VA awards $2.68M contract for surgical instruments to Olympus America Inc., highlighting a need for specialized medical equipment

Contract Overview

Contract Amount: $2,675,872 ($2.7M)

Contractor: Olympus America Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-04-01

End Date: 2025-03-31

Contract Duration: 1,095 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: ENT DEPARTMENT SCOPE LEASE

Place of Performance

Location: CENTER VALLEY, LEHIGH County, PENNSYLVANIA, 18034

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.7 million to OLYMPUS AMERICA INC for work described as: ENT DEPARTMENT SCOPE LEASE Key points: 1. Contract value of $2.68M over three years suggests a significant investment in essential medical supplies. 2. Sole awardee indicates potential for limited competition, requiring scrutiny of pricing and value. 3. Fixed-price contract type aims to control costs, but requires careful monitoring for scope creep. 4. The contract supports the Department of Veterans Affairs' mission to provide healthcare to veterans. 5. Focus on surgical and medical instruments places this within a critical segment of the healthcare sector. 6. Delivery order award type suggests a need for timely and specific equipment provision.

Value Assessment

Rating: good

The contract value of $2.68M over three years for surgical and medical instruments appears reasonable given the specialized nature of the equipment and the agency served. Benchmarking against similar contracts for medical devices within the Department of Veterans Affairs or other federal health agencies would provide a clearer picture of value for money. However, the fixed-price nature of the contract suggests an effort to control costs upfront. Without specific per-unit cost data or comparisons to commercial list prices for these instruments, a definitive value assessment is challenging, but the overall commitment indicates a recognized need.

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 fact that it resulted in a single award suggests that Olympus America Inc. was the most advantageous offer received based on the evaluation criteria. While full and open competition is generally preferred, a single award can sometimes indicate a highly specialized market or a dominant incumbent. Further analysis of the number of bids received would clarify the extent of competition.

Taxpayer Impact: Full and open competition is beneficial for taxpayers as it typically drives down prices through market forces, ensuring the government receives competitive offers and avoids overpayment.

Public Impact

Veterans receiving care from the Department of Veterans Affairs will benefit from access to necessary surgical and medical instruments. The contract ensures the availability of critical medical supplies for VA healthcare facilities, particularly in Pennsylvania. This spending supports the medical technology sector, specifically manufacturers of surgical and diagnostic equipment. The provision of these instruments is essential for the effective delivery of healthcare services to the veteran population.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for limited competition if only one bid was truly viable.
Reliance on a single vendor for critical medical supplies could pose supply chain risks.
Need to ensure ongoing price competitiveness if future awards are made to the same vendor.

Positive Signals

Awarded through full and open competition, suggesting a fair process.
Fixed-price contract helps manage budget certainty.
Supports a critical healthcare need for veterans.

Sector Analysis

The market for surgical and medical instruments is a significant segment within the broader healthcare industry. This contract falls under the 'Surgical and Medical Instrument Manufacturing' (NAICS 339112) sector. This industry is characterized by innovation, stringent regulatory requirements, and a mix of large established players and specialized niche manufacturers. Federal spending in this area is crucial for equipping government healthcare facilities, including those serving military personnel and veterans. Comparable spending benchmarks would involve analyzing other large federal contracts for similar medical devices and equipment procured by agencies like the Department of Defense and the Health Resources and Services Administration.

Small Business Impact

The data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). Therefore, the primary impact on small businesses would be through potential subcontracting opportunities, which are not detailed in this award notice. Without specific subcontracting plans or goals, it's difficult to assess the direct impact on the small business ecosystem. However, large prime contracts often create downstream opportunities for smaller suppliers and service providers within the industry.

Oversight & Accountability

The Department of Veterans Affairs has established oversight mechanisms for its contracts, including the use of contract officers and the potential involvement of the VA Office of Inspector General for audits and investigations. Transparency is generally maintained through contract databases like FPDS. Accountability is tied to the terms of the firm fixed-price contract, requiring delivery of specified goods. The effectiveness of oversight depends on diligent contract management and performance monitoring by the VA.

