VA awards $2.48M sole-source maintenance contract for surgical navigation systems

Contract Overview

Contract Amount: $247,980 ($248.0K)

Contractor: Medtronic USA Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2026-07-07

End Date: 2027-07-07

Contract Duration: 365 days

Daily Burn Rate: $679/day

Competition Type: NOT COMPETED

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: FULL-SERVICE MAINTENANCE CONTRACT FOR THE STEALTHSTATION S8 SURGICAL NAVIGATION SYSTEM WITH FUSION ENT NAVIGATION SYSTEM AND O-ARM O2 IMAGING SYSTEM

Place of Performance

Location: NASHVILLE, DAVIDSON County, TENNESSEE, 37212

State: Tennessee Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $247,980 to MEDTRONIC USA INC for work described as: FULL-SERVICE MAINTENANCE CONTRACT FOR THE STEALTHSTATION S8 SURGICAL NAVIGATION SYSTEM WITH FUSION ENT NAVIGATION SYSTEM AND O-ARM O2 IMAGING SYSTEM Key points: 1. Contract awarded on a sole-source basis, limiting competitive opportunities. 2. Focus on specialized surgical and medical instrument manufacturing (NAICS 339112). 3. Contract duration of one year with a fixed price structure. 4. Potential for increased costs due to lack of competition. 5. Performance located in Tennessee, impacting regional workforce. 6. System is critical for complex surgical procedures, indicating high performance needs.

Value Assessment

Rating: fair

The contract value of $2.48 million for a one-year maintenance agreement for specialized surgical equipment appears within a reasonable range for such systems. However, without competitive bidding, it is difficult to benchmark against market rates or assess if the government is receiving the best possible value. The fixed-price nature provides cost certainty but may not incentivize cost efficiencies from the contractor. Further analysis would require comparison with similar maintenance contracts for comparable surgical navigation systems.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed. This typically occurs when only one responsible source is available or capable of meeting the requirement. The lack of competition means that the Department of Veterans Affairs did not benefit from a bidding process that could drive down prices through market forces. The justification for a sole-source award would need to be thoroughly reviewed to ensure it was appropriate.

Taxpayer Impact: Sole-source awards can lead to higher prices for taxpayers as there is no competitive pressure to offer the lowest possible cost. This limits the government's ability to secure the best value for public funds.

Public Impact

Veterans receiving advanced surgical care through state-of-the-art navigation systems. Surgical teams utilizing the StealthStation S8 and O-Arm O2 imaging for precision procedures. Healthcare services provided at a VA facility in Tennessee. Potential for specialized technical jobs in maintenance and support within the region.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may lead to higher costs for taxpayers.
Sole-source award raises questions about market availability and contractor dependency.
Limited transparency into the pricing structure due to non-competitive nature.

Positive Signals

Ensures continued availability of critical surgical technology for veterans.
Fixed-price contract provides budget predictability for the VA.
Contract supports specialized medical equipment maintenance, crucial for patient safety.

Sector Analysis

The contract falls within the Healthcare sector, specifically focusing on the maintenance of advanced medical technology. The market for surgical navigation systems and imaging equipment is highly specialized, often dominated by a few key manufacturers. Spending in this area is driven by the need for precision and improved patient outcomes in complex surgical procedures. Benchmarking would involve comparing this maintenance cost to the overall acquisition cost of the systems and similar service contracts within the medical device industry.

Small Business Impact

This contract does not appear to involve small business set-asides, as indicated by the 'sb' field being false. The prime contractor, Medtronic USA Inc., is a large corporation. There is no explicit information regarding subcontracting opportunities for small businesses within this award, which could be a missed opportunity to engage the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures would be tied to the terms and conditions of the firm fixed-price contract, including service level agreements and performance standards. Transparency is limited due to the sole-source nature of the award, but contract details should be publicly available through federal procurement databases. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected.

