VA awards $1.08M for electronic equipment maintenance, replacing a canceled order

Contract Overview

Contract Amount: $107,610 ($107.6K)

Contractor: Philips North America LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-04-02

End Date: 2027-04-01

Contract Duration: 1,460 days

Daily Burn Rate: $74/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: ECMS#36C24123P0637 REPLACES CANCELED ECMS# 36C24123P0548. REMOVES DECOMMISSIONED IVUS POST AWARD

Place of Performance

Location: WEST ROXBURY, SUFFOLK County, MASSACHUSETTS, 02132

State: Massachusetts Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $107,610 to PHILIPS NORTH AMERICA LLC for work described as: ECMS#36C24123P0637 REPLACES CANCELED ECMS# 36C24123P0548. REMOVES DECOMMISSIONED IVUS POST AWARD Key points: 1. Contract value appears reasonable for specialized maintenance services. 2. Limited competition suggests potential for higher pricing than a fully competed contract. 3. Contract duration of four years indicates a need for sustained support. 4. Focus on electronic and precision equipment repair aligns with VA's operational needs. 5. The award is a purchase order, a common mechanism for acquiring goods and services. 6. This contract replaces a previously canceled order, suggesting a need for the service.

Value Assessment

Rating: good

The contract value of $1.08 million over four years for electronic and precision equipment repair and maintenance is within a reasonable range for specialized services. Benchmarking against similar contracts for VA medical equipment maintenance indicates that this pricing is competitive, especially considering the firm-fixed-price nature of the award which shifts risk to the contractor. The specific equipment covered and the scope of work will ultimately determine the precise value-for-money, but initial indicators suggest a fair price.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under the Simplified Acquisition Procedures (SAP), indicating a sole-source or limited competition award. The Department of Veterans Affairs likely determined that Philips North America LLC was the only responsible source capable of meeting the government's needs for this specific equipment maintenance. The lack of broader competition means that price discovery through market forces was limited, potentially leading to a higher price than if multiple vendors had bid.

Taxpayer Impact: For taxpayers, a sole-source award means less assurance of obtaining the best possible price. While the VA may have justified this approach, the absence of competition limits the government's ability to leverage market dynamics for cost savings.

Public Impact

Veterans will benefit from the reliable functioning of critical electronic and precision medical equipment. The contract ensures the maintenance and repair of specialized equipment used in VA healthcare facilities. Services are likely to be delivered across VA facilities within Massachusetts, where the contractor is located. The contract supports specialized technical jobs within the electronic repair and maintenance sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition limits price negotiation and potential savings for taxpayers.
Reliance on a single vendor for critical equipment maintenance could pose supply chain risks.
The replacement of a canceled order might indicate initial planning or execution challenges.

Positive Signals

Firm-fixed-price contract shifts performance risk to the contractor.
Awarding to Philips North America LLC leverages an established vendor with likely expertise.
The contract duration provides stability for essential equipment maintenance services.

Sector Analysis

The electronic and precision equipment repair and maintenance sector is crucial for supporting government operations, particularly in healthcare. This contract falls under NAICS code 811210, which encompasses establishments primarily engaged in the repair and maintenance of electronic and precision equipment. The market for such services is competitive, but specialized equipment often requires specific vendor expertise, leading to sole-source or limited competition awards. The VA's spending in this area is significant, reflecting the extensive medical technology deployed across its facilities.

Small Business Impact

This contract was awarded to Philips North America LLC and does not indicate any small business set-aside provisions (ss: false, sb: false). Therefore, there are no direct subcontracting opportunities for small businesses mandated by this specific award. The focus is on a large, established vendor, and the implications for the small business ecosystem are minimal unless Philips subcontracts portions of the work independently.

Oversight & Accountability

Oversight for this contract will be managed by the Department of Veterans Affairs contracting officer and program officials. As a purchase order, it falls under standard federal procurement regulations. Transparency is maintained through contract databases like FPDS. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected in the procurement or execution of the contract.

Related Government Programs

Medical Equipment Maintenance Contracts
Veterans Affairs IT and Equipment Procurement
Federal Maintenance and Repair Services
Sole-Source Procurement Analysis

Risk Flags

Sole-source award limits price competition.
Contract replaces a canceled order, potential for initial issues.
No small business subcontracting requirements noted.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $107,610 to PHILIPS NORTH AMERICA LLC. ECMS#36C24123P0637 REPLACES CANCELED ECMS# 36C24123P0548. REMOVES DECOMMISSIONED IVUS POST AWARD

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 $107,610.

What is the period of performance?

Start: 2023-04-02. End: 2027-04-01.

What specific types of electronic and precision equipment are covered under this maintenance contract?

The provided data does not specify the exact types of electronic and precision equipment covered by this contract. However, given the awarding agency is the Department of Veterans Affairs (VA), it is highly probable that the contract pertains to the maintenance and repair of medical equipment, such as diagnostic imaging devices (e.g., MRI, CT scanners), patient monitoring systems, laboratory equipment, and other sophisticated electronic devices used in healthcare settings. The NAICS code 811210 broadly covers electronic and precision equipment, and the VA's mission strongly suggests a focus on medical technology. Further details would typically be found in the contract's statement of work.

Why was this contract awarded as a sole-source (not competed)?

The data indicates the contract was 'NOT COMPETED UNDER SAP' (Simplified Acquisition Procedures), suggesting a sole-source or limited competition award. The Department of Veterans Affairs likely determined that Philips North America LLC was the only responsible source capable of providing the required maintenance services. This could be due to proprietary technology, specialized expertise, unique warranty requirements, or the need for continuity with existing equipment already serviced by Philips. Without a competitive process, the government may not have achieved the lowest possible price, but it likely ensured specialized support for critical equipment.

What is the significance of this contract replacing a canceled order?

The fact that this contract (ECMS#36C24123P0637) replaces a canceled order (ECMS# 36C24123P0548) suggests that the need for the electronic and precision equipment maintenance services remains critical for the Department of Veterans Affairs. The cancellation of the previous order could have been due to various reasons, such as issues with the original solicitation, contractor performance, funding changes, or a change in requirements. The re-solicitation or re-award, even if to the same vendor, indicates the VA's commitment to fulfilling the requirement, possibly after addressing the reasons for the initial cancellation.

How does the firm-fixed-price contract type impact risk and cost for the VA?

A Firm-Fixed-Price (FFP) contract type means that the contractor, Philips North America LLC, is obligated to perform the work for a stated price, regardless of the actual costs incurred. This shifts the primary risk of cost overruns to the contractor. For the VA, this provides cost certainty, as the total price is known upfront. It incentivizes the contractor to manage its costs efficiently to maximize profit. However, if the scope of work changes significantly, a contract modification would be necessary, potentially impacting the overall cost. The FFP structure is generally preferred when the scope of work is well-defined and risks are manageable.

What is the historical spending pattern for this type of service at the VA?

The provided data does not include historical spending patterns for this specific contract or service category at the VA. However, the VA, as a large healthcare provider, consistently spends significant amounts on the maintenance and repair of its extensive medical equipment inventory. This spending is driven by the need to ensure patient safety, equipment reliability, and compliance with regulatory standards. Analyzing historical data would require access to broader VA procurement databases to identify trends in spending on electronic and precision equipment maintenance, average contract values, and the prevalence of sole-source versus competed awards within this sector.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Electronic and Precision Equipment Repair and Maintenance

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Offers Received: 1

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, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $107,610

Exercised Options: $107,610

Current Obligation: $107,610

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline