MRI Purchase Contracts:
How To Simplify Magnet Purchase And Installation.

By Robert Junk, AIA, AHRA and Tobias Gilk

If you recently attended RSNA, particularly if you were there shopping for a new MRI system, perhaps your head has stopped spinning by now. So many vendors. So many magnet systems. So many choices. Are you prepared to enter the 3.0 T arms race? Headed towards the cutting-edge with a high-field open MRI? Clinical necessity and raw economics will drive much of your purchase decision, but what other considerations should you review before you sign that million-dollar contract?

There are a number of options open to buyers of MRI equipment which enable you to simplify the purchase process and consolidate multiple loose ends under a single contract.

The two ends of the spectrum: Do-It-Yourself vs. All-In-One

Typically, facility owners are left to their own devices once the magnet is purchased. That means the facility picks their architects, contracts with a builder, hires a shielding vendor to provide an RF enclosure, and bring in a rigging company to offload the delivered MRI and set it in position. In this full a la carte fashion, a facility has more direct control over each aspect of the process, though this control also demands that the facility take on the responsibility for coordinating this multifaceted task. Our experience has been that the more contracts there are, the more finger-pointing (and less quick resolution) when problems occur. It seems that everyone loves the ‘blame game.’

Particularly for facilities without institutional or individual experience in MRI projects, this level of required coordination may be daunting. There are no end to horror stories of MRI siting projects going horribly awry, projects profoundly delayed and / or vastly over budget. Considering that a full scanning day of a high-field MRI is likely to generate more than $5,000 in daily revenue, even project delays without a blown construction budget can have profound financial impacts. With an a la carte menu of services, it is the facility that is clearly in the driver’s seat and there may be few avenues of recourse if the project comes unglued.

There are opportunities to group some of these services in more comprehensive construction contracts, or even design-build packages which combine design services with construction. These packaging of services bring larger pieces of the total project under a single point of authority. Sometimes these pairings are synergistic and can actually yield savings to the facility, either in terms of shortened construction schedule or reduced costs. Other times, grouping services under a single player’s contract serves only to hold a single party more responsible for the success of the entire project.

If a la carte is at one extreme, the total all-in-one package is at the other. Frequently referred to as ‘turn-key’ project delivery, it is possible to ask your MRI vendor to provide everything from design services, to rigging, to shielding, to construction. Frankly, many vendors only make turn-key delivery available grudgingly. These additional services are marketed as value-added, but even at inflated prices, they don’t add much value to the MRI vendor. There are just too many opportunities for design and construction mishaps which could jeopardize the relationship of the magnet OEM with the facility.

Typically, when asked to provide turn-key services, a magnet vendor turns everything over to a familiar general contractor. The contractor then assumes all the responsibility for the project design (typically sub-contracted out to an architect), RF shield installation (sub-contracted to a shielding vendor) and magnet delivery (usually sub-contracted to a rigging specialist). The contractor charges a markup on all subcontractor fees, and the MRI vendor providing the turn-key service tacks on a markup on the contractor’s fees and rolls it all in with the magnet purchase.

In this arrangement, even if a facility contracts with GE, Philips, Siemens or any other MRI equipment vendor, that vendor is likely to have very little to do with the construction of the facility beyond processing requests for payment. It is typically a very hands-off arrangement between the general contractor and the MRI vendor. While total project responsibility under this arrangement does lie at the feet of the MRI vendor, it is the contractor, and the consultants and subcontractors they bring on board, who will make or break the project.

Though it is worth noting that the level of service and attention to a design and construction project will vary significantly by vendor and individual project managers. Many third-party resellers of used MRI systems are far more involved in their turn-key projects than are many OEMs. And either OEM or reseller, it is true of any service relationship that the success of a project will depend largely on the working styles of the parties involved. It’s not enough to know that the vendor you’ve hired has delivered successful projects before, you need to know who was on that particular project team and if those individuals will be working with you.

The advantage to a facility of going with an MRI vendor turn-key delivery is that all aspects of an MRI project are tied to a single company. The facility does not need to baby sit the project with the same level of daily scrutiny that is required when they assemble their own project. But this freedom and single point of project responsibility does come at a price. Turn-key projects come with single-envelope statements, but you will pay more, perhaps 20% more, for design and construction services than you would if you assembled your own project team.

So which pairings of services in equipment purchase, design and installation work to a facility’s financial benefit? Which ones add cost, but centralize critical lines of responsibility? And which ones provide only convenience to the facility?

Join us in January for part II of this article when we’ll identify how equipment buyers can maximize their value by smartly negotiating MRI purchase to include critical options, as well as recommendations on composing the project team to build your facility, and structuring contracts for design and construction services. January's feature articles, including part II of this feature, will be available only to paid subscribers, so don't miss the chance to renew or subscribe for the first time!

To learn more about how to get the most value from your MRI vendor, or MRI suite design and construction services, contact Junk Architects at (816) 472-7722.