JA Brand-Name FibroScan v4 REDACTED 9-8-2022 BJS.docx

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

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

2. Description of Action Being Approved: This proposed action is for the issuance of an Indefinite Delivery Requirements, Firm-Fixed-Price (FFP) contract on an application for Brand-Name description basis for FibroScan® equipment with Controlled Attenuation Parameter (CAP) software.

3. Description of Supplies/Services including Estimated Values: FibroScan® utilizes Vibration-Controlled Transient Elastography (VCTE) technology, a non-invasive approach to determine the degree of fibrosis or scarring as well as steatosis or fat in the liver. This has been validated in more than 1,200 publications evaluating the effectiveness, efficacy, and/or accuracy of VCTE to help aid physicians in their evaluation of liver diseases. This technology has been endorsed by various professional societies including the American Association for the Study of Liver Diseases (AASLD), the American Gastroenterological Association (AGA), and the European Association for the Study of the Liver (EASL). The specific components and quantities covered by this Brand-Name Justification are as follows:

FibroScan® 430 Mini – System Package with M Probe, XL Probe Cap Software, 1 Battery, 1AC Power Adapter, Initial Set Up, Training, and 1 Year Premium Warranty Plan – Includes Initial Training Session at the Time of Installation and One On-Site Follow Up Training

FibroScan® 630 Expert Package with M Probe, XL Probe, Cap Software, Installation, Training, and 1Year Premium Service Plan.

Includes Initial Training Session at Time of Installation and On-Site Follow up Training Sessions Over the Course of the Premium SE

Premium Extended Warranty 3-Year Package - Includes Probe Calibrations, Software Updates, and Training for up to 6-Certified VHA Operators Annually

Source Selection Information – See FAR 2.101 and 3.104

Calibrations, Software Updates, and Training for up to 6-Certified VHA Operators Annually

The ordering period will be for one (1) 12-month base period and four (4) option periods. The Government estimated cost for this requirement is detailed in the table below:

Base 1st Option

2nd Option

3rd Option

FibroScan® works by emitting a series of 50Hz mechanical pulses applied with controlled application pressure to induce a mechanical shear wave in the liver tissue. For each measurement, the shear wave propagation speed is detected by the FibroScan® VCTE technology and converted to its equivalent liver stiffness value in kilopascals. Providers are able to utilize these readings to determine the extent of liver fibrosis or scarring. In addition, FibroScan® with Controlled Attenuation Parameter (CAP) software provides an estimate of hepatic steatosis or fat in the liver.

The FibroScan® system with VCTE is proprietary and was approved by the Food and Drug Administration (FDA) for use in the United States in April 2013 and the CAP Software was FDA-approved in June 2015. FibroScan® is being utilized at more than 50 VA Medical Centers, all of which were procured independently either directly from the manufacturer or through their authorized distributor Fidelis Sustainability Distribution (Fidelis). Paris, France based EchosenTM is the Original Equipment Manufacturer (OEM) of FibroScan® and is the only manufacturer that can fulfill this requirement.

4. Statutory Authority Permitting Other Than Full and Open Competition: The statutory authority permitting other than full and open competition is 41 U.S.C.3304(a)

(1) as implemented by the Federal Acquisition Regulation (FAR) Subpart 6.302-1(c) entitled, "Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements: Application for Brand-Name Descriptions".

5. Rationale Supporting Use of Authority Cited Above: The FibroScan® VCTE technology allows for accurate and reproducible assessment of liver fibrosis and steatosis for all Veterans at VA Medical Centers nation-wide regardless of liver disease etiologies and is uniquely qualified to continue providing liver testing capabilities to Veterans at VA Medical Centers nation-wide. The Department of Veterans Affairs must support the more than 175 FibroScan® currently in use throughout the VA. The results of the market research revealed Echosens is the OEM of these FibroScan®. Echosens controls FibroScan® distribution, warranties, and FibroScan® support structure to meet the Government's requirement through the use of an Authorized SDVOSB Distributor, Fidelis.

Source Selection Information - See FAR 2.101 and 3.104

The details of which are in the market research section (Section 8) of this document. This effort did not yield any additional sources capable of supporting the VA with FibroScan® support in order to meet the Government’s requirements. A meeting was held with the VA working group consisting of VA Hepatologists who are elastography subject matter experts on 10 February 2022 to validate the capabilities of the FibroScan® and evaluate other available elastography options. Based on this meeting it was determined that FibroScan® is still required to support Veteran Patient Care Nation-wide.

