NIH awards $250K for Philips MRI scanner maintenance, a sole-source purchase order

Contract Overview

Contract Amount: $250,240 ($250.2K)

Contractor: Philips North America LLC

Awarding Agency: Department of Health and Human Services

Start Date: 2026-04-06

End Date: 2027-04-07

Contract Duration: 366 days

Daily Burn Rate: $684/day

Competition Type: NOT COMPETED UNDER SAP

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: SERVICE CONTRACT FOR PHILIPS 3T MRI SCANNER

Place of Performance

Location: BETHESDA, MONTGOMERY County, MARYLAND, 20892

State: Maryland Government Spending

Plain-Language Summary

Department of Health and Human Services obligated $250,239.84 to PHILIPS NORTH AMERICA LLC for work described as: SERVICE CONTRACT FOR PHILIPS 3T MRI SCANNER Key points: 1. Value for money is difficult to assess due to the lack of competitive bidding. 2. The contract is a sole-source award, limiting price discovery and potentially increasing costs. 3. Risk indicators are moderate, with a single award and a firm-fixed-price structure. 4. Performance context is limited to maintenance of a specific medical device. 5. The contract falls within the healthcare sector, specifically medical equipment maintenance.

Value Assessment

Rating: fair

Benchmarking the value of this contract is challenging as it was not competitively procured. The firm-fixed-price structure provides cost certainty for the government, but without comparison to other bids or market rates, it's difficult to determine if the $250,239.84 price represents good value. The duration of 366 days for a single award suggests a specific need for maintenance services on the Philips 3T MRI scanner.

Cost Per Unit: N/A

Competition Analysis

Competition Level: sole-source

This contract was awarded as a sole-source purchase order, meaning it was not competed. Philips North America LLC was the only vendor considered. This approach bypasses the standard competitive bidding process, which typically leads to better price discovery and potentially lower costs for the government. The lack of competition raises questions about whether the government secured the best possible pricing.

Taxpayer Impact: Sole-source awards can lead to higher costs for taxpayers as there is no competitive pressure to drive down prices. This limits the government's ability to leverage market forces for cost savings.

Public Impact

The National Institutes of Health (NIH) benefits from continued operational capability of its Philips 3T MRI scanner. Services delivered include maintenance and repair of critical medical imaging equipment. The geographic impact is localized to the NIH facility in Maryland. Workforce implications are minimal, likely involving specialized technicians from the contractor.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Lack of competition may result in suboptimal pricing.
Sole-source award limits transparency in pricing justification.
Reliance on a single vendor for maintenance could pose future supply chain risks.

Positive Signals

Firm-fixed-price contract provides cost certainty.
Specific focus on maintaining critical medical equipment ensures operational readiness.
Award to a known manufacturer of the equipment may ensure specialized expertise.

Sector Analysis

This contract falls within the healthcare sector, specifically the maintenance and repair of medical equipment. The market for medical equipment maintenance is often characterized by specialized knowledge and manufacturer-specific requirements. While precise market size data for this niche is not readily available, the overall healthcare equipment market is substantial. This contract represents a small portion of overall federal spending on healthcare services and equipment.

Small Business Impact

This contract does not appear to involve a small business set-aside, nor is there information indicating subcontracting opportunities for small businesses. The award is made directly to Philips North America LLC, a large corporation. Therefore, the direct impact on the small business ecosystem is likely negligible for this specific procurement.

Oversight & Accountability

Oversight for this contract would fall under the purview of the National Institutes of Health (NIH) within the Department of Health and Human Services. As a purchase order, it is subject to internal agency procurement regulations and financial controls. Transparency is limited due to the sole-source nature, but contract award data is generally available through federal procurement databases. There is no specific mention of an Inspector General investigation related to this particular award.

Related Government Programs

Federal contracts for medical equipment maintenance
Department of Health and Human Services procurement
National Institutes of Health operational support
Sole-source procurements analysis

Risk Flags

Sole-source award lacks competitive justification.
Potential for inflated pricing due to lack of competition.
Limited transparency on vendor selection criteria.

Frequently Asked Questions

What is this federal contract paying for?

Department of Health and Human Services awarded $250,239.84 to PHILIPS NORTH AMERICA LLC. SERVICE CONTRACT FOR PHILIPS 3T MRI SCANNER

Who is the contractor on this award?

The obligated recipient is PHILIPS NORTH AMERICA LLC.

