36C10G20D0029-P00001005.pdf

Source Selection Information – See FAR 2.101 and 3.104

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

Pursuant to FAR Subpart 6.302-3

1. Contracting Activity: Department of Veterans Affairs (VA) Office of Acquisition Operations Strategic Acquisition Center (SAC) 10300 Spotsylvania Avenue, Suite 400 Fredericksburg, VA 22408

2. Description of the Action:

The proposed action is to obtain approval for the execution of contract modification to modify the current process of sourcing the identified sterilization/sanitation product group, for the Medical Surgical Prime Vendor (MSPV) Indefinite-Delivery Indefinite- Quantity (IDIQ) bridge contract 36C10G20D0029. The modification will be made on the basis of other than full and open competition to allow the incumbent Prime Vendor (PV) that is currently providing distribution services of medical and surgical (med/surg) supplies for the VA in support of the VA’s MSPV program to supply and distribute the specific identified product group.

MSPV is a mandatory national program obligatory under Veterans Health Administration (VHA) MSPV Mandatory Policy Memorandum (6/22/15), which provides a customized distribution system to meet facility requirements by providing an efficient, cost-effective, just-in-time distribution catalog ordering process. Participation is required for VA Medical Centers (VAMCs), facilities and VA personnel, The MSPV program is based on standard commercial practices and enables facilities to reduce inventory holding costs and streamline delivery and distribution tasks within the facility. The Prime Vendor (PV) model is required because VA lacks sufficient internal capability to warehouse, coordinate deliveries, and consolidate supply stores.

The current MSPV bridge contract terms only allow for the distribution services for medical and surgical supplies from Government sources as identified on the Government master list. As a result of the declared Novel Coronavirus (COVID-19) pandemic, the current demand on supply is exceeding the capacity of the Government supplier to meet the nationwide supply demands of the VA. The shortages have increased delivery times and the number of backorders on critical sterilization/sanitation items.

On March 13, 2020, the President declared the COVID-19 pandemic a national emergency. During this declared national emergency, it is critical that the VA make every effort to maintain availability of supply to achieve timely delivery in response to the heavy volume of orders in support of Veterans Health Administration’s (VHA) urgent operational medical/surgical supply needs.

Consideration was given to add additional Government sources to the master list;

however, this was not viewed as the best approach. The rationale for allowing the PV to source the identified items vice adding additional sources to the Government master list is that, it would allow for the greatest amount of agility, in responding to additional supply shortages should and/or when they occur at other sources. Additionally, any newly awarded PV, other than the incumbent, would require an initial implementation period, of up to four months, to install required information technology (IT)/software, establish necessary distribution agreements with suppliers, and begin identifying and stocking needed supplies for each facility. During this implementation period, there would be no supply deliveries, resulting in continued delays in patient care on a massive scale. Given current healthcare crises the nation is facing and could potentially face (i.e. longer wait times, other epidemics, pandemics, etc.), any additional delays to support and bolster the VA supply chain would be unacceptable and injurious. This justification and approval (J&A) will authorize and allow for the modification of the MSPV bridge contract for the duration of this national emergency and pandemic to meet the needs of the agency as well as the needs of its approximate nine million Veteran patients. The incumbent PV has demonstrated requisite expertise, knowledge of management, responsiveness, experienced personnel, without which the service of current delivery of medical and surgical equipment would be impossible. The VA’s need for supply and distribution services of the identified product group is of such an unusual and compelling urgency that the primary mission of the VA will be in jeopardy of failing, unless permitted to execute the modification, allowing for the limiting of the number of sources from which Government solicits bids or proposals. Use of the supply and distribution services of the current PV, solely for the identified product group, poses the least risk to the provision of medical care within VA’s facilities. These supply and distribution services would not to exceed the span of the 12-month period of performance (PoP) of the MSPV bridge contract.

On March 13, 2020, the VA executed a J&A bridge award to the MSPV-Next Generation (NG) contractor for the continuation of distribution services to bridge the gap between when the MSPV-NG contract concludes on March 31 to the time the competitive MSPV

2.0 acquisition is awarded. While changing the structure from distribution only to supply and distribution for the identified product group under this current non-competitive bridge contract action would appear to be a reverse of course (given that VA revised the structure of MSPV on March 13, 2020), the current circumstances justify this action for those sterilization/sanitation items currently in short supply. For the identified product group, the PV will function as supply and distribution solution to meet the needs to increase the number of healthcare supplies available to VHA facilities nationwide, to supplement the use of non-preferred sources and contracting methods (example:

Government Purchase Card (GPC), local/regional contracts, etc.), and to increase cost savings and avoid cost gouging while ensuring volumes to meet the needs of the Veterans.

The PoP for this contract modification will coincide with the April 1, 2020 to March 31, 2021 PoP of the MSPV bridge contract identified below or until the current pandemic is over and the state of emergency is lifted, whichever occurs first.

