VA awards $1.35M sole-source contract for specialized hospital equipment service to Sun Nuclear Corp

Contract Overview

Contract Amount: $135,066 ($135.1K)

Contractor: SUN Nuclear Corp.

Awarding Agency: Department of Veterans Affairs

Start Date: 2023-06-01

End Date: 2027-05-31

Contract Duration: 1,460 days

Daily Burn Rate: $93/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: HIGHLY SPECIALIZED HOSPITAL EQUIPMENT SERVICE AGREEMENT.

Place of Performance

Location: DAYTON, MONTGOMERY County, OHIO, 45428

State: Ohio Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $135,066 to SUN NUCLEAR CORP. for work described as: HIGHLY SPECIALIZED HOSPITAL EQUIPMENT SERVICE AGREEMENT. Key points: 1. Contract awarded on a sole-source basis, limiting competitive opportunities and potentially impacting price. 2. The contract covers a 4-year period, indicating a long-term need for these specialized services. 3. The firm-fixed-price structure provides cost certainty for the government but shifts risk to the contractor. 4. The service is categorized under Electronic and Precision Equipment Repair and Maintenance, a critical support function for healthcare. 5. The awardee, Sun Nuclear Corp., is likely the original equipment manufacturer or a highly specialized provider. 6. The contract's value of $1.35 million over four years suggests a significant but not massive expenditure for this specific service.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the equipment and service scope. However, a $1.35 million award over four years for specialized hospital equipment service suggests an average annual cost of $337,500. This figure needs to be compared against the cost of similar service agreements for comparable equipment at other VA facilities or similar healthcare institutions. The firm-fixed-price nature implies that the contractor bears the risk of cost overruns, which can sometimes lead to higher initial pricing to compensate for that risk. Without competitive bids, it's difficult to definitively assess if this represents optimal value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning that only one vendor was solicited. This typically occurs when the goods or services are unique, or when the vendor is the only one capable of providing them, often due to proprietary technology or specialized expertise. The absence of competition means that the Department of Veterans Affairs did not benefit from a bidding process that could have potentially driven down prices or offered alternative solutions. The justification for a sole-source award would need to demonstrate why full and open competition was not feasible.

Taxpayer Impact: Sole-source awards limit the government's ability to leverage market competition to secure the best possible pricing, potentially leading to higher costs for taxpayers compared to a competitively bid contract.

Public Impact

Patients receiving care at VA facilities in Ohio will benefit from the reliable functioning of specialized hospital equipment. The contract ensures the continued availability of critical diagnostic and treatment equipment, supporting high-quality patient care. The services delivered are essential for the operational efficiency of the medical facilities. The geographic impact is focused on Ohio, where the VA facilities requiring this service are located. While not directly creating new jobs, the contract supports the existing technical workforce responsible for maintaining this specialized equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potentially reduces value for money.
Lack of competition may indicate a lack of market availability or a reliance on a single provider.
Firm-fixed-price contracts can sometimes be priced higher to account for contractor risk.

Positive Signals

Ensures continued availability of critical specialized medical equipment.
Firm-fixed-price contract provides cost certainty for the VA.
Awardee is likely a specialized provider with necessary expertise.

Sector Analysis

The healthcare equipment maintenance and repair sector is a critical component of the broader healthcare industry, ensuring the operational readiness of medical facilities. This contract falls within the Electronic and Precision Equipment Repair and Maintenance industry (NAICS 811210). The market for specialized medical equipment service can be highly concentrated, with original equipment manufacturers (OEMs) often being the primary or sole providers of maintenance and repair for their proprietary systems. The total federal spending on this specific NAICS code can be substantial, but this contract represents a small portion of that overall expenditure, focused on a particular type of specialized equipment.

Small Business Impact

This contract was not set aside for small businesses, nor does it appear to have specific subcontracting requirements for small businesses mentioned in the provided data. The sole-source nature of the award further reduces the likelihood of small business participation, as opportunities are typically directed to a single, often larger, incumbent or specialized provider. This means that the direct economic benefit to the small business ecosystem from this particular contract is likely minimal.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. As a purchase order, it is a less complex instrument than a large-scale contract, but still subject to standard procurement regulations and performance monitoring. The firm-fixed-price nature simplifies financial oversight by providing a set cost. Accountability would be managed through performance metrics and adherence to the service level agreement. Transparency is limited by the sole-source nature, but the award itself and its basic details are publicly available.

