VA awards $4M sole-source contract for medical scope lease and maintenance to Olympus America Inc

Contract Overview

Contract Amount: $4,017,825 ($4.0M)

Contractor: Olympus America Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-01-01

End Date: 2026-12-31

Contract Duration: 1,095 days

Daily Burn Rate: $3.7K/day

Competition Type: NOT 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 $4.0 million to OLYMPUS AMERICA INC for work described as: MEDICAL SCOPE LEASE W/ SERVICE MAINTENANCE Key points: 1. Contract awarded on a sole-source basis, raising questions about potential cost efficiencies and market competition. 2. The contract covers a lease with service maintenance, indicating a need for ongoing support and specialized equipment. 3. A fixed-price contract structure aims to provide cost certainty for the government. 4. The duration of the contract (3 years) suggests a long-term requirement for the leased medical equipment. 5. The award is a BPA Call, indicating it was placed against an existing Blanket Purchase Agreement. 6. The specific product code (334510) relates to electromedical and electrotherapeutic apparatus manufacturing.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging without more specific details on the leased medical scopes and their associated services. However, a $4 million price tag over three years for specialized medical equipment and maintenance suggests a significant investment. Comparing this to similar sole-source awards for comparable equipment would be necessary to determine if the pricing is competitive. The firm fixed-price nature provides some cost predictability, but the lack of competition limits the ability to assess true value for money.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded on a sole-source basis, meaning it was not competed among multiple vendors. This typically occurs when a specific product or service is only available from a single source, or under specific emergency or urgency conditions. The lack of competition means that the Department of Veterans Affairs did not solicit bids from other potential suppliers, which can limit price discovery and potentially lead to higher costs than if the contract had been competed.

Taxpayer Impact: Taxpayers may not be receiving the best possible price due to the absence of competitive bidding. The government's ability to negotiate favorable terms is reduced when only one vendor is considered.

Public Impact

Veterans receiving medical care will benefit from access to potentially advanced medical scoping equipment. The services delivered include the lease of medical equipment and ongoing maintenance, ensuring operational readiness. The geographic impact is likely concentrated within the facilities served by the Department of Veterans Affairs in Pennsylvania, where the contract is registered. The contract supports the healthcare workforce by providing them with the necessary tools for diagnosis and treatment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competitive pricing and potential cost savings for taxpayers.
Lack of transparency in the procurement process due to sole-source justification.
Potential for vendor lock-in with specialized medical equipment and maintenance.

Positive Signals

Ensures access to necessary medical equipment for veteran healthcare.
Service maintenance component guarantees equipment functionality and reduces downtime.
Firm fixed-price contract provides budget certainty.

Sector Analysis

The electromedical and electrotherapeutic apparatus manufacturing sector is a critical component of the healthcare industry, providing essential diagnostic and therapeutic devices. This contract falls within the broader healthcare technology market, which is characterized by rapid innovation and high demand for specialized equipment. Spending in this area is often driven by the need for advanced medical capabilities and the maintenance of existing infrastructure. Comparable spending benchmarks would typically involve analyzing other federal or large healthcare system procurements for similar leasing and maintenance agreements of high-value medical devices.

Small Business Impact

This contract does not appear to have a small business set-aside. The award to Olympus America Inc., a large corporation, suggests that small businesses were not specifically targeted for this procurement. There is no information provided regarding subcontracting opportunities for small businesses within this award, which could be a missed opportunity to engage the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily fall under the Department of Veterans Affairs' contracting and program management offices. Accountability measures would be tied to the terms and conditions of the firm fixed-price contract, including delivery schedules and service level agreements for maintenance. Transparency is limited due to the sole-source nature of the award. Inspector General jurisdiction would apply if any fraud, waste, or abuse were suspected in the procurement or execution of the contract.

Related Government Programs

Department of Veterans Affairs Medical Equipment Procurement
Medical Device Leasing and Maintenance Contracts
Electromedical Apparatus Federal Spending

Risk Flags

Sole-source award may indicate a lack of competition, potentially leading to higher costs.
Limited public information on the specific justification for the sole-source procurement.
Need for further analysis to benchmark pricing and ensure value for money.

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $4.0 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 $4.0 million.

What is the period of performance?

Start: 2024-01-01. End: 2026-12-31.

What is the specific type of medical scope being leased, and what are its key features and intended uses?

The provided data does not specify the exact model or type of medical scope being leased. However, the North American Industry Classification System (NAICS) code 334510 indicates it falls under 'Electromedical and Electrotherapeutic Apparatus Manufacturing.' This broad category includes devices like endoscopes, laparoscopes, and other visualization equipment used in minimally invasive procedures across various medical specialties such as gastroenterology, pulmonology, and surgery. The intended uses would likely involve diagnostic imaging and potentially therapeutic interventions within the Department of Veterans Affairs healthcare system. Further details on the specific scope model would be required for a precise understanding of its capabilities and applications.

What is the justification for awarding this contract on a sole-source basis?

The justification for a sole-source award is not detailed in the provided data. Typically, sole-source contracts are justified when only one responsible source can satisfy the agency's needs. This could be due to proprietary technology, unique capabilities, urgent and compelling circumstances, or a lack of market research indicating other viable sources. For medical equipment, it might stem from a need to maintain compatibility with existing systems, specific performance requirements only met by one manufacturer, or a requirement for specialized training and support that only the original equipment manufacturer can provide. A formal justification document (e.g., a Justification and Approval for Other Than Full and Open Competition) would normally be required and publicly accessible for such awards.

How does the annual cost of this lease compare to purchasing similar equipment outright or leasing from other vendors?

Direct comparison of the annual cost is difficult without knowing the specific medical scope model and its features. The total contract value is approximately $1.34 million per year ($4,017,824.86 / 3 years). To benchmark this, one would need to research the market price for purchasing comparable high-end medical scopes and their associated service contracts, as well as explore lease agreements from other manufacturers or leasing companies. Given this is a sole-source award, it is plausible that the price may be higher than if it were competitively procured. A thorough market analysis or review of similar sole-source awards for comparable equipment would be necessary to assess value for money.

What are the specific service maintenance components included in the contract, and what is the expected response time for service calls?

The provided data indicates 'SERVICE MAINTENANCE' is included but does not detail the specific components of the service agreement. Typically, such maintenance includes routine inspections, preventative care, repairs, and potentially software updates. The expected response time for service calls is also not specified. These details would normally be outlined in the contract's statement of work or service level agreement. For critical medical equipment, rapid response times and comprehensive maintenance are crucial to minimize patient care disruptions. The absence of these specifics in the summary data limits a full assessment of the service aspect's value.

What is the track record of Olympus America Inc. in fulfilling similar federal contracts, particularly for medical equipment leasing and maintenance?

Olympus America Inc. is a known provider of medical and scientific equipment, including endoscopes and related systems. Their track record in fulfilling federal contracts, particularly with agencies like the Department of Veterans Affairs, would need to be examined through contract databases and performance reports. While they are a major player in the medical device market, the success of this specific contract depends on their performance against the agreed-upon terms, including equipment reliability, maintenance responsiveness, and adherence to the service schedule. A review of past performance evaluations and any past disputes or contract terminations would provide a clearer picture of their reliability in the federal space.

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: NOT 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: $4,091,641

Exercised Options: $4,017,825

Current Obligation: $4,017,825

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C26219A0033

IDV Type: BPA

Timeline