VA awards $26.4M for patient monitoring systems, with Philips North America LLC as the primary contractor

Contract Overview

Contract Amount: $26,364,630 ($26.4M)

Contractor: Philips North America LLC

Awarding Agency: Department of Veterans Affairs

Start Date: 2013-06-21

End Date: 2018-09-11

Contract Duration: 1,908 days

Daily Burn Rate: $13.8K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 1

Pricing Type: FIRM FIXED PRICE

Sector: Healthcare

Official Description: PATIENT MONITORING EQUIPMENT SYSTEM, ANESTHESIA RECORD KEEPING SYSTEM, EVENT MANAGEMENT ALARM SYSTEM AND RELATED ITEMS FOR VISN 22.

Place of Performance

Location: ANDOVER, ESSEX County, MASSACHUSETTS, 01810

State: Massachusetts Government Spending

Plain-Language Summary

Department of Veterans Affairs obligated $26.4 million to PHILIPS NORTH AMERICA LLC for work described as: PATIENT MONITORING EQUIPMENT SYSTEM, ANESTHESIA RECORD KEEPING SYSTEM, EVENT MANAGEMENT ALARM SYSTEM AND RELATED ITEMS FOR VISN 22. Key points: 1. Contract awarded through full and open competition, suggesting a competitive bidding process. 2. The contract value of $26.4 million over approximately five years indicates significant investment in medical equipment. 3. The use of a Firm Fixed Price contract type aims to control costs and provide budget certainty. 4. The award was a BPA Call, indicating it was placed against an existing Blanket Purchase Agreement. 5. The contractor, Philips North America LLC, is a major player in the medical technology sector. 6. The contract duration of 1908 days (approx. 5.2 years) suggests a long-term need for these systems.

Value Assessment

Rating: good

The contract value of $26.4 million for patient monitoring equipment over five years appears reasonable given the scope and the contractor's market position. Benchmarking against similar large-scale procurements for advanced medical systems would provide a more precise value-for-money assessment. The firm fixed price structure helps manage cost overruns, but the total cost is dependent on the specific items and quantities ordered under the BPA Call.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under a full and open competition, which typically involves a broad solicitation to all eligible responsible sources. The number of bidders is not specified, but this approach generally fosters price discovery and encourages competitive pricing. The use of a BPA Call suggests that the underlying BPA itself was likely competed, and this call leverages that established agreement.

Taxpayer Impact: A full and open competition is generally favorable for taxpayers as it maximizes the potential for competitive pricing and ensures that the government explores a wide range of options, potentially leading to better value.

Public Impact

Veterans receiving care within VISN 22 will benefit from updated patient monitoring and anesthesia record-keeping systems. The contract supports the delivery of critical healthcare services by ensuring the availability of essential medical equipment. The geographic impact is focused on facilities within VISN 22, serving a specific region of veterans. The contract supports the healthcare workforce by providing them with modern tools for patient care and monitoring.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for vendor lock-in if the specific equipment requires proprietary consumables or maintenance.
Ensuring the equipment meets the latest technological standards and interoperability requirements throughout its lifecycle.
Managing the transition and training for healthcare staff on new or updated systems.

Positive Signals

Award to a reputable contractor with a strong track record in medical technology.
Use of a firm fixed price contract to control costs.
Competition ensures a baseline level of market vetting for price and capability.
Long-term contract duration allows for stable provision of essential services.

Sector Analysis

The contract falls within the Electromedical and Electrotherapeutic Apparatus Manufacturing sector (NAICS 334510). This sector is characterized by innovation and significant R&D investment. The market includes major global players like Philips, GE Healthcare, and Medtronic. Spending in this area is driven by healthcare demand, technological advancements, and replacement cycles for existing equipment. The VA's spending on such systems is substantial, reflecting the critical need for advanced medical technology in serving its patient population.

Small Business Impact

The provided data indicates that this contract was not specifically set aside for small businesses (ss: false, sb: false). While Philips North America LLC is a large corporation, there may be opportunities for small businesses to participate as subcontractors, particularly in areas like installation, maintenance, or specialized support services. Further analysis of subcontracting plans would be needed to assess the direct impact on the small business ecosystem.

Oversight & Accountability

Oversight for this contract would primarily reside with the Department of Veterans Affairs (VA) contracting officers and program managers. The VA has an Office of Inspector General (OIG) that conducts audits and investigations into VA programs and contracts to ensure accountability and prevent fraud, waste, and abuse. Transparency is facilitated through contract award databases like FPDS, though detailed performance metrics and specific equipment utilization data may not be publicly available.

