P03- 36C262-27-AP-0185-FY26-2204 JOFOC NCO22 ELA CBOC HCA Approved.pdf

Request for Sole Source Justification

VHAPG Part 806.3 OFOC Page 1 of 6 Revision: 04 Effective Date: 12/15/25 Acquisition ID#: 36C262-27-AP-0185_

DEPARTMENT OF VETERANS AFFAIRS

Justification and Approval (J&A)

For Other Than Full and Open Competition (>SAT)

Acquisition Plan Action ID: 36C262-27-AP-0185

1. Contracting Activity: The Department of Veterans Affairs (VA), Veterans Integrated

Services Network (VISN) 22, VA Greater Los Angeles Healthcare System, (VAGLAHS) is the requiring activity. This acquisition is being executed by Network Contracting Office (NCO) 22.

2. Nature and/or Description of the Action Being Approved: This document serves as the justification for Other Than Full and Open Competition to establish a new sole‑source contract for Community Based Outpatient Clinic (CBOC) services with Valor Healthcare INC, a large business. The contract will be a Firm Fixed Price (FFP), Indefinite Delivery/Indefinite Quantity (ID/IQ) with a Per Member Per Month (PMPM) rate structure, supporting the provision of primary care and telehealth services for approximately 1,600 Veteran beneficiaries located in East Los Angeles (ELA) within the VAGLAHS catchment area.

The procurement is being conducted using Acquisition of Commercial Products and Commercial Services RFO 12.201‑1, Simplified Procedures. The justification follows the documentation format outlined in RFO 6.104‑1, Justification Content, with the statutory authority based on 41 U.S.C. 1901, and services authorized under 38 U.S.C. 8153, VAAR 873.108(b), and VA Directive 1663. These authorities collectively support VA’s responsibility to ensure that qualified Veterans receive essential CBOC services within their community by leveraging VA’s health‑care resource sharing authorities to maintain access, continuity, and compliance with VA standards of care.

3. Description of Supplies/Services Required to Meet the Agency’s Needs: The ELA CBOC provides essential primary care and telehealth services to eligible Veterans in the surrounding community. This requirement ensures continuous, comprehensive, and accessible outpatient care consistent with VA’s mission to deliver high‑quality medical, behavioral health, and administrative support services in a community‑based setting.

The contractor will furnish all primary care physicians, nurses, nurse practitioners, mental health staff, and administrative personnel needed to operate the existing ELA CBOC. Because the clinic is already fully operational, no construction, IT, furniture, or start‑up costs are required. Services will be provided under a sole‑source acquisition using a Per Member Per Month (PMPM) capitated rate under an FFP IDIQ contract, ensuring predictable pricing and ordering flexibility.

VHAPG Part 806.3 OFOC Page 2 of 6

Acquisition ID#: 36C262-27-AP-0185_

Total Estimated Cost for CBOC: $4,864,023.00.

Total estimated cost for the two‑year period plus six‑month extension via RFO 52.217-8. The total ceiling is set at $6,500,000.00

Period of Performance:

Base Period: October 1, 2026 – September 30, 2027 Option Year 1: October 1, 2027 – September 30, 2028

4. Statutory Authority Permitting Other than Full and Open Competition:

RFO 12 Procedures for Acquisition of Commercial Products and Services. The statutory authority for applying the Simplified Procedures for Acquisition of Commercial Products and Services of RFO 12.201-1 is 41 U.S.C. § 1901 and is implemented by RFO 12.102(b) for restricting competition on this procurement.

Competition is restricted on this procurement for the reasons below:

(X) (1) Only One Responsible Source and No Other Supplies or Services Will

Satisfy Agency Requirements ( ) (2) Unusual and Compelling Urgency ( ) (3) Industrial Mobilization, Engineering, Developmental or Research Capability or Expert Services ( ) (4) International ( ) (5) Authorized or Required by Statute ( ) (6) National Security ( ) (7) 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 acquisition requires the use of Acquisition of Commercial Products and Commercial Services RFO 12.201‑1, Simplified Procedure, statutory authority based on 41 U.S.C. 1901, due to the immediate need to maintain uninterrupted healthcare services for Veterans enrolled in the ELA CBOC. This action serves as a bridge contract to ensure continued delivery of primary care and telehealth services while the Department finalizes the award of the long‑term ELA CBOC competed contract scheduled for implementation by July 1, 2028.

CLIN Description Estimat ed Quantit y

Estimated Per Member Per Month (PMPM) Rate

Estimated Monthly Cost

Estimated Annual Cost

0001 Primary Care CBOC Services 10/1/26- 9/30/27

1600 $120.24 $192,384.00 $2,308,608.00

1001 Primary Care CBOC Services 10/1/27- 9/30/28

1725 $123.45 $212,951.25 $2,555,415.00

VHAPG Part 806.3 OFOC Page 3 of 6

Valor Healthcare Inc. is the only responsible source capable of meeting the Government’s immediate requirements without causing a lapse in care. As the incumbent provider, Valor Healthcare Inc. currently operates the ELA CBOC using the same primary care physicians, nurses, nurse practitioners, mental health staff, and administrative personnel. Veterans are familiar with this clinic and its providers;

any interruption in services would negatively affect continuity of care and delay access for more than 1,600 enrolled Veterans.

Awarding this requirement to another contractor at this time would result in unacceptable delays. Awarding a new CBOC requires facility preparation related to construction, staffing, credentialing, information technology integration, and onboarding activities. These processes typically take 12 to 18 months, and VAGLAHS does not have sufficient resources to conduct a full competitive procurement and transition without jeopardizing essential healthcare services.

Furthermore, having to transition to a new provider at this time would result in substantial duplication of costs as it relates to staffing, credentialing, information technology integration, and onboarding activities that cannot be recouped under a short‑term bridge action. Also, retrofitting or configuring a new clinic site for CBOC operations would generate significant expenditures from a construction standpoint that are not appropriate for the limited performance period. It would cost VAGLAHS approximately $3.7 million to build out and retrofit a new clinic, which there is no time for without disruption in Veteran care. Additionally, VAGLAHS would pay approximately $380k in rent annually. In contrast, continuing services with the incumbent avoids unnecessary transition costs and preserves continuity of care.

The long‑term ELA CBOC capitated contract is expected to be awarded by July 1, 2028. Until then, it is in the Government’s best interest to continue services with Valor Healthcare Inc. to ensure stability, maintain established clinical relationships, and prevent any disruption in access to primary and behavioral health services for Veterans.

6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as possible (including whether a notice was or will be publicized as required by RFO Part 5 and, if not, which exception under RFO Part 5 applies): Market research is underway to identify potential sources and determine the appropriate set‑aside strategy for the long‑term primary care contract at the ELA CBOC. These efforts aim to support full and open competition.

For the immediate need, only one responsible source, Valor Healthcare Inc., can provide the credential staff required to maintain uninterrupted care. As the incumbent operating the current ELA CBOC, Valor is the only contractor positioned to prevent a lapse in services for approximately 1,600 Veterans. Accordingly, the bridge action is authorized under RFO 12.201‑1, Simplified Procedure, statutory authority based on 41 U.S.C. 1901.

https://www.acquisition.gov/far-overhaul/far-part-deviation-guide/far-overhaul-part-5 https://www.acquisition.gov/far-overhaul/far-part-deviation-guide/far-overhaul-part-5 https://www.acquisition.gov/far-overhaul/far-part-deviation-guide/far-overhaul-part-5

VHAPG Part 806.3 OFOC Page 4 of 6

A formal synopsis will be issued. Public notice requirements will be met.

To support future competition, the VA is conducting market research that includes reviewing existing contract vehicles, evaluating industry capabilities, assessing small business participation, and determining the procurement strategy. While this will not produce alternatives for the short‑term bridge, it will inform planning for a competitive award. Transition activities—such as credentialing, onboarding, and facility readiness—typically require 4 to 6 months and will be incorporated into the long‑term acquisition plan.

7. Determination by the CO that the Anticipated Cost to the Government will be Fair and Reasonable: In accordance with RFO 12.204(a), the Contracting Officer (CO) will determine that the anticipated cost for this requirement will be fair and reasonable. Determination will be based on the incumbent proposed rates, historical pricing for similar services, the independent government cost estimate (IGCE), and prevailing market rates for equivalent healthcare services. Additionally, the CO will assess whether the proposed rates are aligned with competitive benchmarks and confirm that no excessive cost increases are present.

8. Description of the Market Research Conducted and the Results, or a Statement of the Reasons Market Research Was Not Conducted: Market research was conducted in accordance with RFO Part 10 – Market Research and VAAR Part 810 to identify vendors potentially capable of providing CBOC services.

The contract specialist conducted searches through several government databases and reviewed vendor performance data, contract history, and other available resources to assess viable sources capable of meeting the requirement. Market research for this requirement was conducted on May 26, 2026.

A search in SAM.gov, (https://sam.gov), using the same NAICS code 621498 – All Other Outpatient Care Centers identified 299 vendors. A search in Dynamic Small Business Search (DSBS) using the same NAICS code identified three (3) vendors, totaling 302 vendors. Of these, 58 were SDVOSB, but none of them appeared to offer Community-Based Outpatient Clinic (CBOC) services or demonstrated the capabilities required for this procurement.

The Medical Sharing / Affiliate Nation Program Office (MSO) database confirms that there are currently 17 vendors nationally capable of performing CBOC services, including the incumbent vendor.

Market research confirmed that although multiple vendors are capable of performing the work under a new long-term contract, only the incumbent vendor is positioned to continue services immediately without a lapse in care. Any transition to a new vendor for the short-term period would result in unacceptable delays or disruption to Veteran care.

https://sam.gov/

VHAPG Part 806.3 OFOC Page 5 of 6

Acquisition ID#: 36C262-27-AP-0185_

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

The ELA CBOC currently provides primary care and behavioral health services to more than 1,600 Veterans, many of whom are elderly and rely heavily on consistent access to community‑based healthcare. Continuity of care is essential for this population, as disruptions in primary care, chronic disease management, mental health treatment, laboratory services, and medication monitoring can result in significant adverse health outcomes. A sudden lapse in services would jeopardize Veteran health by delaying treatment, interrupting clinical relationships, and reducing access for vulnerable Veterans who depend on the established clinic staff for timely and ongoing medical support. Maintaining uninterrupted care is therefore critical to safeguarding Veteran health and ensuring compliance with VA standards of accessibility.

The short‑term contract is a temporary solution designed solely to preserve continuity of care while the VA completes the competitive acquisition process for the long‑term CBOC requirement. By continuing services with the incumbent provider during this interim period, the Government ensures that elderly and medically fragile Veterans retain immediate, stable access to essential healthcare in their community without interruption.

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

Valor Healthcare Inc. 14643 Dallas Pkwy, Ste 100, Dallas, TX 75254.

UEI: TB2ELWL2QEB5.

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: VAGLAHS plans to award a new long-term ELA CBOC contract. The anticipated start date for the competitively awarded long‑term contract is July 1, 2028. The actions leading up to this award, including market research, requirements refinement, acquisition planning, and solicitation development, will remove current barriers to competition and enable full and open competition for the subsequent acquisition.

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.

Haymish Khan Date Supervisory Program Specialist

VAGLAHS

VHAPG Part 806.3 OFOC Page 6 of 6

13. Approvals in accordance with the VHAPM Part 806.3 OFOC SOP:

a. Contract Specialist: I certify that the foregoing justification is accurate and complete to the best of my knowledge and belief.

Jose Diaz Date Contract Specialist Network Contracting Office 22

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

Haig Altunian Date Contracting Officer

c. One Level Above the Contracting Officer (Required over SAT but not exceeding $900K): I certify the justification meets requirements for other than full and open competition.

Jarrod Washington Date Division 3 Chief, Healthcare Resources

d. Director of Contracting Review and Approval: I approve the justification for other than full and open competition for HCA review and approval. .

Sabrina J. Smith Date

Director of Contracting

e. 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 (if over $90 million) or approve ($900K to $90 million) for other than full and open competition.

Curtis M. Jordan Date Executive Director, Regional Procurement Office West Head of Contracting Activity (HCA) https://dvagov.sharepoint.com/sites/vhapromanual/SitePages/VHAPM-Part-806.3.aspx