The unique features of FibroScan® which specifically set this technology apart from all other devices and tests, supports its continued use and thus meets the Government’s need are as follows:

a. FibroScan® is a Point of Care (POC) tool that is performed in the outpatient clinic by non-radiologists and non-technologists, which is beneficial because a variety of trained health care team members can perform the exams at the bedside or in clinic without having to submit an order and be transported to Radiology for an exam. Moreover, if a GI clinician determines a patient needs an evaluation, they can conveniently bring in the portable machine on wheels and perform the exam. Ultrasound-based elastography requires an Ultrasound Technologist and is a tool that is deployed and controlled through the Radiology service. With MR Elastography or options in the elastography space market their tool is a software upgrade to existing radiology-based ultrasound equipment which is again controlled by Radiology and needs to be done by Radiology techs within their department. Additionally, FibroScan technology allows the option for providers to interpret study results immediately and provide recommendations without the need for Radiologist’s evaluation. This allows the VA to provide easily accessible and cost-effective care to Veterans at all VA clinics.

b. FibroScan® VCTE based elastography has extensive scientific validation cited as a first line test for fibrosis assessment in viral hepatitis, non-alcoholic fatty liver disease (NAFLD) and a number of additional etiologies that are supported by clinical practice guidelines which effectively supports their usefulness. In addition, FibroScan is utilized in the assessment of hepatic steatosis and evaluation for clinically significant portal hypertension. The American Association for the Study of Liver Diseases (AASLD) recommends VCTE testing such as with FibroScan® and the World Health Organization (WHO) has FibroScan® based VCTE listed in the clinical practice guidelines which supports FibroScan® as being the most prevalent, integrated and recommended VCTE technology available currently used for assessment, evaluation and diagnosis to provide high quality and cost-effective care within the field of Hepatology. Such technology will enable VA health care team early to detect this serious medical condition that may plague approximately 1.8 million of our Veterans. Early detection is vital to the appropriate treatment and care.

Source Selection Information – See FAR 2.101 and 3.104

c. Ease of Use - Use of FibroScan® does not require assistance of the ancillary radiology department and can be used by any trained clinical care provider at the bedside; no sonographer, technician, or radiologist is needed to perform the test or interpret results which will allow Veterans to receive their results faster. Clinics and inpatient services often do not have the staffing resources to have a radiologist or technician available. The picture generated on the screen of the FibroScan® is a quality assessment tool only (not a radiographic image) that shows measurements with quantitative and real time results for POC testing. The VA needs a currently available, easily accessible, easy to use and accurate tool for Liver Disease care and diagnosis. A large majority, if not all, of VA facilities have FibroScans currently and have staff that are trained to perform and interpret a FibroScan exam. Switching over to another system will need the investment of additional resources and time for training, procurement, re- evaluation of diagnosis standardization and metrics already established for FibroScans.

d. FibroScan VCTE is utilized over other methods to measure liver fibrosis and steatosis in the liver because other strategies, namely liver biopsy, and Magnetic Resonance (MR) elastography have additional challenges. Specifically, liver biopsy generally is not sought after by patients if other preliminary tests are available because it is invasive and carries more risks to the patient, is expensive, and isn’t available at all VA stations which necessitates patients needing to travel or be sent to the community or other VAs for care. MR elastography is also expensive and is only available at a relatively small number of VA stations, resulting in minimal availability across VHA which also requires the need for travel. VA is required to provide comprehensive, quality health care to Veterans in close proximity to a Veterans home, in order to do that the VA needs this technology to test Veterans without sending them miles away for a MR Elastography test that must be read by a specialized technician. Without the ongoing support from National Gastrointestinal and Hepatology Program (NGHP) of FibroScan® upgrades and warranties utilizing volume discounts, various stations nationwide will struggle individually with purchasing this proprietary technology than if supported with centralized coordination from the National Program Office.

6. Description of Efforts Made to Solicit Offers from as many potential sources as practical: The Government will continue to conduct market research to ascertain if there are changes in the marketplace that would enable future actions to be competed; however, all future requirements will be handled on a case-by-case basis to determine any future acquisition strategy.

There is limited competition anticipated for this acquisition, as there is Echosens the Original Equipment Manufacturer, and Fidelis the only known Authorized Distributor of FibroScan® systems. Additionally, the proposed action will be synopsized on the Federal Business Opportunities Page in accordance with FAR 5.201. Section 8 of this document addresses the market research to support efforts made to solicit from others.

