The U.S. Department of Defense recently awarded a couple of sizeable contracts to medical device companies: $43.7 million to Welch Allyn and $32 million to Hologic ($HOLX).
Medical device maker Welch Allyn received a one-year contract worth up to $43.7 million. This is for its 5th option period; there are 9 annual option periods in total. The contract is a fixed price with economic adjustments that is for patient monitoring systems, sub-systems, accessories, consumables, spare parts and training.
The company markets products including those for physical exam, patient monitoring, blood pressure measurement, cardiopulmonary and medical lighting. The contracting agency is the Defense Logistics Agency Troop Support; it will be used by Army, Navy, Air Force, Marine Corps and federal civilian agencies. Payment comes out of fiscal 2014 funds.
Up to $32 million went to Hologic for a five-year contract with no option periods. The contract has a fixed price, but an indefinite delivery date for an indefinite quantity. It's to purchase ThinPrep pap test kits and related supplies, for which Hologic is the sole-supplier.
Hologic markets ThinPrep as the most accurate, most widely used pap smear.
With the same contracting agency as Welch Allyn, the Hologic payment is expected to be allocated from fiscal 2014 through fiscal 2019 and the Army, Navy, Air Force and Marine Corps will all be using these diagnostics.
- here is the list of recent U.S. Department of Defense contracts