36C257-25-AP-2886-FY25-1067 JOFOC Reference Lab Bridge - HCA Approved.pdf

VHAPG Part 808.405-6 Limiting Sources Page 1 of 5 Revision: 01 Effective Date: 09/01/2024 Acquisition ID#: 36C257-25-AP-2886

LIMITED SOURCES JUSTIFICATION

ORDER >SAT

FAR PART 8.405-6

Acquisition Plan Action ID: 36C257-25-AP-2886 RPOW JOFOC Tracking Number: FY25-NCO17-1264

(1) Contracting Activity. Department of Veterans Affairs (VA), Network Contracting Office (NCO) 17, located at 5441 Babcock Road, Ste 302, San Antonio, TX 78240, in support of the El Paso Veterans Health Care System (EPVHCS), located at 5001 North Piedras Street, El Paso, TX 79930. Purchase Request Number: 756-25-3-056-0074.

(2) Description of Action. This acquisition is conducted under the authority of the Multiple- Award Schedule Program (41 U.S.C. 152(3) and 40 U.S.C. 501). NCO 17 intends to award a sole source contract to Laboratory Corporation of America Holdings (LabCorp) for Reference Laboratory services supporting the EPVHCS. The order will be placed as a bridge contract with a period of performance of 07/01/2025 through 06/30/2026. The contract will contain FAR 52.217-8, Option to Extend Services.

Order against: FSS Contract Number: V797D-50532 Name of Proposed Contractor: Laboratory Corporation of America Holdings Street Address: 231 Maple Avenue City, State, Zip: Burlington, NC 27215 Phone: (502) 228-8630

(3) Description of Services. The contractor shall provide reference laboratory testing services for 712 different tests, with an estimated annual quantity of 67,730 tests. The contractor must have an existing interface with the Veterans Health Information Systems and Technology Architecture (VistA) and Computerized Patient Records System (CPRS). Services shall include daily transportation of clinical laboratory specimens from the EPVHCS facilities to the Contractor's laboratory(s), the performance of analytical testing as defined by the Contractor's reference test manual and the reporting of analytical test results and consultative services as required to assimilate the full scope of its laboratory operations to EPVHCS and any supplies needed to ship specimens according to Federal and State Requirements of Category A and B Specimens. This service also has a requirement for STAT testing where transportation services must occur within one (1) hour of notification and test results within four (4) hours of receipt of the specimen.

The contractor must place in the EPVHCS laboratory a specimen processor, who is responsible for providing specimen processing services. Services of the specimen processor include preparing specimens for submission to the contractor’s testing facility, packaging specimens for courier pickup, obtaining billing information for the contractor’s use, ensuring the completion of the appropriate test request forms, confirming that reports are generated for specimens https://www.acquisition.gov/far/part-8#FAR_8_405_6 http://uscode.house.gov/browse.xhtml;jsessionid=114A3287C7B3359E597506A31FC855B3 https://www.gpo.gov/fdsys/pkg/USCODE-2011-title40/pdf/USCODE-2011-title40-subtitleI-chap5-subchapI-sec501.pdf

VHAPG Part 808.405-6 Limiting Sources Page 2 of 5

Acquisition ID#: 36C257-25-AP-2886 processed and facilitating inquiries to the contractor. The estimated value of the proposed action is $3,264,998.66.

(4) Identify the Authority and Supporting Rationale.

FAR 8.405-6(a)(1)(A): An urgent and compelling need exists and following the ordering procedures would result in unacceptable delays.

FAR 8.405-6(a)(1)(B): Only one source is capable of providing the supplies or services required at the level of quality required because the supplies or services are unique or highly specialized.

Due to recent changes at the EPVHCS, lab orders from two other locations were transferred to the EPVHCS laboratory. This change resulted in a significant increase to the type and quantity of tests required to be processed using the Reference Laboratory service contract. Due to these changes, Option Year 4, period of performance of 07/01/2025 to 06/30/2026, will not be exercised. A one-year bridge order is necessary to ensure uninterrupted laboratory fee-based testing with a period of performance of 07/01/2025 to 06/30/2026. This bridge contract will allow for sufficient time to prepare a new contract.

LabCorp is the current service provider for order 36C25721N0426. Due to the limitations in the VA’s VistA system, all reference laboratory tests must be manually entered and configured. This includes multiple data entries, as well as setup for both interfacing and shipping workflows.

Regulatory agencies also require that any newly added tests be validated. This means verifying all incoming results from the reference lab through Health Level 7 (HL7) communication. The validation process involves checking the accuracy of normal and abnormal results, reference ranges, abnormal flags, and any interpretive comments. Acquisition Plan 36C257-25-AP-2607 for a new competitive contract is being processed with an estimated start date of 05/01/2026 to allow for a transition period to configure and validate newly added tests with no interruptions in service.

Currently, the LabCorp test menu for EPVHCS includes over 400 tests, including panels consisting of multiple tests. Replicating this entire menu with another reference lab would require extensive time and labor. Additionally, reference labs often use different testing methodologies, which can produce significantly different values for the same analytes. As a result, VA clinicians would have to re-establish baselines and monitoring protocols for patients—potentially disrupting continuity of care. Switching to a different reference laboratory would lead to major delays and could negatively impact patient care. A new reference lab cannot be integrated by 06/30/2025, when the current contract is due to expire. Therefore, it is imperative to continue service with LabCorp until a new long-term contract can be awarded.

FAR 8.405-6(a)(1)(C): In the interest of economy and efficiency, the new work is a logical follow-on to an original Federal Supply Schedule order, provided that the original order was placed in accordance with the applicable Federal Supply Schedule ordering procedures. The original order must not have been previously issued under sole source or limited source procedures.

https://www.acquisition.gov/far/part-8#FAR_8_405_6 https://www.acquisition.gov/far/part-8#FAR_8_405_6 https://www.acquisition.gov/far/part-8#FAR_8_405_6

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FAR 8.405-6(b): Items peculiar to one manufacturer:

A patent, copyright, or proprietary data limits competition. The proprietary data is:

These are “direct replacements” parts/components for existing equipment.

The material/service must be compatible in all aspects (form, fit, and function) with existing systems presently installed/performing.

(5) Describe Why You Believe the Order Represents the Best Value consistent with FAR 8.404(d) to aid the contracting officer in making this best value determination.

To ensure that pricing is fair and reasonable, pricing will be compared to the El Paso Specialized Reference Testing Blanket Purchase Agreement (BPA), 36C25724A0006 and Option Year 4 of the current El Paso Reference Laboratory order, 36C25721N0426. Based upon a cursory review of these contracts, pricing should not be significantly higher than the pricing of the other Reference Laboratory BPA’s or orders. The Contracting Officer has determined that placing the proposed order represents the best value and results in the lowest overall cost alternative to meet the Government’s needs.

(6) Describe the Market Research Conducted among schedule holders and the results or a statement of the reason market research was not conducted. Market Research was conducted pursuant to FAR part 10 and VAAR 810.001-70. Market Research was conducted by El Paso Pathology and Laboratory Medicine Services (P&LMS) from February through March 2025 and by the contracting team from March through April 2025. Searches were conducted using the Small Business Administration’s (SBA) Dynamic Small Business Search (DSBS), Government Services Administration (GSA) eLibrary, contacting knowledgeable individuals, previous market research, commercial source internet search, Ability One, and UNICOR. Market research results are as follows:

a) DSBS – The Contract Specialist performed a search in the DSBS using NAICS 621511 and keywords “Reference Laboratory”, two (2) SDVOSB’s, MCI Diagnostics and Xprt Lab, LLC.

b) GSA eLibrary - There are several Special Item Numbers (SIN) under Veterans Affairs (VA) Federal Supply Schedule (FSS) 621 II, Medical Laboratory Testing and Analysis Services.

This procurement requires testing that is included in SIN’s 621-200 through 621-212. A review of all of the schedules resulted in no Small Business having the capability to perform all of the tests required. Schedule 621-202, Cytogenetics, only includes 4 large businesses with the capability. Central Tox LLC (SDVOSB) was not on schedules 621-202 and 621-210. MCI Diagnostics Center (SDVOSB) was not on schedules 621-202 and 621-

207. NEO Services (SDVOSB) was not on schedules 621-200, 621-202, 621-203, 621-204, 621-205, 621-207, 621-209, and 621-212. There are three large business in the FSS that may be able to support the requirement: LabCorp, Quest Diagnostics, and ARUP Laboratories.

c) Knowledgeable Individual – The Contract Specialist contacted the El Paso Laboratory Information Manager to discuss the process required to transition to a new contractor https://www.acquisition.gov/far/part-8#FAR_8_405_6 https://www.acquisition.gov/far/part-10 https://www.va.gov/oal/library/vaar/vaar810.asp

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Acquisition ID#: 36C257-25-AP-2886 to support Reference Lab Testing. The Laboratory Information Manger described the process to enter, configure, and validate new tests if a contract were awarded to a vendor other than LabCorp. If the lab were required to transition to a new contractor, the process to reconfigure the test menu to that of the new contractor would be extensive and would not be completed prior to the end of the current contract, 6/30/2025.

d) Previous Market Research – The Contract Specialist reviewed market research for three similar requirements. The market research resulting in contracts 36C25724A0006, 36C25724D0043, and 36C25724D0028 resulted in one SDVOSB that may be capable of providing the service. Contract 36C25724A0006, was awarded to a SDVOSB, but only one quote was received. The other two contracts were awarded to large businesses.

e) Commercial Source Internet Search – The Contract Specialist conducted an internet search for Reference Laboratory Testing in El Paso Texas. There were two (2) large business vendors found that have the capability to perform routine and STAT testing:

LabCorp and Quest Diagnostics.

f) Ability One – The Contract Specialist conducted a search of the mandatory sources, Ability One, using the keywords “Reference Laboratory” did not generate any results.

g) UNICOR – The Contract Specialist conducted a search of the mandatory sources, UNICOR, using the keywords “Reference Laboratory” did not generate any results.

The purpose of this bridge contract is to continue reference laboratory services using a system already in place with LabCorp. Based on the market research, it is in the government's best interest to solicit this requirement as a sole-source acquisition directly from LabCorp, in accordance with FAR 8.405-6(a)(1)(B).

(7) Any Other Facts Supporting the Justification. None

(8) A Statement of the Actions, if any, the agency may take to remove or overcome any barriers that led to the restricted consideration before any subsequent acquisition for the supplies or services is made. Market research for a long-term contract is in progress with an intent to compete the requirement. Due the time required to transition from one reference lab vendor to another, the long-term contract will not be awarded in time to facilitate this transition. The long-term contract is anticipated to be awarded no later than May 2026.

(9) 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. I understand that processing this limited sources justification restricts consideration of Federal Supply Schedule contractors to fewer than the number required by FAR Subpart 8.4.

Oscar Vasquez Date Laboratory Manager Pathology and Laboratory Medicine Services El Paso Veterans Affairs Health Care System

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(10) Approvals in accordance with the VHAPM Part 806.3 OFOC SOP:

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

Delphia Schoenfeld Date Contracting Officer Laboratory Support Services (LSS) Network Contracting Officer 17

b. One Level Above the Contracting Officer (Required over the SAT but not exceeding $750K).

I certify the justification meets requirements for other than full and open competition.

Michael Tusinger Date Branch Chief Laboratory Support Services (LSS) Network Contracting Officer 17

c. Director of Contracting: I certify the justification meets requirements for other than full and open competition.

Mark A. Layman Date Director of Contracting Network Contracting Officer 17

d. VHA RPO HCA Review and Approval (over $750,000 to $75 million). I have reviewed the foregoing justification and find it to be complete and accurate to the best of my knowledge and belief and approve for restricting consideration of the Federal Supply Schedule contractors to fewer than the number required by FAR Subpart 8.4.

Curtis M. Jordan Date Executive Director, Regional Procurement Office West Head of Contracting Activity (HCA) https://dvagov.sharepoint.com/sites/VHAProcurement/VHAPM2/VHAPM_Part_806.3.aspx https://dvagov.sharepoint.com/sites/VHAProcurement/VHAPM2/VHAPM_Part_806.3.aspx