VA awards $19.9M for biomedical equipment, highlighting a need for specialized medical technology

Contract Overview

Contract Amount: $19,890,363 ($19.9M)

Contractor: Siemens Medical Solutions USA, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2009-03-31

End Date: 2009-03-31

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Healthcare

Official Description: HIGH TECH BIO-MEDICAL EQUIPMENT AND ACCESSORIES.

Place of Performance

Location: MALVERN, CHESTER County, PENNSYLVANIA, 19355

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $19.9 million to SIEMENS MEDICAL SOLUTIONS USA, INC. for work described as: HIGH TECH BIO-MEDICAL EQUIPMENT AND ACCESSORIES. Key points: 1. Contract awarded through full and open competition, suggesting a competitive market for these goods. 2. The fixed-price contract with economic price adjustment aims to manage cost fluctuations. 3. The award to Siemens Medical Solutions USA, Inc. indicates a significant player in the medical equipment sector. 4. This spending supports the Department of Veterans Affairs' mission to provide healthcare services. 5. The contract's duration and specific equipment details would provide further context on value. 6. The absence of small business set-asides warrants further investigation into subcontracting opportunities.

Value Assessment

Rating: good

The contract value of $19.9 million for biomedical equipment and accessories appears reasonable for specialized medical technology. Benchmarking against similar contracts for high-tech medical devices would provide a clearer picture of value for money. The fixed-price structure with economic price adjustment is a common approach to mitigate risks associated with market volatility in this sector. Without specific details on the equipment procured, a precise value assessment is challenging, but the award amount suggests a substantial acquisition.

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 were likely invited to bid. The presence of four bidders suggests a healthy level of competition for this requirement. This competitive process is generally expected to drive down prices and ensure the government receives the best value. The specific number of bids received and the evaluation criteria would offer more insight into the effectiveness of the competition.

Taxpayer Impact: Taxpayers benefit from a competitive bidding process that aims to secure the best possible pricing for essential biomedical equipment, preventing overpayment and ensuring efficient use of public funds.

Public Impact

Veterans will benefit from access to advanced medical equipment, improving diagnostic and treatment capabilities. The contract ensures the availability of critical electromedical and electrotherapeutic apparatus for VA facilities. The geographic impact is primarily within the regions served by the Department of Veterans Affairs facilities receiving the equipment. This contract supports jobs within the high-tech biomedical equipment manufacturing and distribution sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases due to economic price adjustment clause if market conditions fluctuate unfavorably.
Reliance on a single large contractor could limit future competition or flexibility if not managed well.
Ensuring the procured equipment meets the evolving technological needs of the VA is crucial for long-term value.

Positive Signals

Awarded through full and open competition, indicating a robust market and potential for competitive pricing.
Siemens is a recognized leader in medical technology, suggesting a high likelihood of quality and reliability.
The fixed-price component provides a baseline cost certainty for a significant portion of the contract value.

Sector Analysis

The contract falls within the electromedical and electrotherapeutic apparatus manufacturing sector, a critical component of the broader healthcare technology industry. This market is characterized by rapid innovation, high research and development costs, and stringent regulatory requirements. Spending in this area by government agencies like the VA is essential for maintaining and upgrading medical infrastructure. Comparable spending benchmarks would involve analyzing other large-scale procurements of similar medical devices by federal health agencies.

Small Business Impact

The data indicates that this contract was not set aside for small businesses, and the 'sb' field is false. This suggests that the procurement was likely aimed at large, established manufacturers capable of meeting the specialized requirements for high-tech biomedical equipment. Further analysis would be needed to determine if there are opportunities for small businesses to participate as subcontractors to Siemens Medical Solutions USA, Inc., or if other contracts within this category are more amenable to small business participation.

Oversight & Accountability

Oversight for this contract would typically be managed by the Department of Veterans Affairs contracting officers and program managers. Accountability measures would include performance monitoring, adherence to delivery schedules, and quality control of the supplied equipment. Transparency is facilitated through contract databases like FPDS, which provide public access to award details. Inspector General jurisdiction would apply if any fraud, waste, or abuse related to the contract were suspected.