Related Government Programs

Department of Veterans Affairs Medical Equipment Procurement
Federal Supply Schedule (FSS) Contracts for Medical Supplies
Defense Logistics Agency (DLA) Medical Supplies
General Services Administration (GSA) Schedules

Risk Flags

Potential for limited competition if only one viable bidder.
Supply chain vulnerability for specialized medical equipment.
Need for ongoing price monitoring to ensure value.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.7 million to OLYMPUS AMERICA INC. ENT DEPARTMENT SCOPE LEASE

Who is the contractor on this award?

The obligated recipient is OLYMPUS AMERICA 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 $2.7 million.

What is the period of performance?

Start: 2022-04-01. End: 2025-03-31.

What is the track record of Olympus America Inc. as a federal contractor, particularly with the Department of Veterans Affairs?

Olympus America Inc. has a history of federal contracting, primarily supplying medical and surgical equipment. Analyzing their past performance with the VA and other agencies is crucial. This includes reviewing past contract values, delivery performance, any reported issues or disputes, and overall customer satisfaction ratings. A strong track record with the VA suggests familiarity with their requirements and processes, potentially contributing to a smoother execution of this current contract. Conversely, a history of performance issues could indicate higher risks for this award. Data from contract databases like FPDS can provide insights into their federal award history, including on-time delivery rates and any corrective actions taken.

How does the per-unit cost of the instruments under this contract compare to market rates or similar federal contracts?

Determining the precise per-unit cost benchmark is challenging without specific itemized pricing from the contract. However, the overall contract value of $2.68M over three years for surgical and medical instruments suggests an average annual spend of approximately $890,000. To benchmark this, one would need to compare the unit prices of specific instruments (e.g., endoscopes, surgical tools) against prices listed on federal supply schedules, other agency contracts for similar items, or commercial price lists. If this contract was awarded through a competitive process, it implies that the pricing was deemed fair and reasonable relative to other offers. However, a detailed analysis would require access to the specific product catalog and pricing structure associated with this award.

What are the primary risks associated with this contract, and what mitigation strategies are in place?

Key risks include potential supply chain disruptions for specialized instruments, the possibility of price increases in future delivery orders if not adequately controlled by the contract terms, and performance issues if the contractor fails to meet delivery schedules or quality standards. Given it's a firm fixed-price contract, scope creep is a risk that requires diligent contract management to prevent. Mitigation strategies typically involve robust contract oversight by the VA, clear performance metrics, regular communication with the contractor, and potentially maintaining relationships with alternative suppliers for critical items. The VA's procurement process should have included risk assessments and defined remedies for non-performance.

How effective is the Department of Veterans Affairs in leveraging competition for surgical and medical instruments?

The effectiveness of VA's competition strategy for surgical and medical instruments can be assessed by examining the prevalence of full and open competition versus sole-source or limited-source awards within this category. While this specific contract was awarded under full and open competition, a broader analysis of VA's spending patterns in this sector is needed. Factors to consider include the number of bids typically received, the market structure (i.e., number of qualified vendors), and whether the VA utilizes multiple award schedules or task order contracts to foster ongoing competition. High competition levels generally lead to better pricing and value for the government.

What is the historical spending trend for surgical and medical instruments by the Department of Veterans Affairs?

Historical spending data for surgical and medical instruments by the VA would reveal trends in procurement volume, average contract values, and the types of instruments most frequently purchased. Analyzing spending over the past 5-10 years can indicate whether the VA's needs are growing, stable, or declining, and whether procurement strategies have evolved. This data can also highlight shifts in technology or medical practices influencing purchasing patterns. Understanding historical spending helps in forecasting future requirements and budgeting, and it can identify periods of significant investment or cost-saving initiatives within the VA's medical supply chain.

Industry Classification

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

Product/Service Code: MEDICAL/DENTAL/VETERINARY EQPT/SUPP

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: 3500 CORPORATE PKWY, CENTER VALLEY, PA, 18034

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: $2,675,872

Exercised Options: $2,675,872

Current Obligation: $2,675,872

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36F79721D0168

IDV Type: FSS

Timeline