36C259-24-AP-4693-FY24-652 JOFOC NCO19 VISN LabCorp_redacted.pdf

VHAPG Part 808.405-6 Limiting Sources Attachment 2: Request for Limited Sources Justification Format >SAT

Effective Date: 02/01/2022 Page 1 of 6

LIMITED SOURCES JUSTIFICATION

ORDER >SAT

FAR PART 8.405-6

Acquisition Plan Action ID: 36C259-24-AP-4693 Tracking Number: FY24 - NCO 19- 2608

(1) Contracting Activity:

Department of Veterans Affairs Network Contracting Office (NCO) 19 6162 South Willow Drive, Suite 300 Greenwood Village, CO 80111

Organizational Activities: PURCHASE REQUEST (2237):

VA Montana Health Care System, 1892 Williams St, Fort Harrison, MT 59636

436-25-1-112-0010

VA Billings Healthcare Center, 1775 Spring Creek Dr., Billings, MT 59102

436-25-1-820-0001

VA Cheyenne Medical Center (VAMC), 2360 E Pershing Blvd, Cheyenne, WY 82001

442-25-1-054-0044

VA Eastern Colorado Health Care System, 1700 N Wheeling Street, Aurora, CO 80045

554-25-1-023-0012

VA Western Colorado Health Care System, 2121 North Ave, Grand Junction, CO 81501

575-25-1-035-0020

VA Eastern Oklahoma Health Care System, Jack C.

Montgomery VA Medical Center, 1011 Honor Heights Dr., Muskogee, OK 74401

623-25-1-022-0008

VA Oklahoma City Health Care System, 921 NE 13th St, Oklahoma City, OK 73101

635-25-1-114-0002

VA Salt Lake City Health Care System, 500 Foothill Blvd, Salt Lake City, UT 84148

660-25-1-071-0014

VA Sheridan Medical Center, 1898 Fort Rd., Sheridan, WY 82801

666-25-1-113-0012

(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). The proposed action is a request for a new, six (6)-month firm-fixed price interim FSS Task Order to the incumbent contractor, Laboratory Corporation of America (LabCorp) for off-site Reference Laboratory Testing and Analysis Services. This task order will ensure the continuation of services until a new VISN-wide

Effective Date: 02/01/2022 Page 2 of 6 multi-award Federal Supply Schedule Blanket Purchase Agreement (FSS-BPA) for Reference Lab Testing can be competed and awarded around 4/1/2025.

Order against: FSS Contract Number: V797D-50532

Name of Proposed Contractor: LabCorp Street Address: 231 Maple Ave.

City, State, Zip: Burlington, NC, 27215 Phone: 502-228-8630

(3) Description of Supplies or Services:

The estimated value of the proposed action is $2,766,000.00.

This requirement is for off-site Reference Laboratory and Analysis Testing Services which includes pickup and transport of specimens, analytical processing as defined in the contractor laboratory manual, analysis, reporting of analytical results through VA VISTA interface and interpretation for clinical and anatomical pathological specimens. The incumbent contractor, LabCorp, will continue to provide a wide range of testing services in the specialized testing areas of hematology, chemistry, coagulation, microbiology, molecular, genetics, virology, clinical interpretation, cytology and anatomic pathology, oncology, and in specialized pathology support.

The period of performance on this task order will be October 1, 2024 - March 31, 2025 with FAR Clause 52.212-8 Option to Extend Services included. The current BPA order, 36C25924N0010, expires on 9/30/24 with no extensions available.

(4) Identify the Authority and Supporting Rationale (see below and if applicable, a demonstration of the proposed contractor’s unique qualifications to provide the required supply or service.

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.

The unique characteristics of the incumbent, LabCorp, is: 1) that they have a currently established working electronic interface system with all eight (8) VISN 19 locations, 2) they have the most comprehensive test menu, offering an in-house test compendium of over 6,000 tests, and 3) they have the capability to meet the required turnaround times (TATs) for VISN 19’s large reference lab volume of 7,000 – 8,000 tests per month across all laboratory disciplines (i.e. hematology, microbiology, clinical chemistry, serology, toxicology, etc.).

Effective Date: 02/01/2022 Page 3 of 6

Without the approved electronic interface, every test would have to be created, submitted, and the results received and analyzed manually. This manual process is extremely time consuming and expensive, so much so that current staffing levels at the VISN 19 facilities could not support it at the present volume. In addition, the risk to patient care is greatly increased due to the amount of human-performed, manual processes involved. The possibility of error during any phase of the testing/analyzing process increases tremendously without the electronic interface.

Part of establishing the electronic interface is the entering of all contractor test names, codes, and the corresponding test result ranges into the VA VISTA system prior to beginning any reference lab requirement. For VISN 19 laboratories, the process of establishing a new electronic interface can take 12 months or longer at each location. If any other contractor were selected it would be logistically impossible to have the interface operational for a 10/1/24 start date. This would cause major disruption in patient critical care.

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.

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:

General Services Administration (GSA) has already determined the Federal Supply Schedule (FSS) prices of LabCorp reference laboratory services to be fair and reasonable. A sampling of the latest LabCorp FSS price list shows the same pricing as the current FSS-BPA (36C25922A0002) pricing. It is, therefore, the best value to the Government to award to LabCorp as a sole source FSS Task Order.

(6) Describe the Market Research Conducted among schedule holders and the results or a statement of the reason market research was not conducted.

Effective Date: 02/01/2022 Page 4 of 6

Market research included a Sources Sought notice (36C25923Q0659) posted to Contract Opportunities on 7/6/2023 through 8/11/2023, a VA VetBiz search on 2/13/2024, an SBA search on 2/5/2024, and a GSA eLibrary search on 7/19/2023. Small business reference labs that resulted from the search are: Analytical Edge Laboratories (SB), Space City Laboratories (SB), Kashi Clinical Laboratories (SB), Central Tox (SDVOSB), MCI Diagnostics Center (SDVOSB), NEO Services (SDVOSB), North Shore Medical Labs (SB), Castle Biosciences (SB), CDX Diagnostics (SB), Veracyte Labs SD (SB), Biodesix (SB), Fulgent Therapeutics (SB), Pediatric Allergy Solutions (SB), Magnus Diagnostic Laboratories (SB), Hato Rey Pathology Associates (SB), and Ipsum Diagnostics (SB).

None of the small businesses found, including SDVOSBs and VOSBs, are capable of fulfilling this requirement for the following reasons: 1) VISN 19 test volumes are beyond their capabilities, 2) they are unable to meet the limitations of subcontracting, 3) they do not have an approved interface with VistA, 4) they are unable to meet acceptable turnaround times, and 5) they lack a dedicated courier system. Therefore, there is no expectation of two or more SDVOSBs, VOSBs, or other small businesses able to provide the required testing.

Of the ten (10) large business schedule holders found on GSA eLibrary, only LabCorp can completely fulfill this requirement. LabCorp is capable of providing testing and interfacing of results on over 6,000 tests on their test menu across all laboratory disciplines (i.e. hematology, microbiology, clinical chemistry, serology, toxicology, etc). Besides Labcorp, VISN 19 also has test interface capability with two other large companies, ARUP and Quest Diagnostics.

However, neither ARUP nor Quest Diagnostics currently offers: 1) all required testing, 2) required TAT capabilities for all tests and all locations, and 3) the workforce to perform all 7,000

– 8,000 tests per month. Furthermore, Quest Diagnostics only has an established interface with Oklahoma VA laboratories, but not the rest of the VISN 19 laboratories at this time.

Market Research Summary:

There is no expectation of two or more SDVOSBs, VOSBs, or other small businesses able to provide testing at VISN19 volumes, perform the required 6000+ tests listed in Source Sought (36C25923Q0659), interfacing, acceptable turnaround times, and dedicated courier services for VISN19 reference lab testing.

To ensure continuation of critical patient services, a 6-month bridge FSS-Task order is required with LabCorp since LabCorp is the sole contractor able to fully fulfill this requirement.

(7) Any Other Facts Supporting the Justification:

VISN 19 has historically used three (3) separate BPAs to fill their reference lab testing needs.

There are already BPAs in place with ARUP and Quest. However, LabCorp’s ability to handle the large test volume of VISN 19 make it a necessity to award this sole source FSS Task Order to LabCorp.

Effective Date: 02/01/2022 Page 5 of 6

(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:

Offsite Reference Lab Testing requirements will be competed to the greatest extent practicable.

There is already a package being worked by NCO 19, 36C259-23-AP-2698, with an anticipated award date of 4/1/25.

(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 of this limited sources justification restricts consideration of Federal Supply Schedule contractors to fewer than the number required by FAR Subpart 8.4. (This signature is the requestor’s supervisor, fund control point official, chief of service or someone with responsibility and accountability.)

Effective Date: 02/01/2022 Page 6 of 6

(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.

Contracting Officer Network Contracting Office 19

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.

Branch Chief, Labs Network Contracting Office 19

HIGHER LEVEL APPROVAL (Required for orders over $750,000):

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

Director of Contracting Network Contracting Office 19

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.

Executive Director, Regional Procurement Office West Head of Contracting Activity (HCA)