36C24922P1069 WEIGHT BASED INVENTORY MANAGEMENT SYSTEM REDACTED JOFOC.pdf

Part 806.3 Other Than Full and Open Competition (OFOC) Attachment 7: Request for Sole Source Justification Format >SAT

VISN 9 Weight-Based Inventory Management System

Rev: 13 Effective Date: 02/01/22 Page 1 of 6

DEPARTMENT OF VETERANS AFFAIRS

Justification and Approval (J&A) For

Other Than Full and Open Competition (>SAT)

Acquisition Plan Action ID:_______ 36C249-22-AP-2354_________________________

1. Contracting Activity: Department of Veterans Affairs, Network Contracting Office (NCO) 9 located at 1639 Medical Center Parkway Murfreesboro TN 37129 in support of the entire Veterans Integrated Service Network (VISN) 9 Medical Facilities.

Procurement Requests:

VISN Office #486-22-3-3000-0310 Lexington Medical Centers: 596-22-3-950-0206 Louisville Medical Centers: 603-22-3-984-0429 Memphis Medical Centers: 614-22-2-560-0133 Mountain Home Medical Centers: 621-22-3-091-0303 Nashville Medical Centers: 626-22-3-313-0153 Murfreesboro Medical Centers: 626-22-3-313-0154

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

VISN 9 medical centers have a need to procure a weight-based inventory management system to better manage and control inventory throughout the facilities. This is a new requirement to be awarded as 12-month firm-fixed-price contract for VISN 9. NCO 9 proposes to solicit from a single source, SDV Medical doing business as SDV Office Systems LLC (a Service Disabled Veteran Owned Small Business (SDVOSB)), who is the sole SDVOSB distributor and business partner of Par Excellence. Par Excellence is a small business according to NAICS 333997 (scales and balance manufacturer) and sole manufacturer of the weight-based management equipment.

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

This procurement is for the purchase and installation of a Point of Use (POU) weight-based inventory management system to include software licenses at all VA medical centers and designated Community Based Outreach Clinics (CBOCs) throughout VISN 9. The Contractor must ensure the system is fully operational and fully train VA staff to properly use the new system. The system will interface with the General Inventory Package (GIP) system to identify out of balance on-hand quantities between GIP and inventory bins.

The POU systems will automate inventory management processes in open shelf distribution points (i.e., supply closets). The systems shall produce an accurate real-time reading of quantities on-hand accessible by web-based programs and provide data mining capabilities that shall include, at a minimum: current stock levels, recommended order points, average usage levels per item, and the ability to track medical supply usage per patient treated at VISN 9 VAMCs and their CBOC locations.

VISN 9 Weight-Based Inventory Management System

Rev: 13 Effective Date: 02/01/22

The estimated contract value for all equipment, installation, software licenses, and support for one calendar year is $18,578,694.00. The period of performance for the software license and support is 10/01/2023-09/30/2024.

Statutory Authority Permitting Other than Full and Open Competition:

( x ) (1) Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements per 41 USC §3304(a)(1) as implemented by FAR 6.302-1;

( ) (2) Unusual and Compelling Urgency per 41 USC §3304(a)(2) as implemented by FAR 6.302-2;

( ) (3) Industrial Mobilization, Engineering, Developmental or Research Capability or Expert Services per 41 USC §3304(a)(3) as implemented by FAR 6.302-3;

( ) (4) International Agreement per 41 USC §3304(a)(4) as implemented by FAR 6.302-4 ( ) (5) Authorized or Required by Statute per 41 USC §3304(a)(5) as implemented by FAR 6.302-5;( )

(6) National Security per 41 USC §3304(a)(6) as implemented by FAR 6.302-6;

( ) (7) Public Interest per 41 USC §3304(a)(7) as implemented by FAR 6.302-7;

Demonstration that the Contractor’s Unique Qualifications or Nature of the Acquisition Requires the Use of the Authority Cited Above (applicability of authority):

Market research did not reveal any other manufacturers of the weight-based inventory management systems.