Related Government Programs

Surgical Navigation Systems Maintenance
Medical Equipment Service Contracts
Department of Veterans Affairs Healthcare Procurement
StealthStation S8 Maintenance
O-Arm O2 Imaging System Support

Risk Flags

Sole-source award limits competition and potentially increases costs.
Lack of detailed performance metrics in provided data.
No information on small business subcontracting opportunities.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $247,980 to MEDTRONIC USA INC. FULL-SERVICE MAINTENANCE CONTRACT FOR THE STEALTHSTATION S8 SURGICAL NAVIGATION SYSTEM WITH FUSION ENT NAVIGATION SYSTEM AND O-ARM O2 IMAGING SYSTEM

Who is the contractor on this award?

The obligated recipient is MEDTRONIC USA 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 $247,980.

What is the period of performance?

Start: 2026-07-07. End: 2027-07-07.

What is the track record of Medtronic USA Inc. in fulfilling similar maintenance contracts with the federal government, particularly for surgical navigation systems?

Medtronic USA Inc. is a major medical device manufacturer with a significant presence in federal contracting. While specific details on past performance for this exact system and contract type are not provided, Medtronic generally holds numerous contracts across various federal agencies for its medical equipment. A review of federal procurement data would likely reveal a history of awards for sales, service, and maintenance of their product lines. However, the success and value derived from those past contracts would require a deeper dive into performance reports, any past disputes, and pricing comparisons to assess their reliability and cost-effectiveness as a sole-source provider in this instance.

How does the annual maintenance cost of $2.48 million compare to the acquisition cost of the StealthStation S8 Surgical Navigation System and O-Arm O2 Imaging System?

The provided data does not include the acquisition cost of the StealthStation S8 Surgical Navigation System and O-Arm O2 Imaging System. Therefore, a direct comparison of the annual maintenance cost ($2.48 million) to the initial purchase price cannot be made. Typically, maintenance contracts for complex medical equipment can range from 5% to 15% of the acquisition cost annually. Without the acquisition cost, it is impossible to determine if this maintenance fee is reasonable or excessive. Further investigation into the original purchase price of these systems is necessary for a proper value assessment.

What specific justification was provided for awarding this contract on a sole-source basis, and were alternative solutions considered?

The data indicates the contract was 'NOT COMPETED,' implying a sole-source justification was used. Common reasons for sole-source awards in this context include unique proprietary technology, lack of available competition, or urgent and compelling needs where only one source can fulfill the requirement. The specific justification document, often a Justification and Approval (J&A) for Other Than Full and Open Competition, would detail why other sources were not considered viable. Without access to this document, it's impossible to know the exact reasoning or if alternatives were genuinely explored and found unsuitable. This lack of competition is a key area for scrutiny.

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

The provided data does not specify the key performance indicators (KPIs) or service level agreements (SLAs) for this maintenance contract. However, for critical surgical equipment, typical SLAs would likely include response times for service calls, equipment uptime guarantees, preventative maintenance schedules, and availability of spare parts. Contractor performance is generally monitored by the contracting officer's representative (COR) or a designated technical point of contact within the VA. Monitoring would involve tracking adherence to SLAs, quality of service provided, and timely completion of maintenance tasks. Formal performance reviews may also be conducted periodically.

What is the historical spending pattern for maintenance of the StealthStation S8 and O-Arm O2 systems by the Department of Veterans Affairs?

The provided data only includes details for a single delivery order with an end date of July 7, 2027. It does not offer historical spending patterns for the maintenance of these specific systems. To understand historical spending, one would need to query federal procurement databases for all previous contracts awarded to Medtronic USA Inc. (or other entities) for the maintenance and support of the StealthStation S8 and O-Arm O2 Imaging System by the Department of Veterans Affairs. Analyzing this historical data would reveal trends in contract duration, value, and whether previous awards were also sole-source.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Medtronic Public Limited Company

Address: 710 MEDTRONIC PKWY, MINNEAPOLIS, MN, 55432

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: $247,980

Exercised Options: $247,980

Current Obligation: $247,980

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C24924D0063

IDV Type: IDC

Timeline