Final Class JA Surgical Implants Redacted.pdf

U.S. DEPARTMENT OF VETERANS AFFAIRS

Office of Procurement, Acquisition and Logistics (OPAL)

Strategic Acquisition Center (SAC) 10300 Spotsylvania Avenue, Suite 400

Fredericksburg, Virginia 22408

CLASS JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

Title 41 United States Code (U.S.C.) § 3304(a)(5) and 38 U.S.C. § 8123

(1) Identification of the agency and the contracting activity, and specific identification of the document as a "Justification for Other Than Full and Open Competition."

This Class Justification and Approval (J&A) for Other Than Full and Open Competition is executed by the Strategic Acquisition Center (SAC), Acquisition Service 4 on behalf of the U.S. Department of Veterans Affairs (VA), Veterans Health Administration (VHA), Prosthetic & Sensory Aids Service (PSAS).

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

The purpose of this Class Justification and Approval (J&A) action is to permit the noncompetitive establishment of national contract vehicles with as many as 50+ different manufacturers, distributors, and other organizations for the purpose of ordering surgical implants under the 38 U.S.C. § 8123 statutory authority. The use of 38 U.S. Code § 8123 will promote the following:

a) Standardization of pricing for surgical implants across the VA Enterprise

b) Provide adequate national clinical availability of surgical implant items for compliant ordering

c) Safeguard patients by ensuring all items are authorized under 38 U.S. Code § 8123 by a VHA Clinical Evaluation Team review

d) Ensure Food and Drug Administration (FDA) approval/clearance when required.

e) Ensure all items comply with United States Trade Agreements Act (TAA) or the Buy American Act (BAA).

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

The Department of Veterans Affairs (VA) Veterans Health Administration (VHA) Prosthetics Sensory Aid Service (PSAS) in conjunction with the Strategic Acquisition Center (SAC) has a requirement for the establishment of the Next Generation of National Contracts for Prosthetics Surgical Implants inclusive of both biologic (BI) and non-biologic (NBI) prosthetics surgical implants. The Class J&A action is necessary to establish a robust supply chain for ordering and delivery of prosthetics surgical implants, Strategic Acquisition Center (SAC) ensuring availability and consistency of products for nationwide usage, and to obtain volume-based standardized pricing by establishing enterprise-wide indefinite delivery/indefinite quantity (IDIQ) National Contract ordering vehicles. It is the VA’s objective to establish multiple single award IDIQ National Contracts that will standardize national pricing for the contractors that provide at least 80% of the VA’s annual spend for prosthetic implant devices. Each of the resulting national contract vehicles, issued under the basis of this Class J&A, will have a base ordering period of one (1) year and four (4) one (1) year option ordering periods.

The supplies to be acquired consist of various types of prosthetics surgical implants needed for a variety of prosthetic related surgeries and patient treatment and include only items from the surgical implants in support of prosthetics product lines.

The product line encompasses a variety of different items considered prosthetics surgical implants, to include auxiliary products (screws, anchors, plates, etc.) and instrumentation sets required for use by clinicians performing implant surgery, which may be required by a VA clinician for a Veteran patient’s treatment. The exact number and exact type of prosthetics surgical implants that are on the national contract vehicle are constantly changing based on clinicians’ requirements for Veteran patient treatments and advances in technology; currently throughout the entirety of the prosthetics national contract vehicle portfolio there are over 200,000+ individual prosthetics surgical implant line items.

The estimated dollar value of this class J&A action, and the resulting national contract vehicles in support of the prosthetics surgical implant supply chain portfolio, is based on 80% of the prosthetics surgical implants spend as detailed on the fiscal year 2021 annual sales report for the prosthetics surgical implant contractors and is not to exceed $3,404,871,393.29 for all national contract vehicles established over the five-year life (FY23-FY28) of this J&A. The estimated dollar value consists of 80% of sales to the VA from various surgical implant contractors during FY21. The listed contractors in Attachment 1 – Potential Surgical Implant Contractors, represent the potential surgical implant contracts in which the VA plans to enter into non-competitive contracts.

All prosthetics surgical implants are to be made available under the execution of a national contract vehicle and will be technically reviewed in a collaborative effort by the VHA PSAS, and the SAC based on product usage, product form/function, and product pricing.

The resulting non-competitive contracts will be executed for a base ordering period of one (1) year and four (4) one (1) year option ordering periods; this equates to a total maximum allowable 60-month contract ordering period.

