VA awards $3.38M lease for medical scopes with service to Olympus America Inc

Contract Overview

Contract Amount: $3,375,196 ($3.4M)

Contractor: Olympus America Inc

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-04-01

End Date: 2027-03-30

Contract Duration: 1,093 days

Daily Burn Rate: $3.1K/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: LONG BEACH, LOS ANGELES County, CALIFORNIA, 90822

State: California Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $3.4 million to OLYMPUS AMERICA INC for work described as: MEDICAL SCOPE LEASE W/ SERVICE MAINTENANCE Key points: 1. Contract awarded to a single, established vendor for specialized medical equipment. 2. Lease agreement includes service maintenance, ensuring operational readiness. 3. Potential for higher costs due to limited competition for specialized equipment. 4. Spending aligns with the Electromedical and Electrotherapeutic Apparatus Manufacturing sector.

Value Assessment

Rating: fair

The contract price of $3.38M for a 3-year lease with maintenance appears reasonable given the specialized nature of the equipment and the sole-source provider. Benchmarking against similar high-end medical equipment leases would be necessary for a definitive assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

The contract was competed under SAP (Simplified Acquisition Procedures) but awarded as a BPA Call, suggesting limited competition. This approach may not yield the best price discovery compared to a full and open competition.

Taxpayer Impact: Taxpayer funds are utilized for essential medical equipment for veterans. The lack of robust competition could lead to a higher overall cost than potentially achievable through broader bidding.

Public Impact

Ensures access to critical medical diagnostic equipment for veterans. Supports the operational needs of the Department of Veterans Affairs healthcare facilities. Potential for long-term reliance on a single vendor for maintenance and upgrades.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Limited competition may lead to inflated pricing.
Vendor lock-in for maintenance and future upgrades.
Dependence on a single supplier for critical medical technology.

Positive Signals

Provides necessary medical equipment for veteran care.
Includes essential service maintenance for equipment longevity.

Sector Analysis

This contract falls within the Electromedical and Electrotherapeutic Apparatus Manufacturing sector, which involves specialized and often high-cost medical devices. Spending benchmarks for similar leased medical equipment with service contracts are typically high due to technological complexity and maintenance requirements.

Small Business Impact

The contract was not awarded to a small business. There is no indication of specific provisions or set-asides for small businesses in this procurement, which is common for highly specialized equipment.

Oversight & Accountability

The Department of Veterans Affairs is responsible for oversight. The use of a BPA Call suggests adherence to simplified acquisition procedures, but the lack of full competition warrants scrutiny to ensure fair pricing and value.

Related Government Programs

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

Risk Flags

Limited competition
Potential for overpricing
Vendor lock-in
Lack of small business participation

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $3.4 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 $3.4 million.

What is the period of performance?

Start: 2024-04-01. End: 2027-03-30.

What is the specific type of medical scope and its criticality to VA operations?

The specific type of medical scope is not detailed, but it falls under 'Electromedical and Electrotherapeutic Apparatus Manufacturing.' Given it's a lease with service maintenance from the VA, it's likely a critical diagnostic or surgical tool essential for patient care. Its criticality impacts the urgency of procurement and the acceptable range of competition.

What are the risks associated with a sole-source award for medical equipment maintenance?

The primary risk is inflated pricing due to a lack of competitive bidding, potentially costing taxpayers more. Another risk is vendor lock-in, making it difficult and expensive to switch providers for future needs or upgrades. This also creates a dependency on a single entity for essential repairs and support, potentially impacting equipment uptime.

How does this spending compare to industry benchmarks for similar leased medical equipment?

Without specific details on the scope's capabilities and model, a precise benchmark is difficult. However, high-end leased medical equipment with comprehensive service agreements typically commands significant costs. The VA's price of approximately $1.12M per year (including maintenance) for such specialized equipment is substantial and warrants comparison with similar procurements across healthcare providers.

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: $5,640,021

Exercised Options: $5,640,021

Current Obligation: $3,375,196

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Parent Contract

Parent Award PIID: 36C26219A0033

IDV Type: BPA

Timeline