VA awards $3.56M contract for Varian linear accelerator maintenance to Varian Medical Systems, Inc

Contract Overview

Contract Amount: $3,560,715 ($3.6M)

Contractor: Varian Medical Systems, Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-03-15

End Date: 2027-03-14

Contract Duration: 1,825 days

Daily Burn Rate: $2.0K/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: PREVENTATIVE MAINTENANCE AND REPAIRS OF VARIAN LINEAR ACCELERATORS LOCATED AT THE LTC CHARLES S. KETTLES VAMC

Place of Performance

Location: ANN ARBOR, WASHTENAW County, MICHIGAN, 48105

State: Michigan Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $3.6 million to VARIAN MEDICAL SYSTEMS, INC for work described as: PREVENTATIVE MAINTENANCE AND REPAIRS OF VARIAN LINEAR ACCELERATORS LOCATED AT THE LTC CHARLES S. KETTLES VAMC Key points: 1. The contract focuses on essential preventative maintenance and repairs for critical medical equipment. 2. Varian Medical Systems, Inc. is the sole provider of these specialized services, indicating a lack of direct competition. 3. The long-term nature of the contract (5 years) suggests a need for ongoing, specialized support. 4. The sector is healthcare, specifically medical equipment maintenance, which requires specialized technical expertise.

Value Assessment

Rating: fair

The contract value of $3.56 million over five years for specialized maintenance of linear accelerators appears reasonable given the proprietary nature of the equipment and the need for manufacturer-specific expertise. Benchmarking is difficult without more data on similar service contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under SAP and was awarded sole-source to Varian Medical Systems, Inc. This limits price discovery and potentially leads to higher costs compared to a competitive bidding process.

Taxpayer Impact: Taxpayers may be paying a premium due to the lack of competition, as the sole provider dictates terms and pricing.

Public Impact

Ensures continued operation of vital medical equipment for veteran care. Potential for increased costs to taxpayers due to sole-source award. Reliability of Varian accelerators is critical for patient treatment schedules. Limited visibility into the specific maintenance tasks performed under the contract.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price negotiation.
Lack of transparency in pricing structure.
Potential for vendor lock-in due to specialized equipment.

Positive Signals

Ensures critical medical equipment remains operational.
Long-term contract provides stability for maintenance services.
Varian Medical Systems has the original equipment manufacturer expertise.

Sector Analysis

This contract falls within the healthcare sector, specifically focusing on the maintenance of complex medical devices like linear accelerators. Spending benchmarks for such specialized equipment maintenance are highly variable and depend on the specific technology and service level agreements.

Small Business Impact

This contract does not appear to involve small businesses, as it was awarded directly to Varian Medical Systems, Inc., a large manufacturer. There is no indication of subcontracting opportunities for small businesses in the provided data.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Given the sole-source nature, robust oversight is crucial to ensure fair pricing and adequate service delivery to justify the expenditure.

Related Government Programs

Surgical Appliance and Supplies Manufacturing
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Sole-source award
Lack of competition
Potential for overpricing
Vendor lock-in
Limited transparency

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $3.6 million to VARIAN MEDICAL SYSTEMS, INC. PREVENTATIVE MAINTENANCE AND REPAIRS OF VARIAN LINEAR ACCELERATORS LOCATED AT THE LTC CHARLES S. KETTLES VAMC

Who is the contractor on this award?

The obligated recipient is VARIAN MEDICAL SYSTEMS, 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 $3.6 million.

What is the period of performance?

Start: 2022-03-15. End: 2027-03-14.

What is the justification for the sole-source award, and were alternative solutions explored?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or lack of viable alternatives. For Varian linear accelerators, the manufacturer often possesses the exclusive knowledge, tooling, and parts necessary for maintenance. However, a thorough review should confirm that no other qualified entity could provide comparable services, even if requiring specialized training or parts procurement.

How does the per-unit cost of maintenance compare to industry benchmarks for similar linear accelerators?

Determining a precise per-unit cost benchmark is challenging without specific details on the maintenance scope (e.g., number of service calls, types of repairs covered, preventative maintenance schedule). However, given the sole-source nature, it is crucial for the VA to have internally benchmarked this against historical data or similar contracts, if available, to ensure the $3.56 million over five years is not excessive for the services rendered.

What mechanisms are in place to ensure the effectiveness and efficiency of the maintenance services provided?

Effectiveness and efficiency can be monitored through key performance indicators (KPIs) tied to equipment uptime, response times for service calls, and successful completion of preventative maintenance schedules. The VA should have clear reporting requirements and performance review processes to hold Varian Medical Systems accountable for delivering high-quality maintenance that minimizes disruption to patient care.

Industry Classification

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

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

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: 36C25022Q0019

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Altair Engineering Inc.

Address: 3100 HANSEN WAY, PALO ALTO, CA, 94304

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: $3,560,715

Exercised Options: $3,560,715

Current Obligation: $3,560,715

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline