VA awards $877.8M for MRI CT MOVE services, with sole-source contract to Philips North America LLC

Contract Overview

Contract Amount: $87,780 ($87.8K)

Contractor: Philips North America LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-05-01

End Date: 2027-04-30

Contract Duration: 364 days

Daily Burn Rate: $241/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MRI CT MOVE

Place of Performance

Location: DURHAM, ORANGE County, NORTH CAROLINA, 27705

State: North Carolina Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $87,780 to PHILIPS NORTH AMERICA LLC for work described as: MRI CT MOVE Key points: 1. Contract awarded on a sole-source basis, raising questions about potential price overruns and limited market engagement. 2. The duration of the contract (364 days) suggests a need for ongoing services rather than a one-time acquisition. 3. The absence of small business set-asides indicates a lack of specific focus on supporting smaller enterprises in this procurement. 4. The contract type is Firm Fixed Price, which typically shifts risk to the contractor but can lead to higher initial bids. 5. The procurement was not competed under SAP (Simplified Acquisition Procedures), suggesting a value exceeding typical thresholds for simplified competition.

Value Assessment

Rating: questionable

Benchmarking the value of this contract is challenging due to its sole-source nature and the specific nature of 'MRI CT MOVE' services, which are not easily comparable to standard IT or construction contracts. The lack of competition means there's no direct market price discovery to assess if $877.8 million represents a fair price. Without competitive bids, it's difficult to determine if this represents good value for money or if taxpayers are potentially overpaying.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not openly competed. Philips North America LLC was the only vendor considered. This approach bypasses the standard competitive bidding process, which typically involves multiple vendors submitting proposals. The lack of competition limits the government's ability to leverage market forces to secure the best possible pricing and terms.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. It also limits opportunities for other qualified vendors to secure government contracts.

Public Impact

Veterans will benefit from the continuity of essential medical imaging and related services provided under this contract. The services delivered are critical for diagnosis and treatment planning within the Department of Veterans Affairs healthcare system. The geographic impact is likely nationwide, supporting VA facilities across North Carolina and potentially other regions where Philips provides services. The contract may have implications for specialized medical equipment technicians and support staff within the VA and potentially at Philips.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits price competition and potential for cost savings.
Lack of transparency in the justification for sole-source award.
High dollar value without competitive benchmarking raises concerns about value for money.
Potential for vendor lock-in with a single provider for critical services.

Positive Signals

Firm Fixed Price contract shifts some performance risk to the contractor.
Contract duration suggests a stable, long-term need for these services.
Award to an established vendor like Philips may indicate a known quantity for service delivery.

Sector Analysis

The healthcare technology sector, particularly medical imaging equipment and services, is a significant area of federal spending. Contracts like this support the operational readiness of healthcare providers, including those serving veterans. The market is characterized by a few large, established players like Philips, Siemens, and GE Healthcare, making sole-source awards, while often scrutinized, sometimes necessary for specialized or integrated systems. Benchmarking is difficult without specific service details, but large-scale imaging service contracts can run into hundreds of millions annually.

Small Business Impact

This contract does not appear to include any specific small business set-asides. The sole-source nature of the award further limits opportunities for small businesses to participate, either as prime contractors or potentially as subcontractors, unless specifically included by the prime. This could mean a missed opportunity to foster small business growth within the healthcare technology support ecosystem.

Oversight & Accountability

Oversight for this contract will primarily fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures will be tied to the performance standards outlined in the contract. Transparency is limited due to the sole-source nature of the award; however, contract details should be publicly available through federal procurement databases. The Inspector General's office for the VA would have jurisdiction to investigate any potential fraud, waste, or abuse related to this contract.

Related Government Programs

VA Medical Equipment Procurement
Healthcare IT Services
Medical Imaging Services
Sole Source Healthcare Contracts
Philips Healthcare Solutions

Risk Flags

Sole-source award without clear justification.
High contract value without competitive benchmarking.
Potential lack of transparency in procurement process.
Absence of small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $87,780 to PHILIPS NORTH AMERICA LLC. MRI CT MOVE

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 $87,780.

What is the period of performance?

Start: 2026-05-01. End: 2027-04-30.

What is the specific justification provided by the Department of Veterans Affairs for awarding this contract on a sole-source basis to Philips North America LLC?

The provided data does not include the specific justification for the sole-source award. Typically, sole-source contracts are justified under specific circumstances outlined in federal acquisition regulations, such as when only one responsible source can provide the required supplies or services, or when a compelling urgency exists. Without the official justification document, it is impossible to assess the validity of the sole-source determination. This lack of transparency is a significant concern for ensuring fair competition and optimal use of taxpayer funds. Further investigation into VA procurement records would be necessary to obtain and evaluate this critical information.

How does the $877.8 million contract value compare to historical spending by the VA on similar 'MRI CT MOVE' services or comparable imaging equipment maintenance and support?

The provided data does not offer historical spending figures for 'MRI CT MOVE' services or comparable imaging equipment maintenance and support by the VA. To conduct a meaningful comparison, one would need to access historical contract databases and identify procurements for similar imaging modalities (MRI, CT) and associated services, such as maintenance, software updates, and operational support. Analyzing the annual spending trends, contract durations, and pricing structures of previous awards would help determine if the current $877.8 million represents an increase, decrease, or is in line with past investments. The sole-source nature of this award makes direct price-to-price comparisons with previously competed contracts difficult.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract, and how will performance be monitored?

The provided data does not detail the specific Key Performance Indicators (KPIs) or Service Level Agreements (SLAs) for this contract. In a contract of this magnitude and duration, robust KPIs and SLAs are crucial for ensuring the VA receives the expected quality and timeliness of 'MRI CT MOVE' services. These would typically include metrics related to equipment uptime, response times for service calls, image quality standards, and potentially patient throughput. Performance monitoring would likely involve regular reporting from Philips, periodic reviews by VA contracting officers and technical representatives, and potentially user feedback mechanisms. The effectiveness of oversight hinges on the clarity and measurability of these performance standards.

What is the potential impact of this sole-source award on the broader market for medical imaging services and equipment maintenance, particularly for other vendors?

A sole-source award of this magnitude to Philips North America LLC can have a significant impact on the broader market for medical imaging services and equipment maintenance. It effectively removes a substantial portion of potential revenue from the competitive landscape for a defined period, potentially disadvantaging other vendors who could have bid on the contract. This can stifle innovation and competition if other manufacturers or service providers are unable to gain a foothold or expand their market share within the VA system. While it ensures a specific provider for the VA's needs, it may limit the diversity of solutions and potentially increase long-term reliance on a single vendor, which could affect pricing dynamics in future procurements.

Are there any provisions within the contract for technology refresh or upgrades to ensure the VA's imaging capabilities remain current throughout the contract period?

The provided data does not specify whether the contract includes provisions for technology refresh or upgrades. Given the rapid pace of technological advancement in medical imaging, it is critical for a contract of this duration and value to address how the VA's equipment and software will be kept current. Such provisions might include options for upgrading hardware, incorporating new software features, or transitioning to newer imaging technologies. Without explicit clauses for technology refresh, the VA risks operating with potentially outdated equipment by the end of the contract term, which could impact diagnostic accuracy and efficiency. This aspect warrants further investigation into the contract's detailed terms and conditions.

Industry Classification

NAICS: Construction › Building Finishing Contractors › Other Building Finishing Contractors

Product/Service Code: INSTALLATION OF EQUIPMENT › INSTALLATION OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 36C24626Q0451

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, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $88,070

Exercised Options: $88,070

Current Obligation: $87,780

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline