VA awards $2.9M for XR MRI station at Salisbury, NC, to Philips North America LLC

Contract Overview

Contract Amount: $2,931,329 ($2.9M)

Contractor: Philips North America LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-05-03

End Date: 2026-05-22

Contract Duration: 749 days

Daily Burn Rate: $3.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MODALITY: XR MRI STATION: VAMC SALISBURY, NC PURCHASE ORDER: 36A79724N0138, 659B39006, 659B39011 REQUIREMENT: ADMINISTRATIVE CORRECTIONS

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 MRI STATION: VAMC SALISBURY, NC PURCHASE ORDER: 36A79724N0138, 659B39006, 659B39011 REQUIREMENT: ADMINISTRATIVE CORRECTIONS Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract is a delivery order under an existing contract, indicating potential for follow-on work. 3. The fixed-price contract type shifts risk to the contractor for cost overruns. 4. The duration of the contract is approximately two years, suggesting a defined project scope. 5. The awardee, Philips North America LLC, is a significant player in the medical equipment market. 6. The North American Industry Classification System (NAICS) code 334517 points to Irradiation Apparatus Manufacturing, which aligns with MRI equipment.

Value Assessment

Rating: good

The total award amount of $2,931,328.75 for an XR MRI station appears to be within a reasonable range for specialized medical equipment. Benchmarking against similar procurements for advanced imaging systems would provide a more precise value-for-money assessment. The fixed-price nature of the contract is generally favorable for the government, as it caps the potential expenditure. However, without detailed specifications and market research data, a definitive value assessment is challenging.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of three bids suggests a moderate level of competition for this specialized equipment. A higher number of bidders typically leads to more competitive pricing, but the complexity and niche nature of XR MRI technology may limit the pool of qualified offerors.

Taxpayer Impact: Full and open competition is generally beneficial for taxpayers as it encourages multiple vendors to offer their best pricing, potentially leading to cost savings for the government.

Public Impact

Veterans in the Salisbury, NC area will benefit from enhanced diagnostic imaging capabilities. The contract will facilitate the acquisition of advanced XR MRI technology for the VAMC. The delivery and installation of the equipment will support the operational needs of the medical facility. The contract may indirectly support jobs in the medical technology manufacturing and installation sectors.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the chosen system requires proprietary consumables or maintenance.
Ensuring the selected XR MRI technology meets the evolving clinical needs of the VAMC.
Adequate training and support for medical staff to effectively utilize the new equipment.

Positive Signals

Awarded through full and open competition, indicating a competitive process.
Fixed-price contract type provides cost certainty for the government.
Philips North America LLC is an established provider of medical imaging solutions.

Sector Analysis

The medical imaging equipment sector is characterized by high technological advancement and significant R&D investment. Companies like Philips compete in a global market for sophisticated diagnostic tools. This contract for an XR MRI station fits within the broader category of medical device manufacturing and healthcare technology procurement, where spending is driven by the need for advanced patient care and diagnostic accuracy. Comparable spending benchmarks would involve analyzing procurements for other high-end MRI systems or advanced imaging modalities across federal healthcare agencies.

Small Business Impact

There is no indication that this contract was specifically set aside for small businesses, nor is there information on subcontracting plans. Given the specialized nature of XR MRI technology, it is likely that larger, established manufacturers were the primary bidders. Further analysis would be needed to determine if any small businesses were involved in the supply chain or as subcontractors.

Oversight & Accountability

The Department of Veterans Affairs (VA) has established oversight mechanisms for contract awards, including internal review processes and compliance checks. The contract is a delivery order under an existing contract, which implies that the initial contract underwent a thorough review. Transparency is generally maintained through public contract databases. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract.

Related Government Programs

VA Medical Equipment Procurement
Advanced Diagnostic Imaging Systems
Radiology Equipment Contracts
Philips Healthcare Solutions

Risk Flags

Potential for cost overruns if contractor underestimated expenses under fixed-price contract.
Risk of obsolescence if technology rapidly advances beyond the procured system.
Dependence on a single vendor for maintenance and consumables could arise.