7. Determination of Fair and Reasonable Cost: In accordance with FAR 15.305(a) (1), normally, competition establishes price reasonableness; however, since this is a Brand-Name acquisition, competition may be extremely limited to Echosens the OEM, and Fidelis as they are the only known authorized distributor of FibroScan® systems in the United States. Therefore, the prices quoted may be evaluated to determine whether they are fair and reasonable by any one or combination of the following:

a. VA will ask the vendor to provide their commercial catalog pricing, as offered to their most preferred customers. VA will also independently develop, separate from the IGCE, a target price based on the lowest price in the market and discounts for VA volume and other factors, i.e., the “Lowest Defensible Price.” The potential awardee will be required to justify increases over this price to satisfy Government determination that the offer price is “fair and reasonable.” The contracting officer will make a determination that the anticipated costs will be fair and reasonable as required by FAR 6.303-2(b)(7), prior to any contract award.

b. The VA is limiting competition by restricting the requirement to a Brand-Name FibroScan® System based on the more than 175 FibroScan systems currently in use throughout the VA. As a result of restricted competition, the VA expects that it could result in paying higher prices as there are no other competitors currently in the commercial marketplace or other vendors that can meet VA’s need. The VA is willing to trade the possibility of a higher priced for this Non- Invasive VCTE Equipment in order to ensure that clinical standards continue to be met, and the use of the current FibroScan systems are maintained. FibroScan is currently the only elastography device utilized by the VA supported by extensive use and scientific validation which reduces clinical variability and costs related to the need for additional training on new devices at sites that already have FibroScan. The SAC Contracting Team currently has the historical pricing of the FibroScan Family of products over the past 5-years as a strong baseline for any future pricing.

8. Description of the Market Research conducted and results: Market research established 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 IAW FAR 10.002. An Intent to Sole Source to Fidelis was issued on April 26, 2022, for this follow-on FibroScan System Contract in support of the Department of Veterans Affairs by the SAC and National GI and Hepatology Program (NGHP) within the Office of Specialty Care Services in the Office of the Deputy Under Secretary for Health for Policy and Services. The Government conducted market research using the following methods:

a. Inventories of the Requiring Agency: Not applicable. The program office indicated the need could not be met with neither Supply Fund Stock nor VA Excess stock.

b. Excess from other agencies (see Subpart 8.1): Not applicable. The program office indicated the need could not be met with other Government Agencies Excess stock.

c. Federal Prison Industries, Inc.: (see Subpart 8.6): Search of UNICOR’s website http://www.unicor.gov using the Search using the term “Non-Invasive VCTE Equipment” resulted in zero results.

d. Supplies which are on the Procurement List maintained by the Committee for Purchase from People Who Are Blind or Severely Disabled (see Subpart 8.7): Search of Ability One website: http://abilityone.gov through their product category for medical and dental supplies using the term “Non-Invasive VCTE Equipment” provided zero results.

e. Wholesale supply sources: such as stock programs of the General Services Administration (GSA) (see 41 CFR 101-26.3), the Defense Logistics Agency (see 41 CFR101-26.6), the Department of Veterans Affairs (see 41 CFR 101-26.704), and military inventory control points: Not applicable.

f. A review of GSA Advantage, or Federal Supply Schedule (FSS), Schedule 65 IIA Medical Equipment and Supplies yielded no FSS holders capable of supplying Non-Invasive VCTE Equipment.

g. IAW with VAAR 810.001 and 810.002, a query of the Veterans Information Pages (VIP) database (VetBiz) was conducted to identify potential Veteran Owned (VOSB) and Service Disabled Veteran Owned Small Businesses (SDVOSB) that were capable of providing Non-Invasive VCTE Equipment.

NAICS 334510, PSC 6525; ELECTROMEDICAL AND ELECTROTHERAPEUTIC

APPARATUS MANUFACTURING yielded 125 potential VIP certified SDVOSB/VOSB’s. The SAC Contracting Team determined through the market research below that none of the 125 potential VIP certified SDVOSB/VOSB’s could meet the Government’s requirements for the FibroScan systems.

A Sources Sought (3610G22R0008) was also published on 4 January 2022, in Contract Opportunities for 30 days. On January 14, 2022, one company submitted information by the closing date and time that is capable of meeting the requirement: Fidelis Sustainability Distribution LLC. (Fidelis).