Strategic Acquisition Center (SAC)

The purpose of the Class J&A is for approval to execute national contract vehicles, via other than full and open competition. The execution of these national contract vehicles will ensure VA is able to maintain a successful and robust prosthetics surgical implant supply chain of products that could be called upon for use in patient care as determined by a clinician on an individual patient treatment basis.

The need for non-competitive national contract vehicles for prosthetics surgical implants are as follows; the use of specific surgical implants is based solely upon a patient’s need and the physician's determination of medical necessity during a medical or surgical service(s) and/or procedure(s) at any of the Veterans Affairs Medical Centers (VAMC). A physician's decision to use a particular manufacturer's surgical implant is based on the technical characteristics of the implant and its expectation to produce a higher quality of life for the patient or achieve certain therapeutic results.

(4) An identification of the statutory authority permitting other than full and open competition.

The statutory authority permitting other than full and open competition is Title 41 United States Code (U.S.C.) § 3304(a)(5) and 38 U.S.C. § 8123 implemented by the Federal Acquisition Regulation (FAR) subpart 6.302-5 entitled, “Authorized or required by statute” and VA Acquisition Regulation (VAAR) 806.302-571 entitled “Authorized or Required by Statute”-VA unique authorities”.

(5) A demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited.

Most surgical implant products are unique and proprietary to each individual manufacturer. The use of a particular manufacturer's prosthetics surgical implant requires highly specialized training on the part of the physician. Once trained and comfortable with a manufacturer’s surgical implant, the physician will likely use that manufacturer's products for the duration of his or her career. Prosthetics surgical implants are products that are unique to each company and typically proprietary in nature. Although, there are similarities amongst products, specific surgical implant(s) form and function are mostly unique to individual manufacturers. Therefore, the general nature and current market conditions for prosthetics surgical implants themselves, are a barrier to competition.

The significance of these national contract vehicle is to directly support Veteran patient care, relating to and through, the ordering of prosthetics surgical implants. These national contract vehicles facilitate the prescribing clinician’s ability to provide the most optimal care by having access to an ordering vehicle for manufacturer specific prosthetics surgical implant items that have been technically reviewed to ensure

Strategic Acquisition Center (SAC) compliance with laws and regulations and are available for ordering at pre-determined fair and reasonable pricing. The national contract vehicle directly contributes to clinician efficiency in the Veteran patient care process by saving time, money and reinforcing adequate technical safeguards.

VHA Directive 1081.01(1) dated October 29, 2018, establishes policy, procedures, and responsibilities for the use of Title 38 United States Code (U.S.C.) § 8123 authority for the procurement of prosthetics surgical implants, without regard to any other provision of law. In accordance with 38 U.S.C. § 8123, "the Secretary may procure prosthetics appliances and necessary services required in the fitting, supplying, and training and use of prosthetics appliances by purchase, manufacture, contract, or in such other manner as the Secretary may determine to be proper, without regard to any other provision of law."

Additionally, 48 CFR § 806.302-571 states that full and open competition need not be provided when authorized by a statute, and § 806.302-571(b)(1) outlines the specific products covering prosthetic appliances and necessary services required in fitting, supplying, training and use of prosthetic appliances by purchase. The prescribing clinician will provide the necessary clinical evidence to support medical need for specialized prosthetics surgical implants and supporting equipment for the Veteran who is eligible, referred, and approved for care.

(6) A description of efforts made to ensure that offers are solicited from as many potential sources as is practicable, including whether a notice was or will be publicized as required by subpart 5.2 and, if not, which exception under 5.202 applies.

In accordance with VAAR 806.302-571, contracting activities may procure prosthetic appliances and necessary services required in the fitting, supplying, training and use of prosthetic appliances by purchase, manufacture, contract, or in such other manner as determined to be proper, without regard to any other provision of law once it is determined that § 8123 is applicable. The Under Secretary has exercised this authority in this class of products due to the critical nature of these items. The determination to procure prosthetics surgical implants through the execution of contract via other than full and open competition is wholly with the discretion of the Contracting Officer. A notice of the proposed action will be synopsized via the Government Point of Entry (GPE) in accordance with FAR Section 5.201, and the agency will make publicly available the justification required by 6.305(a) within 14 days after contract award.

(7) A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable.