After much research and looking into the capabilities required for the weight-based inventory management system to function properly it has been determined that this is the only product in the market capable of meeting our need. This Par Excellence system is a highly specialized system that if improperly implemented or if pieced together does not work as it should, which was experienced previously at the National level

The product requires bins compatible with the software in order to function properly and pass along data as designed. This product already has all the required approvals for being implemented inside of a VA facility as it is currently being used in other VA facilities. It also is the only product with the needed Generic Inventory Package (GIP) interface which is a key element in separating it from other products in the market as it is able to load information into VA systems remotely without requiring additional work arounds of transferring data that can cause corruption or improper entries since a Technician would have to manually input all changes.

This is the only system that allows a beginning-to-end solution for tracking changes in supplies and increasing our ability to care for patients properly, while also reduing our risk of error due to stock outs.

Previously, the Federal Government had the ability to procure the system directly from the original equipment manufacturer (OEM) Par Excellence. As of June 7, 2022, Par Excellence and SDV Office Systems established an agreement authorizing the distribution of their equipment and software strictly through their SDVOSB partner SDV Office Systems for Government use.

A review of SDV Office Systems’ responsibility assessment shows that they have no issues on FAPIIS and have never been debarred, terminated for cause or defaulted on any government contract in the past. No other concerns have been identified. If the contract is not awarded to SDV Office Systems, the VISN medical facilities will have to continue with the current inventory management

VISN 9 Weight-Based Inventory Management System

Rev: 13 Effective Date: 02/01/22 Page 3 of 6 system or seek out another form of inventory management system resulting in implementation delays and additional cost.

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

This technology is new to VISN 9. The VISN 9 office reached out to other VISNs in search of inventory tracking systems to help reduce stock outs and cost. The weight-based inventory management system was first procured by VISN 20 in April 2019, and since then, have been procured and is being successfully used by VISNs 6, 7, 10, 16, 19, and 21.

The Contract Specialist’s (CS) market research consisted of a keyword search for “weight-based inventory management” on VETBIZ.gov. No potential SDVOSB/VOSB sources were found. The CS also posted a sources sought (36C24922Q0465) seeking weight-based management system from 07/05/2022 through 07/15/2022. The OEM (Par Excellence), SDV Office Systems, and Becton Dickson and Company responded.

The OEM (Par Excellence) responded stating that they only distribute to the Federal Government through their SDVOSB partner SDV Office Systems. SDV Office Systems also responded providing a Letter of Authority (LOA) from Par Excellence. Becton Dickson and Company’s responded proposing a Radio Frequency Identification (RFID) type of inventory management. When questioned about RFID, the CS was told that someone would have to scan the inventory which still requires a lot of human interaction and has greater room for human error. The information from Becton Dickson and Company was provided to the VISN and their evaluation determined it would not meet the needs or intent of the VISN requirement.

Since only two weight-based inventory system responses were received (from the OEM and their SDVOSB partner), the CS posted an intent to sole source (36C24922Q0505) from 07/15/2022 through 08/01/2022 to PAR Excellence the OEM. The CS was then reminded that the OEM strictly provides the weight-based inventory management system to the Federal Government through their SDVOSB partner, SDV Office Systems. The intent to sole source was amended and extended to 08/08/2022 to reflect the correct sole source recipient of SDV Office Systems. No responses from any other potential sources with weight-based management systems were received.

Determination by the Contracting Officer (CO) that the Anticipated Cost to the Government will be Fair and Reasonable:

Since this is new technology and the technology is proprietary to one manufacturer the Contracting Officers who had awarded contracts have had to rely on the CS’s market research to determine price reasonableness. CS reached out to NC 20 discuss their procurement. Contract for NCO 20 (36C26019D0004) was awarded to the OEM for an estimated amount of $25,000,000.00 for approximately throughout VISN. VISN 9’s estimated value is $18,578,694.00 and has approximately within the VISN. However, the number of bins and equipment needed at each location is less than VISN 20. A cost comparison to previous VISN procurements will be done to come up with a fair and reasonable assessment. Based on the market research findings, CO can anticipate the cost of this procurement to be fair and reasonable.

VISN 9 Weight-Based Inventory Management System

Rev: 13 Effective Date: 02/01/22 Page 6 of 6

d. 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 for other than full and open competition.

Terry L. Spitzmiller Date Executive Director Regional Procurement Office Central (VHA)