VA Contract Number Prime Vendor Contractor 36C10G20D0029 Medline Industries, Inc.

3. Description of Supplies or Services:

The solution offered by this contract modification will afford the VA the authority needed to allow the PV to immediately obtain supplies from the most readily available source(s), in the effort to meet the orders of the 1,255 VA healthcare facilities including, 170 medical centers, and 1,074 outpatient sites, within all 18 Veterans Integrated Services Networks (VISN) to avoid an interruption in the healthcare supply chain that would prove injurious to patient health and safety. Under the contract modification, the PV will be able to leverage their existing commercial network in order to propose sources and prices for items identified by the MSPV Program Office from the Government master listing. After an examination of the prices identified by the PV, the SAC’s contracting team will determine if the prices are fair and reasonable. As currently required, distribution services would continue for all other, medical, surgical, dental, cleaning, rescue and safety, laboratory, prosthetic supplies, other medical/surgical cleaning, rescue and safety supplies, and non-expendable equipment as used by the VA medical facilities. The estimated not to exceed maximum total value for the proposed PV contract modification for the identified product group is listed below.

Product Group Performance Period Maximum Value Wipe, Disinfectant NTE 12 Months

4. Statutory Authority:

The statutory authority permitting other than full and open competition is 41 U.S.C.3304(a)(3) as implemented by the Federal Acquisition Regulation (FAR) Subpart 6.302-3 entitled, “Industrial mobilization; engineering, developmental, or research capability; or expert services.”

5. Rationale Supporting Use of Authority Cited Above:

As a result of the COVID-19 pandemic and the declared national emergency, the supply chain has been overburdened to the point that there are now significant supply shortages and increasing supply allocations being implemented, greatly reducing the availability of item quantities from Government sources.

VA’s rationale is that under the current declared national emergency, precluding full and open competition for the execution of the modification will allow the VA to maintain producers, manufacturers, and suppliers available for furnishing vital supplies during this national emergency. Failure to execute this action could result in serious jeopardy to patient health and safety and mission loss for the MSPV program as well as other areas of the VA and other Government agency facilities.

The need to maintain producer, manufacturer, and suppliers available for furnishing supplies during this national emergency is further justified for the following reasons:

1. The work performed is essential to accomplishing the VA mission of delivering healthcare services and supplies to our nation’s, approximate, nine million Veterans currently receiving care through VA’s healthcare system. Worldwide supplies of the identified product group is so strained that additional, in some cases non-traditional, sources of supply are needed to meet demands. A prolonged disruption of VA’s healthcare supply chain, due to shortages and backorders, would immediately hinder the delivery of essential medical, surgical, dental, and laboratory supplies and other contracted healthcare such as cleaning, rescue and safety supplies and services used in the direct delivery of patient care. This impairment would cause unacceptable delays in fulfilling the VA’s requirements and would directly impact the health, safety, quality and timeliness of care delivered to Veterans.

2. Current PV is the only source that is immediately capable of meeting the contractual duties through use of supply and distribution methodologies and not require a 75 to 120-day implementation period. No other contractor currently has the required infrastructure, ordering capability, or Electronic Data Interchange (EDI) in place, for the facilities contemplated under this contract, to deliver the necessary medical supplies required to support patient care and safety without significant delay. Under the proposed modification , the PV is positioned and equipped to assume the sourcing and distribution of requirements to be added as a result of this J&A because they already have established commercial contracts with suppliers and have existing relationships with many of the suppliers where products need to be added. Under the proposed modification, VA’s healthcare facilities will be able to expeditiously procure their required supplies using the mandated MSPV channels, which account for FDA safety requirements.

3. VA personnel are not available or able to perform the tasks performed by the PVs. As current regional distributors for the MSPV program, the existing PV’s have the prevailing infrastructure, ordering capability, and required resident knowledge which make them uniquely qualified, and currently the only sources capable of providing enhanced supply and distribution of the required medical commodities, as identified by the PMO, throughout the entire VA healthcare network. For example, the VA would have to incur the extensive cost of hiring and training additional Government and/or contractor personnel and leasing and/or constructing central warehouses and distribution centers in the effort to fulfill med/surg shipments to VA Medical Centers.

4. Failure to either properly account for or make correct decisions with regard to supply and distribution of these necessary critical high demand supplies, while simultaneously monitoring the full supply chain spectrum for any critical issues (i.e. medical item recalls, filtering out non-FDA compliant or grey-market items or non-Buy American Act/non-Trade Agreements Act compliant items) would rapidly result in diminished levels of safety and efficiency to patient care.

