JA_Sole Source Purchase Order_Ref Lab_Bethesda_19 Nov 2024v1..._Redacted....pdf

CUI/SP-SSEL

Justification and Approval for Sole Source / Purchase Order

1. Contracting Activity: US Army Health Readiness Contracting Office/ Health Readiness Branch

2. Description of Action: This is a new requirement for a Firm-Fixed Price (FFP) Purchase Order in support of the patient care mission for Walter Reed National Military Medical Center, Bethesda, MD 208895, in accordance with Army Regulation 40-3 Medical, Dental, and Veterinary Care, Chapter 14 Medical Laboratory Management. Clinical reference laboratory testing includes comprehensive support generally encompassing the American Medical Association's Current Procedural Terminology (CPT) coding within the range of 80047 to 88399, and includes, but is not limited to, support across multiple clinical and anatomic pathology disciplines to include chemistry, hematology and coagulation, urinalysis, transfusion medicine, microbiology, molecular, histology, cytology, and genetic testing. The reference laboratory must be capable of providing comprehensive reference laboratory support which includes current support of 5,482 unique, individually orderable tests and panels across all the aforementioned disciplines performed. Reference laboratory support should provide "one stop shopping" (i.e., maximize the use of their network of laboratories as opposed to referral to other commercial reference laboratories) in order to minimize testing delays, facilitate identification of test requirements and costs, and track pending tests.

3. Description of Supplies/Services: The Contractor shall provide all personnel, equipment, supplies, facilities, transportation, tools, materials, supervision, and other items and non-personal services necessary to perform clinical reference laboratory testing services as defined in the Performance Work Statement (PWS). The contract period of performance will be from 1 Dec 2024 – 31 Mar 2025.

The estimated total contract value is $2,264,000.00.

4. Authority Cited: The statutory authority for applying the Simplified Procedures for Certain Commercial Products and Commercial Services of 13.501(a)(ii) is 41 U.S.C. § 1901 and is implemented by FAR 13.106-1(b)(2) for restricting competition on this procurement.

Competition is restricted on this procurement due to Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

5. Reason for Authority Cited: Prior to initiation of a new contract for clinical reference laboratory testing support, the contractor's reference laboratory must have an approved Business to Business (828) Agreement from the Defense Health Agency (DHA) 828 Program Management Office (PMO) to connect to the Government via the Military Health System (MHS) 828 Gateway. Additionally, the reference laboratory must have approved interfaces to the DoD Electronic Health Records (EHR) (e.g., Composite Health Care System (CHCS) and MHS Genesis), in addition to obtaining the requisite Information Assurance (IA) approvals or Authority To Operate (ATO).

Current DoD approved mechanisms for approval and/or ATO are via DoD Instruction (DoDI) 8582 and 8510 (e.g., Risk Management Framework (RMF)). Currently there is only one contractor capable of meeting this requirement within the timeframe allotted and possesses an RMF ATO. Laboratory Corporation of America, is the only logical and responsible contractor in place and currently doing this work with the same customers requiring these services. It is essential that clinical reference laboratory testing services continue without disruption and any source other than Laboratory Corporation of America, would cause unacceptable delay that would negatively impact the mission of the MHS and patient care.

6. Efforts to Obtain Competition: A sole source contract with Laboratory Corporation of America, is necessary to ensure that there is no break in service for the Reference Laboratory Testing Services. A Notice of Intent was posted on SAM on 18 November 2024 and will close on 03 December 2024. Currently, no interested sources.

a. Effective competition. Due to the timelines involved to find a replacement, only Laboratory Corporation of America, was deemed capable of fulfilling the specific needs of the government – especially since they have been performing this work since 01 Apr 2021 and already have employees already familiar with this requirement.

b. Subcontracting competition. Laboratory Corporation of America is a large business concern and has a commercial subcontracting in place.

7. Actions to Increase Competition: There are no practical alternatives available to increase competition for this requirement.

8. Market Research: Market research was conducted IAW FAR Part 10 on 26 September 2024 for this effort.

9. Interested Sources: To date, no other sources have expressed an interest in the purchase order in writing or otherwise. Any proposals received shall be considered.

10. Other Facts: None

a. Procurement history.

i. Contract numbers and dates of all awarded contracts for these same requirements.

DADA109800001, Smith-Kline Beecham, 30 September 2002 - 31 March 2003.

DADA1003D0030, Quest Diagnostics, 1 April 2003-31 March 2005. This was an interim contract awarded to Quest Diagnostics, Inc. in order to complete the competitive acquisition that would follow.

W81K0405DM001, Quest Diagnostics, 1 April 2005 – 31 March 2006. This was a letter contract awarded to the incumbent in order to complete the competitive acquisition that would follow.

W81K0406D0001, Quest Diagnostics, 1 April 2006 – 30 September 2010. This was a competitive follow-on contract.