Fidelis Sustainability Distributionc, LLC SAM UEI: JSRRJ6NZFJD8 Business Information Email: dustin.lee@FIDELISSD.COM (mailto:dustin.lee@FIDELISSD.COM) WWW.FIDELISSD.COM (WWW.FIDELISSD.COM) Phone: (541) 941-9800 - Last Verifi ed: 5/18/2021

Fidelis’s approach to meet the requirement included Non-Invasive VCTE Equipment FibroScan® manufactured by Echosens™. The manufacturer is a French high- technology company specializing in non-invasive diagnostic products and services for hepatology. FibroScan® has been validated in over 1,200 publications on the various aspects of effectiveness, efficacy and accuracy to help aid Physicians in their treatment of Liver Disease. The RFI and Market Research reinforces Fidelis’s claims of being the sole authorized distributor of FibroScan® products in the United States. This was also verified through Echosens™ North America office located in Waltham, Massachusetts.

On 2 February 2022, a second vendor submitted information in response to the RFI after the RFI Closing. Franklin Young International, which is also a SDVOSB, is an authorized distributor of Velacur™ manufactured by Sonic Incytes.

Franklin Young International, Incorporated Location: Upland, California Phone: (909) 931-5012 Email: Ron@franklinyoung.com Web: www.franklinyoung.com (mailto:Ron@franklinyoung.com) SAM UEI: EDQMKDZR8L13 - DUNS: 113785385 Last Verified:

4/15/2022(www.franklinyoung.com)

Sonic Incytes is a health technology company headquartered in Vancouver, British Columbia, Canada. Cleared by the FDA, Velacur™ is a handheld, point of care ultrasound solution that quantifies liver disease using technology similar to MRI elastography combined with 3D tissue sampling. It provides a picture of liver health in real time, so physicians can be confident in the diagnosis, treatment, and care of their patients with chronic liver disease. Unlike biopsy and MRI, the procedure is non- invasive, comfortable, and convenient. Unfortunately, since this product has not been sold widely within the United States or within the VA there is not sufficient published articles or evidence that it provides consistently accurate results, thus does not meet the Government’s Requirements for supporting the Department of Veterans Affairs needs to have devices well studied and supported as proven to be effective and accurate by scientific evidence.

9. Any other facts supporting the use of other than full and open competition: Current research has found that the only other technology to come forward as a potential competitor is the Velacur™. The National Gastrointestinal and Hepatology Program (NGHP) Elastography Working Group, consisting of multiple hepatologists, confirmed that Velacur is a very new technology, and it is unknown how accurate or consistent it is with assisting in diagnosis, treatment, and care for patients with chronic liver disease. Currently there are more than 175 FibroScan systems in use throughout the VA that must be maintained with software upgrades and warranty support: not supporting FibroScan’s operations will increase costs and variability if additional equipment and training will need to be purchased and trained on. Additionally, there is insufficient validated studies of Velacur’s effectiveness and accuracy. This does not align with VA’s goal to ensure consistent and high-quality care.

10. Interested Sources: No other sources expressed an interest in the acquisition other than Fidelis and Franklin Young International.

Interested Vendors List

11. Actions to Remove Barriers to Future Competition: The Government will continue to conduct market research to ascertain if there are changes in the marketplace that would enable future actions to be competed. All future requirements will be handled on a case-by-case basis to determine any future acquisition strategy.

12. Certifications:

a. TECHNICAUREQUIREMENTS PERSONNEL:

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

b. CONTRACTING OFFICER:

I certify that this justification is accurate and complete to the best of my knowledge and belief. Furthermore, I determine that the anticipated price to the Government for this action will result in fair and reasonable prices paid based on the rationale outlined in Section 7 of this justification.

13. Approval: In my role as the Competition Advocate of the procuring activity described in Section 1 of this document, and based on the foregoing justification, I hereby approve the Sole Source Brand-Name acquisition of FibroScan® on an other than full and open competition basis pursuant to the statutory authority cited in Section 4 above. My approval is subject to availability of funds, and provided that the property and services herein described have otherwise been authorized for acquisition. As this action does not exceed $XXX -the certification below required by FAR 6.304 serves as approval.

Source Selection Information - See FAR 2.101 and 3.104 image3.jpeg image4.jpeg image5.jpeg image6.jpeg image7.png image8.png image9.png image1.jpeg image2.jpeg