DoD's $5.4M contract for irradiation apparatus manufacturing awarded to Siemens Medical Solutions USA, Inc

Contract Overview

Contract Amount: $5,406,736 ($5.4M)

Contractor: Siemens Medical Solutions USA, Inc.

Awarding Agency: Department of Defense

Start Date: 2025-12-18

End Date: 2027-12-28

Contract Duration: 740 days

Daily Burn Rate: $7.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 27

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: 8511823570!MAINTENANCE

Place of Performance

Location: MALVERN, CHESTER County, PENNSYLVANIA, 19355

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Defense obligated $5.4 million to SIEMENS MEDICAL SOLUTIONS USA, INC. for work described as: 8511823570!MAINTENANCE Key points: 1. Value for money appears fair given the firm-fixed-price structure, though detailed cost breakdowns are not public. 2. Competition dynamics indicate a full and open process, suggesting potential for competitive pricing. 3. Risk indicators are moderate, with a fixed-price contract and a long performance period. 4. Performance context is within the Defense Logistics Agency's mandate for specialized equipment. 5. Sector positioning is within the manufacturing of medical and scientific apparatus.

Value Assessment

Rating: fair

The contract value of $5.4 million over approximately two years for irradiation apparatus manufacturing is difficult to benchmark without specific details on the equipment's capabilities and complexity. Siemens Medical Solutions USA, Inc. is a large, established provider in the medical technology space. The firm-fixed-price contract type suggests that the contractor bears the risk of cost overruns, which can be a positive indicator for value if the price is competitive. However, without comparable contract data or detailed cost analysis, a definitive assessment of value for money is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, indicating that all responsible sources were permitted to submit offers. The presence of 27 offers suggests a robust bidding process. A high number of bidders generally supports price discovery and can lead to more competitive pricing for the government. The specific details of the solicitation and evaluation criteria would provide further insight into the quality of competition.

Taxpayer Impact: A full and open competition with multiple bidders is beneficial for taxpayers as it increases the likelihood of securing the best possible price for the required goods or services.

Public Impact

The Department of Defense is the primary beneficiary, likely for medical readiness or research applications. Services delivered include the manufacturing and potentially maintenance of specialized irradiation apparatus. Geographic impact is primarily tied to the contractor's facilities and the DoD's operational locations. Workforce implications may include specialized manufacturing roles within Siemens and related supply chains.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for long-term reliance on a single supplier for specialized equipment maintenance.
Firm-fixed-price contracts can sometimes lead to less incentive for innovation if not structured carefully.
Complexity of irradiation apparatus may present unforeseen technical challenges during manufacturing or deployment.

Positive Signals

Award to a well-established company with a track record in medical solutions.
Full and open competition with a significant number of offers suggests a competitive market.
Firm-fixed-price contract aligns incentives for cost control.

Sector Analysis

The market for irradiation apparatus is a specialized segment within the broader medical technology and scientific instrumentation industry. This sector is characterized by high barriers to entry due to complex engineering, regulatory requirements, and significant R&D investment. Companies like Siemens Medical Solutions USA, Inc. operate within a global market for such equipment, serving both government and commercial clients. Spending in this area is often driven by defense readiness, medical research, and industrial applications.

Small Business Impact

The data indicates that this contract was not set aside for small businesses (ss: false, sb: false). There is no explicit information on subcontracting plans for small businesses. Given the specialized nature of irradiation apparatus manufacturing, it is possible that the prime contractor may engage small businesses for specific components or services, but this is not guaranteed by the contract terms provided.

Oversight & Accountability

Oversight for this contract would typically fall under the Defense Contract Management Agency (DCMA) and the relevant program executive office within the Department of Defense. The firm-fixed-price nature of the contract places the onus on the contractor to manage costs and performance. Transparency is generally maintained through contract award databases and reporting requirements, though specific performance metrics and oversight activities are not detailed here. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Medical Equipment Manufacturing
Defense Logistics Agency Procurement
Irradiation Technology
Siemens Medical Solutions Contracts

Risk Flags

Potential for cost overruns if scope is not tightly defined.
Long performance period increases exposure to market or technological changes.
Dependence on a single supplier for critical apparatus.

