36C24219D0098 APPROVED JA for OFOC AND USE OF 52.217-8 - VISN 2 UPSTATE PRESCRIPTION EYEGLASSES AND OPT SVCS.pdf

Request for SDVOSB/VOSB Sole Source Justification Format >SAT & Use of 52.217-8

Contract 36C24219D0098, VISN 2 Upstate Prescription Eyeglasses & Optician Services

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 exercise FAR Clause 52.217-8, Option to Extend Services, under Contract 36C24219D0098, which was a sole source Firm Fixed Price (FFP)

Indefinite Delivery/Indefinite Quantity (IDIQ) contract awarded 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 on August 9, 2019. This requirement is for the manufacturing and delivery of both dress and safety prescription eyeglasses to include fitting services provided by a licensed optician. The Contractor shall offer both dress and safety frames, as well as single vision, bifocal, trifocal, and progressive lenses.

The anticipated performance period for the six-month extension of services under FAR 52.217-8 is

April 1, 2021 through September 30, 2021, and the extension will be accomplished via unilateral modification following the notification requirements outlined in the contract.

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 and in house (onsite at VA facilities) optician fitting services.

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 including fitting services by a licensed optician according to contract specification for beneficiaries of the following sites of care and their entire catchment areas, including their respective Community Based Outpatient Clinics (CBOCs), within the

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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 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 and there were 22,594 orders placed with a total expenditure of $1,701,303.97.

These figures were lower than anticipated at time of award due to 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) 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 covers the period November 1, 2020 through March 31, 2021.

In order to estimate the value of a six-month extension under FAR 52.217-8, the October 1, 2019 –

March 31, 2020 workload and expenditure information was reviewed, as it would not have included the previously described COVID-19 impacts on ordering. Using that information, it is estimated that the six-month extension would be valued at approximately $1,130,022.97. Use of the extension 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).

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4. Statutory Authority Permitting Other than Full and Open Competition: 41 USC §3304(a)(5), 38 U.S. Code § 8127(c), as implemented by 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 current performance during Option 1. 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 January 21, 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 in October 2020 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 January 21, 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

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.

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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.

The extension of services under FAR 52.217-8 would allow for continued services during the long-term contract procurement process, as significant time was lost in the long-term procurement planning due to the belief VISN 2 Upstate would be reverting to WSIFB. Without this contract extension, 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 provide continuous services from the incumbent contractor until a long-term contract can be competitively awarded.

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

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Independent Government Estimate (IGE), market research, and other available price analysis techniques in accordance with FAR 13.106-3(a)(2). These prices will remain in effect during the extension of services under FAR 52.217-8.

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 continues to meet 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.

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 on a 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

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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

c. VHA RPO HCA Review and Approval: I have reviewed the foregoing justification and find it to be complete and accurate to the best of my knowledge and belief and recommend approval (if over $68 million) or approve ($700K to $68 million) for other than full and open competition.

Joseph P. Maletta Date

Executive Director, RPO East

Head of Contracting Activity (HCA) https://vaww.pclo.infoshare.va.gov/PMWeb/VHAPM_Part_806.3.aspx

Text8: 2/10/2021