Fully Signed and Approved SSJ LabCorp Ref Lab Bridge.pdf

36C244-26-AP-2689 | VISN 4 Reference Laboratory Services

DEPARTMENT OF VETERANS AFFAIRS

RESTRICTING COMPETITION USING SIMPLIFIED PROCEDURES

FOR COMMERCIAL ITEMS IN ACCORDANCE WITH FAR 12.102

This justification aligns with the deviation outlined in the Revolutionary FAR Overhaul (RFO) for FAR 12.201-1 Simplified Acquisition Procedures, as required by Executive Order (E.O.) 14275, Restoring Common Sense to Federal Procurement, signed April 15, 2025. Deviation effective date: October 14, 2025.

Acquisition Plan Action ID: 36C244-26-AP-2689

1. Contracting Activity: Department of Veterans Affairs (VA), Veterans Integrated Service Network 04

(VISN04), VA Pittsburgh Healthcare System (VAPHS), Network Contracting Office 4 (NCO4) in support of VISN 4 Healthcare and Medical Facilities.

2237/PR Number: 481-26-4-941-0063

2. Nature and Description of the Action Being Processed: The VISN 4 healthcare facilities require the procurement of a one-year Firm-Fixed Priced Indefinite Delivery/Indefinite Quantity bridge contract for Reference Laboratory Services. Award shall be made through a sole source to Laboratory Corporation of America.

The use of a short-term, one-year ID/IQ is necessary at this time as there were several previous protests lodged across the country against pending VA Reference Laboratory Testing services contracts. Protests were based upon statutory requirements for VA to set aside contracts for SDVOSB concerns. These protests as well as significant staff resources for credentialing, oversight, training, and contract administration have impacted the VISN 04 efforts to award a new contract via a competitive action. A long-term contract is anticipated to be solicited and awarded in FY 2027. As such, this action is a “sole source” follow-on contract is required in order to continue these critical healthcare services.

This sole source justification was not submitted within the originally anticipated timeframe by the contracting office. Although this document is not timely in relation to the contract period of performance, it is being executed to ensure full transparency, proper oversight, and compliance with all applicable acquisition regulations.

3. Description of Services Required to Meet the Agency’s Needs: Reference laboratory testing and pathology services that include pickup and transport of specimens to its laboratory; pre-analytic processing defined in its laboratory user’s manual; analysis, reporting analytic results, and consultation regarding selection, collection, transportation, and result interpretation.

Period of performance: March 1, 2026 – February 28, 2027.

Total estimated value of the procurement: $7,323,866.14.

4. Statutory Authority Permitting Other than Full and Open Competition:

FAR 12.102 Restricting Competition. The statutory authority for restricting competition on this procurement is 41 U.S.C. § 1901 and is implemented by FAR 12.102(b) for restricting competition using Simplified Acquisition Procedures for commercial items. Competition is restricted on this procurement for the reason below:

(X) (1) Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements

5. Demonstration that the Contractor’s Unique Qualifications or Nature of the Acquisition Requires the Use of the Authority Cited Above (applicability of authority): Reference laboratory testing directly impacts clinical decision-making, treatment initiation, and patient outcomes. As such, any disruption in testing services could result in delayed diagnosis and treatment decisions, repeat specimen collections, causing patient inconvenience and potential harm, and increased risk of specimen degradation due to improper handling or delayed transport. LabCorp possess established processes, validated methodologies, and proven experience meeting VA-specific clinical, regulatory and turnaround time requirements. Transitioning to a new vendor would introduce unacceptable risks to patient safety due to onboarding delays, test validation requirements, staff retraining, and potential lapses in continuity of services.

VISN 04 facilities continue to face critical staffing shortages in laboratory, pathology, and clinical support roles. These shortages limit internal capacity to perform specialized and high-complexity testing and reduce the ability to manage multiple external vendors simultaneously. LabCorp supports VISN 04 by reducing administrative and clinical workload on VA staff, providing comprehensive testing services under a single, integrated framework, and offering consistent specimen handling, reporting, and clinical support.