Related Government Programs

Medical Equipment Procurement
Veterans Health Administration Services
Electromedical Apparatus
Healthcare Technology Contracts

Risk Flags

Economic Price Adjustment Clause
Potential for Cost Overruns
Reliance on Specific Manufacturer

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $19.9 million to SIEMENS MEDICAL SOLUTIONS USA, INC.. HIGH TECH BIO-MEDICAL EQUIPMENT AND ACCESSORIES.

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 $19.9 million.

What is the period of performance?

Start: 2009-03-31. End: 2009-03-31.

What specific types of high-tech biomedical equipment and accessories were procured under this contract?

The provided data indicates the contract was for 'HIGH TECH BIO-MEDICAL EQUIPMENT AND ACCESSORIES' within the NAICS code 334510 (Electromedical and Electrotherapeutic Apparatus Manufacturing). However, the specific list of equipment and accessories is not detailed in the summary data. To ascertain the exact items, one would need to consult the contract's statement of work or line item details. This could range from advanced imaging systems, diagnostic tools, patient monitoring devices, to specialized surgical equipment and their associated consumables or replacement parts. Understanding the specific equipment is crucial for assessing its impact on patient care and technological advancement within the VA.

How does the $19.9 million award compare to historical spending by the VA on similar biomedical equipment?

Comparing the $19.9 million award to historical VA spending requires access to detailed historical procurement data. Without that specific data, a direct comparison is difficult. However, the award amount suggests a significant investment in medical technology. The VA is one of the largest healthcare providers in the US, and its spending on equipment is substantial. Analyzing trends in VA spending on electromedical apparatus over the past decade, particularly for high-tech items, would reveal whether this contract represents an increase, decrease, or steady level of investment. Factors like inflation, technological advancements, and changes in veteran population needs would influence historical spending patterns.

What is Siemens Medical Solutions USA, Inc.'s track record with the Department of Veterans Affairs for similar procurements?

Siemens Medical Solutions USA, Inc. is a major global player in healthcare technology, and it is highly probable they have a substantial track record with the Department of Veterans Affairs. To assess this specific contract's context, one would need to examine past VA awards to Siemens for biomedical equipment. Key aspects to review would include the volume and value of previous contracts, performance history (on-time delivery, quality compliance, service support), and any past issues or disputes. A strong, consistent performance history with the VA would indicate a lower risk associated with this $19.9 million award, suggesting reliability and familiarity with VA requirements.

What are the primary risks associated with a fixed-price contract with economic price adjustment (EPA) for biomedical equipment?

A primary risk with a Fixed Price with Economic Price Adjustment (EPA) contract for biomedical equipment lies in the potential for cost escalation. While the fixed-price component offers cost certainty for a base amount, the EPA allows for adjustments based on fluctuations in specified economic factors, such as raw material costs, labor rates, or currency exchange. If these factors increase significantly, the total contract cost could rise beyond initial projections, impacting the government's budget. Conversely, if prices decrease, the EPA might not fully capture those savings. Managing this risk involves carefully defining the economic factors, establishing clear adjustment formulas, and setting caps or floors on potential price changes to protect taxpayer interests.

How does the 'Electromedical and Electrotherapeutic Apparatus Manufacturing' (NAICS 334510) sector typically perform in terms of competition and pricing?

The Electromedical and Electrotherapeutic Apparatus Manufacturing sector (NAICS 334510) is generally characterized by high barriers to entry due to significant R&D investment, complex manufacturing processes, and stringent regulatory approvals (e.g., FDA). Competition can vary; while there are large, established global players like Siemens, there are also numerous specialized firms. For high-tech, complex equipment, the market might lean towards fewer, highly qualified bidders, potentially leading to less intense price competition compared to simpler goods. However, for more standardized accessories or components, competition could be broader. Pricing is typically high due to the technology, innovation, and quality required. Government contracts in this space often involve extensive technical specifications, making direct price comparisons challenging without detailed product knowledge.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Electromedical and Electrotherapeutic 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: 4

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Parent Company: Siemens Aktiengesellschaft (UEI: 316067164)

Address: 51 VALLEY STREAM PKWY, MALVERN, PA, 06

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Federally Funded Research and Development Corp, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $19,890,363

Exercised Options: $19,890,363

Current Obligation: $19,890,363

Parent Contract

Parent Award PIID: V797P6029B

IDV Type: IDC

Timeline