VA awards $2.9M for XR CT equipment to Philips, highlighting irradiation apparatus manufacturing needs

Contract Overview

Contract Amount: $2,907,320 ($2.9M)

Contractor: Philips North America LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-01-04

End Date: 2026-04-01

Contract Duration: 1,183 days

Daily Burn Rate: $2.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 4

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Healthcare

Official Description: MODALITY: XR CT PURCHASE ORDER: 648B22537 STATION: VAMC PORTLAND OR

Place of Performance

Location: BOTHELL, SNOHOMISH County, WASHINGTON, 98021

State: Washington Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.9 million to PHILIPS NORTH AMERICA LLC for work described as: MODALITY: XR CT PURCHASE ORDER: 648B22537 STATION: VAMC PORTLAND OR Key points: 1. Value for money assessed against market benchmarks for similar medical imaging equipment. 2. Competition dynamics indicate a full and open process, potentially driving competitive pricing. 3. Risk indicators include contract duration and fixed-price with economic price adjustment terms. 4. Performance context relies on successful delivery and integration of advanced imaging technology. 5. Sector positioning places this within the broader healthcare technology and medical device market.

Value Assessment

Rating: good

The contract value of $2.9 million for an XR CT system appears reasonable when benchmarked against similar advanced medical imaging equipment purchases by federal agencies. While specific per-unit costs are not provided, the fixed-price with economic price adjustment structure suggests an effort to manage cost fluctuations. Further analysis would involve comparing the specific model and features to other competitive bids or market offerings to confirm optimal value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The presence of 4 bids suggests a healthy level of competition for this requirement. This competitive environment is generally favorable for price discovery and ensuring the government receives competitive offers.

Taxpayer Impact: A full and open competition process is beneficial for taxpayers as it increases the likelihood of securing the best possible price and quality for the required medical equipment.

Public Impact

Veterans receiving advanced diagnostic imaging services at VAMC Portland, OR. Improved diagnostic capabilities for a range of medical conditions requiring CT scans. Potential for enhanced patient care and treatment planning through higher quality imaging. Support for the medical staff at VAMC Portland with state-of-the-art diagnostic tools.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clauses can lead to cost increases beyond initial projections.
Long contract duration (1183 days) increases exposure to market volatility and technological obsolescence.
Reliance on a single vendor for specialized equipment may limit future flexibility.

Positive Signals

Awarded through full and open competition, suggesting a robust bidding process.
The contract specifies a fixed-price structure, providing some cost certainty.
The equipment is intended for a critical healthcare facility, addressing a clear need.

Sector Analysis

This contract falls within the healthcare technology sector, specifically focusing on medical imaging equipment. The market for CT scanners and related diagnostic apparatus is characterized by significant R&D investment, technological advancements, and a mix of large established manufacturers and specialized providers. Federal agencies, particularly the VA and DoD, are major purchasers of such equipment to maintain and upgrade their healthcare facilities.

Small Business Impact

The data indicates this contract was not specifically set aside for small businesses, nor does it explicitly mention subcontracting goals for small businesses. The primary contractor, Philips North America LLC, is a large corporation. Further investigation into subcontracting plans would be needed to assess the impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs' contracting officers and program managers. The contract's fixed-price nature with economic price adjustments requires careful monitoring of price changes. Transparency is facilitated by the contract award being publicly available, but detailed performance metrics and ongoing cost reviews would be key accountability measures.

Related Government Programs

VA Medical Equipment Procurement
Radiological Apparatus Manufacturing
Advanced Diagnostic Imaging Systems
Healthcare Technology Contracts

Risk Flags

Potential for cost overruns due to Economic Price Adjustment
Risk of technological obsolescence over the contract duration
Dependence on a single supplier for critical equipment

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.9 million to PHILIPS NORTH AMERICA LLC. MODALITY: XR CT PURCHASE ORDER: 648B22537 STATION: VAMC PORTLAND OR

Who is the contractor on this award?

The obligated recipient is PHILIPS NORTH AMERICA LLC.

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 $2.9 million.

What is the period of performance?

Start: 2023-01-04. End: 2026-04-01.

What is the specific model of the XR CT equipment being procured and what are its key technical specifications?

The provided data does not specify the exact model of the XR CT equipment. It only indicates the general category as 'Irradiation Apparatus Manufacturing' and the modality as 'XR CT'. To provide a detailed answer, access to the contract's statement of work or technical exhibits would be necessary. These documents would typically outline the required technical specifications, performance standards, and potentially the specific product model or equivalent that the contractor must supply. Without this information, a precise technical comparison is not possible.

How does the awarded price compare to the average market price for similar XR CT systems from Philips or other manufacturers?

The provided data states an award amount of $2,907,320 but does not include a per-unit cost or specific model details, making a direct price comparison challenging. To benchmark this value, one would need to identify comparable XR CT systems from Philips and other leading manufacturers, considering factors like imaging resolution, speed, features (e.g., dose reduction technology, AI capabilities), and warranty/service packages. Publicly available market research reports, industry pricing guides, or data from similar federal procurements (if available) could be consulted. Given the $2.9M total, if it represents a single unit, it would be on the higher end, reflecting advanced technology, but without more detail, a definitive assessment of value is difficult.

What are the key performance metrics and delivery milestones outlined in the contract?

The provided data indicates a start date of 2023-01-04 and an end date of 2026-04-01, giving a duration of 1183 days. However, specific performance metrics and delivery milestones are not detailed in this summary. Typically, such a contract would include phased delivery schedules for equipment, installation, training, and potentially acceptance testing criteria. Performance would likely be evaluated based on the successful installation and operational readiness of the equipment, adherence to delivery timelines, and compliance with technical specifications. The 'DELIVERY ORDER' designation suggests this might be one of multiple orders against a larger contract vehicle, further obscuring specific milestones without the full contract details.

What is the track record of Philips North America LLC in supplying similar medical imaging equipment to the VA or other federal agencies?

Philips North America LLC is a well-established global provider of medical technology, including diagnostic imaging systems like CT scanners. They have a significant history of supplying equipment to various federal agencies, including the Department of Veterans Affairs (VA) and the Department of Defense (DoD). Their track record generally includes delivering complex systems and providing associated services. Specific performance on past VA contracts for similar equipment would require a deeper dive into contract databases (like FPDS or SAM.gov) to review past awards, performance evaluations (e.g., CPARS reports), and any documented issues or successes. However, as a major industry player, their general experience is substantial.

How has VA spending on irradiation apparatus manufacturing evolved over the past five fiscal years?

Analyzing VA spending trends on 'Irradiation Apparatus Manufacturing' requires accessing historical federal procurement data. This specific PSC code (or related ones) would need to be queried across multiple fiscal years. Generally, spending in this category can fluctuate based on capital equipment replacement cycles, technological upgrades, and specific healthcare initiatives. The VA, with its extensive network of medical centers, often undertakes significant investments in diagnostic and therapeutic equipment. A five-year trend analysis would reveal if this $2.9M award represents a typical investment level, an increase, or a decrease compared to historical spending patterns for such apparatus.

Industry Classification

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

Solicitation ID: 36A79722Q0013

Offers Received: 4

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

Evaluated Preference: NONE

Contractor Details

Address: 22100 BOTHELL EVERETT HWY, BOTHELL, WA, 98021

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

Financial Breakdown

Contract Ceiling: $2,907,320

Exercised Options: $2,907,320

Current Obligation: $2,907,320

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA797H17D0022

IDV Type: IDC

Timeline