VA awarded $48.1M for high-tech biomedical supplies, with Philips Medical Systems as the sole provider

Contract Overview

Contract Amount: $48,137,412 ($48.1M)

Contractor: Philips Medical Systems North America Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2009-03-31

End Date: 2009-03-31

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: BOTHELL, SNOHOMISH County, WASHINGTON, 98021, UNITED STATES OF AMERICA

State: Washington Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $48.1 million to PHILIPS MEDICAL SYSTEMS NORTH AMERICA INC. for work described as: HIGH TECH BIO-MEDICAL SUPPLIES AND ACCESSORIES. Key points: 1. The contract value of $48.1 million for biomedical supplies represents a significant investment in healthcare infrastructure. 2. Sole-source procurement raises questions about potential price inflation and lack of competitive pressure. 3. The contract's duration and specific deliverables are not detailed, making performance assessment challenging. 4. The award to a single, established vendor suggests a focus on specialized or proprietary equipment. 5. The absence of small business set-asides may limit opportunities for smaller, innovative suppliers in this sector.

Value Assessment

Rating: questionable

Benchmarking the value of this $48.1 million contract is difficult without specific details on the biomedical supplies procured and their intended use. As a sole-source award, there's no direct comparison to market pricing derived from competitive bids. The price paid by the VA cannot be definitively assessed as good or bad without understanding the unique specifications and the absence of viable alternatives. However, sole-source contracts inherently carry a higher risk of being less cost-effective than competitively awarded ones.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning only one vendor, Philips Medical Systems North America Inc., was considered. This approach bypasses the typical competitive bidding process. While sole-source awards can be justified for unique or proprietary items where no other supplier can meet the requirements, it significantly limits price discovery and can lead to higher costs for the government.

Taxpayer Impact: Sole-source awards mean taxpayers may not be getting the best possible price, as competition is a key driver for cost savings in government procurement.

Public Impact

Veterans Affairs (VA) healthcare facilities will benefit from access to high-tech biomedical supplies and accessories. The contract supports the delivery of advanced medical care and diagnostic services to veterans. The geographic impact is likely nationwide, covering VA medical centers and clinics across the United States. The contract may sustain or create jobs within Philips Medical Systems and its supply chain.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and potentially increases costs for taxpayers.
Lack of detailed performance metrics makes it difficult to assess the effectiveness of the spending.
The specific nature of 'high-tech' supplies is vague, hindering a clear understanding of the value proposition.
No information on small business participation or subcontracting opportunities is provided.

Positive Signals

Ensures access to potentially critical and specialized biomedical equipment for veteran healthcare.
Award to an established vendor like Philips suggests a focus on reliability and proven technology.
The contract addresses a clear need within the VA's healthcare mission.

Sector Analysis

The biomedical equipment and supplies sector is a critical component of the healthcare industry, characterized by rapid technological advancements and significant R&D investment. This contract falls within the broader medical device manufacturing and distribution market. Spending in this area is driven by the need for advanced diagnostic, therapeutic, and monitoring equipment in hospitals and clinics. Comparable spending benchmarks would typically involve analyzing other large-scale procurements of similar medical technologies by government agencies or large healthcare systems.

Small Business Impact

This contract does not appear to include any specific small business set-asides, nor is there information indicating subcontracting goals for small businesses. As a sole-source award to a large corporation, it is unlikely to directly benefit the small business ecosystem. The absence of small business participation means that opportunities for innovative smaller firms to supply the VA with these types of high-tech biomedical supplies are missed.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' procurement and program management offices. Accountability measures would be tied to the terms and conditions of the firm fixed-price contract, requiring delivery of specified goods. Transparency is limited due to the sole-source nature and lack of publicly available performance data. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

VA Medical Equipment Procurement
Department of Defense Medical Supplies
Federal Supply Schedule (FSS) Medical Devices
Healthcare Technology Acquisition

Risk Flags

Sole-source procurement
Lack of competition
Limited transparency on specific items procured
No clear performance metrics provided

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $48.1 million to PHILIPS MEDICAL SYSTEMS NORTH AMERICA INC.. HIGH TECH BIO-MEDICAL SUPPLIES 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 $48.1 million.

What is the period of performance?

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

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

The provided data indicates the contract was for 'HIGH TECH BIO-MEDICAL SUPPLIES AND ACCESSORIES' under NAICS code 334517 (Irradiation Apparatus Manufacturing). However, the specific list or categories of supplies are not detailed in the summary data. This lack of specificity makes it challenging to fully assess the value and necessity of the procurement. Without knowing the exact items, it's impossible to determine if they are standard or highly specialized, or if alternative, potentially more cost-effective options were overlooked due to the sole-source nature of the award.

How does the $48.1 million contract value compare to similar procurements for high-tech biomedical supplies by the VA or other agencies?

Direct comparison is difficult due to the sole-source nature of this award and the lack of specific item details. Typically, competitive solicitations for similar high-tech biomedical equipment would yield a range of pricing, allowing for benchmarking. As a sole-source contract with Philips Medical Systems, there's no competitive baseline. To assess value, one would need to compare the unit prices of the specific items procured against market rates for comparable equipment from other manufacturers, assuming such comparisons are feasible given the potential proprietary nature of the supplies. Historical spending by the VA on similar categories, if available, could offer some context, but the unique nature of 'high-tech' supplies complicates direct comparisons.

What are the risks associated with awarding a sole-source contract for critical biomedical supplies?

The primary risk of a sole-source award for critical biomedical supplies is the potential for inflated pricing due to the absence of competition. Without competing bids, the vendor has significant leverage, and the government may pay more than necessary. Another risk is reduced innovation, as there's less incentive for the sole provider to offer cutting-edge solutions if they are guaranteed the contract. Furthermore, reliance on a single supplier can create vulnerabilities in the supply chain; if the sole provider experiences production issues or goes out of business, the government could face critical shortages. Ensuring the necessity and justification for a sole-source award is paramount to mitigate these risks.

What is the track record of Philips Medical Systems North America Inc. in supplying the federal government, particularly the VA?

Philips Medical Systems North America Inc. is a well-established global entity in the healthcare technology sector. While specific contract details beyond this award are not provided in the summary, large medical equipment manufacturers like Philips typically have extensive experience supplying federal agencies, including the Department of Veterans Affairs. Their track record generally involves providing a wide range of medical imaging, patient monitoring, and healthcare informatics solutions. Government contract databases often show a history of awards to such large corporations, reflecting their capacity to meet complex requirements, though the nature and value of past contracts would need further investigation to fully assess their performance and reliability specifically for the VA.

What performance metrics or oversight mechanisms were in place for this contract?

The provided summary data does not detail specific performance metrics or oversight mechanisms for this contract. As a firm fixed-price contract, the primary expectation is the delivery of the specified high-tech biomedical supplies and accessories by the agreed-upon deadlines. Oversight would typically involve contract officers and technical monitors within the VA ensuring compliance with the contract terms. However, without explicit performance standards, quality control measures, or reporting requirements detailed in the summary, assessing the effectiveness of oversight and the contractor's performance is not possible. Further review of the contract's statement of work and associated clauses would be necessary.

How does this contract align with the VA's overall mission to provide healthcare to veterans?

This contract directly aligns with the VA's core mission of providing comprehensive healthcare services to veterans. High-tech biomedical supplies and accessories are essential for modern medical diagnosis, treatment, and patient care. By procuring these items, the VA ensures that its medical facilities are equipped with the necessary tools to deliver quality healthcare. The investment supports the VA's ability to offer advanced medical technologies, potentially improving health outcomes for veterans and addressing a wide range of medical needs, from routine care to complex interventions.

Industry Classification

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

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, 98021

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

Financial Breakdown

Contract Ceiling: $48,137,412

Exercised Options: $48,137,412

Current Obligation: $48,137,412

Parent Contract

Parent Award PIID: V797P6011B

IDV Type: IDC

Timeline