VA awards $39.3M for high-tech biomedical supplies, primarily for medical equipment wholesalers

Contract Overview

Contract Amount: $39,296,826 ($39.3M)

Contractor: Siemens Medical Solutions USA, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2008-12-30

End Date: 2008-12-30

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: HIGH TECH BIO-MEDICAL SUPPLIES AND ACCESSORIES

Place of Performance

Location: MALVERN, CHESTER County, PENNSYLVANIA, 19355

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $39.3 million to SIEMENS MEDICAL SOLUTIONS USA, INC. for work described as: HIGH TECH BIO-MEDICAL SUPPLIES AND ACCESSORIES Key points: 1. Contract focuses on a broad category of medical supplies, suggesting potential for economies of scale. 2. The fixed-price contract type offers cost certainty for the government. 3. Sole-source award raises questions about competition and potential for overpayment. 4. The duration of the contract is not specified, making long-term value assessment difficult. 5. The award is concentrated in Pennsylvania, potentially limiting broader geographic reach for services. 6. The contractor is a large entity, indicating capacity but potentially less flexibility for smaller suppliers.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without specific line-item details or a defined period of performance. However, the award amount of $39.3 million for 'HIGH TECH BIO-MEDICAL SUPPLIES AND ACCESSORIES' suggests a significant procurement. Given the sole-source nature, it's difficult to assess if competitive pricing was achieved. Further analysis would require comparing the specific items procured against market rates and similar government contracts to determine if the price represents good value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor was considered. This approach is typically used when specific circumstances justify bypassing full and open competition, such as the unique capabilities of a single provider or urgent needs. The lack of competition means that the Department of Veterans Affairs did not benefit from a bidding process that could have driven down prices or offered a wider range of solutions.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to ensure the lowest possible price. It also limits opportunities for other qualified businesses to secure government contracts.

Public Impact

Veterans will benefit from access to necessary high-tech biomedical supplies and accessories. The contract supports the provision of medical, dental, and hospital equipment and supplies. The primary geographic impact appears to be concentrated in Pennsylvania, where the contractor is located. The contract likely supports a workforce involved in the distribution and potentially maintenance of these medical supplies.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and taxpayer value.
Lack of defined performance period hinders long-term value assessment.
Concentration in one state may not serve all VA facilities effectively.
Broad category of supplies makes specific performance evaluation difficult.

Positive Signals

Contract ensures availability of critical biomedical supplies for veterans.
Fixed-price contract provides cost predictability.
Award to a known entity may indicate established reliability.

Sector Analysis

The procurement falls within the broader healthcare sector, specifically focusing on medical supplies and equipment. The market for biomedical supplies is substantial, driven by technological advancements and the ongoing needs of healthcare providers. This contract represents a significant investment by the VA in ensuring its facilities are equipped with necessary high-tech items. Comparable spending benchmarks would involve analyzing other large-scale medical supply contracts awarded by federal agencies or large healthcare systems.

Small Business Impact

Information regarding small business set-asides or subcontracting plans is not explicitly provided in the data. As this was a sole-source award to Siemens Medical Solutions USA, Inc., a large corporation, it is unlikely that small business participation was a primary consideration in the contract's structure. Further investigation into the contractor's subcontracting practices would be needed to assess any impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures would be tied to the terms and conditions of the firm fixed-price contract, ensuring delivery of specified goods. Transparency is limited due to the sole-source nature and lack of publicly detailed performance metrics. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Medical Equipment and Supplies
Healthcare Services Procurement
Department of Veterans Affairs Contracts
Biomedical Technology Acquisition

Risk Flags

Sole Source Justification
Lack of Defined Performance Period
Potential for Price Inflation
Limited Competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $39.3 million to SIEMENS MEDICAL SOLUTIONS USA, INC.. HIGH TECH BIO-MEDICAL SUPPLIES 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 $39.3 million.

What is the period of performance?

Start: 2008-12-30. End: 2008-12-30.

What specific high-tech biomedical supplies and accessories were procured under this contract?

