VA awards $51.9M for high-tech biomedical supplies, with Philips Medical Systems as the primary contractor

Contract Overview

Contract Amount: $51,920,540 ($51.9M)

Contractor: Philips Medical Systems North America Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2008-12-31

End Date: 2008-12-31

Number of Offers Received: 23

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

State: Washington Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $51.9 million to PHILIPS MEDICAL SYSTEMS NORTH AMERICA INC. for work described as: HIGH TECH BIO-MEDICAL SUPPLIES AND ACCESSORIES Key points: 1. Contract awarded for essential medical equipment and supplies, indicating a need for ongoing healthcare support. 2. The contract value suggests a significant investment in maintaining and upgrading medical infrastructure. 3. Focus on high-tech biomedical supplies points to the adoption of advanced medical technologies. 4. The duration of the contract (ending 2008) implies a need for stable, long-term supply chain management. 5. The award to a single, established vendor may streamline procurement but warrants scrutiny for competitive pricing. 6. The specific product category points to a specialized segment within the broader medical supply market.

Value Assessment

Rating: fair

The contract value of $51.9 million for biomedical supplies is substantial. Without specific unit cost data or comparison to similar VA procurements for the same period, a precise value-for-money assessment is challenging. However, the award to a single entity suggests potential for negotiated volume discounts. Further analysis would require benchmarking against market rates for similar high-tech biomedical equipment and accessories during the contract period (ending 2008).

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was awarded on a sole-source basis, indicating that only one vendor was deemed capable or available to fulfill the requirement. This approach bypasses a competitive bidding process, which typically leads to better price discovery and potentially lower costs for the government. The rationale for a sole-source award needs to be clearly documented to ensure it was justified and not a missed opportunity for competition.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as the government lacks the leverage of multiple competing bids to drive down costs.

Public Impact

Veterans will benefit from access to advanced medical equipment and supplies necessary for their care. The contract ensures the availability of critical high-tech biomedical items for VA medical facilities. Geographic impact is likely nationwide, supporting VA hospitals and clinics across the United States. The contract supports the medical technology sector and the workforce involved in supplying and maintaining these devices.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pressure, potentially increasing costs for taxpayers.
Lack of transparency in the sole-source justification could mask inefficiencies.
Contract awarded in 2008, historical data may not reflect current market conditions or technological advancements.
No indication of small business subcontracting, potentially limiting opportunities for smaller firms.

Positive Signals

Ensures consistent supply of critical high-tech biomedical equipment and accessories.
Award to a known entity like Philips Medical Systems suggests a focus on reliability and established performance.
The contract value indicates a significant commitment to veteran healthcare infrastructure.

Sector Analysis

This contract falls within the healthcare sector, specifically focusing on the procurement of high-tech biomedical supplies and accessories. The market for such goods is characterized by rapid technological advancement, high research and development costs, and significant regulatory oversight. The Department of Veterans Affairs is a major purchaser of medical equipment, and contracts of this magnitude are common to ensure the operational readiness of its extensive healthcare network. Benchmarking would involve comparing this award to other large-scale procurements of similar medical technology by federal agencies or large healthcare systems.

Small Business Impact

The provided data indicates that small business participation was not a stated factor in this contract award (ss: false, sb: false). As a sole-source award, there were likely no formal subcontracting requirements mandated. This means that opportunities for small businesses to participate in supplying or servicing these high-tech biomedical goods were potentially limited. Further investigation into the contractor's subcontracting practices would be needed to assess the broader impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' procurement and program management offices. Given the sole-source nature, a robust justification and approval process would be expected. Transparency might be limited due to the lack of a competitive process. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected during the contract's lifecycle.

Related Government Programs

Department of Veterans Affairs Medical Equipment Procurement
Federal Healthcare Supply Chain Management
High-Tech Medical Device Acquisition
Sole-Source Federal Contracts
Biomedical Equipment and Supplies

Risk Flags

Sole-source award may limit price competition.
Short contract duration (if ending 2008) is unusual for high-value equipment.
Lack of small business set-aside information.
Historical data (2008) may not reflect current market value or technology.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $51.9 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 $51.9 million.

