VA leases endoscopes for $3.25M from Olympus America Inc. under full and open competition

Contract Overview

Contract Amount: $3,248,064 ($3.2M)

Contractor: Olympus America Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-04-01

End Date: 2024-09-30

Contract Duration: 913 days

Daily Burn Rate: $3.6K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: ENDOSCOPE LEASE

Place of Performance

Location: CENTER VALLEY, LEHIGH County, PENNSYLVANIA, 18034

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $3.2 million to OLYMPUS AMERICA INC for work described as: ENDOSCOPE LEASE Key points: 1. Lease agreement for surgical instruments valued at $3.25 million. 2. Olympus America Inc. is the sole awardee, indicating potential market concentration. 3. The contract is a delivery order, suggesting it's part of a larger framework. 4. Fixed-price contract type aims to control costs for the VA.

Value Assessment

Rating: good

The $3.25 million lease over approximately 1.5 years for endoscopes appears reasonable given the specialized nature of medical equipment. Benchmarking against similar leases for advanced surgical instruments would provide a more precise valuation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which generally promotes competitive pricing. However, the specific awardee, Olympus America Inc., suggests they may hold a dominant position in this niche market.

Taxpayer Impact: The competitive bidding process likely secured a fair price for taxpayers, avoiding excessive costs associated with sole-source or limited competition contracts.

Public Impact

Ensures VA facilities have access to necessary surgical equipment for patient care. Supports ongoing medical procedures and diagnostic capabilities within the VA system. Potential for improved patient outcomes through the use of modern endoscope technology.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Reliance on a single supplier for a critical medical device.
Lease structure may be less cost-effective than outright purchase over the long term.

Positive Signals

Full and open competition utilized.
Firm fixed price contract type.

Sector Analysis

Spending in the Surgical and Medical Instrument Manufacturing sector is crucial for healthcare providers. This lease represents a typical expenditure for acquiring or leasing specialized medical equipment, with benchmarks varying significantly based on technology and volume.

Small Business Impact

The data does not indicate whether small businesses were involved in this procurement. Further analysis would be needed to determine the extent of small business participation.

Oversight & Accountability

The contract is a delivery order under a larger agreement, suggesting it has undergone initial review. Ongoing monitoring of equipment performance and lease terms by the VA is essential for accountability.

Related Government Programs

Surgical and Medical Instrument Manufacturing
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Potential for vendor lock-in with Olympus America Inc.
Lease costs may exceed purchase costs over the long term.
Lack of specific endoscope model details hinders precise value assessment.
Limited insight into small business participation.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $3.2 million to OLYMPUS AMERICA INC. ENDOSCOPE LEASE

Who is the contractor on this award?

The obligated recipient is OLYMPUS AMERICA INC.

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: 2022-04-01. End: 2024-09-30.

What is the total cost of ownership if the VA were to purchase these endoscopes outright versus leasing them over the contract duration?

Calculating the total cost of ownership requires comparing the lease payments ($3.25M) against the depreciated value and maintenance costs of purchased equipment. If the lease term is significantly shorter than the useful life of the endoscopes, purchasing might be more economical. However, leasing offers flexibility and avoids large upfront capital expenditures, which can be advantageous for budget management.

What specific endoscope models are being leased, and how do their features and costs compare to comparable models from other manufacturers?

The provided data lacks specific model information. To assess value, a detailed comparison of the leased endoscope models' technical specifications, capabilities, and pricing against similar offerings from competitors like Fujifilm or Karl Storz is necessary. This would reveal if Olympus America Inc. provided a competitive price for the technology offered.

What is the VA's strategy for managing endoscope technology upgrades and replacements beyond this lease period?

The VA's strategy for future technology management is not detailed here. Understanding their plan for acquiring newer models, whether through subsequent leases, outright purchases, or other procurement methods, is crucial. This ensures continued access to state-of-the-art equipment and avoids potential obsolescence issues after the current lease expires.

Industry Classification

NAICS: Manufacturing › Medical Equipment and Supplies Manufacturing › Surgical and Medical Instrument 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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3500 CORPORATE PKWY, CENTER VALLEY, PA, 18034

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: $3,248,064

Exercised Options: $3,248,064

Current Obligation: $3,248,064

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36F79721D0168

IDV Type: FSS

Timeline