20-RHCO-P-474 Redacted.pdf

Control No: 20-RHCO-P-474 Contractor: Varian Medical Systems Inc.

Program/Equipment: TrueBeam Linear Accelerator

Version – March 2017 FOR OFFICIAL USE ONLY

FAR Subpart 13.5 Simplified Procedures for Certain Commercial Items – Sole Source Justification and Approval

Contracting Activity: Regional Health Contracting Office-Pacific, Joint BaseLewis McChord Health Contracting Branch (JBLM HCB).

Description of Action.

Madigan Army Medical Center (MAMC), Clinical Engineering Branch (CEB), JB Lewis McChord (Tacoma) WA has follow on requirement for maintenance and repair services for the Government-owned Varian TrueBeam Linear Accelerator

(LINAC).

The Varian TrueBeam LINAC customizes high energy x-rays or electrons to conform to the shape and size of a tumor and destroys cancer cells inside a human body while sparing the surrounding normal tissue. The LINAC is used for treating multiple parts of the body and the body’s organs. This unit is one of two systems used by MAMC’s Radiology Oncology Department to deliver a wide range of customized radiotherapy treatment for cancer patients.

Varian’s TrueBeam LINAC is under warranty until 13 August 2020 and requires a maintenance and repair service contract with the manufacturer (Varian). The maintenance and repair service was included in the warranty section of the Delivery Order used to obtain the LINAC. The manufacturer (Varian) is the sole source provider of the services required. Varian does not train third party engineers to service the LINAC. Moreover, MAMC’s CEB technician have not received training nor are they certified to service the LINAC.

This action is a follow-on to DLA contract SPE2D1-14-D-0005 / Delivery Order (DO) SPE2D1-18-F-0240. DO SPE2D1-18-F-0240 was the contract vehicle used to obtain the Government-owned Varian TrueBeam LINAC located at MAMC. As mentioned in the paragraph above, the maintenance and repair service for LINAC was included in the delivery order in/under the warranty section. The Contract Action Reports relating to the DO indicate the contract was competed under full and open competition.

Program/Equipment: TrueBeam Linear Accelerator

Version – March 2017 FOR OFFICIAL USE ONLY

3. Description of Supplies/Services:

This is a follow on contract to DLA contract SPE2D1-14-D-0005 for maintenance and repair services for the Government-owned Varian TrueBeam Linear Accelerator (LINAC). The estimated total value including options is $874,825.00. The required services will ensure the TrueBeam LINAC stays in optimum operating condition. The services to be performed under contract are:

Scheduled Preventive Maintenance (PM) Scheduled Calibration (CAL) Guaranteed Uptime of equipment (96%) Comprehensive parts coverage Firmware upgrade support Un-limited help desk support On-site support visits Components coverage

Estimated Quantity:

The estimated quantity of this effort is 12 services during the period of performance including option years.

Estimated Price

Period From Date To Date Value Base 1 Sep 20 31 Aug 20 $249,950.00

Option Year 1 1 Sep 21 31 Aug 22 $249,950.00 Option Year 2 1 Sep 22 31 Aug 23 $249,950.00

FAR Clause 52.217-8 option: 1 Sept 23 29 Aug 24 $124,975.00 Total $874,825.00

4. Authority Cited: Simplified Procedures for Certain Commercial Items, 41 U.S.C. 1901 (or 41 U.S.C. 1903 for Special Emergency Procurement) as implemented by FAR Subpart 13.5:

Unusual and compelling urgency Exclusive licensing agreements Industrial mobilization Other:

5. Reason for Authority Cited:

(a) This acquisition must be accomplished through a sole source solution because:

Program/Equipment: TrueBeam Linear Accelerator

Version – March 2017 FOR OFFICIAL USE ONLY

Varian Medical Systems Inc. is the sole source provider of the services required. Varian has provided a sole source letter and the letter is included in this acquisition’s Paperless Contract File.

Varian Medical Systems Inc. does not train third party engineers to service its equipment/products.

Varian Medical Systems Inc. maintains proprietary rights on its hardware and software.

Imperative to maintain the piece of equipment in optimum operating condition to ensure equipment effectiveness and patient safety.

(b) Alternatives: There is other specialized equipment and procedures that can be used to treat patients with cancer, such as internal radiation therapy (i.e. implants), intraoperative radiation therapy, or peptide receptor radionuclide therapy. Nevertheless, Government employed Radiation Oncologists have determined external beam radiation treatment delivered by the Government-owned Varian TrueBeam LINAC best meets the needs of MAMC’s cancer patients. MAMC’s Radiation Oncologists are trained on the procedures for using the Varian’s TrueBeam LINAC which provide reduced liability risk, and reduces the administrative and training burden which accompanies transitioning to a new piece of equipment or procedure. Said reductions, provide a significant cost savings to the Government.

Moreover, it is imperative the Government-owned equipment is kept in optimum operating condition so it may provide effective treatment to cancer patients, aid in their recovery, and provide for a better quality of life derived from the most appropriate form of treatment deemed by the attending Radiation Oncologist. This-in itself-is a significant intangible benefit to the Government consistent with the mission of the US Army Medical Command

(c) Other Variable Considered.

