DoD awards $22.1M for patient monitoring systems, with 36 delivery orders expected over 3 years

Contract Overview

Contract Amount: $22,123,681 ($22.1M)

Contractor: Philips North America LLC

Awarding Agency: Department of Defense

Start Date: 2024-01-31

End Date: 2027-01-30

Contract Duration: 1,095 days

Daily Burn Rate: $20.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 36

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: 8510393041!PATIENT MONITORING SYS

Place of Performance

Location: CAMBRIDGE, MIDDLESEX County, MASSACHUSETTS, 02141

State: Massachusetts Government Spending

Plain-Language Summary

Department of Defense obligated $22.1 million to PHILIPS NORTH AMERICA LLC for work described as: 8510393041!PATIENT MONITORING SYS Key points: 1. Contract value appears reasonable given the duration and scope of patient monitoring system supply. 2. Full and open competition suggests a healthy market for these critical healthcare devices. 3. Potential risks include supply chain disruptions and the need for ongoing technological upgrades. 4. Performance context is within the Defense Logistics Agency's mission to provide medical equipment. 5. This contract positions Philips as a key supplier within the federal healthcare sector.

Value Assessment

Rating: good

The total award of $22.1 million over three years for patient monitoring systems seems competitive. While specific benchmarks for this exact configuration are unavailable, the firm-fixed-price structure suggests predictable costs. The number of delivery orders (36) indicates a phased approach to procurement, which can help manage budgets and ensure timely delivery of necessary equipment to military healthcare facilities.

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 were likely invited to bid. The Defense Logistics Agency's use of this method suggests a robust market for patient monitoring systems. The presence of multiple bidders generally leads to more competitive pricing and a wider selection of products, benefiting the government.

Taxpayer Impact: Taxpayers benefit from competitive pricing achieved through a broad solicitation process, ensuring that the government is not overpaying for essential medical equipment.

Public Impact

Military healthcare facilities and personnel will benefit from access to advanced patient monitoring systems. The services delivered include the supply and potential maintenance of critical medical devices. Geographic impact is likely nationwide, supporting various military treatment centers. Workforce implications include ensuring medical staff have the tools needed for patient care.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if follow-on contracts are not competitively bid.
Ensuring interoperability with existing military medical IT infrastructure.
Maintaining adequate stock levels to meet unpredictable demand.

Positive Signals

Awarded under full and open competition, indicating strong market interest.
Firm-fixed-price contract provides cost certainty.
Long-term contract (3 years) allows for stable supply chain planning.

Sector Analysis

The market for electromedical and electrotherapeutic apparatus, including patient monitoring systems, is a significant segment of the healthcare technology sector. Federal agencies, particularly the Department of Defense, are major consumers of these products to support military personnel and their families. Spending in this area is driven by the need for advanced diagnostic and monitoring capabilities in both deployed and domestic healthcare settings. Comparable spending benchmarks are difficult to pinpoint without specific system configurations, but the overall federal investment in medical equipment is substantial.

Small Business Impact

The contract does not indicate a small business set-aside. While the primary awardee is a large corporation, there may be opportunities for small businesses to participate as subcontractors, particularly in areas like installation, maintenance, or specialized component supply. The impact on the small business ecosystem will depend on the subcontracting plans, if any, outlined by the prime contractor.

Oversight & Accountability

Oversight for this contract will be managed by the Defense Logistics Agency, likely through contracting officers and program managers. Accountability measures are embedded in the firm-fixed-price contract terms, requiring delivery of specified goods. Transparency is facilitated by the contract award data being publicly available. Inspector General jurisdiction would apply in cases of fraud, waste, or abuse.

Related Government Programs

Medical Equipment Procurement
Defense Health Agency Contracts
Patient Monitoring Systems
Electromedical Apparatus Manufacturing

Risk Flags

Supply Chain Vulnerability
Technological Obsolescence
Interoperability Challenges
Cybersecurity Risks

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $22.1 million to PHILIPS NORTH AMERICA LLC. 8510393041!PATIENT MONITORING SYS

Who is the contractor on this award?

The obligated recipient is PHILIPS NORTH AMERICA LLC.

