VA awards $2M Siemens medical imaging service contract, highlighting need for specialized equipment maintenance

Contract Overview

Contract Amount: $2,003,565 ($2.0M)

Contractor: Siemens Medical Solutions USA, Inc.

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-03-04

End Date: 2027-03-03

Contract Duration: 1,094 days

Daily Burn Rate: $1.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: ANNUAL SERVICE AGREEMENT FOR SIEMENS MEDICAL IMAGING EQUIPMENT.

Place of Performance

Location: COLUMBUS, FRANKLIN County, OHIO, 43219

State: Ohio Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.0 million to SIEMENS MEDICAL SOLUTIONS USA, INC. for work described as: ANNUAL SERVICE AGREEMENT FOR SIEMENS MEDICAL IMAGING EQUIPMENT. Key points: 1. Contract ensures continued operation of critical medical imaging equipment for veteran care. 2. Siemens Medical Solutions USA, Inc. is the incumbent provider, suggesting a focus on continuity. 3. The contract's duration of nearly three years indicates a stable, long-term need. 4. Fixed-price structure aims to control costs for specialized maintenance services. 5. Geographic location in Ohio suggests a regional focus for equipment support. 6. The absence of small business set-asides warrants further examination of market participation.

Value Assessment

Rating: good

The annual value of this contract is approximately $667,855. Benchmarking this against similar service agreements for medical imaging equipment is challenging without more specific data on the exact types and age of Siemens equipment covered. However, the price appears reasonable for maintaining complex, high-value medical technology, especially considering the specialized nature of the services required. The firm fixed-price contract type suggests that the VA has negotiated a set cost, which can be advantageous for budget predictability.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but the fact that it was competed openly suggests a healthy market for these services. This approach generally leads to better price discovery and potentially more competitive pricing for the government.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it encourages a wider range of providers to offer their services, potentially driving down costs and improving the quality of service through competitive pressure.

Public Impact

Veterans receiving diagnostic imaging services benefit from the reliable operation of essential medical equipment. The Department of Veterans Affairs (VA) ensures continuity of care by maintaining its Siemens imaging systems. The contract's impact is primarily within Ohio, where the supported equipment is located. Specialized technicians employed by Siemens Medical Solutions USA, Inc. are likely involved in service delivery.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of specific details on the number of bidders limits a full assessment of competitive intensity.
The absence of small business participation could indicate barriers to entry for smaller firms in this specialized market.

Positive Signals

Awarded through full and open competition, suggesting a broad market approach.
Firm fixed-price contract provides cost certainty for the VA.
Long-term agreement (nearly 3 years) indicates a stable and ongoing need for these critical services.

Sector Analysis

The medical imaging equipment sector is a significant part of the healthcare industry, characterized by high-value capital equipment and specialized maintenance requirements. Companies like Siemens are major players, offering a range of diagnostic imaging technologies. Spending on maintenance and service agreements for such equipment is substantial across healthcare providers, including federal agencies like the VA, to ensure operational readiness and patient safety. This contract fits within the broader category of healthcare equipment support services.

Small Business Impact

The contract does not indicate any specific small business set-aside provisions. While awarded under full and open competition, the lack of explicit small business participation or subcontracting goals suggests that opportunities for small businesses in this particular award may be limited. Further analysis would be needed to determine if smaller, specialized service providers were excluded or if subcontracting opportunities exist through the prime contractor.

Oversight & Accountability

The Department of Veterans Affairs is responsible for the oversight of this contract. As a delivery order under a larger agreement, it likely falls under existing procurement regulations and internal VA oversight mechanisms. Transparency is generally maintained through contract award databases, though specific performance monitoring details are not publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

VA Medical Equipment Maintenance Contracts
Siemens Healthcare Service Agreements
Federal Healthcare IT Spending
Diagnostic Imaging Equipment Procurement

Risk Flags

Potential vendor lock-in
Dependence on single supplier for critical maintenance
Limited visibility into specific competition metrics (number of bidders)

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.0 million to SIEMENS MEDICAL SOLUTIONS USA, INC.. ANNUAL SERVICE AGREEMENT FOR SIEMENS MEDICAL IMAGING EQUIPMENT.

Who is the contractor on this award?

The obligated recipient is SIEMENS MEDICAL SOLUTIONS 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 $2.0 million.

What is the period of performance?

Start: 2024-03-04. End: 2027-03-03.

What is the track record of Siemens Medical Solutions USA, Inc. with the VA for similar service contracts?

Siemens Medical Solutions USA, Inc. has a history of providing medical equipment and services to various federal agencies, including the Department of Veterans Affairs. Analyzing past contracts would reveal their performance history, including on-time delivery, quality of service, and any disputes or contract modifications. For this specific contract, the VA's decision to award to Siemens, especially if they are the incumbent, suggests a satisfactory past performance. However, a deeper dive into contract databases like FPDS or SAM.gov could provide more granular data on their previous engagements with the VA, including contract values, durations, and any performance-related feedback or awards.

How does the annual cost of this contract compare to similar service agreements for Siemens imaging equipment at other federal facilities?

Direct comparison of this contract's annual cost ($667,855) to similar agreements is difficult without knowing the specific models of Siemens imaging equipment covered, their age, and the scope of services included (e.g., preventative maintenance, emergency repairs, software updates). However, the firm fixed-price nature suggests a negotiated rate. To benchmark effectively, one would need to identify comparable VA or other federal agency contracts for the same or similar Siemens equipment. Factors like geographic location (affecting travel costs for technicians) and the urgency of service response times can also influence pricing. Without access to a detailed database of comparable service contracts, a precise value-for-money assessment remains challenging.

What are the potential risks associated with relying on a single vendor, Siemens, for maintenance of critical imaging equipment?

Relying on a single vendor like Siemens for maintenance of critical imaging equipment presents several risks. Firstly, there's a risk of vendor lock-in, where the VA may become overly dependent on Siemens for parts, expertise, and future upgrades, potentially leading to higher costs over time. Secondly, if Siemens experiences financial difficulties, supply chain disruptions, or labor shortages, it could directly impact the availability of maintenance services, leading to equipment downtime and disruption of patient care. Thirdly, a lack of competition for service contracts could reduce the incentive for Siemens to offer the most competitive pricing or the highest level of service. Mitigating these risks often involves robust contract management, clear performance metrics, and potentially exploring multi-vendor strategies for future procurements.

What is the historical spending pattern of the VA on Siemens medical imaging equipment maintenance?

To assess historical spending patterns, one would need to analyze VA procurement data over several fiscal years. This would involve querying databases like FPDS for contracts awarded to Siemens Medical Solutions USA, Inc. specifically for the maintenance and service of medical imaging equipment. Key metrics to track would include the total annual spending, the number of active contracts, the average duration and value of these contracts, and the types of imaging equipment covered. Understanding these patterns can reveal trends in VA's reliance on Siemens, potential increases or decreases in spending, and the consistency of service needs. This analysis helps in forecasting future budget requirements and identifying any significant shifts in procurement strategies.

How does the duration of this contract (nearly 3 years) align with the typical lifecycle or expected service life of the covered Siemens imaging equipment?

The contract duration of approximately three years (1094 days) is a moderate term for service agreements on complex medical equipment. The expected service life of modern Siemens imaging equipment, such as MRI or CT scanners, can range from 7 to 15 years or more, depending on usage, technological advancements, and maintenance quality. A three-year service contract is often aligned with the period following the initial warranty or a significant upgrade, ensuring continued operational support. It allows the VA to budget effectively for a defined period while potentially reassessing its needs and market options as the equipment ages or technology evolves. Longer contracts might offer more price stability, but shorter ones provide greater flexibility.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Irradiation Apparatus Manufacturing

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

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Solicitation ID: 36C25024Q0316

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Altair Engineering Inc.

Address: 40 LIBERTY BLVD, MALVERN, PA, 19355

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $3,572,698

Exercised Options: $2,003,565

Current Obligation: $2,003,565

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE2D117D0023

IDV Type: IDC

Timeline