JOFOC Philips Intellispace Redacted.pdf

Effective Date: 03/15/2023 Revision: 02

DEPARTMENT OF VETERANS AFFAIRS

Justification and Approval

For

Exception to Fair Opportunity Memo

Acquisition Plan Action ID:36C261-24-AP-3304 JOFOC Tracker Number: FY24-NCO21-2536

1. Contracting Activity: Department of Veterans Affairs (VA), Network Contracting Office 21 (NCO 21), located at 3230 Peacekeeper Way, McClellan Park, CA 95652, in support of Veterans Integrated Service Networks 21 (VISN 21), VA Northern California Health Care System (VANCHCS).

The 2237 number is 612-25-1-476-0001.

2. Description of Action: This is a request for approval of a firm-fixed price task order under Veterans Affairs National Acquisition Center (NAC) contract VA797H-17-D-0022 for full-service maintenance coverage on the Philips Healthcare imaging equipment known as Intellispace Xcelera (Xcelera) and is being used throughout NCO 21 VISN Wide VA Medical Centers. This procurement will be conducted in accordance with Federal Acquisition Regulation (FAR) Subpart 16.5, Indefinite- Delivery Contracts. The purpose of the service agreement is to reduce service costs and improve equipment turn-around time and reliability.

3. Description of Supplies or Services: The proposed action is for a service contract to cover the Philips Healthcare Xcelera system, which provides cardiac picture archiving. It is used by a wide range of cardiology devices to store images that are vital to doctors and clinicians to treat, diagnosis, and monitor patient’s health. The Xcelera system is a mission critical medical device that is a shared resource throughout VISN 21. The proposed service contract will include hardware support, software support, clinical education, and software upgrades. The Xcelera system is a Food and Drug Administration (FDA) 510K regulated device; therefore, ongoing education and system upgrades are required by the original equipment manufacturer (OEM), the only authorized service provider. The total estimated value of the proposed action is $3,105,550.00 for one (1) base year, plus four (4) option years. The anticipated Period of Performance commencement date is October 1, 2024.

Period of Performance Amount Base Year: 10/1/2024 - 9/30/2025 $621,110.00 Option Year 1: 10/1/2025 - 9/30/2026 $621,110.00 Option Year 2: 10/1/2026 - 9/30/2027 $621,110.00 Option Year 3: 10/1/2027 - 9/30/2028 $621,110.00 Option Year 4: 10/1/2028 - 9/30/2029 $621,110.00 Grand Total: $3,105,550.00

4. Statutory Authority: The statutory authority permitting an exception to fair opportunity is Section 41 U.S.C. 4106(c) as implemented by the Federal Acquisition Regulation (FAR) 16.505(b)(2)(i):

Revision: 02

( ) FAR 16.505(b)(2)(i)(A): The agency need for the supplies or services is so urgent that providing a fair opportunity would result in unacceptable delays.

(X) FAR 16.505(b)(2)(i)(B): Only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized.

( ) FAR 16.505(b)(2)(i)(C): The order must be issued on a sole-source basis in the interest of economy and efficiency because it is a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order.

( ) FAR 16.505(b)(2)(i)(D): It is necessary to place an order to satisfy a minimum guarantee.

( ) FAR 16.505(b)(2)(i)(E): For orders exceeding the simplified acquisition threshold, a statute expressly authorizes or requires that the purchase be made from a specified source”. The statutory authority permitting an exception to fair opportunity for this action is 38 U.S.C. 8127(c), known as the Veterans First Contracting Program which provides the authority to directly contract with a Service-Disabled Veteran-Owned Small Business (SDVOSB) or a Veteran-Owned Small Business

(VOSB).

5. Rationale Supporting Use of Authority Cited Above: All large-scale medical centers (VA or private) are required by the FDA to maintain a certain regulated systems to perform clinical functions on patients. The Xcelera system, a FDA mandated system for Cardiology viewing (Ultrasounds and Fluoroscopy), has been used in VISN 21 for approximately ten (10) years. Philips Healthcare is the original equipment manufacturer (OEM) and sole source service provider for the Philips Intellispace Cardiovascular (ISCV) Portfolio software (per the OEM letter dated August 14, 2024). The Philips Healthcare services include any necessary system upgrades, providing the hospital with “up to date” products, relieving the hospital staff of any foreseeable “product/software end-life concerns.”

6. Efforts to Obtain Competition: Market research was conducted, details of which are in the market research section of this document. This effort did not yield any additional sources that can meet the Government’s requirements. There is no competition anticipated for this acquisition. In accordance with 16.505(b)(2), this action will be synopsized at award on the SAM.Gov Contract Opportunities site and the justification will be made publicly available.

7. Actions to Increase Competition: In situations involving complex medical equipment, it is difficult to remove barriers to competition because the OEM is the only qualified company capable to provide the repair and maintenance of its own specialized medical equipment. This is especially true where proprietary software, specific diagnostics tools, and specialized electronics are used to maintain the Xcelera equipment in accordance with OEM specifications. Unless the manufacturer

Revision: 02 chooses to license its software and authorize local service providers to maintain the Philips Medical equipment. The Government will continue to conduct market research to ascertain if there are changes in the marketplace that would enable future actions to be competed.

8. Market Research: U.S. General Services Administration (GSA) and Veteran Small Business Certification (VetCert) were used to determine if there were any other vendors capable of providing service and/or maintenance on the Philips medical imaging equipment. Additionally, an intent to sole source was posted to SAM.gov from August 6, 2024 through August 9, 2024 and no responses were received from any source. It has been determined that Philips Healthcare is the only company capable of providing these services on this highly-specialized equipment to the agency.

9. Other Facts: The use of these consolidated High-Tech Medical Equipment (HTME) contracts after first considering mandatory sources is strongly encouraged by the NAC. Philips Healthcare has been providing “Satisfactory” and “Very Good” performance on their current and past orders with VA Northern CA Healthcare System, as well as other VA facilities.

10. Technical and Requirements Certification: I certify that the supporting data under my cognizance, which are included in this justification, are accurate and complete to the best of my knowledge and belief.

Date

11. Determination that Anticipated Cost is Fair and Reasonable: A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable: The anticipated cost to the government is considered fair and reasonable based upon adequate competition on the VA NAC contract requirements and negotiation of prices prior to contract award.