VA awards $6M Philips sustainment task order for electromedical apparatus manufacturing

Contract Overview

Contract Amount: $6,000,350 ($6.0M)

Contractor: Philips North America LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2024-08-30

End Date: 2025-08-31

Contract Duration: 366 days

Daily Burn Rate: $16.4K/day

Competition Type: FULL AND OPEN COMPETITION

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: TASK ORDER 36 - PHILIPS SUSTAINMENT

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $6.0 million to PHILIPS NORTH AMERICA LLC for work described as: TASK ORDER 36 - PHILIPS SUSTAINMENT Key points: 1. Contract focuses on sustainment services for critical medical equipment. 2. Awarded to a single, established vendor, suggesting potential for specialized knowledge. 3. Pricing appears fixed, which can offer budget predictability. 4. The contract duration is one year, allowing for regular performance review. 5. This award falls within the manufacturing of electromedical and electrotherapeutic apparatus. 6. The agency is the Department of Veterans Affairs, indicating a focus on veteran healthcare.

Value Assessment

Rating: good

The contract value of approximately $6 million for a one-year sustainment period for electromedical apparatus appears reasonable given the specialized nature of such equipment. Benchmarking against similar sustainment contracts for complex medical devices would provide a more precise value-for-money assessment. The firm fixed-price structure helps control costs for the VA. Without specific details on the scope of services, a direct comparison to market rates for similar services is challenging, but the award to a known manufacturer like Philips suggests a focus on maintaining original equipment performance.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, indicating that multiple vendors had the opportunity to bid. The specific number of bidders is not provided, but the competitive process should theoretically lead to better pricing and terms for the government. The fact that it was competed fully suggests that the market for sustainment services for this type of equipment is considered robust enough to support multiple potential providers.

Taxpayer Impact: A full and open competition generally benefits taxpayers by fostering a competitive environment that can drive down costs and improve service quality, ensuring the VA receives the best value for its investment.

Public Impact

Veterans receiving care at VA facilities will benefit from the continued operational readiness of essential electromedical equipment. The services delivered will ensure the proper functioning and maintenance of critical healthcare technology. The geographic impact is likely nationwide, supporting VA medical centers across the country. Workforce implications may include the need for specialized technicians for maintenance and repair, potentially sourced through the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if specialized knowledge is highly concentrated with Philips.
Reliance on a single vendor for sustainment could limit flexibility in adopting new technologies or service models.
The fixed-price nature might disincentivize proactive, long-term maintenance if not carefully monitored.

Positive Signals

Award to a known manufacturer like Philips suggests familiarity with the equipment and potential for high-quality sustainment.
Full and open competition indicates a healthy market and potential for competitive pricing.
The firm fixed-price contract provides cost certainty for the VA.

Sector Analysis

This contract falls within the electromedical and electrotherapeutic apparatus manufacturing sector, which includes a wide range of medical devices used for diagnosis, treatment, and monitoring. The market for sustainment and maintenance of such equipment is significant, driven by the high cost and complexity of medical technology. The Department of Veterans Affairs is a major purchaser of healthcare-related goods and services, and contracts like this are crucial for maintaining its operational capabilities. Comparable spending benchmarks would involve looking at other large federal agencies or healthcare systems that procure similar sustainment services.

Small Business Impact

The data indicates this contract was not set aside for small businesses (ss: false, sb: false). While this specific award may not directly benefit small businesses through a set-aside, the prime contractor, Philips North America LLC, may engage small businesses as subcontractors for specific services or parts, depending on their subcontracting plan. The overall impact on the small business ecosystem would depend on the extent of such subcontracting opportunities.

Oversight & Accountability

Oversight for this contract will likely be managed by the Department of Veterans Affairs contracting officers and program managers. Accountability measures are inherent in the firm fixed-price contract type, requiring the contractor to deliver specified services within the agreed-upon price. Transparency is facilitated through contract databases like FPDS, where award details are publicly available. Inspector General jurisdiction would apply if any fraud, waste, or abuse is suspected.

Related Government Programs

Department of Veterans Affairs Medical Equipment Procurement
Federal Healthcare IT Sustainment Contracts
Electromedical Apparatus Maintenance Services
Medical Device Lifecycle Management

Risk Flags

Potential for vendor lock-in
Reliance on single source for critical sustainment
Need for robust performance monitoring

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $6.0 million to PHILIPS NORTH AMERICA LLC. TASK ORDER 36 - PHILIPS SUSTAINMENT

Who is the contractor on this award?