1) Impact Statement. The Government-owned piece of equipment is a highly specialized piece of equipment. Varian’s TrueBeam LINAC customizes high energy x-rays or electrons to conform to the shape and size of a tumor inside a human body to destroy the cancer cells while sparing the surrounding normal tissue.

If this J&A is not approved the Government-owned Varian TrueBeam LINAC will not be maintained to manufacturer standards. The LINAC not being maintained to standard places cancer patients at risk of being treated with faulty equipment which could lead to a loss of life, a needless loss of life which could have easily been adverted by properly maintaining the Government-owned piece of equipment.

Program/Equipment: TrueBeam Linear Accelerator

Version – March 2017 FOR OFFICIAL USE ONLY

2) The Government’s minimum requirements are 12 service visits which include scheduled equipment preventive maintenance, scheduled equipment calibration, a guarantee of 96% equipment uptime as outlined by the performance requirement summary, comprehensive parts coverage, firmware upgrade support, component coverage, on-site support visits, and unlimited help desk support.

The Government-owned Varian TrueBeam LINAC is currently under warranty until 13 August 2020. After 13 August 2020, the Contractor will not service the equipment uncompensated.

The current acquisition will provide service coverage for the Government-owned Varian TrueBeam LINAC for 36 months, Base plus two (2) option years.

3) Competition feasibility. A contributing factor which influenced the decision to solicit to one source is the fact that the Varian’s TrueBeam LINAC was procured by DLA (SPE2D1-14-D-0005 / DO# SPE2D1-18-F-0240). The Contract Action Reports (CAR) indicate the DLA contract was awarded under Full and Open Competition and that four offers were received for the requirement. Nevertheless, upon award, follow on service requirements are limited to one source because of proprietary rights held by the Contractor.

4) Known Constraints. Equipment procured via a DLA contract. Equipment within its lifecycle. Proprietary rights held by the Contractor. Contractor does not train 3rd party engineers to service the TrueBeam LINAC.

6. Efforts to Obtain Competition:

(a) In accordance with DFARS PGI 206.302-1(d), A Sought Notice was posted to www.betaSAM.gov on 14 August 2020 with a closing date of 20 August 2020.

Received replies from LL3, LLC; A&B Technical LLC; The Remi Group; and Cen Med Enterprises. Said entities articulated a technical capability of servicing a Varian TrueBeam LINAC; however, none provided documents identifying their entity as a “Varian Certified” Service Provider. Being aVarian Certified Service Provider is a requirement for this acquisition. Moreover, Varian Medical System LLC responded to the Sources Sought Notice on 17 August 2020. Varian Medical System LLC attached a Sole Source Service Provider Letter to their response.

The Sole Source Service Provider Letter states Varian does not train or certified third party service providers.

(b) Effective Competition: In the future, Joint Base Lewis McChord Health Contracting Branch along with MAMC’s CEB will continue to perform market research to monitor any changes in the status of this requirement. As technology becomes available, research will be performed to consider other possible sources that may meet or exceed this current requirement. However, since this is a sole source action, effective competition is not applicable.

Program/Equipment: TrueBeam Linear Accelerator

Version – March 2017 FOR OFFICIAL USE ONLY

(c) Subcontracting Competition.

1. In accordance with FAR 19.702(a)(1), a subcontracting plan is required for negotiated acquisitions over 700K. However, Varian Medical System LLC provided a Sole Source Service Provider Letter in their response to the Source Sought dated 17 August 2020. Additionally a teleconference was conducted with Varian Medical System LLC’s Representative to address subcontracting opportunities. The Varian Medical System LLC’s Representative articulated subcontracting opportunities are not possible for this service requirement. A record of the teleconference is filed in this acquisition’s PCF.

2. The Contracting Officer has determined that no subcontracting possibilities exist for this requirement and that determination has been approved one level above the Contracting Officer level as required by FAR 19.705-2(c).

7. Actions to Increase Competition: Varian Medical System LLC is the only authorized company that can perform the maintenance and repair services of the Government-owned Varian TrueBeam LINAC located at MAMC. The Contracting Officer shall publish the notices required by FAR 5.201 and any bids or proposals received shall be considered.

8. Market Research: Market research for this acquisition was conducted July 2020 through Mid-August 2020. Market research revealed, Varian Medical System LLC is the only authorized company capable of performing the maintenance and repair services of the Government-owned Varian TrueBeam LINAC located at MAMC. Additional market research was conducted using numerous sources (please refer to the Market Research Report filed in this acquisition’s PCF Cabinet). A summary of research conducted includes:

a. FAR 8.002(a)(1)(i) through FAR 8.002(a)(iv), which addresses supplies (including Federal Prison Industries and Ability One), are not applicable and will not be considered.

b. A review of FAR 8.002(a)(1)(v) was conducted and consideration to General Service Administration (GSA) and/or Federal Supply Schedules (FSS). However, there are no possible sources available to fulfill this requirement.

c. FAR 8.003, Use of Other Mandatory Sources does not apply

d. FAR 8.004, Use of Other Sources, and FAR 12.1, Acquisition of Commercial Items, Google search conducted with keywords “TrueBeam Linear Accelerator” revealed the LINAC is available on the open market. However, only Varian Medical System LLC can provide the Maintenance and repair services for the Government-owned LINAC located at MAMC; therefore, a sole source contract is being contemplated.

