47QRAA18D001P-001.pdf

LIMITED SOURCE JUSTIFICATION

FAR Subpart 8.405-6(a)(1)(i)(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”

VHA MSPV HCPEO Program Management Support Services

1. Agency and Contracting Activity:

Department of Veterans Affairs (VA) Strategic Acquisition Center – Frederick (SAC-F) 321 Ballenger Creek Drive, Suite 125 Frederick, MD 21703

2. Nature and/or description of action:

The Contracting Activity proposes to negotiate a new, noncompetitive award (limited source, bridge contract) with Deloitte Consulting, LLP (“Deloitte”) for the procurement of program management support services for the Medical Surgical Prime Vendor (MSPV) and Healthcare Commodity Program Executive Office (HCPEO) programs. The current task order, GS-00F- 0028Y VA119A-17-F-0405, was awarded to Deloitte as a sole source logical follow on against Deoitte’s General Services Administration (GSA) Schedule GS-00F-0028Y, which expires May 9, 2020. This task order was awarded to Deloitte in order to continue services while the Government hired federal employees to perform the required services in house. The task order subsequent to the current task order was competed and awarded to Deloitte under VA’s Services for Program Excellence and Corporate Transformation (SPECTRUM) Indefinite Delivery/Indefinite Quantity contract vehicle. VHA requires continued support services until a new contract can be competitively awared.

The VA’s Veterans Health Administration (VHA) HCPEO requires a firm fixed price bridge contract with Deloitte as they are the only source capable of providing the services required at the level of quality required for continued program support services. The anticipated period of performance is a four month base period with two – one month option periods for a not to exceed six-month period of performance. This period of performance is tailored to provide continued service while a long-term vehicle can be awarded.

A task order will be issued via GSA Schedule GS-00F-0028Y, an indefinite delivery vehicle, which ends on May 9, 2020. The current task order awarded to Deloitte expires on March 24, 2019. The total estimated value of the task order is below:

Base Period March 25, 2019 – July 24, 2019 $3,327,500.00 Option One July 25, 2019 – August 24, 2019 $830,450.00 Option Two August 25, 2019 – September 24, 2019 $830,450.00

3. Description of supplies or services:

VHA manages the United States’ largest integrated healthcare system. In 2016 the system consisted of 18 Veterans Integrated Services Networks (VISNs) with approximately 150 VA Medical Centers (VAMCs), 820 outpatient clinics, and various other facilities to include Community Living Centers (CLCs), Vet Centers, and Domiciliaries. Together these health care

Limited Source Justification VHA MSPV & HCPEO Program Management Office Support facilities, and more than 53,000 independent licensed health care practitioners who work within them, provide comprehensive care to approximately 9.3 million enrolled Veterans. The healthcare system receives a significant portion of its medical and surgical supply support via a national MSPV program that is supported by four contracts. In addition, the system is supported by a variety of disparate supply programs including, but not limited to, the GSA Federal Strategic Sourcing Initiatives (SSI) for office supplies, janitorial/sanitation, and Ability One procurement list items.

VHA designed the HCPEO and MSPV Program Management Office (PMOs) to provide a customized distribution system that offers an effective, efficient, and expeditious means for VA medical facilities to obtain routinely ordered expendable medical, surgical and other supplies.

The advantages of a properly managed expendable supply chain program include fast order turnaround, reduction of administrative workload, consolidated deliveries and receiving, reduced product pricing, and product standardization. To deliver on this mission, VHA established the MSPV Program Office within the Procurement & Logistics Office’s (P&LO) HCPEO. As the primary entity responsible for the procurement and distribution model of VHA commodities and related services, the HCPEO must examine opportunities for efficiency, cost avoidance, and enterprise solutions to supply chain challenges. This may include integration of coordinating systems (including the Generic Inventory Package (GIP), Point Of Use (POU), and the Medical Products Data Base (MedPDB); providing data analytics support to analyze information received from the field to develop the required MSPV Formulary; continuously improving a joint VHA/Office of Procurement, Acquisition and Logistics (OPAL) process to allow rapid access to needed supplies as transition occurs; establishing the concept of operations (CONOPS) for the maintenance of the catalog through the commodities or product lifecycle; planning the integration of new supply chain programs with the current VA data repository and all required enterprise IT systems, including, but not limited to those mentioned above.

