VA awards $6.8M for radiology equipment maintenance, with GE Healthcare as primary contractor

Contract Overview

Contract Amount: $6,817,636 ($6.8M)

Contractor: GE Precision Healthcare LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2020-11-07

End Date: 2025-11-06

Contract Duration: 1,825 days

Daily Burn Rate: $3.7K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: RADIOLOGY EQUIPMENT PM

Place of Performance

Location: PHOENIX, MARICOPA County, ARIZONA, 85012

State: Arizona Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $6.8 million to GE PRECISION HEALTHCARE LLC for work described as: RADIOLOGY EQUIPMENT PM Key points: 1. Contract value appears reasonable given the 5-year duration for specialized equipment maintenance. 2. Full and open competition was utilized, suggesting a competitive bidding process. 3. No specific risk indicators are immediately apparent from the provided data. 4. Performance context is maintenance of critical radiology equipment for veteran care. 5. This contract falls within the healthcare sector, specifically medical equipment services.

Value Assessment

Rating: good

The contract value of approximately $6.8 million over five years for radiology equipment maintenance suggests a moderate annual spend. Benchmarking against similar contracts for maintenance of complex medical imaging equipment would provide a clearer picture of value for money. However, the firm fixed-price structure generally offers cost certainty. The provided data does not include specific unit costs for maintenance tasks, making a detailed per-item price assessment difficult.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under full and open competition, indicating that all responsible sources were permitted to submit bids. The data does not specify the number of bidders, but the use of this procurement method generally fosters price discovery and encourages competitive pricing. This approach aims to ensure the government receives the best value by considering a wide range of potential contractors.

Taxpayer Impact: Taxpayers benefit from a competitive process that is designed to drive down costs and ensure fair market pricing for essential radiology equipment maintenance services.

Public Impact

Veterans will benefit from the continued availability and proper functioning of critical radiology equipment. Services include maintenance and repair of radiology apparatus, ensuring diagnostic capabilities. The contract's geographic impact is focused on Arizona, where the contractor is located. Workforce implications include the need for skilled technicians to perform maintenance and repairs.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Positive Signals

Awarded under full and open competition.
Firm fixed-price contract type provides cost predictability.
Long-term contract (5 years) allows for consistent service delivery.

Sector Analysis

The healthcare sector, particularly the medical equipment manufacturing and maintenance sub-sector, is characterized by high technological complexity and specialized service needs. This contract for radiology equipment maintenance fits within this niche, where original equipment manufacturers or specialized third-party service providers often hold significant market share. Spending in this area is driven by the continuous need to maintain advanced diagnostic imaging systems to ensure patient care quality and operational efficiency within healthcare facilities.

Small Business Impact

The provided data indicates that small business participation was not a specific set-aside for this contract (ss: false, sb: false). Therefore, the primary focus was on securing the best value through open competition. There is no explicit information on subcontracting plans for small businesses. The impact on the small business ecosystem would depend on whether any small businesses were involved as subcontractors to the prime contractor, GE Precision Healthcare LLC.

Oversight & Accountability

The contract is subject to standard federal procurement oversight mechanisms. As a delivery order under a larger contract vehicle, its execution will be monitored by the Department of Veterans Affairs. Transparency is facilitated through contract databases like FPDS. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse related to the contract's performance or award.

Related Government Programs

Medical Equipment Maintenance Contracts
Radiology Services
Department of Veterans Affairs Healthcare Procurement

Risk Flags

Potential for technological obsolescence over the 5-year term.
Risk of performance degradation by the contractor over the contract duration.
Lack of specific unit cost data for detailed value analysis.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $6.8 million to GE PRECISION HEALTHCARE LLC. RADIOLOGY EQUIPMENT PM

Who is the contractor on this award?

The obligated recipient is GE PRECISION HEALTHCARE 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 $6.8 million.

What is the period of performance?

Start: 2020-11-07. End: 2025-11-06.

What is the historical spending pattern for radiology equipment maintenance by the Department of Veterans Affairs?

