VA797H-17-D-0024-081.pdf

1 Page Source Selection Info – See FAR 3.104 & FAR 2.101

DEPARTMENT OF VETERAN AFFAIRS

Office of Acquisition and Logistics

National Acquisition Center

P.O. Box 76

Hines, IL 60141

Justification for an Exception to Fair Opportunity

FAR 16.505(b)(2)(i)(C) – Logical Follow-on

(1) Identification of the agency and the contracting activity.

This Justification for an Exception to Fair Opportunity is on behalf of the Veterans Affairs Ann

Arbor Health Care System located in Ann Arbor, Michigan executed by the Veterans Affairs

National Acquisition Center located in Hines, Illinois.

(2) Nature and/or description of the action being approved.

This activity proposes to issue a sole-source delivery order against the High-Tech Medical

Equipment multiple-award Indefinite Delivery, Indefinite Quantity contract VA797H-17-

D-0024 awarded to GE Healthcare.

Original Delivery Order #: VA797H-13-J-1370 Original Purchase Order #: 506-

B30033

Equipment: MRI Model #: MR750W 3.0T Serial #: PU300053C

Manufacturer: GE Award Date: 1/24/2014

Procurement Source: VA National Acquisition Center Delivery Date: 2/24/2015

(3) A description of the supplies or services required to meet the agency’s needs, including the estimated value.

The end user is requesting an upgrade of their current 3T GE 750W, to the Signa Premier which would provide the following:

• Increase patient throughput

• Mavric reducing metal artifact

• 128 Channel system

• Extreme gradient technology

• Signa works ST applications (Advanced application suite)

• Arch Quite Technology (Benefit for studies with patients with PTSD)

• Magic works 3T

• The MRI upgrade will include Microsoft 64-bit Windows Operating System supported by

Microsoft.

The estimated total value of this upgrade, including equipment and turnkey installation, is

$2,295,254.50.

(4) An identification of the exception to fair opportunity (see 16.505(b) (2)) and the supporting rationale, including a demonstration that the proposed contractor’s unique qualification or the nature of the acquisition requires use of the exception cited. If the contracting officer uses the logical follow-on exception, the rationale shall describe why the relationship between the initial order and the follow-on is logical (e.g. in terms of scope, period of performance, or value).

Upgrade to SIGNA Premier 3.0T PO# 506-B80056

Source Selection Info – See FAR 3.104 & FAR 2.101

The order will be issued on a sole-source basis in accordance with FAR 16.505(b)(2)(i)(C) in the interest of economy and efficiency because it is a logical follow-on to an order already issued to GE, and FAR 16.505(b)(2)(i)(B), as GE is the only vendor capable of providing the required upgrade.

The equipment was originally procured in 2014 under delivery order VA797H-13-J-1370 against GE contract V797P-6019B and delivery, installation and final inspection was completed in 2015. All contract awardees were provided fair opportunity during the solicitation and award of the original equipment order.

This action is for an extensive MRI system upgrade for equipment that was initially procured through GE. The magnet, a primary system component from the initial purchase, will remain in place while the rest of the system will be replaced. This upgrade will extend the life of the MRI system for another 10 years in lieu of procuring a new system and service will be provided by

GE throughout this period. GE, the original equipment manufacturer (OEM) is the only vendor that can provide the required hardware, software, supplies, services and unique qualifications to meet this government requirement.

(5) A determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

All items are currently on GE Healthcare’s IDIQ contract VA797H-17-D-0024 and were previously determined fair and reasonable at time of award.

(6) Any other facts supporting the justification.

The upgraded MRI system will have a 10-year life expectancy, the same as a new system. This period is derived from the CSN Catalog link: https://vaww.ecms.va.gov/isms. This guide is used for all medical device/system life expectancies. Although the entire system has a 10-year life expectancy, the manufacturer’s life expectancy for the magnet is much greater. The manufacturer provides a one-year standard warranty on the magnet after the system is upgraded. They will also continue to service this equipment through the 10-year life expectancy.

Furthermore, this non-competed upgrade is advantageous from a cost stand point. Installation of a new system would require removal of the exterior window of the 3rd floor. Removal of this window is required to permit installation of a new magnet with the use of a crane, which is not required for the upgrade. The Facility Projects Team estimates this work to cost approximately

$530,000.00 and a new system is estimated at $3,216,866.00 for a total of $ 3,746,866.00 versus

$2,287,944.00 for this upgrade.

Upgrade vs New

Pricing

Upgrade Existing

Equipment

New Equipment

Price Difference

MRI Solution $2,036,564.50 $3,216,866.00 $1,180,301.50

Turnkey Estimate $ 258,690.00 $530,000.00 $271,310.00

Totals $2,295,254.50 $3,746,866.00 $1,451,611.50

Upgrade to SIGNA Premier 3.0T PO# 506-B80056

Source Selection Info – See FAR 3.104 & FAR 2.101

As shown above, the non-competed upgrade results in estimated savings of $ 1,451,611.50, therefore it has been determined GE Signa Premier 3.0T upgrade is in the best interest of the government.

(7) A statement of the actions, if any, the agency may take to remove or overcome any barriers that led to the exception to fair opportunity before any subsequent acquisition for the supplies or services is made.

Future requirements will be handled on a case by case basis and all attempts will be made to provide fair opportunity to all contract holders when appropriate.

(8) The contracting officer’s certification that the justification is accurate and complete to the best of the contracting officer’s knowledge and belief.

By signing this justification, the Contracting Officer hereby certifies that the justifications are accurate and complete to the best of their knowledge.

(9) Evidence that any supporting data that is the responsibility of the technical or requirements personnel (e.g., verifying the Government’s minimum needs or requirements or other rationale for an exception to fair opportunity) and which form a basis for the justification have been certified as complete and accurate by the technical or requirements personnel.

By signing this justification, the requiring activity hereby certifies that the justifications are accurate and complete to the best of their knowledge.

(10) A written determination by the approving official that one of the circumstances in

(b)(2)(i)(A) through (F) of this section applies to the order.

Based on the information contained herein, a determination has been made that this requirement meets the exception at FAR 16.505(b)(2)(i)(C) since it is a logical follow-on to an order already issued under the contract. All awardees were given a fair opportunity to be considered for the original order.

Upgrade to SIGNA Premier 3.0T PO# 506-B80056

Source Selection Info – See FAR 3.104 & FAR 2.101

CERTIFICATION AND APPROVAL

TECHNICAL/REQUIREMENTS CERTIFICATION:

Pursuant to FAR 16.505(b)(2)(ii)(B)(9), I certify that any supporting data that is my responsibility and which forms a basis for the justification is complete and accurate to the best of my knowledge and belief.

Prasad S. Manda Date

VISN 10 Facility Biomedical Engineer

Veterans Affairs Ann Arbor Health Care System

CONTRACTING OFFICER CERTIFICATION:

Pursuant to FAR 16.505(b)(2)(ii)(B)(8), I certify that the justification is complete and accurate to the best of my knowledge and belief.

Stephanie Thigpen Date

Contracting Officer (orders less than $700,000)

VA National Acquisition Center – Hines

High-Tech Medical Equipment Ordering Division

Reagan P. Criddle Date

VA National Acquisition Center – Hines

Chief, High-Tech Medical Equipment Ordering Division

COMPETITION ADVOCATE APPROVAL:

Craig Robinson

Competition Advocate (orders > $700,000 up to $13,500,000) Date

VA National Acquisition Center – Hines

Associate Executive Director

Pursuant to 16.505(b)(2)(ii)(C))