VA awards $230K ultrasound service contract to Philips for irradiation apparatus manufacturing

Contract Overview

Contract Amount: $229,963 ($230.0K)

Contractor: Philips North America LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2025-08-11

End Date: 2027-08-10

Contract Duration: 729 days

Daily Burn Rate: $315/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: EPIQ ULTRASOUND SERVICE CONTRACT

Place of Performance

Location: FAYETTEVILLE, CUMBERLAND County, NORTH CAROLINA, 28301

State: North Carolina Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $229,962.96 to PHILIPS NORTH AMERICA LLC for work described as: EPIQ ULTRASOUND SERVICE CONTRACT Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract duration of approximately two years provides a stable service period. 3. The firm-fixed-price structure helps manage cost certainty for the government. 4. The award is a delivery order, indicating it's part of a larger contract vehicle. 5. The contractor, Philips, is a known entity in medical device manufacturing. 6. The service is categorized under Irradiation Apparatus Manufacturing, suggesting specialized equipment needs.

Value Assessment

Rating: good

The contract value of $229,962.96 for a two-year ultrasound service contract appears reasonable given the specialized nature of irradiation apparatus manufacturing. Benchmarking against similar contracts is difficult without more specific details on the scope of services and equipment involved. However, Philips is a major manufacturer in this space, suggesting their pricing may be competitive within the established market for such specialized services.

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 a bid. The data does not specify the number of bidders, but this method generally fosters a competitive environment, which can lead to better pricing and service offerings for the government. The use of this procurement method suggests the agency sought the best value available in the market.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it maximizes the potential for cost savings through a wider range of offers and encourages contractors to provide competitive pricing.

Public Impact

The Department of Veterans Affairs (VA) will benefit from this contract by ensuring access to essential ultrasound services. This contract supports the delivery of medical services to veterans, potentially improving diagnostic capabilities. The services are likely to be utilized within VA facilities in North Carolina, impacting local healthcare delivery. The contract supports the specialized field of irradiation apparatus manufacturing, contributing to the maintenance and operation of critical medical equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific performance metrics makes it difficult to assess service quality beyond contract adherence.
The contract is a delivery order, which may indicate it's part of a larger, potentially more complex, contract vehicle with its own risks.
Limited public information on the specific type of ultrasound service and equipment necessitates assumptions about its criticality.

Positive Signals

Awarded to a well-established manufacturer (Philips) with a known presence in the medical device industry.
Firm-fixed-price contract type provides cost predictability.
Procured via full and open competition, suggesting a robust selection process.

Sector Analysis

The contract falls within the broader healthcare and medical equipment manufacturing sector. This specific award relates to irradiation apparatus manufacturing, a niche within medical technology that often involves specialized equipment for imaging or treatment. The market for such services is typically dominated by a few key manufacturers who possess the proprietary technology and expertise required. Spending in this area is driven by the need for advanced diagnostic and therapeutic tools within healthcare systems.

Small Business Impact

The contract was awarded under full and open competition and does not indicate any specific small business set-aside. Therefore, there are no direct subcontracting implications for small businesses stemming from this particular award. The primary contractor, Philips, is a large corporation, and it is unlikely that this specific delivery order would involve significant subcontracting opportunities for small businesses unless explicitly mandated or pursued by the prime contractor.

Oversight & Accountability

Oversight for this contract will primarily reside with the Department of Veterans Affairs, which is responsible for managing and monitoring contract performance. As a delivery order under a larger contract vehicle, oversight may also be influenced by the terms of the base contract. Transparency is facilitated through public contract databases, but detailed operational oversight and accountability measures are internal to the VA. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Medical Equipment Maintenance Services
Diagnostic Imaging Services
Veterans Health Administration Contracts
Irradiation Equipment Procurement
Philips Healthcare Contracts

Risk Flags

Potential for vendor lock-in due to specialized equipment.
Reliance on a single manufacturer for critical maintenance.
Limited transparency on specific service scope and performance metrics.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $229,962.96 to PHILIPS NORTH AMERICA LLC. EPIQ ULTRASOUND SERVICE CONTRACT

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 $229,962.96.

