31

Contract Duration: 1,981 days

Daily Burn Rate: $9.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MAINTENANCE AND REPAIR OF EQUIPMENT

Place of Performance

Location: ALBUQUERQUE, BERNALILLO County, NEW MEXICO, 87108

State: New Mexico Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $18.1 million to SIEMENS MEDICAL SOLUTIONS USA, INC. for work described as: MAINTENANCE AND REPAIR OF EQUIPMENT Key points: 1. Contract focuses on essential maintenance and repair services for critical medical equipment. 2. Siemens Medical Solutions USA, Inc. holds a significant portion of this contract value. 3. The contract duration extends over several years, indicating a need for sustained support. 4. Fixed-price contract type suggests cost certainty for the government. 5. The specific equipment type (Irradiation Apparatus) points to specialized maintenance needs. 6. Geographic focus on New Mexico highlights regional service delivery.

Value Assessment

Rating: good

The contract value of $18.1 million for maintenance and repair of irradiation apparatus appears reasonable given the specialized nature of the equipment and the multi-year duration. Benchmarking against similar contracts for high-value medical equipment maintenance is necessary for a definitive value assessment. However, the firm fixed-price structure provides cost predictability. The award to Siemens, a known manufacturer, suggests potential for efficient service delivery due to familiarity with the equipment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of a single award does not necessarily imply limited competition, as it could be the result of the most advantageous offer being selected. Further analysis of the bidding process would reveal the number of proposals received and the extent of price discovery achieved.

Taxpayer Impact: Full and open competition generally leads to better pricing for taxpayers by fostering a competitive environment where vendors strive to offer the most cost-effective solutions.

Public Impact

Veterans in New Mexico will benefit from the reliable functioning of critical medical equipment. Services ensure the availability of advanced diagnostic and treatment tools for healthcare providers. The contract supports the operational readiness of VA medical facilities in the region. Maintenance activities contribute to patient safety by ensuring equipment operates within specifications.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specialized parts or knowledge are exclusively held by Siemens.
Reliance on a single contractor for critical equipment maintenance could pose risks if performance falters.

Positive Signals

Awarded through full and open competition, suggesting a competitive bidding process.
Firm fixed-price contract provides cost certainty and limits the government's exposure to cost overruns.
Long contract duration allows for consistent and predictable maintenance services.

Sector Analysis

The market for medical equipment maintenance and repair is a significant segment within the broader healthcare industry. This contract falls under the 'Irradiation Apparatus Manufacturing' category, which involves highly specialized equipment used in medical imaging and treatment. The spending benchmark for such specialized maintenance can vary widely based on equipment complexity and manufacturer. Siemens is a major player in this sector, offering a range of medical technologies and associated support services.

Small Business Impact

The provided data indicates that this contract was not set aside for small businesses (ss: false, sb: false). There is no explicit information regarding subcontracting plans for small businesses. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, unless the prime contractor voluntarily engages small businesses for support services.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs contracting officers and program managers. Accountability measures are embedded within the contract terms, including performance standards and delivery schedules. Transparency is facilitated through contract award databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

VA Medical Equipment Maintenance Contracts
Irradiation Apparatus Service Contracts
Federal Healthcare Equipment Procurement
Department of Veterans Affairs Service Contracts

Risk Flags

Potential for vendor lock-in
Reliance on single source for critical maintenance
Performance risk associated with contractor service delivery

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $18.1 million to SIEMENS MEDICAL SOLUTIONS USA, INC.. MAINTENANCE AND REPAIR OF EQUIPMENT

Who is the contractor on this award?

The obligated recipient is SIEMENS MEDICAL SOLUTIONS USA, 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 $18.1 million.

What is the period of performance?

Start: 2019-10-28. End: 2025-03-31.

What is the historical spending pattern for maintenance and repair of irradiation apparatus by the Department of Veterans Affairs?

Analyzing historical spending for similar maintenance and repair contracts for irradiation apparatus by the VA is crucial for understanding trends and establishing benchmarks. While this specific contract is valued at $18.1 million, examining prior years' expenditures on comparable services can reveal if this award represents an increase, decrease, or stable level of investment. Factors such as the number of facilities acquiring or utilizing such equipment, technological advancements, and the aging of existing equipment fleets all influence historical spending. Without access to the VA's detailed historical procurement data for this specific equipment category, it is difficult to provide precise figures. However, a consistent need for maintenance suggests a stable or growing requirement for these services over time, driven by the ongoing use of advanced medical technology within VA facilities.

How does the per-unit cost of maintenance for this contract compare to industry benchmarks for similar irradiation apparatus?

Determining the precise per-unit cost of maintenance for this contract is challenging without knowing the exact number and types of irradiation apparatus being serviced. The total contract value of $18.1 million covers a period of approximately 5.5 years (October 2019 to March 2025). To benchmark, one would need to identify comparable irradiation apparatus (e.g., linear accelerators, CT scanners with specific radiation components) and their typical annual or per-incident maintenance costs from industry reports or other government contracts. Siemens, as the manufacturer, may offer competitive pricing through their service agreements. However, comparing this to third-party maintenance providers or other manufacturers' service contracts would be necessary to assess if the VA is receiving a value-for-money price. The firm fixed-price nature suggests the government has negotiated a set rate, but its competitiveness against market rates requires detailed analysis of the service scope and equipment specifics.

What are the potential risks associated with relying on a single contractor, Siemens Medical Solutions USA, Inc., for this specialized maintenance?

Relying on a single contractor, even a reputable one like Siemens, for specialized maintenance of critical equipment like irradiation apparatus presents several potential risks. Firstly, there's the risk of vendor lock-in, where the government becomes overly dependent on Siemens for proprietary parts, software updates, and specialized technicians, potentially leading to higher costs in the future or difficulties in switching providers. Secondly, performance risk is a concern; if Siemens experiences staffing shortages, supply chain disruptions, or a decline in service quality, it could directly impact the operational availability of essential medical equipment, potentially affecting patient care. Thirdly, a lack of ongoing competition during the contract term could reduce the incentive for Siemens to maintain optimal service levels or offer cost reductions. Finally, if the equipment is older or unique, finding alternative qualified service providers might be extremely difficult or impossible, further entrenching reliance on the incumbent.

What is the track record of Siemens Medical Solutions USA, Inc. in fulfilling similar federal contracts for medical equipment maintenance?

Siemens Medical Solutions USA, Inc. has a substantial track record in fulfilling federal contracts, particularly within the Department of Defense and the Department of Veterans Affairs, for a wide array of medical equipment, including imaging and radiation therapy systems. Their experience often encompasses installation, maintenance, repair, and upgrade services. Publicly available contract databases often show numerous awards to Siemens for similar services across various agencies. While specific performance metrics for past contracts are not detailed here, their continued success in securing large federal contracts suggests a generally positive performance history and capability to meet government requirements. However, a thorough review would involve examining past performance evaluations, any documented disputes or contract terminations, and the overall volume and complexity of their prior federal engagements in this domain.

How does the duration and value of this contract align with typical federal procurements for specialized medical equipment maintenance?

This contract, valued at approximately $18.1 million and spanning roughly 5.5 years (from late 2019 to mid-2025), aligns reasonably well with typical federal procurements for specialized medical equipment maintenance. Multi-year contracts are common for such services to ensure continuity of care and operational readiness, and durations of 3-7 years are not unusual. The value is significant, reflecting the high cost of maintaining complex, high-technology medical devices like irradiation apparatus. Larger contracts often indicate a broader scope of service, covering multiple facilities or a larger fleet of equipment. Compared to smaller, ad-hoc repair contracts, this award suggests a strategic approach by the VA to secure comprehensive, long-term support for critical assets, which can often lead to better overall value and predictability than repeatedly re-competing smaller service needs.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Irradiation Apparatus Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Altair Engineering Inc.

Address: 40 LIBERTY BLVD, MALVERN, PA, 19355

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $18,139,358

Exercised Options: $18,139,358

Current Obligation: $18,139,358

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE2D117D0023

IDV Type: IDC

Timeline