Program/Equipment: TrueBeam Linear Accelerator

Version – March 2017 FOR OFFICIAL USE ONLY

e. A Dynamic Small Business Search was conducted with keyword “TrueBeam Linear Accelerator” results from this search did not identify contractors that can provide the same or equal supplies outlined by the requiring activity.

f. Market research was conducted by personal telephone contact and internet searches with the potential vendors in the past 90 days.

g. The Government-owned TrueBeam LINAC is still within in its lifecycle.

Transitioning to another highly specialized piece of equipment that customizes high energy x-rays or electrons to conform to the shape and size of a tumor and destroys cancer cells inside a human body while sparing the surrounding normal tissue would be counter-productive and not a sound investment of taxpayer money. It is fiscally and productively advantageous to the Government to keep the existing integrated equipment.

h. Joint Base Lewis-McChord Health Contracting Branch will continuously monitor any changes in this requirement along with the CEB, MAMC, Joint Base Lewis McChord (Tacoma) WA.

9. Interested Sources: LL3, LLC; A&B Technical LLC; The Remi Group; and Cen-Med Enterprises expressed interest in this acquisition via a reply to the sources sought. Said entities articulated a technical capability of servicing a Varian TrueBeam LINAC;

however, none provided documents identifying their entity as a “Varian Certified” Service Provider. Being a Varian Certified Service Provider is a requirement for this acquisition.

Moreover, Varian Medical System LLC responded to the Sources Sought Notice on 17 August 2020. Varian Medical System LLC attached a Sole Source Service Provider Letter to their response. The Sole Source Service Provider Letter states Varian does not train or certified third party service providers. A copy of Varian’s correspondences in contained in this acquisition’s PCF Cabinet.

10. Other Facts:

a. Procurement History

(1) Known Contract Number. SPE2D1-14-D-0005, Radiation Therapy Equipment.

Awarded September 2014 by the Defense Logistics Agency. A warranty (maintenance and repair services) was included in the contract. The contract FPDS NG indicates at least three delivery orders have been awarded from the primary contract (SPE2D1-14- D-0005).

(2) Competitive status as it relates to SPE2D1-14-D-0005. SPE2D1-14-D-0005 was awarded based on a Full and Open Competition basis. The CARS pertinent to SPE2D1-14-D-0005 indicates the contracting office received four offers for the requirement.

(3) Competitive status as it relates to Maintenance and Repair Services for Varian’s TrueBeam LINAC. A deliberate search of hard files and internet based resources was

Program/Equipment: TrueBeam Linear Accelerator

Version – March 2017 FOR OFFICIAL USE ONLY conducted for contract relating to maintenance and repair of said equipment and nothing was found. Narrowing the scope to the Government-owned Varian TrueBeam LINAC at MAMC, this is the first acquisition for maintenance and repair services for the LINAC since the initial delivery of the equipment. The requirement to maintain the equipment in optimum operating condition; which ensures quality care and provides for medical staff & patient safety, and Sole Source Letter received from Varian Medical Inc.; hampers competitive efforts. Continuous market research will be conducted to identified if Varian Medical Systems LLC begins to outsource its maintenance and repairs service for the LINAC.

(3) Unusual patterns. No unusual patterns (e.g. several consecutive, urgent buys) were revealed while conducting the market research report and the research conducted to complete the J&A.

11. Technical Certification: I certify that the supporting data under my cognizance which are included in the justification are accurate and complete to the best of my knowledge and belief.

Signature:

Date: Technical:

12. Requirements Certification: I certify that the supporting data under my cognizance which are included in the justification are accurate and complete to the best of my knowledge and belief.

Signature:

Requirements: Date:

Program/Equipment: TrueBeam Linear Accelerator

Version – March 2017 FOR OFFICIAL USE ONLY

13. Fair and Reasonable Cost Determination: I hereby determine that the anticipated cost or price to the Government for this contract action will be fair and reasonable.

This determination will be made using the following: price analysis cost analysis IGCE audit: other:

As a part of this basis, certified cost or pricing data is not required because the item and/or services being acquired are considered commercial.

Signature:

Contracting Officer

14. Contracting Officer Certification: I certify that this justification is accurate and complete to the best of my knowledge and belief.

Contracting Officer

Program/Equipment: TrueBeam Linear Accelerator

Version – March 2017 FOR OFFICIAL USE ONLY

Approval Based on the foregoing justification, I hereby approve the procurement of services pertinent to scheduled maintenance of the Government-owned TrueBeam LINAC on a sole source basis pursuant to the authority of the Simplified Procedures for Certain Commercial Items, 41 U.S.C. 1901as implemented by FAR Subpart 13.5, subject to availability of funds, and provided that the services or supplies herein described have otherwise been authorized for acquisition.

Special Advocate for Competition:

Typed Name: