VA awards $2.17M lease for medical scopes with service to Olympus America Inc

Contract Overview

Contract Amount: $2,174,149 ($2.2M)

Contractor: Olympus America Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-02-01

End Date: 2027-01-31

Contract Duration: 1,095 days

Daily Burn Rate: $2.0K/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 $2.2 million to OLYMPUS AMERICA INC for work described as: MEDICAL SCOPE LEASE W/ SERVICE MAINTENANCE Key points: 1. The contract is a sole-source award for medical scope leasing and maintenance. 2. Olympus America Inc. is the sole provider for this specific equipment. 3. The contract duration is three years, with a firm fixed price. 4. This award falls under the Electromedical and Electrotherapeutic Apparatus Manufacturing sector.

Value Assessment

Rating: fair

The $2.17 million contract for a medical scope lease with service maintenance appears to be priced at a fair market value given the specialized nature of the equipment and the sole-source provider. Benchmarking is difficult without comparable sole-source contracts.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was not competed under Simplified Acquisition Procedures (SAP) and was awarded as a sole-source contract. This limits price discovery and competition, potentially leading to higher costs for taxpayers.

Taxpayer Impact: The sole-source nature of this award may result in a higher cost to taxpayers compared to a competitively bid contract.

Public Impact

Veterans will receive access to necessary medical equipment through this lease. The maintenance service ensures the equipment remains operational for patient care. The Department of Veterans Affairs continues to procure specialized medical equipment.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Sole-source award limits competition and price discovery.
Lack of competition may lead to inflated costs.

Positive Signals

Ensures availability of critical medical equipment for veterans.
Includes essential service maintenance for operational readiness.

Sector Analysis

The Department of Veterans Affairs is procuring electromedical equipment, a sector that often involves specialized technology and limited manufacturers. Benchmarks for sole-source leases of such equipment are difficult to establish without direct comparisons.

Small Business Impact

This contract was awarded to Olympus America Inc., a large business. There is no indication of small business participation in this specific award.

Oversight & Accountability

The Department of Veterans Affairs is responsible for overseeing this contract. The sole-source nature warrants scrutiny to ensure fair pricing and necessity.

Related Government Programs

Electromedical and Electrotherapeutic Apparatus Manufacturing
Department of Veterans Affairs Contracting
Department of Veterans Affairs Programs

Risk Flags

Sole-source award
Lack of competition
Potential for inflated pricing
Limited transparency in price determination

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $2.2 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 $2.2 million.

What is the period of performance?

Start: 2024-02-01. End: 2027-01-31.

What is the justification for the sole-source award, and how was the fair market price determined?

The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the absence of other responsible sources. The fair market price is usually determined through market research, historical pricing data, or independent cost estimates. For this contract, the VA would need to document why Olympus America Inc. is the only viable source and how they validated the price against similar, albeit potentially scarce, market offerings.

What are the potential risks associated with a sole-source contract for medical equipment?

Sole-source contracts carry risks such as higher prices due to lack of competition, potential for vendor lock-in, and reduced incentive for the vendor to innovate or offer cost savings. For medical equipment, there's also a risk of obsolescence if the vendor doesn't keep pace with technological advancements. The VA must actively manage these risks through contract clauses and continuous market surveillance.

How does this lease agreement ensure the effective and efficient use of taxpayer funds for medical equipment?

The effectiveness and efficiency are primarily driven by the necessity of the equipment for veteran care and the fairness of the price. While a sole-source award inherently presents challenges to cost-efficiency, the inclusion of service maintenance is crucial for operational effectiveness. The VA's oversight should focus on ensuring the equipment is utilized optimally and that the pricing, despite being sole-source, remains justifiable and aligned with any available benchmarks.

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: $2,174,149

Exercised Options: $2,174,149

Current Obligation: $2,174,149

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C26219A0033

IDV Type: BPA

Timeline