Due to the scope, complexity, and level of effort required to administer the HCPEO and MSPV programs, and to plan the implementation of similar non med/surg supply chain programs, VHA requires coordinated and comprehensive program management support services to maintain MSPV operations until the office can be fully staffed with VA employees, and to establish, plan and initially staff the additionally contemplated supply chain program management offices. The Contractor shall support VHA in administration of the MSPV Program, to include the implementation of a clinician driven sourcing model, as well as the continuous planning and implementation of other/additional products or commodities that are not included in the MSPV program but are required for the operations of VHA facilities. Required tasks will include the programmatic planning that will result in a comprehensive strategy to support the phased transition from current state to full implementation of the MSPV and the HCPEO office. Work also includes spend analysis; elicitation of product requirements to populate the catalogs;

planning a joint VHA/OPAL process to allow rapid access to needed supplies as transition occurs; establishing the CONOPS for the maintenance of the catalogs through the program lifecycle; planning the integration of program data with the current VA data repository and all required enterprise IT systems; plan the development of a program training components; assist in the development of program strategic communication and organizational change management plans as well as developing COAs and managing risks to ensure no gap in coverage from current to future state program implementation.

These efforts will provide HCPO with a disciplined approach to category management, supplier and performance management, compliance management, and acquisition planning and execution oversight. The Contractor shall provide the support as outlined to ensure that VHA consistently receives innovative, best-in-class products and services from suppliers at the best value which allows HCPO to deliver outcomes that improve the Veteran experience.

The key objectives of this effort are as follows:

• Implement industry best practices and end-to-end supplier management strategies, to include o Transforming the environment to utilize managed services, cloud services, and commercial off-the-shelf (COTS) solutions o Developing consistent/standard processes and metrics to optimize spend, while improving product and service quality

• Manage the sourcing lifecycle

• Utilize best value versus lowest cost awards when appropriate

• Ensure suppliers are accountable for performance and results

• Monitor HCPO supplier performance reports and drive improvements

• Identify cost avoidance/savings to reinvest in transforming HCPO legacy infrastructure and systems

The scope of work is composed of four (4) major efforts with the following goals and objectives:

• Compliance Management and Operations -o Establish and publish policies and procedures, for strategic sourcing solutions

(e.g. Supplier Management, Category Management, Acquisitions Planning and Execution) o Establish a methodology for continuous process improvement for business processes o Establish an operational internal and external Communication Plan o Establish performance measures and baseline targets for strategic sourcing o Implement and utilize effective and robust collaboration and information sharing tool o Streamline and establish governance policies and boards for strategic sourcing o Streamline process for maintaining operational budget for strategic sourcing solutions

• Acquisition Planning and Execution -o Modernize acquisition practices and capabilities across strategic sourcing solutions o Consolidate requirements and contracts o Institutionalize acquisition policies and processes to implement the following, but not limited to: strategic sourcing, category management, clinically driven sourcing, and performance management o Utilize and leverage value-based and outcome driven acquisition solutions o Increase customer engagement and create operational efficiency

• Category Management -o Improve spend and demand management o Implement effective cost avoidance and cost savings strategies to include strategic sourcing model for leveraging buying power, and adopting and utilizing various government and commercial strategic sourcing vehicles and initiatives o Create operational and evidence-based category management strategies to include documented and vetted long-term category management roadmap with interim phases/stage gates

• Supplier Management -o Establish supplier management solutions for supplier outreach and communication o Establish and publish supplier relationship management goals, objectives and framework across all categories o Align supplier performance to supplier value by utilizing existing performance tools o Enforce consistent and standard processes and metrics to optimize spend, while improving product and service quality o Establish a disciplined approach to educating customer on supplier capabilities

The contractor shall provide support to the HCPEO and MSPV PMOs with the following tasks:

• Task 1: Integrated Baseline Review and Kickoff Meeting

• Task 2: HCPEO Charter for each PEO Subtask

• Task 3: Project Management and Reporting for each PEO Subtask

• Task 4: Transition Plans for each PEO Subtask

• Task 5: PEO Organizational Change Management, Communications, and Training

Strategy Execution

• Task 6: Core Support Tasks, including continued support of Program Analysis and

Recommendations/Gap Analysis, Catalog Management Plan, Program Control Plan, and Implementation Plan

The required support includes implementation of a clinician driven sourcing model, programmatic planning of a comprehensive strategy to support the phased transition from current state to full implementation of the MSPV and the HCPEO office, and development of a joint VHA/OPAL process to allow rapid access to needed supplies as transition occurs.

Additionally, the contractor will assist in establishing the CONOPS for the maintenance of the MSPV catalogs through the program lifecycle, integrating program data with the current VA data repository and IT systems, as well as development of program strategic communication and organizational change management plans.

4. Authority and supporting rationale:

The authority permitting an exception to fair opportunity is Federal Acquisition Regulation (FAR) Subpart 8.405-6(a)(1)(i)(B), entitled: “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 existing task order was awarded by SAC-F as a new, non-competitive award (sole source logical follow on) under task order GS-00F-0028Y VA119A-17-F-0405 to the original award, which was awarded under VA task order number VA798-11-D-0124 VA119A-16-J-0067. The original task order was competed under VA’s SPECTRUM Indefinite Delivery/Indefinite Quantity contract vehicle. The SPECTRUM contract vehicle has since expired and no new orders or extensions may be placed against the contract. The existing task order was placed against Deloitte’s FSS GS-00F-0028Y. The proposed task order will be also placed against Deloitte’s FSS Schedule.

The logical follow-on was awarded to allow the HCPO and MSPV program offices the time needed to obtain sufficient Government staffing to take over from the contractor. However, several factors, including a hiring freeze and the time needed to obtain the necessary approvals to request waivers to hire, delayed the hiring process, which resulted in selectees accepting other offers. Most impactful to the program were the recent changes in key leadership roles and a dramatic shift in the direction of major programs. Development of the new program framework began during the final months of 2018; final approvals by senior leadership is underway. These changes greatly expanded the scope of major programs and resulted in the HCPO and MSPV taking on greater responsibilies and workload that was previously performed by the Strategic Acquisition Center (SAC). As a result, the MSPV and HCPO do not possess staff with the requisite skills and capabililtes required to sustain the current program and support the phased transition from current state to full implementation of the next evolution of the programs under the MSPV and the HCPEO office. The recent hiring efforts of the HCPO did not consider the specialized skills and capabilities needed to accommodate the increased roles and responsibilities now required to sustain the current programs while implementing program changes. Had the HCPO filled those positions, there would still be a staffing deficit and the office would have to acquire additional staff.

The proposed task order will provide the Government with continued program management support over the next six months to allow for a follow-on vehicle. The proposed six-month extension will allow the program to remain in a state whereby the Government can continue to manage the program supplemented by continuous contractor support. Deloitte has provided these support services to VHA for over two years and has spent considerable time and effort developing the MSPV and HCPEO programs in coordination with VHA to ensure the programs will be functional, as well as accepted and implemented VHA-wide. Over this time, Deloitte has gained detailed understanding of the requirement, which includes tasks and deliverables to ensure consistent execution, implementation, and maintenance of the MSPV and HCPEO program offices. This detailed and historical understanding of the MSPV and HCPEO programs makes Deloitte extremely well-suited to provide the required, continued services without any down-time or introductory period, which could otherwise be inefficient to the Government and cause substantial delays. During performance of the existing task order, Deloitte successfully provided the required services, has worked through recruitment costs, and has established a system for providing staff that have a well-rounded understanding of the current state of development of the MSPV and HCPEO programs. A change of contractors now would require a complete change in existing staff, with added costs associated with reviewing new credentialing packages, conducting orientation, and obtaining Personal Information Verification (PIV) and network access, during this time no services would be provided.

As the current task order’s period of performance ends on March 24, 2019, it is necessary for VHA to avoid the risk of a break in service for the MSPV and HCPEO program office development. The programs are critical to ensure efficient management of providing medical care and facilities to Veterans. Failure to award these additional months of final development would severely impact VHA’s operations as the MSPV and HCPEO programs would be overwhelmed with program management requirements from across the VHA and face serious challenges to successfully bringing the MSPV and HCPEO programs to the stability. Under the existing task order, Deloitte has invested an immense amount of time to understand and assist the development of the MSPV and HCPEO programs. Awarding an order to a different contractor without a comprehensive transition period, which involves workload transition, potential staff exchange, knowledge transfer, and a probable program management learning curve, would be damaging to the final implementation of the programs. Re-competing this requirement prior to the end of the existing task order is not feasible and would result in substantial duplication of cost to the Government that is not expected to be recovered through competition.

Additionally, a change in contract support now would place the program at great risk. There is no time to permit a seamless transition to a different contractor. The organization is undergoing significant change as current efforts to support the transition from the current MSPV-NG distribution program to the next evolution of VHA distribution under Supply Chain Transformation, MSPV 2.0. This transition requires daily communication and support that understands the project history, key stakeholders, and the agency requirements.

5. Determination that order represents best value:

As part of its evaluation, the Government will evaluate Deloitte’s proposed labor rates and level of effort and mix of labor for each task to determine whether Deloitte’s total proposed price is reasonable in accordance with FAR 8.405-2(d) and the task order provides best value to the Government in accordance with FAR 8.404(d). An award will only be made if Deloitte’s proposed labor rates are at or below its schedule rates and its proposed level of effort and mix of labor for each task is acceptable.

6. Description of Market Research or statement of the reason market research was not conducted:

As the incumbent contractor, Deloitte is the only contractor in a position to provide the necessary continued services in order to prevent a break in services. As such, Deloitte was the only contractor reviewed as part of the market research. Once the bridge contract is in place, the Government will conduct comprehensive market research to determine the appropriate acquisition strategy, including whether Vendor Information Pages (VIP) verified Veteran-Owned businesses are available to provide the services at a fair and reasonable price that provides best value to the Government.

For the long-term effort, a Sources Sought notice has already been published to the Federal Business Opportunities (FBO)

The Government will submit a notice of intent to sole source to FBO soliciting feedback from industry concerning the proposed sole source contract to Deloitte.

7. Other facts supporting the justification:

While other contractors may have experience with the development and implementation of program offices, none have the unique knowledge of complexities related to the MSPV and HCPEO programs that Deloitte possesses. This knowledge is necessary to seamlessly and expeditiously complete the final implementation phase of program office development, which will stabilize performance under the programs and be completely staffed by Government employees, as opposed to contractor employees.

8. Actions the agency may take to remove or overcome barriers:

The need for continued contractor support, as proposed, will allow the MSPV and HCPEO program offices the time needed to prepare a long-term solution to continue the required services . Market research has already begun for the follow-on contract to determine the appropriate acquisition strategy. This sole source bridge task order will provide the necessary breathing room to complete a comprehensive market research report

CERTIFICATIONS

9. Contracting Officer’s certification that the justification is accurate and complete:

I certify that this justification is accurate and complete to the best of my knowledge and belief.

Corey Mann Date Contracting Officer

10. Technical personnel 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 Technical Representative

APPROVALS

11. Approving Official certification:

In my role as Contracting Activity Competition Advocate, based on the foregoing justification, I hereby approve the acquisition of program management support services on a limited sources basis pursuant to the authority cited in paragraph 4 above, subject to availability of funds, and provided that the services herein described have otherwise been authorized for acquisition.

Clint Druk Date Deputy Director, SAC-F Competition Advocate