The provided data categorizes the procurement broadly as 'HIGH TECH BIO-MEDICAL SUPPLIES AND ACCESSORIES' and lists the North American Industry Classification System (NAICS) code as '423450' for Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers. However, it does not detail the specific items purchased. This level of detail is crucial for a thorough value assessment, as it would allow for comparison against market prices for individual items and an understanding of the technological sophistication involved. Without this granular information, it's difficult to ascertain the precise nature of the 'high-tech' components or the specific needs being met.

How does the $39.3 million award compare to historical spending on similar biomedical supplies by the VA or other agencies?

Direct comparison of the $39.3 million award to historical spending is challenging without knowing the contract's period of performance and the specific items procured. If this represents an annual spend, it could be significant, especially for a sole-source contract. Historical data from agencies like the General Services Administration (GSA) or other branches of the Department of Defense might offer benchmarks for similar categories of medical equipment and supplies. However, the 'high-tech' designation suggests potentially higher unit costs than standard supplies. A comprehensive analysis would require examining multi-year spending trends for comparable goods and services across the federal government to contextualize this award.

What are the potential risks associated with a sole-source award for essential biomedical supplies?

The primary risk of a sole-source award for essential biomedical supplies is the lack of competitive pricing, potentially leading to overpayment by the government and taxpayers. Without competition, the contractor faces less pressure to offer the most cost-effective solutions. Additionally, sole-source contracts can create vendor lock-in, making it difficult to switch providers even if better options emerge. There's also a risk that innovation might be stifled, as the sole provider may have less incentive to invest in developing more advanced or affordable alternatives. Ensuring robust oversight and justification for the sole-source determination is critical to mitigate these risks.

What is the track record of Siemens Medical Solutions USA, Inc. in fulfilling federal contracts, particularly for biomedical supplies?

Siemens Medical Solutions USA, Inc. is a major player in the healthcare technology and services industry. While specific details on their track record for this exact contract are not provided, the company generally has extensive experience with government contracts, including those with the Department of Veterans Affairs and other federal agencies. Their history likely includes supplying a wide range of medical equipment and related services. Assessing their performance would involve reviewing past contract awards, delivery timeliness, product quality, and any documented issues or disputes. A deeper dive into contract databases and performance reviews would be necessary for a definitive assessment.

How does the 'firm fixed price' contract type impact the government's risk and the contractor's incentive for cost control?

A 'firm fixed price' (FFP) contract type shifts the majority of the cost risk from the government to the contractor. This means the contractor is obligated to complete the work for the agreed-upon price, regardless of their actual costs. This provides the government with cost certainty and protects against cost overruns. For the contractor, it creates a strong incentive to manage costs efficiently and effectively to maximize profit. If costs exceed the fixed price, the contractor absorbs the loss. Conversely, if the contractor can deliver the supplies for less than the fixed price, they retain the difference as profit. This structure is generally favored for procurements where the scope of work is well-defined and risks are manageable.

What is the significance of the NAICS code 423450 (Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers) in understanding this contract?

The NAICS code 423450 indicates that the primary function of this contract is the wholesale distribution of medical, dental, and hospital equipment and supplies. This means the contract is likely focused on acquiring these goods from manufacturers and supplying them to VA facilities, rather than direct manufacturing or provision of services. Merchant wholesalers act as intermediaries, managing inventory, logistics, and distribution. Understanding this classification helps clarify the role of Siemens Medical Solutions USA, Inc. in this transaction – they are acting as a supplier and distributor, ensuring the availability and delivery of necessary equipment and supplies to the VA.

Industry Classification

NAICS: Wholesale Trade › Professional and Commercial Equipment and Supplies Merchant Wholesalers › Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

Contractor Details

Parent Company: Siemens Aktiengesellschaft (UEI: 316067164)

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

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $39,296,826

Exercised Options: $39,296,826

Current Obligation: $39,296,826

Parent Contract

Parent Award PIID: SPM20002D8314

IDV Type: IDC

Timeline