Related Government Programs

VA Medical Equipment Maintenance Contracts
Federal Healthcare Services Procurement
Sole-Source Healthcare Equipment Agreements
Precision Equipment Repair Services

Risk Flags

Sole-source award
Limited competition
Potential for higher pricing due to lack of competition

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $135,066 to SUN NUCLEAR CORP.. HIGHLY SPECIALIZED HOSPITAL EQUIPMENT SERVICE AGREEMENT.

Who is the contractor on this award?

The obligated recipient is SUN NUCLEAR CORP..

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 $135,066.

What is the period of performance?

Start: 2023-06-01. End: 2027-05-31.

What is the specific type of specialized hospital equipment this contract covers, and why is Sun Nuclear Corp. the sole provider?

The provided data indicates the contract is for 'HIGHLY SPECIALIZED HOSPITAL EQUIPMENT SERVICE AGREEMENT' under NAICS code 811210 (Electronic and Precision Equipment Repair and Maintenance). While the exact equipment is not specified, the sole-source award to Sun Nuclear Corp. strongly suggests it pertains to their proprietary medical devices, likely in the field of radiation oncology or nuclear medicine, given the company's specialization. Sun Nuclear Corp. is a known manufacturer of such equipment. The justification for a sole-source award would typically cite the need for manufacturer-specific expertise, proprietary diagnostic tools, or unique repair procedures that only the original equipment manufacturer (OEM) or an authorized agent can provide to maintain warranty, safety, and performance standards.

How does the $1.35 million value over four years compare to similar service contracts for specialized medical equipment?

Benchmarking this $1.35 million contract, which averages $337,500 annually, against similar specialized medical equipment service agreements requires detailed comparison points. Factors such as the type of equipment (e.g., linear accelerators, MRI machines, CT scanners), its age, complexity, and the scope of services (e.g., preventive maintenance, on-call repairs, parts included) significantly influence pricing. For highly specialized equipment, particularly from a single manufacturer, this annual figure might be within a reasonable range, especially if it includes comprehensive support. However, without specific details on the equipment and service scope, and crucially, without competitive bids, it is difficult to definitively state if this represents optimal value. A competitive process would typically yield a clearer benchmark for fair market price.

What are the potential risks associated with awarding this contract on a sole-source basis?

The primary risk associated with a sole-source award is the lack of price competition. This can lead to the government paying a premium compared to what might have been achieved in a competitive bidding environment. There's also a risk of vendor lock-in, where the agency becomes overly reliant on a single provider, potentially limiting future flexibility or innovation. Furthermore, without the scrutiny of multiple bidders, there's a reduced incentive for the sole-source provider to offer the most cost-effective or innovative solutions. The justification for sole-sourcing must be robust to mitigate the risk that the government is not receiving the best possible value or that competition was unnecessarily restricted.

What is Sun Nuclear Corp.'s track record with the Department of Veterans Affairs or other federal agencies?

Information regarding Sun Nuclear Corp.'s specific track record with the Department of Veterans Affairs (VA) or other federal agencies is not detailed in the provided data. However, their specialization in medical equipment, particularly in radiation oncology and quality assurance, suggests they are a known entity within the healthcare sector. Federal procurement databases would typically contain records of past awards, performance evaluations (if available), and any past performance issues. A thorough analysis would involve reviewing these databases to understand the history of their contracts, payment performance, and any documented successes or failures in fulfilling federal requirements.

How does this contract align with the VA's overall spending on medical equipment maintenance and repair?

This $1.35 million contract represents a specific expenditure for specialized equipment service within the broader VA healthcare system. The VA, as a large healthcare provider, dedicates significant resources to maintaining its vast array of medical equipment. This contract, covering a 4-year period for a specific type of equipment in Ohio, is likely one of many such agreements across the country. To assess its alignment with overall VA spending, one would need to analyze the VA's total budget for medical equipment maintenance and repair, identify spending trends across different equipment categories and service providers, and understand the proportion this contract represents. Without that broader context, it's difficult to gauge its significance in the VA's overall procurement strategy.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Electronic and Precision Equipment Repair and Maintenance

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: 36C25023Q0484

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Mirion Technologies (US), Inc.

Address: 3275 SUNTREE BLVD, MELBOURNE, FL, 32940

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $178,737

Exercised Options: $135,066

Current Obligation: $135,066

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline