36C26124D0061 JOFOC_Redacted.pdf

VHAPG Part 813.5 Simplified Acquisition Procedures for Certain Commercial Items Attachment 1: Request for Sole Source Justification Template >SAT $7.5M under FAR13.5

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

DEPARTMENT OF VETERANS AFFAIRS

SOLE SOURCE JUSTIFICATION UNDER SIMPLIFIED PROCEDURES FOR CERTAIN COMMERCIAL

ITEMS IN ACCORDANCE WITH FAR 13.5

Acquisition Plan Action ID:

1. Contracting Activity: Department of Veterans Affairs, Veterans Integrated Service Network (VISN) 21, Network Contracting Office (NCO) 21, 3237 Peacekeeper Way, Bldg 200, Ste 204, McClellan, CA 95652 Requiring Activity: VA Palto Alto Healthcare System (VAPAHCS), Pathology & Laboratory Medicine Service, 3801 Miranda Ave, Palo Alto, CA 94304.

PR#

2. Nature and/or Description of the Action Being Processed: This procurement is for specialized pathology laboratory testing services in accordance with FAR 13.5 Simplified Procedures for Certain Commercial Items and specifically FAR 13.501 Special Documentation Requirements, where acquisitions conducted under Simplified Acquisition Procedures are exempt from the requirements of FAR Part 6, but still require a justification using the format of FAR 6.303 2.

The proposed contract action is for a new, firm fixed price Indefinite Delivery Indefinite Quantity (IDIQ) contract, and the proposed contractor is Stanford Health Care located at 300 Pasteur Dr, Stanford, CA 94305 2200.

3. Description of Supplies/Services Required to Meet the Agency’s Needs: VA Palo Alto Healthcare System requires a contractor to provide specialized pathology laboratory testing services that aid in oncology or hematology disorder diagnosis, microbiology testing that aid in infection control diagnosis and statim (STAT) 24 hour testing services. STAT testing services must include courier service with specimen pickup available within 30 minutes of being contacted. STAT specimen results must be provided within two hours of specimen receipt, and specialized specimens results must be provided within 48 hour of receipt.

The IDIQ includes a base ordering period of one year with four additional ordering periods. The period of performance and estimated costs are as follows:

Period of Performance IGCE Base Period 04/01/24 – 03/31/25 Ordering Period 1 04/01/25 – 03/31/26 Ordering Period 2 04/01/26 – 03/31/27 Ordering Period 3 04/01/27 – 03/31/28 Ordering Period 4 04/01/28 – 03/31/29

Total estimated cost Maximum threshold $7,000,000.00

4. Statutory Authority Permitting Restricted Competition:

FAR 13.5 Simplified Procedures for Certain Commercial Items. The statutory authority for applying the Simplified Procedures for Commercial Items of FAR 13.5 is 41 U.S.C. § 1901 and is implemented

Effective Date: 02/01/2022 Page 2 of 6 by FAR 13.106 1(b)(2) for restricting competition on this procurement. Competition is restricted on this procurement for the reason below:

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

( ) Unusual and Compelling Urgency ( ) Industrial Mobilization, Engineering, Developmental or Research Capability or Expert

Services ( ) International Agreement ( ) Authorized or Required by Statute ( ) National Security ( ) Public Interest

5. Demonstration that the Contractor’s Unique Qualifications or Nature of the Acquisition Requires the Use of the Authority Cited Above (applicability of authority): This procurement involves STAT laboratory testing, which is testing that is needed immediately for emergency medical situations. As such, the testing is prioritized and requires a short turn around time. In Section 4.1.1. of the Performance Work Statement (PWS), STAT test results must be reported within two hours of specimen receipt. This timeframe incorporates the crucial fact that STAT specimens are only stable for testing for one or two hours depending on the specimen sensitivity to temperature. Any potential contractor must be capable to travel to VAPAHCS, pick up the STAT specimens, travel back to their reference laboratory, and test the specimens while the specimens are still stable in order to provide results. As such, any potential contractor for this procurement must be located within a 20 mile radius of VAPAHCS and be able to arrive at VAPAHCS within 30 minutes of being contacted to ensure that all STAT laboratory specimens can be retrieved, tested, and results provided. This will ensure that rapid results are provided to VAPAHCS for immediate patient care decisions and will ensure timely and appropriate medical interventions.

The procurement also involves very specific specialized testing that any proposed contractor must be able to perform at any given time. As detailed in the market research results below, no other company was located who could perform all the specialized testing.

Stanford Health Care contains a reference laboratory testing facility within 20 miles of VAPAHCS and retains all the required licensing, certifications, and trained staff to complete all the required testing services. As detailed in Sections 6 and 8 below, market research efforts did not locate another company who met all the requirements and could provide all the required testing services within the required timeframes. As such, Stanford Health Care is the only responsible, capable, and willing company available to meet the Government’s needs.

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

In order to identify as many potential sources for this procurement and whether or not the procurement could be a small business set aside in any socioeconomic category, a Sources Sought Notice, 36C26123Q1039, was posted to Contracting Opportunities on 07/24/23 with responses due by 07/31/23. A drafted copy of the PWS and list of required tests was included with the posting. No company submitted a capabilities statement as a response to the notice.

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

7. Determination by the CO that the Anticipated Cost to the Government will be Fair and Reasonable: In accordance with FAR 13.106 3(a)(2)(ii) and FAR 13.106 3(a)(2)(iii), anticipated costs for the proposed contract will be considered fair and reasonable based upon a comparison (price analysis) to prices found reasonable on previous purchases and current price lists, catalogs, or advertisements.

8. Description of the Market Research Conducted and the Results, or a Statement of the Reasons Market Research Was Not Conducted: Searches through the Vender Information Pages (VIP) Database under the applicable North American Industry Classification System (NAICS) – 621511 Medical Laboratories and Product Service Code (PSC) – Q301 Medical Laboratory Testing resulted in nine Service Disabled Veteran Owned Small Business (SDVOSB) companies who could potentially provide all the required lab testing services. A search through each company’s capabilities statement and company website revealed the following:

Boulder GX LLC – A search through SAM.gov to verify current registration revealed that this company does not have an active SAM.gov registration. Thus, this company is not eligible to respond to a solicitation or receive a contract award.

Central Tox LLC – The company only provides services in Florida, Maryland, New Jersey, New York, Pennsylvania, Texas, and Virginia. They do not provide services in California.

Compass Medical Solutions LLC – The company only provides consulting services, management support, and procurement support. They do not provide specialized lab testing services.

Dotan Baer – The company provides networking services; they do not provide specialized lab testing services.

Keme62 Medical Solutions LLC – The company provides some lab testing services, but only for urinary tract infections and pharmacogenomics. They are also located in Georgia. Due to the limited testing services and the geographical location, the company cannot provide all the required services in the required time frames.

MCI Diagnostic Center LLC – A review of the company’s website confirmed they are certified and provide services in California; however, the company does not offer all the specialized testing as required by the PWS. Furthermore, a review of the company’s turnaround times for all their offered testing services reveal that the shortest turnaround time is one day. This company does not offer STAT turnaround times of two hours or less, which is required by this procurement. As such, this company is not capable of providing the required services.

Neo Services LLC – Though the company appears qualified and capable of providing the lab testing services, a search through the company website revealed that the company does not provide all the required specialized and STAT testing services. For example, searches through the company list of tests revealed they do not provide Fluorescence in Situ Hybridization (FISH), Dilute Russell Viper Venom Panel, Methotrexate, and Prothrombin Time (PT) Inhibitor Screening, all of which are required for this procurement. Furthermore, the company observes eight US national holidays. Because this procurement requires STAT testing services for all 365 days in a calendar year, the company would not be able to provide the STAT testing services in accordance with the PWS.

Washington Harris Group Inc. – This company provides services in staffing, operating, servicing, and managing healthcare delivery systems but does not specifically provide lab testing services.

YML & Company LLC – This company does not provide services in California. They only provide services in Delaware, Washington DC, Georgia, Maryland, New Jersey, New York, North Carolina, Pennsylvania, and Virginia.

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

In conclusion, of the nine potential SDVOSB firms found on the VIP Database, none of the companies are able to provide all the required testing services in the required timeframes.

Searches through the services that are on the Procurement List maintained by the Committee for Purchase from People who are Blind or Severely Disabled (AbilityOne) revealed that this mandatory program cannot meet this requirement. The program does not provide any laboratory testing services.

A search through the Small Business Administration (SBA) database under the applicable NAICS and keyword “reference lab” revealed one business registered as a SDVOSB, Veteran Owned Small Business (VOSB), and Women Owned Small Business (WOSB): MCI Diagnostic Center LLC. This company was found under the VIP Database and already determine incapable of providing the required services.

Searches through existing VA contracts (Supply Chain Master Catalog, Western States Network Consortium, Office of Procurement, Acquisition, and Logistics Enterprise Contracts, and Strategic Acquisition Center contracts) revealed that though there are several contracts, IDIQs specifically, in place for laboratory testing services, the contracts are restricted for other VISNs to use or the contractors are not located close enough to VA Palo Alto to meet all the required response times.

The only VISN 21 IDIQ located was the current contract for this requirement ( ).

Services were previously procured on IDIQ . This contract was awarded to Stanford Hospital & Clinics SHC Reference Laboratory (Large Business) on 04/01/2019 as a sole source procurement. The IDIQ includes a base year and four, one year ordering periods. All four ordering periods were utilized on the contract, extending the period of performance from 04/01/19 – 03/31/20 to 04/01/23 – 03/31/24.

Market research conducted under revealed that only one capable source was available to meet all the required testing services within the required timeframes: Stanford Hospital & Clinics SHC Reference Laboratory. The company is now called Stanford Health Care.

Stanford Health Care maintains all the required licensing, certifications, and personnel required to perform all the specialized and STAT testing. The Stanford Health Care reference laboratory is located within a 20 mile radius and 30 minutes of VAPAHCS, meeting the distance and time requirements for STAT specimen pickup.

Searches through existing medical contracts administered by the General Services Administration (GSA) found on GSA Advantage revealed Category 621II – Medical Laboratory Testing and Analysis Services. Of the various companies found on this schedule, four were also listed under VA’s National Acquisition Center (NAC) Contract Catalog Search Tool:

• V797D 30178 Millennium Laboratories, Inc.

• V797D 50532 Laboratory Corporation of America Holdings

• V797D 70090 Quest Diagnostics Incorporated

• V797D 70048 Molecular Testing Labs

A review of the GSA contracts revealed the following:

V797D 30178 is no longer an active contract Under V797D 50532, Laboratory Corporation of America Holdings has several California testing facilities. The closest facility to VAPAHCS is the Monogram Biosciences facility

Effective Date: 02/01/2022 Page 5 of 6 located at 345 Oyster Point Blvd, Southern San Francisco, CA 94080. Unfortunately, the facility is over 30 miles away and 36 minutes (outside of peak traffic times) away from VAPAHCS, which does not meet the 20 mile limitation and 30 minute pick up requirement listed in the PWS.

Under V797D 70090, Quest Diagnostics Incorporated as four facilities in California. The closest facility is located at 3714 Northgate Blvd, Sacramento, CA 95834, which is over 100 miles and 2 hours and 11 minutes (outside of peak traffic times) away from VAPAHCS. The location of this testing facility exceeds the 20 mile limitation and cannot meet the 30 minute pick up requirement listed in the PWS.

V797D 70048 is no longer an active contract.

The procurement includes a list of tests that the potential contractor must be able to provide to VAPAHCS. Searches through the contracts listed under GSA under category 621 II did not reveal a company that could provide all the required tests. Some companies, such as MDXHealth Inc., offer very few tests, and those tests are not on the list. Other companies, such as Quest Diagnostics Inc.

and Laboratory Corporation of America, offer some of the tests required under this procurement, but they do not offer all the tests.

Market research revealed that medical laboratories commonly use courier services to pickup specimens for testing. These courier services are either provided in house or hired out to companies who specialize in laboratory courier services. It is also common practice for medical laboratories to transfer the cost of specimen pickup to the customer (i.e., hospital, clinic, emergency room, etc.).

The actual costs for the courier services vary by company and medical laboratory with several factors affecting cost: distance traveled, time of travel, weight and size of specimen(s), and weekend/holiday services. On average, the longer the distance, the shorter the time required to pick up specimens, and off hour services will cost more. Many courier services are able to provide specimen pickup services within 30 minutes (one of the contractor requirements in the Performance Work Statement (PWS)); however, the cost of such services will be high due to the short timeframe.

9. Any Other Facts Supporting the Use of Other than Full and Open Competition:

Though the VA Palo Alto Healthcare System has a laboratory for testing various specimens, it does not have the equipment or staff to provide all the specialized or STAT testing needed to properly care for the Veterans. As such, the proposed contract allows for a contractor to provide the testing services that the VA cannot perform. The contractor requirements and testing times are placed in the PWS so that all services adhere to Veterans Health Administration (VHA) and The Joint Commission (TJC) standards.

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

Stanford Health Care DBA Stanford Medical Center 300 Pasteur Dr, Stanford CA 94305

SAM UEI: HH1KJWE2J6F1

CAGE: 4DDK2

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: The Government will continue to conduct market research to determine if any new companies can provide the required laboratory testing services.

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

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.

Date

Pathology & Laboratory Medicine VA Palo Alto Healthcare System

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.

Contracting Officer Date

Branch Chief

NCO 21

b. One Level Above the Contracting Officer (Required over SAT but not exceeding $750K): I certify the justification meets requirements for other than full and open competition.

Date

Acting Director of Contracting

NCO 21

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 approve ($750K to $7.5 million (or $15.0 million for acquisitions described in FAR 13.500(c)) for other than full and open competition.

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

09/21/2023

9/21/2023

09/21/2023