VA awards $3.2M for irradiation apparatus, with Philips North America LLC securing the contract

Contract Overview

Contract Amount: $3,212,016 ($3.2M)

Contractor: Philips North America LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-04-02

End Date: 2026-09-01

Contract Duration: 152 days

Daily Burn Rate: $21.1K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Healthcare

Official Description: MODALITY: XR HYBRID PURCHASE ORDER: 648B53001/648B53002 STATION: VAMC PORTLAND OR REQUIREMENT: JUN FY25 EQ CONSOLIDATION

Place of Performance

Location: BOTHELL, SNOHOMISH County, WASHINGTON, 98021

State: Washington Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $3.2 million to PHILIPS NORTH AMERICA LLC for work described as: MODALITY: XR HYBRID PURCHASE ORDER: 648B53001/648B53002 STATION: VAMC PORTLAND OR REQUIREMENT: JUN FY25 EQ CONSOLIDATION Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The fixed-price contract with economic price adjustment aims to mitigate cost fluctuations. 3. The contract duration is 152 days, indicating a short-term requirement. 4. The award is for a hybrid purchase order, suggesting a combination of goods and services. 5. The equipment is intended for VAMC Portland, OR, highlighting a specific healthcare facility need. 6. The North American Industry Classification System (NAICS) code 334517 points to Irradiation Apparatus Manufacturing.

Value Assessment

Rating: good

The contract value of $3.2 million for irradiation apparatus appears reasonable given the specialized nature of the equipment. Benchmarking against similar procurements for medical irradiation devices would provide a more precise value-for-money assessment. The fixed-price with economic price adjustment structure is common for equipment purchases where material costs can fluctuate. Without specific details on the exact specifications of the apparatus, a direct comparison to market rates is challenging, but the award to a known manufacturer like Philips suggests a standard market offering.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The presence of two bids suggests a moderate level of competition for this specific requirement. A higher number of bidders typically leads to more competitive pricing, but the specialized nature of irradiation apparatus may limit the pool of qualified vendors. The VA's approach ensures a broad search for the best value.

Taxpayer Impact: Taxpayers benefit from the assurance that the contract was awarded through a process designed to solicit competitive offers, potentially leading to a more favorable price than a sole-source or limited competition award.

Public Impact

Patients at VAMC Portland, OR, will benefit from advanced medical treatment capabilities enabled by the new irradiation apparatus. Healthcare professionals at VAMC Portland will have access to updated technology for diagnostic and therapeutic procedures. The acquisition supports the VA's mission to provide comprehensive healthcare services to veterans. The contract contributes to the operational readiness and technological advancement of a key VA medical facility.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for price increases due to economic price adjustment clause if market conditions change significantly.
Dependence on a single manufacturer (Philips) for this specific apparatus could pose long-term supply chain risks if not managed proactively.

Positive Signals

Awarded through full and open competition, maximizing potential for competitive pricing.
Contract specifies a fixed price with economic price adjustment, providing some cost certainty.
The equipment is for a specific, critical healthcare function at a VA facility.

Sector Analysis

The market for medical irradiation apparatus is a specialized segment within the broader healthcare technology sector. This contract falls under the Irradiation Apparatus Manufacturing industry (NAICS 334517). The global market for radiation therapy equipment is substantial, driven by increasing cancer diagnoses and technological advancements. This procurement by the VA represents a specific instance of federal spending within this niche, likely focused on equipment for diagnostic imaging or therapeutic radiation treatment.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the primary impact on small businesses would be indirect, potentially through subcontracting opportunities if Philips North America LLC engages them. However, given the specialized nature of the equipment, direct subcontracting opportunities for small businesses may be limited.

Oversight & Accountability

The Department of Veterans Affairs (VA) is responsible for overseeing this contract. Standard VA procurement regulations and oversight mechanisms would apply. Transparency is generally maintained through contract award databases like FPDS. Inspector General jurisdiction would cover any potential fraud, waste, or abuse related to the contract's execution and performance.

Related Government Programs

VA Medical Equipment Procurement
Radiation Therapy Equipment
Medical Imaging Systems
Federal Healthcare Technology Spending

Risk Flags

Potential for price escalation due to economic price adjustment.
Short contract duration may indicate urgency or a specific project phase.
Sole-source manufacturer dependency for future needs or support.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $3.2 million to PHILIPS NORTH AMERICA LLC. MODALITY: XR HYBRID PURCHASE ORDER: 648B53001/648B53002 STATION: VAMC PORTLAND OR REQUIREMENT: JUN FY25 EQ CONSOLIDATION

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 $3.2 million.