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $5.4 million to SIEMENS MEDICAL SOLUTIONS USA, INC.. 8511823570!MAINTENANCE

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 Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $5.4 million.

What is the period of performance?

Start: 2025-12-18. End: 2027-12-28.

What is the specific type and capability of the irradiation apparatus being procured?

The provided data indicates the contract is for 'Irradiation Apparatus Manufacturing' under PSC code 334517. This classification typically covers equipment used for emitting ionizing radiation, often for medical sterilization, cancer treatment (radiotherapy), or industrial processing. Without access to the specific contract solicitation (e.g., a Statement of Work or Performance Work Statement), the precise technical specifications, intended use (e.g., medical, research, industrial), and performance capabilities of the apparatus remain unspecified. This level of detail is crucial for understanding the complexity and criticality of the procurement.

How does the awarded price compare to similar irradiation apparatus procurements by the DoD or other federal agencies?

Benchmarking this $5.4 million contract requires access to a database of comparable procurements. Factors such as the specific type of irradiation technology (e.g., electron beam, gamma, X-ray), its power output, intended application (medical vs. industrial), and required certifications (e.g., FDA, military-specific) significantly influence price. Siemens Medical Solutions USA, Inc. is a major player, and their pricing can vary widely based on customization and scale. A comprehensive analysis would involve identifying contracts with similar technical requirements, contract types (firm-fixed-price), and award dates, then comparing the unit costs or total contract values relative to the scope of work.

What is Siemens Medical Solutions USA, Inc.'s track record with the Department of Defense and specifically the Defense Logistics Agency?

Siemens Medical Solutions USA, Inc. has a history of contracting with the U.S. government, including the Department of Defense. Analyzing their past performance with the Defense Logistics Agency (DLA) and other DoD components would involve reviewing contract databases for previous awards, delivery orders, and any reported performance issues or successes. Their experience in manufacturing complex medical and scientific equipment suggests a capability to meet DoD requirements. However, a detailed assessment would require examining specific past contracts, including their value, duration, and whether they were completed satisfactorily, potentially referencing past performance evaluations if publicly available.

What are the potential risks associated with a firm-fixed-price contract for specialized manufacturing like irradiation apparatus?

While firm-fixed-price (FFP) contracts are generally favored for cost control, they carry specific risks in complex manufacturing. For irradiation apparatus, the primary risk is that the contractor may underestimate the costs associated with design, materials, specialized labor, testing, or regulatory compliance. If Siemens encounters unforeseen technical challenges or significant cost increases, they might face reduced profit margins or, in extreme cases, default. Conversely, the government risks paying a premium if the contractor's initial price is inflated to cover potential risks. Effective risk mitigation relies on a well-defined scope of work and realistic initial pricing.

What is the historical spending trend for irradiation apparatus manufacturing within the Defense Logistics Agency?

To assess historical spending trends for irradiation apparatus manufacturing within the DLA, one would need to query federal procurement data over several fiscal years. This would involve filtering for relevant Product Service Codes (PSCs) like 334517 and the awarding agency (DLA). Analyzing this data would reveal the volume and value of contracts awarded in this category, identify key contractors (including Siemens), and show whether spending has been consistent, increasing, or decreasing. Such analysis helps contextualize the current $5.4 million award within the DLA's broader procurement patterns for this type of specialized equipment.

What are the implications of this contract award on the broader market for irradiation technology and medical equipment?

This contract award signifies continued government investment in specialized irradiation technology, potentially influencing market dynamics. For Siemens, it represents a significant revenue stream and reinforces their position as a key supplier to the defense sector. The award, stemming from a full and open competition, suggests that the market is sufficiently competitive to meet DoD needs. However, the niche nature of irradiation apparatus means that a few specialized manufacturers likely dominate. This contract could spur further innovation or capacity expansion within Siemens or its supply chain, impacting availability and pricing for other customers.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 27

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: $5,406,736

Exercised Options: $5,406,736

Current Obligation: $5,406,736

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE2D117D0023

IDV Type: IDC

Timeline