VA awards $159M contract for high-tech biomedical equipment to Philips Medical Systems

Contract Overview

Contract Amount: $158,996,401 ($159.0M)

Contractor: Philips Medical Systems North America Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2008-09-30

End Date: 2008-09-30

Number of Offers Received: 23

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: HIGH TECH BIOMEDICAL EQUIPMENT AND ACCESSORIES

Place of Performance

Location: BOTHELL, SNOHOMISH County, WASHINGTON, 98021

State: Washington Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $159.0 million to PHILIPS MEDICAL SYSTEMS NORTH AMERICA INC. for work described as: HIGH TECH BIOMEDICAL EQUIPMENT AND ACCESSORIES Key points: 1. Contract awarded to a single, established vendor, indicating potential for limited competition. 2. The contract value of $159M suggests significant investment in biomedical technology. 3. Fixed-price contract type aims to control costs, but requires careful monitoring of scope. 4. The sector is critical for healthcare delivery, especially for veterans. 5. The duration of the contract is not specified, impacting long-term planning.

Value Assessment

Rating: fair

Pricing is based on a firm fixed-price structure. Without specific unit costs or comparison data, it's difficult to assess if the $159M represents excellent value. Benchmarking against similar large-scale biomedical equipment procurements would be necessary.

Cost Per Unit: N/A

Competition Analysis

Competition Level: limited

The contract appears to be awarded to a single vendor, Philips Medical Systems. This suggests a limited competition scenario, potentially due to specialized equipment or existing relationships. The impact on price discovery is likely reduced compared to an open competition.

Taxpayer Impact: The $159M expenditure represents a significant allocation of taxpayer funds for essential medical equipment. Ensuring competitive pricing and efficient use of these funds is crucial for maximizing taxpayer value.

Public Impact

Ensures access to advanced biomedical equipment for veterans' healthcare. Supports the Department of Veterans Affairs' mission to provide quality medical services. Potential for technological advancements in veteran care through specialized equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may lead to higher prices.
Lack of contract duration information.
No clear indication of small business participation.

Positive Signals

Firm fixed-price contract helps manage cost certainty.
Award to a known vendor may ensure reliable supply.
Significant investment in critical healthcare infrastructure.

Sector Analysis

This contract falls within the healthcare sector, specifically focusing on high-tech biomedical equipment. Spending in this area is driven by technological advancements and the need for advanced diagnostic and treatment tools. Benchmarks would typically compare spending on similar equipment across federal agencies or large healthcare systems.

Small Business Impact

The data provided does not indicate any specific set-asides or participation goals for small businesses. Further investigation would be needed to determine if small businesses were involved in subcontracting or if opportunities were missed.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Standard procurement regulations and oversight mechanisms should be in place to ensure compliance and accountability. The 'AW' code 'DO' suggests it was awarded under a specific authority, which warrants review.

Related Government Programs

Medical, Dental, and Hospital Equipment and Supplies Merchant Wholesalers
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Potential for lack of competition driving up costs.
Absence of contract duration makes long-term planning difficult.
No clear indication of small business participation.
Need for detailed breakdown of equipment and pricing for value assessment.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $159.0 million to PHILIPS MEDICAL SYSTEMS NORTH AMERICA INC.. HIGH TECH BIOMEDICAL EQUIPMENT AND ACCESSORIES

Who is the contractor on this award?

The obligated recipient is PHILIPS MEDICAL SYSTEMS NORTH AMERICA 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 $159.0 million.

What is the period of performance?

Start: 2008-09-30. End: 2008-09-30.

What specific types of high-tech biomedical equipment are included in this $159M contract, and how do their capabilities compare to current market offerings?

The contract details are limited, but it covers 'HIGH TECH BIOMEDICAL EQUIPMENT AND ACCESSORIES.' To assess value, a breakdown of specific equipment categories (e.g., imaging systems, surgical robots, diagnostic tools) and their technical specifications is needed. Comparing these against the latest commercially available technologies and their pricing would reveal if the VA is acquiring state-of-the-art equipment at a competitive rate or if older technology is being procured at a premium.

Given the limited competition indicated, what steps were taken to ensure the $159M price represents fair and reasonable value for the biomedical equipment?

With a single awardee, Philips Medical Systems, the VA likely relied on pre-negotiated pricing, historical data, or market research to justify the $159M. However, the absence of competitive bids raises concerns about price discovery. The agency should have conducted thorough market research, potentially including requests for information or price quotes from other potential sources, to validate the pricing and ensure it aligns with industry standards for similar procurements.

How will the effectiveness of this biomedical equipment procurement be measured to ensure it meets the healthcare needs of veterans and justifies the significant taxpayer investment?

Effectiveness measurement should involve tracking key performance indicators related to equipment uptime, maintenance costs, user satisfaction among medical staff, and ultimately, the impact on patient outcomes for veterans. The VA should establish clear metrics within the contract or through post-award monitoring to assess if the acquired equipment is performing as expected, contributing to improved healthcare delivery, and providing a justifiable return on the $159M investment.

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: Philips RS North America LLC (UEI: 404553448)

Address: 22100 BOTHELL EVERETT HWY, BOTHELL, WA, 01

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $158,996,401

Exercised Options: $158,996,401

Current Obligation: $158,996,401

Contract Characteristics

Consolidated Contract: Yes

Parent Contract

Parent Award PIID: SPM20002D8321

IDV Type: IDC

Timeline