Which agency awarded this contract?

Awarding agency: Department of Health and Human Services (National Institutes of Health).

What is the total obligated amount?

The obligated amount is $250,239.84.

What is the period of performance?

Start: 2026-04-06. End: 2027-04-07.

What is the track record of Philips North America LLC in providing maintenance services for MRI scanners to federal agencies?

Philips North America LLC is a well-established manufacturer of medical imaging equipment, including MRI scanners. Their track record in providing maintenance services to federal agencies is generally extensive, given their market presence. However, specific performance data for this particular contract or similar sole-source awards would require a deeper dive into federal procurement databases and agency performance reports. Without access to detailed past performance evaluations for this contractor on similar contracts, it's difficult to provide a definitive assessment beyond their general industry reputation. The NIH's decision to award a sole-source contract may imply a perceived necessity or a lack of suitable alternatives, but it does not inherently speak to their past performance quality on other contracts.

How does the awarded price compare to market rates for similar MRI scanner maintenance services?

Directly comparing the awarded price of $250,239.84 to market rates for similar MRI scanner maintenance services is challenging due to the sole-source nature of this contract. Typically, competitive bidding allows for price discovery and benchmarking against multiple offers. Without comparable bids or publicly available pricing data for Philips 3T MRI scanner maintenance from other providers or through competitive contracts, it's difficult to ascertain if this price is optimal. Market rates can vary significantly based on the specific scanner model, service level agreements, geographic location, and the vendor's expertise. A thorough analysis would require obtaining quotes from other qualified service providers or reviewing historical competitive contract data for similar services.

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

The primary risks associated with a sole-source award for critical medical equipment maintenance include potential overpricing due to the absence of competition, reduced incentive for the contractor to innovate or provide superior service, and a lack of transparency in the pricing justification. Taxpayers may bear a higher cost than if the contract were competitively bid. Furthermore, reliance on a single vendor can create dependencies and potential vulnerabilities if that vendor experiences financial difficulties, supply chain disruptions, or changes their service offerings. For critical equipment like an MRI scanner, ensuring continuous, cost-effective, and high-quality maintenance is paramount, and sole-source awards can complicate achieving these objectives.

What is the historical spending pattern for MRI scanner maintenance at NIH or similar agencies?

Analyzing historical spending patterns for MRI scanner maintenance at NIH or similar agencies would provide valuable context for this $250,239.84 award. Without specific historical data, it's difficult to determine if this amount is consistent with previous expenditures for similar services. Factors such as the age of the equipment, the specific model (Philips 3T MRI scanner), the scope of the maintenance agreement (e.g., preventive vs. corrective maintenance, parts included), and the duration of the contract all influence cost. If NIH has previously awarded competitive contracts for similar maintenance, comparing those prices could reveal trends. A significant deviation from historical averages, especially in a sole-source context, would warrant further investigation into the justification for the increased cost.

Are there alternative vendors capable of servicing Philips 3T MRI scanners, and why might NIH have chosen a sole-source award?

While third-party service providers exist for medical equipment, manufacturers like Philips often possess proprietary knowledge, specialized tools, and direct access to genuine parts for their specific models, such as the 3T MRI scanner. Agencies may opt for sole-source awards for critical equipment maintenance if they believe only the original equipment manufacturer (OEM) can provide the necessary expertise, ensure warranty compliance, or guarantee the highest level of performance and safety. Reasons could include the complexity of the technology, specific contractual obligations, or a documented lack of qualified alternative bidders during a previous attempt at competition. The NIH's justification for this sole-source award would likely detail these considerations, emphasizing the unique capabilities or necessity of Philips' service.

Industry Classification

NAICS: Other Services (except Public Administration) › Electronic and Precision Equipment Repair and Maintenance › Electronic and Precision Equipment Repair and Maintenance

Product/Service Code: MAINT, REPAIR, REBUILD EQUIPMENT › MAINT, REPAIR, REBUILD OF EQUIPMENT

Competition & Pricing

Extent Competed: NOT COMPETED UNDER SAP

Solicitation Procedures: SIMPLIFIED ACQUISITION

Solicitation ID: PCA-NIDDK-03289

Offers Received: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 22100 BOTHELL EVERETT HWY, BOTHELL, WA, 98021

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: $250,240

Exercised Options: $250,240

Current Obligation: $250,240

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Timeline