AID-OAA-TO-15-00007_TO1 extension_J and A.pdf

JUSTIFICATION AND APPROVAL

TO: M/OAA/GHSC – Eduardo Elia, Division Chief

CC: M/OAA – Deborah Broderick, Agency Competition Advocate

FROM: GH/OHA/SCH – Sherif Mowafy, GHSC-PSM and Deputy Division Chief

DATE: June 15, 2022

RE: Task Order No. AID-OAA-TO-15-00007 (“Task Order 1”) of the Global Health Supply Chain – Procurement and Supply Management (GHSC-PSM), Contract No. AID-OAA-I-15-00004

SUBJECT: Justification and Approval (J&A) for Other than Full and Open Competition under the “Expedited Procedures Package (EPP) for Programs Managed by the U.S. Agency for International Development (USAID) for the Prevention, Care, and Treatment of HIV/AIDS under the President's Emergency Plan for AIDS Relief (PEPFAR)”

RECOMMENDATION

That you approve this J&A for use of other than full and open competition pursuant to the “Expedited Procedures Package (EPP) for Programs Managed by the U.S. Agency for International Development (USAID) for the Prevention, Care, and Treatment of HIV/AIDS under the President's Emergency Plan for AIDS Relief (PEPFAR)” approved on December 31, 2019. Your approval of this Justification and Approval (J&A) constitutes the justification for other than full and open competition as required by Tab 1 (D&F for the Authorization of Less than Full and Open Competitive Procedures for Contracts) of the EPP.

Approve: __________________________ Disapprove _______________ Date: _____

1. This document sets forth the facts and rationale justifying the use of other than full and open competition.

Approval is requested for the justification for use of other than full and open competition pursuant to the authorities under the “Expedited Procedures Package (EPP) for Programs Managed by the U.S. Agency for International Development (USAID) for the Prevention, Care, and Treatment of HIV/AIDS under the President's Emergency Plan for AIDS Relief (PEPFAR)”

(also referred to as Expedited Procedures Package or EPP for HIV/AIDs) approved December 31, 2019 and effective through December 31, 2024. Your approval of this Justification and Approval (J&A) constitutes the justification for other than full and open competition as required by Tab 1 (Determinations and Finding (D&F) for the Authorization of Less than Full and Open Competitive Procedures for Contracts) of the EPP.

2. The nature and/or description of the action being approved:

The IDIQ ordering period ended on November 23, 2020. The period of performance for the IDIQ and Task Order 1 (HIV) was previously extended once, in 2016, to make up for the eight-month delay resulting from a GAO protest.

This is a request to approve a contract modification to Task Order No. AID-OAA-TO-15-00007 (“Task Order 1”) of the Global Health Supply Chain – Procurement and Supply Management (GHSC-PSM), Contract No. AID-OAA-I-15-00004 – to (i) extend the period of performance (PoP) from November 29, 2023 to November 28, 2024, (ii) increase the level of effort (LOE) in support of field operations by 1,315,016 hours from 9,061,472 hours to 10,376,488 hours, and the level of effort (LOE) in support of Headquarters operations, central procurement, and Headquarters support to field programs by 510,352 hours from 2,125,392 hours to 2,635,744 hours, and (iii) increase the TO ceiling by $750,135,814 from $5,175,232,442 to $5,925,368,256.

Under this action, the GHSC-PSM contractor - Chemonics International - will continue to provide testing, treatment, and diagnostic supplies and equipment for USAID’s global health commodity supply chain in accordance with existing contract requirements.

3. Description of the supplies or services required, including an estimated value:

Task Order 1 mainly procures health commodities for HIV and provides technical assistance to more than 50 countries. Task Order 1’s current ceiling is $5,175,232,442 where $4,770,597,079 have been obligated to date. Task Order 1 procures more than 4,500 different products including treatment, testing, pre-exposure prophylaxis, laboratory consumables, and equipment, among other items. It has also supplied multiple countries with personal protective equipment, rapid diagnostic tests, and other commodities, using funds provided under the American Rescue Plan Act, to help countries with their fight against the COVID 19 pandemic.

4. Statutory authority permitting other than full and open competition:

AIDAR 706.302-70(b)(3) and Action Memorandum entitled “Expedited Procedures Package (EPP) for Programs Managed by the U.S. Agency for International Development (USAID) for the Prevention, Care, and Treatment of HIV/AIDS under the President's Emergency Plan for AIDS Relief (PEPFAR),” approved December 31, 2019. It is expected that over half the funding for the contract will come from the PEPFAR program and, therefore, the EPP may be applied to this action.

5. A discussion of the proposed contractor’s unique qualifications or the nature of the acquisition that requires use of the authority cited.

