VA Awards $1.4M Philips Imaging Service Contract to Philips North America LLC

Contract Overview

Contract Amount: $142,275 ($142.3K)

Contractor: Philips North America LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-04-18

End Date: 2027-04-17

Contract Duration: 1,094 days

Daily Burn Rate: $130/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: ANNUAL PHILIPS IMAGING EQUIPMENT SERVICE CONTRACT.

Place of Performance

Location: COLUMBUS, FRANKLIN County, OHIO, 43219

State: Ohio Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $142,275.28 to PHILIPS NORTH AMERICA LLC for work described as: ANNUAL PHILIPS IMAGING EQUIPMENT SERVICE CONTRACT. Key points: 1. Contract awarded to incumbent provider, Philips North America LLC. 2. Service contract for irradiation apparatus manufacturing. 3. Potential for price increases due to sole-source nature of service. 4. IT sector spending benchmark for similar service contracts.

Value Assessment

Rating: fair

The contract price of $1.42M over three years appears reasonable for specialized imaging equipment service. However, without direct comparable contracts for the same specific Philips equipment, a precise benchmark is difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, suggesting a competitive bidding process. This method generally promotes price discovery and potentially better pricing for the government.

Taxpayer Impact: The competitive award aims to secure fair pricing for taxpayers on essential medical equipment maintenance.

Public Impact

Ensures continued operation of critical medical imaging equipment for veterans. Supports healthcare delivery within the Department of Veterans Affairs. Maintains equipment functionality, potentially reducing downtime for patient care.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in with specialized equipment.
Reliance on a single provider for critical maintenance.

Positive Signals

Competitive award process.
Firm fixed price contract structure.

Sector Analysis

This contract falls within the broader healthcare sector, specifically concerning medical equipment maintenance and services. Spending on such services can vary significantly based on the type and volume of equipment within a healthcare system.

Small Business Impact

The contract was awarded to Philips North America LLC, a large corporation, and there is no indication of small business participation in this specific award. Further analysis would be needed to determine if subcontracting opportunities exist.

Oversight & Accountability

The Department of Veterans Affairs is responsible for oversight of this contract. The firm fixed price structure provides some cost control, but ongoing monitoring of service delivery and performance is crucial.

Related Government Programs

Irradiation Apparatus Manufacturing
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Potential for price escalation in future renewals.
Dependence on a single vendor for critical equipment.
Lack of small business participation noted.
Limited data for precise per-unit cost benchmarking.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $142,275.28 to PHILIPS NORTH AMERICA LLC. ANNUAL PHILIPS IMAGING EQUIPMENT SERVICE CONTRACT.

Who is the contractor on this award?

The obligated recipient is PHILIPS NORTH AMERICA LLC.

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 $142,275.28.

What is the period of performance?

Start: 2024-04-18. End: 2027-04-17.

What is the typical cost range for annual service contracts for similar advanced medical imaging equipment from different manufacturers?

The typical cost range for annual service contracts for advanced medical imaging equipment can vary widely, from tens of thousands to hundreds of thousands of dollars per year, depending on the equipment's complexity, age, and the service level agreement. Factors like manufacturer, specific model (e.g., MRI, CT scanner, PET scanner), and included services (e.g., preventive maintenance, emergency repairs, parts) significantly influence pricing. Benchmarking against similar contracts for comparable equipment from different vendors is essential for assessing value.

What are the risks associated with relying on a single vendor for specialized medical equipment maintenance, even under a competitive contract?

Relying on a single vendor, even after a competitive award, carries risks such as potential price increases in future contract renewals, limited flexibility in adopting new technologies or service providers, and dependence on the vendor's service quality and availability. Vendor lock-in can occur if specialized knowledge or proprietary parts are required, making it difficult and costly to switch providers. This can impact long-term cost-effectiveness and operational agility.

How does the firm fixed price contract structure impact the VA's ability to ensure cost-effectiveness and value for this imaging equipment service?

A firm fixed price contract provides the VA with cost certainty, as the price is set and generally not subject to adjustment based on the contractor's cost experience. This structure shifts the risk of cost overruns to the contractor, incentivizing them to manage their expenses efficiently. For the VA, it simplifies budgeting and protects against unexpected cost increases, thereby enhancing cost-effectiveness and value, provided the initial price was competitively determined and the scope of work is well-defined.

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

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 22100 BOTHELL EVERETT HWY, BOTHELL, WA, 98021

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $191,499

Exercised Options: $142,275

Current Obligation: $142,275

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA797H17D0022

IDV Type: IDC

Timeline