Historical spending on radiology equipment maintenance by the VA can be analyzed by examining past contract awards for similar services. This involves querying federal procurement databases for contracts with the same or similar Product Service Codes (PSCs) and keywords related to radiology equipment maintenance over several fiscal years. Analyzing trends in contract values, number of bidders, and contract types (e.g., firm fixed-price vs. cost-plus) can reveal patterns in how the VA has procured these services. For instance, a review might show an increasing trend in spending due to aging equipment or expansion of services, or a shift towards longer-term maintenance agreements. Understanding these historical patterns provides context for the current $6.8 million award, helping to assess if it aligns with previous investment levels or represents a significant deviation.

How does the annual cost of this contract compare to industry benchmarks for similar radiology equipment maintenance?

The annual cost of this contract is approximately $1.36 million ($6.8M / 5 years). To benchmark this against industry standards, one would need to research average annual maintenance costs for comparable radiology equipment (e.g., MRI machines, CT scanners, X-ray units) from various service providers. Industry reports, market research studies, and data from similar government or private sector contracts can provide this information. Factors influencing benchmarks include the specific type and age of equipment, the scope of the maintenance agreement (e.g., preventive vs. comprehensive), and the service provider's overhead. If the VA's annual cost is significantly higher or lower than the typical range, it warrants further investigation into the reasons, such as unique service requirements, competitive pricing, or potential inefficiencies.

What is GE Precision Healthcare LLC's track record with the Department of Veterans Affairs and other federal agencies?

GE Precision Healthcare LLC's track record with the VA and other federal agencies can be assessed by reviewing their past contract history. This involves searching procurement databases for previous awards to GE Precision Healthcare LLC, noting the agencies involved, contract values, services provided, and performance ratings if available. A history of successful contract performance, timely delivery, and positive feedback suggests reliability. Conversely, a record of contract disputes, performance issues, or significant overruns might indicate higher risk. For this specific contract, understanding GE's experience with maintaining similar radiology equipment for the VA is particularly relevant to gauge their capability and the likelihood of successful execution.

What are the potential risks associated with a long-term (5-year) contract for specialized equipment maintenance?

Long-term contracts for specialized equipment maintenance, like this 5-year agreement, carry several potential risks. Firstly, technological obsolescence is a concern; the equipment might become outdated, or newer, more efficient maintenance techniques could emerge, making the current contract less optimal. Secondly, price escalation risk exists, even with a fixed-price contract, if unforeseen costs arise for the contractor that are not adequately covered by contingencies, potentially impacting future contract renewals or leading to disputes. Thirdly, contractor performance degradation over time is possible, where initial high service quality might decline. Finally, changes in VA's needs or budget constraints could make the long-term commitment inflexible. Mitigating these risks often involves clear performance metrics, regular review clauses, and options for contract modification or termination under specific conditions.

How does the use of a 'Firm Fixed Price' contract type impact cost control and risk for this radiology equipment maintenance contract?

The 'Firm Fixed Price' (FFP) contract type is generally favored for its cost control benefits and risk allocation. For this radiology equipment maintenance contract, FFP means the price is set and not subject to adjustment based on the contractor's actual costs. This places the risk of cost overruns squarely on the contractor, GE Precision Healthcare LLC. Consequently, the contractor has a strong incentive to manage costs efficiently and perform the work within the agreed budget. For the VA, this provides budget certainty and predictability, as the total cost is known upfront. However, if the contractor underestimates costs or encounters unforeseen difficulties, they bear the loss, which could potentially lead to quality compromises if not carefully monitored, or conversely, prompt the contractor to price higher on future bids to account for perceived risk.

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

Parent Company: MIM Software Inc.

Address: 3000 NORTH GRANDVIEW BOULEVARD, WAUKESHA, WI, 53188

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $7,108,367

Exercised Options: $6,817,636

Current Obligation: $6,817,636

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: VA797H17D0024

IDV Type: IDC

Timeline