36C24219D0098 APPROVED JA for OFOC AND ADDITION OF OPTION 2 - VISN 2 UPSTATE PRESCRIPTION EYEGLASSES.pdf

Request for SDVOSB/VOSB Sole Source Justification Format >SAT – Approval for Additional Period of Performance – Contract 36C24219D0098, VISN 2 Upstate Prescription Eyeglasses

VHAPM Part 819.7007/7008 Page 1 of 6 Original Date: 08/30/2017 Revision 03 Eff Date: 04/03/2020

DEPARTMENT OF VETERANS AFFAIRS

Justification and Approval (J&A) For

Other Than Full and Open Competition (>SAT)

Acquisition Plan Action ID: 36C242-19-AP-0565 Contract Action ID: 36C24219D0098

1. Contracting Activity:

Department of Veterans Affairs, New York/New Jersey Health Care Network Veterans Integrated Services Network (VISN) 2 Upstate Canandaigua VA Medical Center 400 Fort Hill Avenue, Canandaigua, NY 14424

2. Nature and/or Description of the Action Being Approved:

Network Contracting Office (NCO) 2 Upstate seeks approval to add a two (2)-month option period to Contract 36C24219D0098, which was a sole source Firm Fixed Price (FFP) Indefinite Delivery/Indefinite Quantity (IDIQ) contract awarded on August 9, 2019 in accordance with 38 USC § 8127(c) to Superior Optical Labs, Inc. (Superior), a Service Disabled Veteran Owned Small Business (SDVOSB), registered in the Vendor Information Pages (VIP) for Prescription Eyeglasses and Optician Services. The original requirement was for the manufacturing and delivery of both dress and safety prescription eyeglasses to include fitting services provided by a licensed optician, however, the optician services component will not be sought for this two (2)-month option period. The Contractor shall offer both dress and safety frames, as well as single vision, bifocal, trifocal, and progressive lenses. The period of performance for the two-month option period is October 1, 2021 through November 30, 2021 and will be accomplished via bilateral modification following the submittal of a price quotation by Superior removing the optician services component and negotiations with Superior, if necessary.

3. Description of Supplies/Services Required to Meet the Agency’s Needs:

The Department of Veterans Affairs (VA) has an ongoing program to provide prescription eyeglasses (both dress and safety) to eligible veterans. The provision of corrective eyeglasses is required for eligible veterans to meet their optic and low vision medical needs. The VA eye clinic prescribes corrective lenses based upon a medical exam. The clinical judgement and assessment are used to determine medical necessity in conjunction with VHA Directive 2008-070 (Prescribing Hearing Aids and Eyeglasses) and 39 CFR 17.149 (Sensory-Neural Aids). Eyeglasses are not an emergent service and follow the administrative standard for assessment and procurement practices. The Contractor shall provide all labor and materials necessary to provide prescription eyeglasses.

At this time, all ordering is done by the Prosthetic and Sensory Aids Service (PSAS) Central Processing Section. However, each VISN 2 Upstate site reserves the authority to develop individual ordering and payment processes during the contract term.

The Contractor is to provide prescription eyeglasses according to contract specification for beneficiaries of the following sites of care and their entire catchment areas, including their respective Community

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Based Outpatient Clinics (CBOCs), within the Veterans Integrated Service Network (VISN) 2 Upstate New York/New Jersey VA Health Care Network:

Albany Stratton VA Medical Center Department of Veterans Affairs 113 Holland Ave.

Albany, NY 12208

Canandaigua VA Medical Center Department of Veterans Affairs 400 Fort Hill Ave.

Canandaigua, NY 14424

Bath VA Medical Center

76 Veterans Ave.

Bath, NY 14810

Rochester Outpatient Clinic (ROPC)

465 Westfall Rd.

Rochester, NY 14620

VA Western NY Healthcare System

3495 Bailey Ave.

Buffalo, NY 14215

Syracuse VA Medical Center

800 Irving Ave.

Syracuse, NY 13210

The number of patients covered by this contract is expected to increase/decrease among VISN 2 Upstate patients and is dependent upon beneficiaries added or removed throughout the contract term. The volumes or amounts of prescription eyeglass orders shown below are estimates only. These estimates are based on historical data (quantities of eyeglasses ordered for Veteran patients in the VISN 2 Upstate Medical Center Optical Clinics during the last five fiscal years) and do not include optician services.

VISN 2 Upstate Medical Center FY 15 FY 16 FY 17 FY 18 FY 19

(528A8) Albany 5,989 6,162 5,956 5,536 5,747

(528A6) Bath 3,794 3,858 4,188 3,822 4,157

(528A5) Canandaigua 3,188 3,964 4,051 2,725 1,505

(528GE) ROPC 972 385 284 1,371 2,730

(528A7) Syracuse 11,290 12,659 11,256 11,921 11,951

(528) Buffalo 7,654 8,364 8,063 7,567 8,117

Upstate Order Total 32,887 35,392 33,798 32,942 34,207

Upstate Obligations Total $ 2,705,463.62 $ 2,273,569.83 $ 2,009,598.39 $ 1,939,440.59 $ 2,013,081.08

The base year of performance under the subject contract was effective October 1, 2019 through September 30, 2020 (FY 20) and there were 22,594 orders placed with a total expenditure of $1,701,303.97. These figures were lower than the quantities anticipated at the time of award due to the Coronavirus 2019 (COVID-19) pandemic operational changes where VISN 2 Upstate’s VA eye clinics were closed except for emergency care. There was one (1) six-month option period (covering October 1, 2020 – March 31, 2021) included in the contract which was exercised under FAR 52.217-9 via Modifications P00002 & P00003. Modification P00002 covered the period of October 1, 2020 through October 31, 2020 and Modification P00003 covered the period November 1, 2020 through March 31, 2021. The contract is currently in the six-month extension period under FAR 52.217-8, effective April 1, 2021 through September 30, 2021, which was exercised via Modification P00004.

From October 1, 2020 through June 30, 2021 there have been 26,558 orders placed with a total expenditure of $1,955,025.79. The workload and expenditure information for April 1, 2021 – June 30, 2021 was reviewed, and using that information, it is estimated that this two-month option period will have a maximum value of approximately $427,098.67. While a more precise estimated value will not be known until the pricing is negotiated to remove the optician services component, adding the two-

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Revision 03 Eff Date: 04/03/2020 month option period will not cause VISN 2 Upstate to exceed the $5 million limit on sole source contract awards under VAAR 819.7007 and 38 USC § 8127(c).

4. Statutory Authority Permitting Other than Full and Open Competition: 41 USC §3304(a)(5), 38 U.S. Code § 8127(c), as implemented by VAAR 819.7007 and FAR 6.302-5 (Authorized or Required by Statute). COs may use the non-competitive (sole source) procedures authorized in VAAR 819.7007 or 819.7008 up to $5,000,000. Check the specific VAAR clause used below:

(x) 819.7007 Sole source awards to a verified service-disabled veteran-owned small business; or ( ) 819.7008 Sole source awards to a verified veteran-owned small business

5. Demonstration that the Contractor’s Unique Qualifications and/or Nature of the Acquisition

Requires the Use of the Authority Cited Above (applicability of authority):

VAAR 819.7007 permits sole source awards to SDVOSB entities based on 38 USC 8127(c) and Superior has been determined to be a responsible source with respect to performance under the base year of Contract 36C24219D0098, as well as during Option 1 and current performance under FAR 52.217-8. Additionally, in accordance with VAAR 819.7003(b)(1)-(3), Superior is an eligible SDVOSB, has certified they are small under NAICS code 339115, and they are a verified SDVOSB within the VIP database, as confirmed by the Contracting Officer on August 4, 2021. Superior made assurances in December 2018 in writing that they were in compliance with the requirements of the Buy American Statute and Limitations on Subcontracting. Superior explained they manufacture all of their eyeglasses and will always do at least 51% of the work, therefore, they can comply with the Limitations on Subcontracting. Superior again made assurances in writing on August 12, 2021 that they are in compliance with the requirements of Limitations on Subcontracting.

Pursuant to VAAR 819.7007 and 38 U.S.C. § 8127(c) a sole source award to a SDVOSB concern is authorized where the SDVOSB concern is determined to be a responsible source with respect to performance of the contract; the anticipated award will exceed the simplified acquisition threshold but will not exceed $5,000,000; and the contract award can be made at a fair and reasonable price that offers best value to the United States. Superior Optical Labs, Inc. is a verified SDVOSB by the Center for Veteran Enterprise (CVE) on the Vendor Information Pages (VIP), as confirmed by the Contracting Officer on August 4, 2021. Superior Optical Labs, Inc. (DUNS No. 788332286) has performed satisfactorily on Contract 36C24219D0098, as well as on contracts for similar supplies and services to other Veteran Integrated Service Networks.