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Logistics Agency).

What is the total obligated amount?

The obligated amount is $22.1 million.

What is the period of performance?

Start: 2024-01-31. End: 2027-01-30.

What is the track record of PHILIPS NORTH AMERICA LLC in supplying patient monitoring systems to the federal government?

PHILIPS NORTH AMERICA LLC has a significant history of supplying medical equipment, including patient monitoring systems, to various federal agencies. Their involvement in government contracts often spans multiple years and includes a range of products from diagnostic imaging to critical care monitoring. Data from federal procurement databases indicates consistent awards for similar equipment, suggesting a strong established presence and capability. The company's performance on previous contracts, including delivery timeliness, product quality, and responsiveness to government needs, would be a key factor in their continued success in securing such awards. Analyzing past performance metrics and any reported issues or successes would provide a clearer picture of their reliability in fulfilling this current contract.

How does the awarded price of $22.1 million compare to similar federal contracts for patient monitoring systems?

Benchmarking the $22.1 million award requires comparing it against contracts for similar patient monitoring systems, considering factors like the number of units, system capabilities (e.g., basic vs. advanced features, telemetry), contract duration, and included services (e.g., maintenance, training). Without specific details on the exact configuration and quantity of systems procured under this contract, a precise comparison is challenging. However, given the 3-year duration and the nature of the systems, the total value appears within a reasonable range for federal procurements of this type. The firm-fixed-price structure also suggests that the government has negotiated a set cost, which aids in budget predictability. Further analysis would involve examining the average cost per unit or per system across comparable awards from agencies like the Department of Veterans Affairs or other DoD branches.

What are the primary risks associated with this contract for the Department of Defense?

The primary risks associated with this contract for the Department of Defense include potential supply chain disruptions, which could impact the timely delivery of critical patient monitoring systems, especially in remote or deployed locations. Technological obsolescence is another significant risk; patient monitoring technology evolves rapidly, and systems procured today might become outdated before the contract's end or shortly thereafter, necessitating early upgrades or replacements. Furthermore, there's a risk related to vendor performance, where the contractor might face challenges in meeting delivery schedules, quality standards, or providing adequate post-installation support. Ensuring interoperability with existing military healthcare IT infrastructure is also a concern, as is the potential for cybersecurity vulnerabilities within the networked monitoring systems.

How effective is the Defense Logistics Agency in managing contracts for medical equipment like patient monitoring systems?

The Defense Logistics Agency (DLA) is a primary entity responsible for procuring and supplying a vast array of goods and services, including medical equipment, to the U.S. military. Its effectiveness in managing contracts for items like patient monitoring systems is generally considered robust, given its scale and specialized mission. DLA leverages various contracting vehicles and strategies, including full and open competition, to ensure competitive pricing and access to a wide range of suppliers. They employ contracting professionals and quality assurance specialists to oversee contract performance, delivery, and compliance. While specific performance metrics for individual contracts are not always publicly detailed, DLA's long-standing role in equipping military healthcare facilities suggests a high degree of operational effectiveness in fulfilling these critical needs.

What are the historical spending patterns for patient monitoring systems by the Department of Defense?

Historical spending patterns for patient monitoring systems by the Department of Defense show a consistent and significant investment over the years. The DoD, through agencies like the Defense Logistics Agency and the Defense Health Agency, regularly procures these essential medical devices to support military treatment facilities worldwide. Spending fluctuates based on factors such as the need for system upgrades, expansion of healthcare services, and the deployment tempo of military personnel. Analysis of past contract awards reveals a pattern of multi-year contracts, often with firm-fixed-price agreements, awarded to major medical equipment manufacturers. The total annual expenditure can range from tens to hundreds of millions of dollars, depending on the scope of procurements in a given fiscal year, reflecting the ongoing requirement for advanced patient care technology within the military health system.

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: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 36

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, Manufacturer of Goods, Not Designated a Small Business, Special Designations

Financial Breakdown

Contract Ceiling: $22,123,681

Exercised Options: $22,123,681

Current Obligation: $22,123,681

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: SPE2D119D0014

IDV Type: IDC

Timeline