W81K040D0011, Quest Diagnostics, 1 October 2010 – 30 March 2012. This was an interim contract awarded to the incumbent in order to complete the completive acquisition that would follow.

W81K0411D0007, Quest Diagnostics, this was a competitive follow-on contract, awarded on 22 April 2011, that was protested on 5 May 2011 by LabCorp and subsequently terminated as describe below.

W81K0412D0013, Quest Diagnostics, 1 April 2012 - 31 March 2013. This was an interim contract awarded to Quest to prevent a break in service. The Center for Health Care Contracting (CHCC) (now HRCO) conducted corrective action following the LabCorp protest, terminated contract W81K0411D0007 on 1 June 2012, and awarded the follow-on contract, W81K0412D0017, to LabCorp. On 12 June 2012, Quest protested to the Government Accountability Office (GAO), the award to LabCorp arguing that the evaluation of their Technical Capability was unreasonable, reevaluation was unreasonable, unequal discussions, and requested a stay. HRCO agreed to conduct corrective action, thus rendering the Quest protest academic. HRCO conducted corrective action and again notified Quest on 12 September 2012 that LabCorp was the successful offeror and confirmed the award of contract number W81K0412D0017. Quest again protested to the GAO on 25 September 2012 and requested a stay. GAO denied the Quest protest on 19 December 2012. Quest promptly appealed to the United States Court of Federal Claims (COFC) on 26 December 2012.

W81K0413D0029, Quest Diagnostics, 1 April 2013- 30 September 2013. This was an interim contract awarded to Quest Diagnostics to prevent a break in service while awaiting a decision from COFC. Following resolution of the final protest, the stay was lifted and contract W81K0412D0017 remained in place.

W81K0412D0017, Laboratory Corporation of America, 1 October 2013 - 30 September 2018 (Included a 6-month transition period from 1 April 2013 to 30 September 2013).

W81K0424P0018, Laboratory Corporation of America, 1 October 2024 – 30 September 2025.

ii. The competitive status of these actions.

Contract DADA109800001 was solicited on a full and open competition basis and awarded to Smith-Kline Beecham, Inc. (now Quest Diagnostics, Inc.). Interim contract DADA10-03-0- 0030 was awarded on a sole-source basis to Quest Diagnostics, Inc. Contract W81K0405DM001 was awarded as a letter contract to Quest Diagnostics, Inc. in order to complete the competitive acquisition that would follow. Contract W81K0406D0001 was solicited on a full and open competition basis and awarded to Quest Diagnostics, Inc.

Contract W81K0410D0011 was awarded as an interim contract on a sole source basis in order to complete the competitive follow-on action. Contract W81K0411D0007, which was solicited on a full and open competition basis and awarded to Quest Diagnostics, Inc. on 22 April 2011, was protested on 5 May 2011 by LabCorp and subsequently terminated. Interim contract W81K0412D0013 was awarded on a sole source basis to Quest Diagnostics to prevent a break in service. Contract W81K0412D0017, which was solicited on a full and open competition basis, was awarded to Laboratory Corporation of America. A stay was issued against this contract due to a protest filed by Quest Diagnostics, Inc. Interim Contract W81K0413D0029 was awarded on a sole- source basis to the incumbent due to a protest of the competitive follow-on contract. Following resolution of the final protest, the stay was lifted and contract W81K0412D0017 remained in place. The fourth and final option period for this contract, to include the extension of services, ends on 30 September 2018.

iii. Authority previously cited if less than full and open competition was used:

Title 10 USC, Section 2304(C)(1) and FAR 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements (DADA10-03-0- 0030, W81K0405DM001, and W81K0411D0007).

iv. If a justification was prepared to support the procurement made before this one, a summary of the contents of paragraph 5 of the justification for that procurement and an explanation of the results.

Yes, Current DoD approved mechanisms for approval and/or ATO are via DoD Instruction (DoDI) 8582 and 8510 (e.g., Risk Management Framework (RMF)). Currently there is only one contractor capable of meeting this requirement within the timeframe allotted and possesses an RMF ATO. Laboratory Corporation of America, is the only logical and responsible contractor in place and currently doing this work with the same customers requiring these services. It is essential that clinical reference laboratory testing services continue without disruption and any source other than Laboratory Corporation of America, would cause unacceptable delay that would negatively impact the mission of the MHS and patient care. In turn, W81K0424P0018 was executed to Laboratory Corporation of America, 1 October 2024 – 30 September 2025 for required services at Randolph and Lackland AFB.

v. If any prior contract for this requirement was accomplished using full and open competition, include a detailed explanation of the changed circumstances causing this action to now limit the sources. Yes, pls see paragraph 5.

vi. An explanation of any unusual patterns that may be revealed by the history, e.g., several consecutive, urgent buys. None

vii. If a justification was prepared to support the procurement made before this one, briefly describe the circumstances justifying the procurement and whether there have been any significant changes. Yes, pls see paragraph 5.