VA awards $3.5M for Philips radiology equipment maintenance, highlighting a need for specialized support

Contract Overview

Contract Amount: $3,545,804 ($3.5M)

Contractor: Philips North America LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-08-07

End Date: 2026-08-06

Contract Duration: 1,460 days

Daily Burn Rate: $2.4K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: PREVENTATIVE MAINTENANCE OF PHILIPS RADIOLOGY EQUIPMENT

Place of Performance

Location: FAYETTEVILLE, WASHINGTON County, ARKANSAS, 72703

State: Arkansas Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $3.5 million to PHILIPS NORTH AMERICA LLC for work described as: PREVENTATIVE MAINTENANCE OF PHILIPS RADIOLOGY EQUIPMENT Key points: 1. Specialized maintenance for critical medical equipment is essential for patient care. 2. Philips is a key vendor in radiology, indicating potential vendor lock-in. 3. The contract value is moderate, but the long duration warrants close monitoring. 4. This spending falls within the broader healthcare sector's equipment maintenance needs.

Value Assessment

Rating: good

The contract value of $3.5M over four years for preventative maintenance appears reasonable given the specialized nature of Philips radiology equipment. Benchmarking against similar sole-source or limited competition contracts for high-end medical equipment maintenance would provide a more precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, which is positive for price discovery. However, the specific nature of Philips equipment may limit the number of actual bidders, potentially impacting the competitive landscape.

Taxpayer Impact: Taxpayer funds are being used for essential equipment upkeep, ensuring continued service delivery. The competitive award process aims to secure fair pricing.

Public Impact

Ensures continued operation of vital diagnostic imaging equipment for veterans. Supports patient access to timely and accurate radiological diagnoses. Maintains the operational readiness of healthcare facilities within the VA. Potentially impacts the VA's ability to manage healthcare costs through preventative measures.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition in future renewals due to specialized equipment.
Reliance on a single manufacturer for maintenance could lead to price increases.
Long-term contract duration requires ongoing performance monitoring.

Positive Signals

Awarded under full and open competition.
Focus on preventative maintenance reduces risk of costly emergency repairs.
Contract supports critical healthcare infrastructure for veterans.

Sector Analysis

This contract falls within the healthcare sector, specifically focusing on the maintenance of advanced medical imaging equipment. Spending on medical equipment maintenance is a significant component of healthcare operational budgets, driven by the need to ensure equipment reliability and patient safety.

Small Business Impact

The data does not indicate any specific provisions or awards to small businesses for this contract. The nature of specialized equipment maintenance often favors original equipment manufacturers or highly specialized service providers.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. Standard oversight mechanisms for delivery orders under larger contracts would apply, including performance reviews and payment verification.

Related Government Programs

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

Risk Flags

Potential for vendor lock-in
Limited competition for specialized services
Long-term contract duration requires sustained oversight
Price escalation risk over contract life

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $3.5 million to PHILIPS NORTH AMERICA LLC. PREVENTATIVE MAINTENANCE OF PHILIPS RADIOLOGY EQUIPMENT

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 $3.5 million.

What is the period of performance?

Start: 2022-08-07. End: 2026-08-06.

What is the typical cost range for preventative maintenance of similar Philips radiology equipment across other federal agencies or large healthcare systems?

Benchmarking the $3.5M contract against similar agreements is crucial. While specific figures vary widely based on equipment model, age, and service level agreements, federal agencies often leverage bulk purchasing or multi-year contracts to negotiate better rates. A comparative analysis would reveal if this contract represents a fair market price or if there are opportunities for cost savings through alternative procurement strategies or vendor negotiations.

What are the risks associated with relying on a single manufacturer, Philips, for the maintenance of critical radiology equipment?

Reliance on a single manufacturer like Philips for specialized equipment maintenance carries inherent risks. These include potential price inflation over time due to limited competition, longer lead times for parts and service, and a lack of flexibility if the agency wishes to switch to different equipment or service providers. This vendor lock-in necessitates careful contract management and exploration of competitive options during future solicitations.

How effectively does this preventative maintenance contract contribute to the overall operational efficiency and cost-effectiveness of the VA's radiology services?

This contract is designed to enhance operational efficiency by minimizing unexpected equipment downtime, which directly impacts patient throughput and diagnostic capabilities. By preventing major failures, it aims to be cost-effective in the long run, avoiding expensive emergency repairs and associated patient care disruptions. The success hinges on the quality of service provided by Philips and the VA's monitoring of equipment performance metrics.

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: $8,809,107

Exercised Options: $4,346,715

Current Obligation: $3,545,804

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