VA Awards $6.16M to AGFA Healthcare for PACS Sustainment, Sole-Source Contract

Contract Overview

Contract Amount: $6,155,694 ($6.2M)

Contractor: Agfa Healthcare Corporation

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-07-15

End Date: 2025-07-14

Contract Duration: 364 days

Daily Burn Rate: $16.9K/day

Competition Type: NOT COMPETED

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: IT

Official Description: AGFA PACS SUSTAINMENT

Place of Performance

Location: AURORA, ARAPAHOE County, COLORADO, 80045

State: Colorado Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $6.2 million to AGFA HEALTHCARE CORPORATION for work described as: AGFA PACS SUSTAINMENT Key points: 1. The Department of Veterans Affairs (VA) has awarded a $6.16 million contract for Picture Archiving and Communication System (PACS) sustainment. 2. The contract was awarded sole-source to AGFA Healthcare Corporation, raising questions about competition and potential price discovery. 3. This expenditure falls under Computer Systems Design Services, a broad category with varying cost benchmarks. 4. The contract duration is one year, with a firm fixed price, indicating defined cost expectations.

Value Assessment

Rating: questionable

As a sole-source award, direct pricing comparisons are difficult. The $6.16 million for a one-year sustainment contract for PACS needs to be benchmarked against similar sole-source or limited-competition contracts for comparable systems to assess value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was not competed, indicating a sole-source award to AGFA Healthcare Corporation. This limits price discovery and may result in a higher cost than if the contract had been openly competed.

Taxpayer Impact: Without competitive bidding, taxpayers may be paying a premium for these PACS sustainment services.

Public Impact

Veterans may experience continuity of care with reliable PACS operations. The sole-source nature of the award could limit innovation and cost-saving opportunities. Transparency in sole-source justifications is crucial for public trust.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition
Lack of price benchmark data
Potential for inflated costs due to no competition

Positive Signals

Ensures continuity of critical healthcare IT services
Firm fixed price provides cost certainty for the period

Sector Analysis

This contract falls under IT services, specifically Computer Systems Design Services. Spending in this sector can vary widely based on system complexity and vendor lock-in. Benchmarking against similar sustainment contracts for large-scale healthcare IT systems is essential.

Small Business Impact

The contract was awarded to AGFA Healthcare Corporation, a large business. There is no indication that small businesses were involved in this specific award, limiting opportunities for small business participation.

Oversight & Accountability

The sole-source nature of this award warrants close oversight to ensure the justification is sound and the pricing is fair. The VA should provide a detailed explanation for the lack of competition.

Related Government Programs

Computer Systems Design Services
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Sole-source award
Lack of competitive bidding
Potential for overpricing
Limited transparency on justification

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $6.2 million to AGFA HEALTHCARE CORPORATION. AGFA PACS SUSTAINMENT

Who is the contractor on this award?

The obligated recipient is AGFA HEALTHCARE CORPORATION.

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 $6.2 million.

What is the period of performance?

Start: 2024-07-15. End: 2025-07-14.

What is the justification for awarding this critical PACS sustainment contract sole-source to AGFA Healthcare Corporation, and what steps were taken to ensure fair pricing?

The justification for a sole-source award typically involves factors like unique capabilities, existing infrastructure compatibility, or urgent need where competition is not feasible. The VA should provide documentation detailing these reasons and the process for price negotiation or validation to ensure the $6.16 million is a fair market price despite the lack of competition.

What are the potential risks associated with a sole-source award for healthcare IT sustainment, particularly concerning system upgrades and long-term cost-effectiveness?

Sole-source awards can lead to vendor lock-in, potentially stifling innovation and preventing the adoption of more cost-effective or advanced solutions. Risks include higher long-term costs due to a lack of competitive pressure, limited flexibility in system upgrades, and a reduced ability to negotiate favorable terms as the contract progresses.

How does this $6.16 million expenditure for one year of PACS sustainment compare to industry benchmarks for similar services, especially considering it's a sole-source award?

Without specific benchmark data for sole-source PACS sustainment contracts of this scale, a direct comparison is challenging. However, the absence of competition inherently raises concerns about whether this price represents optimal value. A thorough review against publicly available data for comparable IT sustainment contracts, even those with limited competition, would be necessary to assess its effectiveness.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Computer Systems Design and Related Services › Computer Systems Design Services

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

Competition & Pricing

Extent Competed: NOT COMPETED

Solicitation Procedures: ONLY ONE SOURCE

Solicitation ID: NONE

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Agfa-Gevaert

Address: 10 S ACADEMY ST, GREENVILLE, SC, 29601

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Foreign Owned, Foreign-Owned and U.S.-Incorporated Business, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $14,540,658

Exercised Options: $6,155,694

Current Obligation: $6,155,694

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Timeline