What is the period of performance?

Start: 2026-04-02. End: 2026-09-01.

What is the specific type and model of the irradiation apparatus being procured, and what are its key technical specifications?

The provided data does not specify the exact model or technical specifications of the irradiation apparatus. It is identified under NAICS code 334517 (Irradiation Apparatus Manufacturing) and is a 'hybrid purchase order' for 'XR HYBRID'. Further details would likely be found in the detailed contract statement of work or technical exhibits, which are not included in the summary data. Understanding the specific capabilities (e.g., type of radiation, energy levels, imaging integration, treatment planning software) is crucial for assessing its suitability for VAMC Portland's needs and for comparing its value against alternative solutions or existing technologies.

How does the $3.2 million contract value compare to historical spending on similar irradiation apparatus by the VA or other federal agencies?

Benchmarking the $3.2 million contract value requires access to historical data on similar procurements. Without specific details on the apparatus's capabilities, a direct comparison is difficult. However, major medical equipment, especially specialized systems like irradiation apparatus used in oncology or advanced diagnostics, can range from hundreds of thousands to several million dollars. The VA has a significant budget for medical equipment. Analyzing past VA contracts for linear accelerators, CT scanners, or other high-cost radiation-related devices would provide context. If this apparatus is a novel or highly advanced system, its price might be at the higher end of the spectrum. Conversely, if it's a more standard or replacement unit, the price should align with previous acquisitions.

What are the primary risks associated with this contract, considering the fixed-price with economic price adjustment (FPEPA) structure and the 152-day duration?

The primary risks associated with this FPEPA contract include potential cost overruns if the economic price adjustment clause is triggered significantly due to inflation or supply chain disruptions affecting component costs. While FPEPA aims to mitigate some risk for the contractor, the government still bears the risk of price escalation. The short 152-day duration suggests a focused, potentially urgent need, which could increase the risk of rushed implementation or unforeseen technical challenges. However, the short duration also limits the government's exposure to long-term market volatility. The risk of contractor performance failure is present, as with any contract, but is mitigated by the VA's oversight and Philips' established market presence.

What is the expected impact of this new irradiation apparatus on the quality and efficiency of patient care at VAMC Portland?

The acquisition of a new irradiation apparatus is expected to enhance the quality and efficiency of patient care at VAMC Portland by providing clinicians with state-of-the-art technology. Depending on the apparatus's function (e.g., diagnostic imaging, radiation therapy), it could lead to more accurate diagnoses, more effective treatment delivery, reduced procedure times, and potentially improved patient outcomes. For instance, if it's for radiation therapy, it might enable more precise targeting of tumors, minimizing damage to surrounding healthy tissue. If it's for imaging, it could offer higher resolution or faster scan times. This upgrade supports the VA's commitment to providing veterans with advanced medical services comparable to leading civilian healthcare facilities.

How does Philips North America LLC's track record with the VA and other federal agencies influence the assessment of this contract's performance risk?

Philips North America LLC is a major global medical technology company with a significant history of supplying equipment and services to the U.S. federal government, including the Department of Veterans Affairs. Their established presence suggests a familiarity with federal procurement processes and a capacity to meet government requirements. While specific performance data for this exact contract isn't available, Philips' general track record as a large, reputable supplier typically indicates a lower risk of contractor failure compared to smaller or less experienced firms. However, past performance on similar contracts, including any past issues or successes with VA procurements, would be a more direct indicator of performance risk. The VA likely considered Philips' past performance during the source selection process.

What are the potential long-term implications for the VA's medical technology portfolio and budget, given this acquisition?

This acquisition represents a specific investment in VAMC Portland's capabilities, contributing to the VA's overall modernization of its medical technology portfolio. The $3.2 million expenditure is part of the VA's annual budget for equipment and infrastructure. Long-term implications include the potential for improved veteran health outcomes and operational efficiencies at the Portland facility. It also sets a precedent for future acquisitions of similar technology. The VA must consider lifecycle costs, including maintenance, upgrades, and eventual replacement, when planning its technology roadmap and budget. This single contract, while significant, is one piece of a larger strategy to ensure the VA's facilities are equipped with modern, effective medical technology.

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: 36A79725Q0008

Offers Received: 2

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: $3,212,016

Exercised Options: $3,212,016

Current Obligation: $3,212,016

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