Related Government Programs

Veterans Health Administration Medical Equipment Procurement
VISN 22 Healthcare Services
Philips Healthcare Solutions Contracts
Anesthesia and Patient Monitoring Systems
Medical Device Manufacturing

Risk Flags

Potential for technological obsolescence
Vendor lock-in risk
Integration and training challenges
Dependence on specific contractor for maintenance and support

Frequently Asked Questions

What is this federal contract paying for?

Department of Veterans Affairs awarded $26.4 million to PHILIPS NORTH AMERICA LLC. PATIENT MONITORING EQUIPMENT SYSTEM, ANESTHESIA RECORD KEEPING SYSTEM, EVENT MANAGEMENT ALARM SYSTEM AND RELATED ITEMS FOR VISN 22.

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 $26.4 million.

What is the period of performance?

Start: 2013-06-21. End: 2018-09-11.

What is the track record of Philips North America LLC with the Department of Veterans Affairs for similar contracts?

Philips North America LLC has a significant history of contracts with the Department of Veterans Affairs, spanning various medical equipment categories. Reviewing historical data reveals numerous awards for patient monitoring systems, diagnostic imaging equipment, and other critical healthcare technology. While this specific contract is for patient monitoring and anesthesia systems, Philips' broader engagement with the VA suggests established relationships and familiarity with VA procurement processes and requirements. Analyzing past performance, including any documented issues or successes, would provide further context on their reliability and capability in fulfilling large-scale VA medical equipment contracts.

How does the awarded price compare to market rates for similar patient monitoring systems?

Directly comparing the total contract value of $26.4 million to 'market rates' is challenging without specific details on the exact equipment, quantities, and service levels procured. However, the contract was awarded under a 'Full and Open Competition' and utilized a 'Firm Fixed Price' structure, which are mechanisms intended to achieve competitive pricing. Philips North America LLC is a major global provider of such technology, and their pricing is generally considered competitive within the high-end medical device market. Benchmarking would require analyzing pricing data for comparable systems from other leading manufacturers (e.g., GE Healthcare, Medtronic) procured by other federal agencies or large healthcare systems around the same period.

What are the primary risks associated with this contract for the VA?

Key risks for the VA include potential technological obsolescence if the equipment has a shorter lifespan than anticipated or if upgrades are prohibitively expensive. Another risk is vendor lock-in, where the VA becomes heavily reliant on Philips for maintenance, consumables, and future upgrades, potentially limiting flexibility and increasing long-term costs. Performance risks could arise if the equipment does not meet clinical needs or reliability standards, impacting patient care. Furthermore, managing the integration of new systems across multiple facilities within VISN 22 and ensuring adequate staff training presents logistical challenges.

How effective are patient monitoring systems in improving patient outcomes within the VA system?

Advanced patient monitoring systems, such as those procured under this contract, are generally considered highly effective in improving patient outcomes. They enable continuous tracking of vital signs, early detection of patient deterioration, and timely intervention, which can reduce adverse events, length of hospital stays, and mortality rates. For anesthesia record-keeping systems, they enhance patient safety during procedures by ensuring accurate documentation and alerting clinicians to critical changes. The effectiveness within the VA system is contingent on proper implementation, integration with electronic health records, adequate training for clinical staff, and ongoing maintenance of the equipment.

What has been the historical spending trend for patient monitoring equipment by the VA?

The VA has consistently allocated significant funds towards the procurement and maintenance of patient monitoring equipment over the years. Historical spending data indicates a steady demand driven by the need to equip its numerous healthcare facilities and replace aging technology. While specific figures fluctuate annually based on capital investment cycles and strategic priorities, the overall trend shows a substantial and ongoing commitment to acquiring advanced medical devices. This $26.4 million award represents a significant, but likely not unprecedented, investment within this broader spending pattern for critical healthcare technology.

What is the significance of the BPA Call award mechanism in this context?

The use of a Blanket Purchase Agreement (BPA) Call signifies that this contract was placed against a pre-existing, competitively awarded BPA. BPAs are established with vendors to streamline the procurement of commonly purchased items or services. A 'Call' against a BPA is essentially an order placed under that agreement. This mechanism is often used for efficiency and to leverage pre-negotiated terms and pricing. It implies that the initial BPA was likely competed, and this call represents a specific exercise of that agreement for the patient monitoring equipment needed by VISN 22.

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: 1

Pricing Type: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Parent Company: Philips RS North America LLC (UEI: 404553448)

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

Business Categories: Category Business, Corporate Entity Not Tax Exempt, Manufacturer of Goods, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $26,364,630

Exercised Options: $26,364,630

Current Obligation: $26,364,630

Contract Characteristics

Commercial Item: COMMERCIAL ITEM

Parent Contract

Parent Award PIID: VA26213A0078

IDV Type: BPA

Timeline