VISN 2 Upstate had historically received prescription eyeglasses through AbilityOne/Winston Salem Industries for the Blind, Inc. (WSIFB) from the time they were added to the Procurement List (January 8, 2006) through September 30, 2019, through a variety of sole source contracts. On October 17, 2018 the United States Court of Appeals for the Federal Circuit (CAFC) issued a ruling in PDS Consultants v. U.S., Winston-Salem Industries for the Blind that states “Where a product or service is on the [AbilityOne Procurement] List and ordinarily would result in the contract being awarded to a nonprofit qualified under the JWOD, the [Veterans Benefits Act of 2006] unambiguously demands that priority be given to veteran-owned small businesses,” which directly impacted VISN 2 Upstate’s contract with WSIFB. As a result of the ruling, VISN 2 Upstate conducted market research and identified SDVOSB interest and capability to provide prescription eyeglasses and optician services and determined that the VA Rule of Two could be met. As VISN 2 Upstate was no longer able to continue the contract with WSIFB beyond the end of the option period that was in place due to the Court’s ruling, a sole source short term contract was awarded under 38 U.S.C. § 8127(c) to a VIP-verified SDVOSB to provide continuity of services to Veteran beneficiaries while a VISN-wide long term contract, which was planned to be awarded competitively, was sought. Contract

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36C24219D0098 was awarded to Superior on August 9, 2019 with an anticipated performance period of October 1, 2019 – March 31, 2021, if the included six-month option period was exercised.

NCO 2 and VISN 2 were working on the VISN-wide long-term procurement when the President signed HR 4920 on August 8, 2020 (PL 116-155) which revised 38 USC § 8127. The revised statute stated that AbilityOne vendors maintain their mandatory status for covered products. The VISN 2 Upstate eyeglass requirement was added to the AbilityOne Procurement List on January 8, 2006 and was therefore considered a covered product in accordance with 38 USC § 8127(d)(2)(C)(i)(I) and (II).

Although the statute provided for an exception, VA determined that the exception did not apply here because the current contract for this requirement was awarded on a sole source basis to Superior Optical Labs, Inc. under 38 USC § 8127(c) rather than competitively awarded under 38 USC 8127(d)(1) as required by the statute. As such, and in accordance with the statute, it was determined that the Upstate requirement must be returned to WSIFB, the AbilityOne vendor, and the solicitation was issued to WSIFB on September 14, 2020.

VA’s determination to transition the VISN 2 Upstate requirement back to WSIFB was challenged before the U.S. Court of Federal Claims who disagreed with the agency’s interpretation of its statute.

In order to ensure continued availability of eyeglasses and optician services while waiting for an opinion, VA exercised one-month of Option 1 (which was included in the contract as a six-month option period) via Modification P00002, which was signed bilaterally by both VA and Superior on September 21, 2020, for the period October 1, 2020 through October 31, 2020. In accordance with the opinion and order issued by the U.S. Court of Federal Claims on October 21, 2020 in Superior Optical Labs, Inc. v. U.S. and Winston-Salem Industries for the Blind, No. 20-1211C, the VA is permanently enjoined from transitioning the VISN 2 Upstate eyeglass requirement to the AbilityOne program. Accordingly, the VA issued Amendment No. 0002 on October 26, 2020 cancelling Solicitation No. 36C24220R0137. In order to continue receiving eyeglasses and optician services from Superior, VA issued Modification P00003 under Contract 36C24219D0098 which was bilaterally signed by both VA and Superior on October 29, 2020. This modification amended the period of performance of Option 1 of the contract back to October 1, 2020 through March 31, 2021.

VA unilaterally issued Modification P00004 on February 24, 2021 to extend services under the contract for six-months via FAR 52.217-8, effective April 1, 2021 through September 30, 2021, in order to allow for continued service during the competitive long-term contract procurement process.

VISN 2 Upstate issued Request for Proposals (RFP) 36C24221R0056 on April 29, 2021 and the response period closed on June 14, 2021.

The addition of a two-month option period will allow for continued services during the remainder of the long-term contract procurement process, as delays during the solicitation and evaluation period have been encountered. Without this additional option period, Veteran beneficiaries of VISN 2 Upstate would not have access to prescription eyeglasses. Moreover, due to the complexities involved in a transition to another contractor who could provide the same or similar services, care would undoubtedly be disrupted. Any gap in the continuity of services would have a detrimental impact on the Veterans. It is therefore necessary to receive continuous services from the incumbent contractor until a long-term contract can be competitively awarded. A separate sole source short term procurement with Superior was contemplated, however, after analysis of the current expenditures under Contract 36C24219D098 was completed and a determination was made that the $5 million limit on sole source contract awards under VAAR 819.7007 and 38 USC § 8127(c) would not be exceeded with the anticipated need for two (2) months of continued performance, a determination was made that adding the two-month option period to the existing contract vehicle was the most prudent choice.

