VA awards $2.3M contract for medical scope lease and service to Olympus America Inc

Contract Overview

Contract Amount: $2,314,207 ($2.3M)

Contractor: Olympus America Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2022-09-30

End Date: 2025-12-14

Contract Duration: 1,171 days

Daily Burn Rate: $2.0K/day

Competition Type: COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: MEDICAL SCOPE LEASE W/ SERVICE MAINTENANCE

Place of Performance

Location: CENTER VALLEY, LEHIGH County, PENNSYLVANIA, 18034

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $2.3 million to OLYMPUS AMERICA INC for work described as: MEDICAL SCOPE LEASE W/ SERVICE MAINTENANCE Key points: 1. Contract provides essential medical equipment and maintenance for patient care. 2. Olympus America Inc. is a known provider of medical devices. 3. The contract duration extends over three years, ensuring continuity of service. 4. Fixed-price contract type helps manage cost predictability. 5. Competition under SAP suggests a streamlined procurement process for this value range. 6. The contract is a BPA Call, indicating it's part of a larger agreement.

Value Assessment

Rating: good

The contract value of $2.3 million over approximately three years for a medical scope lease with service maintenance appears reasonable. Benchmarking against similar contracts for high-value medical equipment leases with integrated service agreements is necessary for a definitive value assessment. However, given the specialized nature of electromedical apparatus and the inclusion of maintenance, the pricing is likely competitive within its niche. The fixed-price structure provides cost certainty for the Department of Veterans Affairs.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was competed under SAP (Small Acquisition Procedures), which is a streamlined process for acquisitions below certain thresholds. While the specific competition details (number of bidders) are not provided, competing under SAP still implies an effort to solicit offers from multiple sources. The use of SAP for this contract value suggests that the agency sought competitive pricing within the established procedures for smaller procurements.

Taxpayer Impact: Competing under SAP aims to achieve fair and reasonable pricing for taxpayers while ensuring timely acquisition of necessary goods and services.

Public Impact

Veterans will benefit from access to advanced medical diagnostic and treatment capabilities. The contract ensures the availability of critical medical scopes and their ongoing maintenance. Services are likely delivered at VA facilities, impacting healthcare delivery nationwide. The contract supports the healthcare workforce by providing them with necessary tools.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the scope technology is proprietary and requires specific maintenance.
Reliance on a single vendor for both leasing and maintenance could limit future negotiation leverage.

Positive Signals

Contract ensures access to up-to-date medical technology through leasing.
Inclusion of service maintenance mitigates risks associated with equipment downtime.
Fixed-price contract provides budget predictability for the VA.

Sector Analysis

The contract falls within the Electromedical and Electrotherapeutic Apparatus Manufacturing sector, specifically related to the leasing and maintenance of specialized medical equipment. This sector is characterized by high innovation, significant R&D investment, and stringent regulatory requirements. The market for such equipment is often dominated by a few key global manufacturers. Spending in this area is crucial for healthcare providers to maintain state-of-the-art diagnostic and treatment capabilities.

Small Business Impact

The provided data indicates that this contract was not specifically set aside for small businesses (sb: false) and the contractor is Olympus America Inc., a large corporation. There is no explicit information regarding subcontracting plans for small businesses within this BPA Call. Therefore, the direct impact on the small business ecosystem from this specific award is likely minimal, though larger prime contractors often engage small businesses in their broader supply chains.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Veterans Affairs' contracting and program management offices. As a BPA Call, it is governed by the terms of the underlying Blanket Purchase Agreement. Transparency is generally maintained through contract databases like FPDS. Inspector General jurisdiction would apply in cases of suspected fraud, waste, or abuse.

Related Government Programs

Medical Equipment Leasing
Medical Equipment Maintenance Services
Department of Veterans Affairs Healthcare Contracts
Electromedical Apparatus Procurement

Risk Flags

Potential for vendor lock-in
Reliance on single vendor for maintenance

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.3 million to OLYMPUS AMERICA INC. MEDICAL SCOPE LEASE W/ SERVICE MAINTENANCE

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 $2.3 million.

What is the period of performance?

Start: 2022-09-30. End: 2025-12-14.

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

Olympus America Inc. has a history of federal contracting, primarily supplying medical and optical equipment. Analysis of federal procurement data would reveal the volume and types of contracts awarded to Olympus by various agencies, including the VA. Their track record likely includes numerous awards for endoscopes, surgical equipment, and related services. A deeper dive would assess past performance ratings, any disputes or terminations, and the overall value of their federal portfolio. For the VA specifically, understanding their consistent provision of essential medical devices and maintenance services would be key to evaluating their reliability and suitability for this current contract.

How does the annual cost of this lease and service compare to industry benchmarks for similar medical scopes?

Determining the precise annual cost benchmark requires detailed specifications of the medical scopes leased and the scope of services included. However, high-end diagnostic and surgical scopes, especially those with advanced features and comprehensive maintenance agreements, represent a significant capital investment. Leasing spreads this cost over time, and bundled maintenance ensures operational readiness. Industry benchmarks often consider factors like the type of scope (e.g., gastrointestinal, respiratory, surgical), brand reputation, technological sophistication, and the level of service (e.g., response time, parts availability, preventative maintenance). Without specific model numbers and service level agreements, a direct comparison is difficult, but the $2.3M over ~3 years suggests a substantial annual expenditure, typical for advanced medical capital equipment.

What are the primary risks associated with leasing medical equipment versus purchasing it outright, and how are they mitigated in this contract?

The primary risks of leasing medical equipment include potentially higher long-term costs compared to outright purchase, especially if the equipment is used for its entire lifespan. There's also a risk of being tied to technology that may become obsolete before the lease term ends, or facing penalties for early termination. Mitigation in this contract comes from the fixed-price structure, which caps the government's financial exposure. The inclusion of service maintenance directly addresses operational risk by ensuring equipment uptime and reducing the burden on VA facilities for repairs. The VA also benefits from access to newer technology without the large upfront capital outlay of a purchase, and can potentially upgrade equipment more easily at the end of the lease term.

What is the expected impact of this contract on the VA's ability to provide timely and effective patient care?

This contract is expected to have a positive impact on the VA's ability to provide timely and effective patient care by ensuring access to essential, well-maintained medical scopes. These devices are critical for diagnostics (e.g., identifying gastrointestinal issues, respiratory problems) and minimally invasive procedures. Reliable access to functioning equipment, coupled with prompt service and maintenance, reduces patient wait times for procedures and diagnostic tests. It also ensures that healthcare providers have the necessary tools to perform their jobs efficiently and accurately, contributing to better patient outcomes and overall quality of care within the VA system.

How has VA's spending on medical scope leasing and maintenance evolved over the past five years?

Analyzing the VA's spending evolution on medical scope leasing and maintenance over the past five years would require accessing historical federal procurement data. Trends could indicate an increasing reliance on leasing models versus purchasing, potentially driven by budget constraints, a desire for technological upgrades, or shifts in asset management strategies. Spending patterns might also reveal fluctuations based on specific equipment needs, agency-wide initiatives, or changes in healthcare delivery models. An upward trend could suggest growing demand for these services or a strategic shift towards leasing. Conversely, a stable or declining trend might indicate consistent needs or a preference for outright purchase where feasible.

Industry Classification

NAICS: Manufacturing › Navigational, Measuring, Electromedical, and Control Instruments Manufacturing › Electromedical and Electrotherapeutic Apparatus Manufacturing

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

Competition & Pricing

Extent Competed: COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

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: $2,314,207

Exercised Options: $2,314,207

Current Obligation: $2,314,207

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C26219A0033

IDV Type: BPA

Timeline