5. The VA’s promise to Veterans, via the Maintaining Internal Systems and Strengthening Integrated Outside Networks Act (MISSION Act) of 2018, may be compromised as VA’s ability to continue to provide Veterans with an excellent healthcare experience and delivery of the right care, at the right time, at the right place may be impacted. Ensuring that covered veterans do not experience a lapse in care resulting from errors or delays by the Department or its contractors or an unusual or excessive burden in accessing hospital care, medical services, or extended care services is a priority

Therefore, award of the non-competitive contract to the current MSPV-NG PV, Medline Industries, Inc. is necessary in response to this national emergency to avoid grave physical and medical risk to Veteran patients as well as direct financial and operational injury to the Government.

6. Efforts to Obtain Competition:

Obtaining competition for this requirement could not be accomplished due to the time required to complete a competitive action. Previous and current ongoing efforts are being made to maximize and obtain competition for the required supplies under MSPV 2.0.

A notice will be publicized as required by FAR Subpart 5.2.

7. Contracting Officer determination that the anticipated cost to the Government will be Fair and Reasonable:

8. Description of Market Research Conducted:

In addition to the PMO market research ongoing with Amazon, the market research recently conducted for MSPV 2.0 is still germane for this J&A as it was recently amended February 10, 2020 and is the most up to date market survey available. In preparation for the continuation of the MSPV program, in 2018 SAC assumed responsibility of awarding the MSPV- 2.0 distribution contracts and VHA assumed responsibility of awarding the MSPV 2.0 supply contracts. Two RFIs and a Vendor Industry Engagement Day were conducted in support of MPSV 2.0 distribution market research. The RFls played an essential role in determining the market's ability to meet our basic requirements, while offering insight into vendor availability and capability.

Market research was conducted to determine the suitability of commercial items, the geographic regions to be competed, and the potential use of SDVOSB or other small business set-asides. This market research establishes that—

- The Government’s need may be met by a type of item or service customarily available in the commercial marketplace that would meet the definition of a commercial item(s) in accordance with FAR 10.002.

- Competition for geographic regions should be conducted at the VISN level, with the exception of Puerto Rico (PR), Guam, American Samoa, Virgin Islands, and the Philippines. It was contemplated that Oklahoma (OK) should be competed as a single region with VISN 17 Texas (TX), not as part of VISN 19, since the discontinuity between OK and the rest of the VISN. However, the Integrated Product Team (IPT) made the determination to leave OK within VISN 19 in an effort to maintain VISN continuity of management.

Given that the above market research conducted for MSPV 2.0, has shown that there is a limited number of capable vendors that could fulfill the MSPV 2.0 requirement for the VA, none would be able to do so without the sizeable startup period built into MSPV 2.0.

Considering this, none of the vendors, outside of incumbents that submitted proposals in response to the MSPV 2.0 RFP, would be able to immediately provide the required distribution services of MSPV.

9. Other Facts:

Currently, the MSPV PVs are the only sources serving in the critical role of comprehensive emergency supply response in support of local, regional, or national emergencies or disasters. Additionally, VA supports the Federal Emergency Management Agency (FEMA) and US Department of Health & Human Services with the delivery of medical supplies and coordination of support missions for response to and recovery from nationally declared emergencies and disasters. VA accomplishes this requirement through the current regional PVs, who are contractually required to perform a full range of support to healthcare facilities to ensure resiliency, continuity and rapid recovery of healthcare services during disasters and other potential disruptions to healthcare service delivery. Given that VA Medical Centers, and other select federal facilities, are designated FEMA facilities with significant contingency and emergency response roles, a supply chain interruption would not only negatively impact healthcare delivery to our nation’s Veterans and their dependents, but also potentially have a direct, negative impact on the greater public.

10. A listing of the sources, if any, that expressed an interest in the acquisition:

None

11. Statement of Actions the Agency may take to overcome barriers to competition in the future:

As this acquisition action was unforeseen and is in response to a declared national emergency, there are currently no actions being taken to overcome barriers to competition in the future. The next contract for MSPV support (MSPV 2.0) is a competitive acquisition and is scheduled for award by no later than 31 March 2021.

12. Procuring Contracting Officer Certification:

I certify that this justification is accurate and complete to the best of my knowledge and belief.

Name: Date: ______________________

Title: Signature:

13. Technical and Requirements Certification:

I certify that the supporting data under my cognizance, which form a basis for this justification, are accurate and complete to the best of my knowledge and belief.

Name: Date: ______________________

Title: Signature:

Approval

For acquisitions over $7,000,000 but not exceeding $13.5M

In my role as Competition Advocate for the procuring activity, based on the forgoing justification, I hereby approve the Medical Surgical Prime Vendor Distribution Bridge contract modification, on an other-than full and open competition basis pursuant to the statutory authority cited in paragraph 4 above, subject to availability of funds, and provided that the property and services herein described have otherwise been authorized for acquisition.

Date