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 MRI STATION: VAMC SALISBURY, NC PURCHASE ORDER: 36A79724N0138, 659B39006, 659B39011 REQUIREMENT: ADMINISTRATIVE CORRECTIONS

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: 2024-05-03. End: 2026-05-22.

What is the specific type of XR MRI technology being procured and what are its key advantages over traditional MRI systems?

The provided data does not specify the exact 'XR' component of the MRI technology, which could refer to extended reality or a specific manufacturer's branding for advanced features. However, XR MRI systems generally aim to enhance diagnostic capabilities through improved image resolution, faster scan times, or novel imaging sequences. These advancements can lead to more accurate diagnoses, better patient comfort (e.g., reduced scan duration), and potentially enable new types of medical research. Without further technical specifications, a detailed comparison to traditional MRI systems is not possible, but the 'XR' designation suggests a move towards next-generation imaging.

How does the awarded price of $2.93 million compare to market rates for similar XR MRI systems?

Benchmarking the $2.93 million award requires comparing it to the prices of similar XR MRI systems from various manufacturers, considering factors like system specifications, included software, warranty, and installation. Publicly available data on exact pricing for such specialized medical equipment is often limited due to proprietary vendor agreements and negotiated discounts. However, high-end MRI systems can range from hundreds of thousands to several million dollars. A thorough value assessment would involve analyzing recent competitive procurements for comparable systems by other federal agencies or large healthcare networks to determine if this price represents good value for the government.

What is Philips North America LLC's track record with the Department of Veterans Affairs for similar medical equipment procurements?

Philips North America LLC is a major global provider of medical technology, including imaging systems. Their track record with the VA likely includes numerous awards for various medical equipment over the years. To assess their performance on this specific contract, one would need to review their past performance ratings on similar VA contracts, looking for any history of delivery delays, quality issues, or contract disputes. Given their established presence, it is probable they have a substantial history of fulfilling VA requirements, but a detailed review of their performance history within the VA system would be necessary for a comprehensive assessment.

What are the potential risks associated with the 'FIRM FIXED PRICE' contract type for this XR MRI station?

The 'FIRM FIXED PRICE' (FFP) contract type shifts the primary cost risk to the contractor, Philips North America LLC. This means the government is obligated to pay the agreed-upon price regardless of the contractor's actual costs. Potential risks for the government under an FFP contract include the contractor potentially cutting corners on quality or service to maintain profitability if they underestimate costs. Conversely, if the contractor significantly overestimates costs, the price may not be competitive. For this specific procurement, risks could also involve the contractor's ability to deliver the advanced XR MRI technology within the fixed price, especially if unforeseen technical challenges arise during manufacturing or integration.

How many other bids were received, and what does this number suggest about the competitiveness of the market for this specific technology?

The data indicates that three bids were received for this contract. While three bids represent a level of competition, the optimal number for ensuring the best price and value can vary depending on the complexity and niche nature of the product or service. For highly specialized equipment like an XR MRI station, three bidders might suggest a reasonably competitive market among qualified vendors. However, if the market typically supports five or more bidders for similar advanced medical equipment, then three might indicate a more limited pool of suppliers, potentially impacting price negotiation.

What is the historical spending pattern of the VA on MRI equipment, and how does this award fit into that pattern?

The VA historically spends significant amounts on medical equipment, including MRI machines, to serve the veteran population. Analyzing historical VA spending on MRI equipment would involve examining aggregate data over several fiscal years, identifying trends in the types of MRI technology procured (e.g., standard, high-field, specialized), average contract values, and key suppliers. This $2.93 million award for an XR MRI station represents a specific investment in advanced imaging capabilities. Its place within the broader pattern would depend on whether the VA is increasing its investment in such advanced technologies, diversifying its imaging modalities, or replacing older equipment. Without historical data, it's difficult to contextualize this single award within a larger spending trend.

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: 36A79723Q0007

Offers Received: 3

Pricing Type: FIRM FIXED PRICE (J)

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: $2,931,329

Exercised Options: $2,931,329

Current Obligation: $2,931,329

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