The obligated recipient is PHILIPS NORTH AMERICA LLC.

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 $6.0 million.

What is the period of performance?

Start: 2024-08-30. End: 2025-08-31.

What is the historical spending by the VA on Philips sustainment contracts, and how does this award compare?

Analyzing historical spending data for Philips sustainment contracts with the Department of Veterans Affairs (VA) is crucial for context. While this specific award is for approximately $6 million, a deeper dive into past contract values, durations, and the scope of services provided under similar Philips sustainment agreements would reveal trends. For instance, if previous contracts were significantly larger or smaller, it could indicate a change in the VA's needs or strategy regarding this equipment. Comparing the current award's value against the average or median historical spending for comparable sustainment services would help determine if this is a routine renewal, an expansion of services, or a reduction. Understanding these patterns can inform future budget planning and identify potential cost efficiencies or areas of increasing expenditure.

How does the pricing of this contract benchmark against similar electromedical apparatus sustainment contracts awarded by other federal agencies?

Benchmarking the pricing of this $6 million contract against similar electromedical apparatus sustainment contracts awarded by other federal agencies is essential for assessing value for money. This involves identifying comparable contracts based on the type of equipment being sustained (e.g., imaging systems, patient monitoring devices), the scope of services (e.g., preventative maintenance, repairs, software updates), and the contract duration. Analyzing the per-unit cost or the overall contract value relative to the number of devices or service hours in these comparable contracts can reveal if the VA is paying a competitive rate. If this contract's pricing is significantly higher than benchmarks, it may indicate inefficiencies or a lack of robust competition. Conversely, if it's lower, it suggests favorable negotiation or a competitive market.

What are the key performance indicators (KPIs) and service level agreements (SLAs) associated with this contract, and how will they be monitored?

The effectiveness and value of this $6 million sustainment contract hinge on clearly defined Key Performance Indicators (KPIs) and Service Level Agreements (SLAs). These metrics typically include response times for service calls, equipment uptime percentages, turnaround times for repairs, and adherence to preventative maintenance schedules. The Department of Veterans Affairs (VA) contracting officers and technical representatives will be responsible for monitoring these KPIs and SLAs throughout the contract period. Robust monitoring involves regular reporting from the contractor, site visits, and performance reviews. Failure to meet agreed-upon standards could trigger contractual remedies, such as service credits or penalties, ensuring accountability and driving the contractor to maintain high service quality for critical medical equipment.

What is the track record of Philips North America LLC in fulfilling similar federal sustainment contracts, particularly with the Department of Veterans Affairs?

Philips North America LLC's track record in fulfilling similar federal sustainment contracts, especially with the Department of Veterans Affairs (VA), is a critical factor in assessing the risk and potential success of this $6 million award. Past performance evaluations, contract completion history, and any documented disputes or contract terminations provide valuable insights. Specifically, examining their performance on previous VA contracts for electromedical equipment sustainment can indicate their reliability, responsiveness, and ability to meet contractual obligations. A history of successful contract completions and positive performance reviews suggests a lower risk profile, while a pattern of issues might raise concerns about the contractor's capacity or commitment, warranting closer scrutiny of this new award.

Are there any identified risks associated with relying on a single vendor (Philips) for the sustainment of this specific type of electromedical apparatus?

Relying on a single vendor, such as Philips North America LLC, for the sustainment of specific electromedical apparatus presents several potential risks. One primary concern is vendor lock-in, where the VA becomes heavily dependent on Philips for parts, expertise, and upgrades, potentially limiting future flexibility and negotiating power. This dependence can also lead to price increases over time, as competition may be stifled. Furthermore, if Philips experiences financial difficulties, supply chain disruptions, or shifts its business strategy, it could directly impact the VA's ability to maintain its critical equipment. Mitigating these risks often involves carefully structured contracts with clear performance expectations, competitive pricing clauses, and contingency planning for alternative service providers or equipment replacement.

Industry Classification

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

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 3000 MINUTEMAN RD MS 0077, ANDOVER, MA, 01810

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: $6,000,350

Exercised Options: $6,000,350

Current Obligation: $6,000,350

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 36C77620D0004

IDV Type: IDC

Timeline