6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable: Laboratory Corporation of America (LabCorp) is a large business contractor of reference laboratory and pathology testing services. VISN 04 previously utilizes reference laboratory testing services as a FSS order against FSS contract number V797D-50532 awarded to LabCorp. LabCorp is the only vendor that can provide the service without interruption. Any other vendor would be unable to be operational within the limited timeframe from expiration of the current contract and inception of the new bridge, which itself is a short-term effort.

VISN 04 will be seeking a long-term competitive contract for Reference Laboratory Testing. Due to size and complexity of the long-term competitive contract, a new bridge contract is needed to ensure the uninterrupted continuation of reference laboratory and pathology testing within the laboratories. This 1-year bridge allows NCO 4 to establish a new type of contract vehicle as a firm fixed price contract which will include a novel pricing methodology to include monthly ceiling limits for each test type and various potential discounts for each month. VISN 04 has encountered payment and invoicing compliance challenges within the reference laboratory testing environment. These challenges include discrepancies in billing formats, lack of alignment with VA financial systems, and delayed or inaccurate invoices that impact timely payment and financial accountability. LabCorp has demonstrated compliance with VA invoicing requirements, proven invoice accuracy and integrity, and established processes for reconciliation, dispute resolution, and audit support. Utilizing alternative vendors that have not demonstrated the same level of compliance presents a high risk of continued or increased invoice discrepancies, payment delays, and administrative burden, which would detract from the mission-critical healthcare operations of

VISN 04.

7. Determination by the Contracting Officer that the Anticipated Cost to the Government will be Fair and Reasonable: Testing prices provided in LabCorp official pricing proposal shall be compared to

LabCorp FSS contract V797 D-50532. Pricing points for individual tests match or are significantly discounted than the FSS rates. A formal price reasonableness determination shall be made in accordance with FAR RFO 12.204(a).

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

Market Research Was Not Conducted: Market research indicates while a small number of reference laboratories may offer similar services, at this time, none can immediately assume full testing volume without disruption, meet VA-specific clinical, security, and invoicing requirements, and support VISN 04 under current staffing constraints.

A previously posted sources sought resulted in additional several vendors have expressed interest in the future long-term contract, which includes a ramp-up period and will be competed, no vendors other than the incumbent are capable of changing out the existing equipment in time to compete for this new bridge contract, which by necessity, does not include a ramp-up period.

In accordance with FAR Part 10 and FAR 6.301(b), the justification shall be made publicly available.

SBS.gov has been queried under the NAICS code 621511 Medical Laboratories yielded 4,449 small businesses. Additional searches using the keyword “Reference Lab” and NAICS code yielded 1 SDVOSB response.

9. Any Other Facts Supporting the Use of Other than Full and Open Competition: The previous bridge contract expired 02/28/2026. A notice to proceed was provided by the Contracting Officer to the contractor dated 03/01/2026 in order for no lapse in services. Prior to and during the current period of performance, NCO4 contracting has been negotiating pricing with the incumbent. Previous competition for a long-term contract experienced multiple protests as well as corrective action. This bridge contract will ensure uninterrupted continuation of reference laboratory services for patient safety and care.

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

Laboratory Corporation of America 231 Maple Avenue Burlington, NC 27215

UEI: NHYWYLK6NBM8

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: NCO4 intends to complete a competitive procurement for a long term, five-year period in the future. At that time, the agency will reevaluate the marketplace and ensure the requirement is solicited to the fullest extent possible.

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.

Christine Haas, Health System Specialist

VISN 4

1. Approvals in accordance with VHAPM Part 806.3 OFOC SOP:

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

Victoria Droz, Contracting Officer Network Contracting Office 4

b. One Level Above the Contracting Officer (Required over SAT but not exceeding $900K): I certify the justification meets requirements for other than full and open competition.

Benjamin P. Iachini, Contracting Officer Network Contracting Office 4

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 $90 million) or approve ($900K to $90 million) for other than full and open competition.

Brent Goe, Acting Executive Director Head of Contracting Activity Regional Procurement Office – East

Curtis Jordan, Executive Director, Procurement Operations

Jeffrey Neill, Senior Procurement Executive, Office of Procurement