The principal reason for the extension is to avoid impairment of the foreign policy objective of ensuring that there be no disruption in the essential quality assured life-saving commodities and services for the prevention, diagnostics, and treatment of people living with HIV as USAID transitions from the GHSC Program to the NextGen follow-on. It is imperative that the NextGen follow-on contractors to GHSC-PSM and the other GHSC awards be able to assume 100% responsibility for USAID’s global health commodity supply chain. Experience has taught us that there has to be a transition and overlap period of 12-18 months for the new contractor(s) to assume full responsibility. Until that point, and perhaps for some time afterwards, USAID will need the redundancy of the GHSC-PSM contract to ensure that there is no serious disruption in furnishing essential, quality-assured health commodities. One of the lessons learned during the transition from the SCMS contract to the GHSC Program was the need for a flexible transition period to ensure a seamless supply of essential medicines and other commodities. The other was the need for redundancy during the transition and even after the new contractors have assumed full responsibility. The transition will be a gradual process until the new contractor(s) are 100% responsible and fully operational. It is important to extend the period of performance and increase the ceiling now to put the contractor on notice that its services will be required for a longer period; to allow sufficient time to negotiate the contractor’s cost proposal; and, most importantly, to provide timely assurance to the Missions that these services will be available to them as part of an orderly and seamless transition to the NextGen Procurement Service Agents (PSAs). Task Order 1 is currently scheduled to stop ordering and delivering some commodities by June 2022, and the related technical assistance activities will be complete in May 2023. In order to make the necessary adjustments to extend these activities before this date, it is critical that the GHSC-PSM contractor is allowed to begin to renegotiate and extend subcontracts now and allow manufacturers to plan extended manufacturing schedules with sufficient lead time.

Even with an approved J&A, the GHSC-PSM contractor cannot order additional commodities from manufacturers before the TO is modified to extend the period of performance, as the GHSC-PSM contractor negotiates additional commodity quantities into its subcontracts.

Modifications of this type often require a couple of months to obtain a proposal/budget from the contractor, negotiate the terms of the extension, and execute the extension, and then an additional two to three months for the contractor to negotiate extensions of its current commodity subcontracts with manufacturers and for USAID to approve these changes. The completion of these activities is expected to occur perilously close to the currently-scheduled end of commodity delivery in June 2022, and leaves little room for slippage. A gap in the delivery of critical, life-saving commodities can be avoided now with timely planning and approval of this J&A.

6. A description of efforts made to ensure that offers are solicited from as many potential sources as is practicable.

Publication of a notice is not required per the determination at AIDAR §705.202(b).

Additionally, the Agency determined that soliciting offers from other potential sources was not practical or necessary because Chemonics, the current incumbent, is the only organization that can provide these services at scale during this timeframe.

GH has considered the option of awarding a separate contract using full and open competition, which could lead to USAID obtaining additional value or better contractual terms, but concluded that this is not a viable alternative. A cost benefit analysis shows that these potential benefits are offset by the cost associated with start-up and close-out of a new contract in such a short period of time. GH’s and OAA’s timeline analysis indicates that the earliest a new contract could be designed, competed, and awarded using full and open competition is June 2023, which is approximately nine months after the Task Order 1 expires. This approach could jeopardize ordering under GHSC-PSM and cause a significant gap in procurement and delivery of life-saving health commodities. In addition, this competitively-awarded bridge contract would only be operational for a brief period before the follow-on contract is awarded.

Therefore, USAID’s best and most viable option is to pursue an extension of the current task order through November 2024.

7. A determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

The Contracting Officer has determined that the anticipated cost or price of the additional quantities of supplies/services to be acquired from Chemonics International, and covered by this J&A, will be fair and reasonable. This anticipated cost is based on an Independent Government Cost Estimate (IGCE) prepared by the COR and the historical costs incurred under the current contract. Prior to the award of the proposed extension, additional cost or price information shall be obtained from the contractor as needed to document a cost analysis and to sufficiently determine that the cost to the Government will be fair and reasonable. There is no change in the scope of work. All previously-incurred costs have been determined to be fair and reasonable.

No other types of costs are anticipated.

8. A description of the market research conducted (see FAR Part 10) and the results or a statement of the reason(s) market research was not conducted.

Additional market research was not conducted because, as discussed above, the extension is intended to provide continuity of services and a seamless transition to the NextGen follow-on contract.

9. Sources, if any, that expressed, in writing, an interest in the acquisition.

None.

10. The actions the Agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required:

No barriers currently exist for new entrants into this domain; however, USAID is competing the follow-on to the GHSC-PSM contract and all the other NextGen contracts for the same or similar services of the GHSC Program.

The solicitation for the follow-on contract is in the final phase of internal review and the estimated release date of the RFP is the end of July 2022.

11. Technical Certification:

In accordance with FAR 6.303-1(c), I hereby certify that the technical statements included above and which form a basis for the justification are complement and accurate in accordance with EPP entitled Justification for Other than Full and Open Competition under the “Expedited Procedures Package (EPP) for Programs Managed by the U.S. Agency for International Development (USAID) for the Prevention, Care, and Treatment of HIV/AIDS under the President's Emergency Plan for AIDS Relief (PEPFAR)” approved December 31, 2019 (attached).

Sherif Mowafy, COR, GH/OHA/SCH Date

12. Office of the General Counsel Clearance:

Samuel Jack, GC/A&A Date

13. Contracting Officer Certification:

In accordance with FAR 6.303, I hereby certify that the justification is accurate and complete to the best of my knowledge and belief.

Eduardo Elia, Contracting Officer, M/OAA/OHA Date

6/15/2022 e-mail 6/6/2022

CLEARANCE PAGE FOR ACTION MEMO FOR

RE: Task Order No. AID-OAA-TO-15-00007 (“Task Order 1”) of the Global Health Supply Chain – Procurement and Supply Management (GHSC-PSM), Contract No. AID-OAA-I-15-00004

SUBJECT: Justification and Approval (J&A) for Other than Full and Open Competition under the “Expedited Procedures Package (EPP) for Programs Managed by the U.S. Agency for International Development (USAID) for the Prevention, Care, and Treatment of HIV/AIDS under the President's Emergency Plan for AIDS Relief (PEPFAR)”

Clearances:

GH/OHA/SCH: DEdgil __Clear________ Date: 06/15/2022