Strategic Acquisition Center (SAC)

The execution of national contract vehicles will utilize the products that are deemed technically acceptable and pricing that is determined fair and reasonable. No products will be added until the contracting officer determines the cost to the Government to be fair and reasonable. This determination will be based on a comparison of current contract pricing, an Independent Government Cost Estimate, past proposal submissions, and other information as made available.

(8) A description of the market research conducted (see part 10) and the results or a statement of the reason market research was not conducted.

In accordance with FAR Part 10 and VA Acquisition Regulation (VAAR) Part 810, the VA has conducted market research to arrive at the most suitable approach to acquiring Prosthetics Surgical Implants and maintaining the necessary supply chain. This market research is conducted in a collaborative effort by PSAS and SAC contracting personnel by, but not limited to, providing results from industry through requests for information (RFI), Industry Days, reviewing the results of recent market research undertaken to meet similar or identical requirements, reviewing catalogs and other generally available product literature published by manufacturers, distributors, and dealers or available online, and reviewing systems such as the System for Award Management (SAM), the Federal Procurement Data System-Next Generation (FPDS-NG), and the Small Business Administration's Dynamic Small Business Search. As part of the market research and IAW FAR 52.225-1 Buy American Act and FAR 52.225-5 Trade American Act, the need for products to be TAA/BAA compliant was a running theme within all the market research tools and the need for all vendors to comply with TAA/BAA requirement was clearly discussed in the August 2022 Industry Day. All participating vendors were clearly aware of VA’s preference to procure TAA and BAA compliant products and all items found to be noncompliant with TAA/BAA would be removed immediately from the vendor’s contract(s). As a result of the market research, the Contracting Officer will included FAR Clauses 52.225-1 Buy American Act and FAR 52.225-5 Trade American Act to the solicitations and will be included in the resulting contracts.

Based on the information obtained from the market research, the Government has identified the existing vendors for the non-biological/biological requirement to be Large Business (LB), Small Business (SB), Veteran-Owned Small Business (VOSB), and Service-Disabled Veteran-Owned Small Business (SDVOSB). Supplies are not readily available on an existing purchasing vehicle such as GWAC, or GSA FSS. Based on the differing requirements of the biologic and non-biologic prosthetics surgical implants, not one vendor can supply all surgical devices. As a result of the market research, the Contracting Officer has determined that as many as 50 sole source IDIQ contracts may be awarded in accordance with 38 U.S. C § 8123 Procurement of prosthetic appliance.

Strategic Acquisition Center (SAC)

38 U.S.C. § 8123 authorizes an acquisition approach without regard to any other provision of law.

(9) Any other facts supporting the use of other than full and open competition.

No additional facts.

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

No additional action or data required.

(11) A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required.

All future requirements will be handled on a case-by-case basis. Towards the expiration of these contracts, consideration will be given as to whether the future acquisition should be competitive. The current national contract vehicles are a compelling part of the VA prosthetics surgical implant supply chain contributing directly to patient care. In this role, the national contract vehicles are vital to ensuring access to the most current products available in the marketplace at the best available pricing. As part of executing the new national contracts, it is required that an IPT, comprised of clinicians and other subject matter experts from various roles across the agency, must be established and work together to define the requirements to present to industry. The clinicians support the IPT by helping define the various categories of items that consist of prosthetics surgical implants and their expertise on identifying all requirements on those items that shall make up the national contract vehicle; their role on the IPT is in addition to their roles providing direct Veteran patient care.

Strategic Acquisition Center (SAC)

(12) Technical and Requirements Certification:

I certify that the supporting data under my cognizance, which are included in this J&A, are accurate and complete to the best of my knowledge and belief.

Contracting Officer Certification:

Pursuant to FAR Part 6.303-2(b)(12). I certify that this justification is accurate and complete to the best of my knowledge and belief.

Concurrence

In my role as the Head of the Contracting Activity, based on the foregoing justification, I hereby concur with these acquisitions on an “other than full and open competition” basis pursuant to the statutory authority cited in paragraph four above, subject to availability of funds, and provided that the property and services herein described have otherwise been authorized for acquisition

Strategic Acquisition Center (SAC)

Approval

In my role as Senior Procurement Executive, based on the foregoing justification, I hereby approve these acquisitions on an “other than full and open competition” basis pursuant to the statutory authority cited in paragraph four above, subject to availability of funds, and provided that the property and services herein described have otherwise been authorized for acquisition. As this action does exceed $75M, the certification below required by FAR 6.304 serves as approval.