What is the period of performance?

Start: 2025-08-11. End: 2027-08-10.

What is the specific nature of the 'ultrasound service' being provided under this contract, and how does it relate to 'irradiation apparatus manufacturing'?

The contract description 'EPIQ ULTRASOUND SERVICE CONTRACT' combined with the NAICS code '334517' (Irradiation Apparatus Manufacturing) suggests that the service likely pertains to the maintenance, repair, calibration, or operational support of ultrasound equipment that is either used in conjunction with or is itself a type of irradiation apparatus. EPIQ is a brand of ultrasound systems manufactured by Philips. Therefore, this contract likely ensures the continued functionality and performance of Philips' EPIQ ultrasound systems, which may be used in medical procedures involving radiation or are advanced imaging devices themselves. The service ensures these critical pieces of medical equipment remain operational for veteran care.

How does the $229,962.96 contract value compare to typical spending on similar ultrasound service contracts within the VA or other federal agencies?

Benchmarking this contract's value requires more granular data on the specific services rendered and the equipment's complexity. A $230,000 contract over two years averages around $115,000 annually. This figure is moderate for specialized medical equipment service contracts, especially those involving advanced imaging systems like Philips' EPIQ line. Larger, multi-year service agreements for extensive imaging departments or more complex machinery could easily run into millions. However, for a specific model or a defined set of services at a particular facility, this amount could be appropriate. Without knowing the exact scope (e.g., preventative maintenance, on-call repairs, parts included), a precise comparison is challenging, but it does not appear excessively high for specialized medical equipment support.

What is Philips North America LLC's track record with the Department of Veterans Affairs for similar service contracts?

Philips North America LLC has a significant history of contracting with the Department of Veterans Affairs, providing a wide range of medical equipment, technology, and services. Publicly available data indicates numerous awards to Philips for various healthcare solutions, including imaging systems, patient monitoring, and related support services. While specific details on prior 'EPIQ Ultrasound Service Contracts' with the VA are not immediately detailed here, Philips' established presence and consistent awards suggest a generally positive or at least functional working relationship. The VA's continued engagement with Philips indicates satisfaction with their offerings or a lack of competitive alternatives for certain specialized equipment.

What are the potential risks associated with relying on a single manufacturer, Philips, for specialized ultrasound equipment services?

Relying on a single manufacturer like Philips for specialized ultrasound equipment services, even if procured through full and open competition for the initial contract, carries inherent risks. These include potential vendor lock-in, where the government becomes dependent on the manufacturer's proprietary technology and service offerings, potentially limiting future flexibility or cost-saving opportunities. There's also a risk of price increases over time, as the manufacturer may have significant leverage due to their unique expertise. Furthermore, service responsiveness and parts availability could become issues if the manufacturer prioritizes other markets or experiences supply chain disruptions. While competition was present for this award, ongoing reliance on one vendor for specialized maintenance requires careful monitoring of performance and pricing.

How does this contract align with the VA's broader goals for modernizing its medical technology and improving veteran healthcare outcomes?

This contract aligns with the VA's broader goals by ensuring the continued operational readiness of critical diagnostic equipment, such as the Philips EPIQ ultrasound systems. Maintaining up-to-date and functional medical technology is fundamental to providing high-quality healthcare and improving patient outcomes. By securing reliable service for these systems, the VA can ensure that veterans have access to accurate diagnoses and timely medical interventions. This contract supports the VA's objective of modernizing its infrastructure and delivering efficient, effective healthcare services, thereby contributing to better health outcomes for the veteran population.

Industry Classification

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

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

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

Financial Breakdown

Contract Ceiling: $229,963

Exercised Options: $229,963

Current Obligation: $229,963

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