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6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed 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:

Prior to award of Contract 36C24219D0098 a Sources Sought Notice was sent directly to four (4) known SDVOSB entities with current VA contracts for prescription eyeglasses on December 4, 2018, which provided an opportunity for the identified companies to respond with their interest and capability to provide the described requirement. Two (2) responses to the Sources Sought Notice were received, including the response from Superior.

7. Determination by the CO that the Anticipated Cost to the Government will be Fair and Reasonable:

Prior to award of Contract 36C24219D0098 the Contracting Officer determined that the prices proposed by Superior were fair and reasonable through a comparison of those prices to the Independent Government Estimate (IGE), market research, and other available price analysis techniques in accordance with FAR 13.106-3(a)(2). While the prices under the additional performance period would differ than those previously negotiated due to the removal of the optician services component, the Contracting Officer expects that Superior’s revised pricing will be determined fair and reasonable and will not award the modification without a determination of fair and reasonable pricing.

8. Description of the Market Research Conducted and the Results, or a Statement of the Reasons

Market Research Was Not Conducted:

Prior to award of Contract 36C24219D0098 a Sources Sought Notice was sent directly to four (4) known SDVOSB entities with current VA contracts for prescription eyeglasses on December 4, 2018, which provided an opportunity for the identified companies to respond with their interest and capability to provide the described requirement. Two (2) responses to the Sources Sought Notice were received, including the response from Superior. Due to the complexities involved in a transition to another contractor who could provide the same or similar services, care would undoubtedly be disrupted, therefore, follow-on market research regarding availability of sources was not conducted at this time as Superior currently meets the eligibility criteria outlined in VAAR 819.7003.

9. Any Other Facts Supporting the Use of Other than Full and Open Competition:

None. Pursuant to 38 U.S.C. § 8127(c) a sole source award to a SDVOSB concern is authorized where the SDVOSB concern is determined to be a responsible source with respect to performance of the contract; the anticipated award will exceed the simplified acquisition threshold but will not exceed $5,000,000; and the contract award can be made at a fair and reasonable price that offers best value to the United States. Superior Optical Labs, Inc. is a verified SDVOSB by the Center for Veteran Enterprise (CVE) on the Vendor Information Pages (VIP). Superior Optical Labs, Inc. (DUNS No.

788332286) has performed satisfactorily under the subject contract, as well as on contracts for similar supplies and services to other Veteran Integrated Service Networks.

10. Listing of Sources that Expressed, in Writing, an Interest in the Acquisition:

During market research prior to award of Contract 36C24219D0098 both Superior Optical Labs, Inc.

and PDS Consultants Inc. expressed interested in the VISN 2 Upstate requirement.

https://www.acquisition.gov/content/part-5-publicizing-contract-actions https://www.acquisition.gov/content/part-5-publicizing-contract-actions

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11. A Statement of the Actions, if any, the Agency May Take to Remove or Overcome any Barriers to Competition before Making subsequent acquisitions for the supplies or services required:

NCO 2 will continue working with VISN 2 Upstate towards award of the in-process, competitive long-term procurement for the stated requirement in order to minimize the need for future sole source requirements.

12. Requirements Certification: I certify that the requirement outlined in this justification is a Bona

Fide Need of the Department of Veterans Affairs and that the supporting data under my cognizance, which are included in the justification, are accurate and complete to the best of my knowledge and belief.

Christopher J. Costantini Date VISN 2 Network Prosthetics Manager

13. Approvals in accordance with the VHAPM Part 806.3 OFOC SOP:

a. Contracting Officer or Designee’s Certification (required): I certify that the foregoing justification is accurate and complete to the best of my knowledge and belief.

Lauren M. Helming Date Contracting Officer Network Contracting Office (NCO) 2

b. One Level Above the Contracting Officer (Required over the SAT but not exceeding

$700K): I certify the justification meets requirements for other than full and open competition.

Allan M. Preston Date Branch Chief, Medical Sharing Network Contracting Office (NCO) 2 https://vaww.pclo.infoshare.va.gov/PMWeb/VHAPM_Part_806.3.aspx

Date6_af_date: 8/24/21