What is the period of performance?

Start: 2008-12-31. End: 2008-12-31.

What was the specific justification for awarding this contract on a sole-source basis to Philips Medical Systems North America Inc.?

The justification for a sole-source award typically stems from situations where only one responsible source is available or capable of providing the required goods or services. For high-tech biomedical equipment, this could be due to proprietary technology, unique compatibility requirements with existing systems, specialized maintenance needs, or a lack of adequate competition within the required timeframe. The Department of Veterans Affairs would have had to document this justification, often requiring approval from higher authorities, to ensure the award was in the government's best interest and that competition was genuinely not feasible. Without access to the specific sole-source justification documentation, the precise reasons remain speculative but likely relate to the specialized nature of 'high-tech biomedical supplies and accessories' and the contractor's specific capabilities.

How does the $51.9 million contract value compare to other VA procurements for similar biomedical supplies during the 2008 period?

Comparing the $51.9 million contract value requires access to historical procurement data for the Department of Veterans Affairs (VA) specifically for 'high-tech biomedical supplies and accessories' around the 2008 timeframe. Without direct access to such comparative data, it's difficult to definitively state whether this award was high, low, or average. However, the VA is one of the largest healthcare providers in the U.S., and its spending on medical equipment and supplies is substantial. A contract of this size suggests a significant scope of need, potentially covering a wide range of advanced equipment or a large volume of specific items for multiple VA facilities. Benchmarking against similar sole-source or competitively awarded contracts for comparable medical technology during that era would be necessary for a precise assessment.

What are the potential risks associated with a sole-source award for critical medical supplies?

Sole-source awards for critical medical supplies carry several potential risks. Primarily, the lack of competition can lead to higher prices than might be achieved through a competitive bidding process, resulting in less value for taxpayer money. It can also reduce the incentive for the sole provider to innovate or maintain high service levels, as there is no direct market pressure from competitors. Furthermore, over-reliance on a single supplier can create vulnerabilities in the supply chain; if the supplier experiences production issues, financial instability, or geopolitical disruptions, the government may face shortages of essential medical items. Ensuring robust contract management, performance monitoring, and clear justification for the sole-source decision are crucial to mitigate these risks.

What specific types of 'high-tech biomedical supplies and accessories' might this contract have covered?

The term 'high-tech biomedical supplies and accessories' is broad and could encompass a wide array of advanced medical products. Given the contractor, Philips Medical Systems, likely categories include sophisticated diagnostic imaging equipment (like MRI, CT scanners, ultrasound machines, and their associated consumables), advanced patient monitoring systems, critical care equipment (ventilators, defibrillators), surgical instruments, laboratory diagnostic equipment, and potentially related software and IT infrastructure for managing these devices. Accessories could include specialized probes, sensors, disposables for imaging, or replacement parts for complex machinery. The 'high-tech' designation implies equipment that incorporates advanced electronics, software, and potentially artificial intelligence or complex data processing capabilities.

What was the performance period of this contract, and how does it align with the typical lifecycle of high-tech biomedical equipment?

The provided data indicates that the contract had an effective start date (sd) and an expiration date (ed) both listed as '2008-12-31'. This suggests the contract was likely awarded and completed within the calendar year 2008, or it was a contract that expired at the end of that year. The duration is very short (less than one year). The typical lifecycle of high-tech biomedical equipment can range from 5 to 15 years or more, depending on the technology and maintenance. A contract of only one year for the supply of such equipment might indicate it was for a specific, short-term need, a pilot program, or perhaps an interim solution before a larger, longer-term contract was established. It is unusual for a contract of this value to have such a short duration unless it was for a very specific set of items or services.

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: $51,920,540

Exercised Options: $51,920,540

Current Obligation: $51,920,540

Contract Characteristics

Consolidated Contract: Yes

Parent Contract

Parent Award PIID: SPM20002D8321

IDV Type: IDC

Timeline