TO2 Justification and Approval Nov 2026.pdf

TAB 2

JUSTIFICATION AND APPROVAL FOR OTHER THAN FULL AND OPEN COMPETITION (J&A)

TO: Atul Gawande, Assistant Administrator, GH/AA

FROM: Christine Hershey, Technical Officer/Activity Manager, GH/ID/MAL

DATE: January 05, 2024

SUBJECT: Justification and Approval (J&A) for Other than Full and Open Competition to Modify Contract #AID-OAA-I-15-00004/AID-OAA-TO-15-00009, Global Health Supply Chain-Procurement and Supply Management (GHSC-PSM) Task Order 2 Malaria under AIDAR 706.302-70 Impairment of foreign aid programs

1. This document sets forth the facts and rationale justifying the use of other than full and open competition, in accordance with AIDAR 706.302-70(b)(3)(i). This document was prepared by the Malaria Division of the Office of Infectious Disease, Bureau for Global Health (GH/ID/MAL) for the GHSC-PSM malaria task order (contract

AID-OAA-I-15-00004/AID-OAA-TO-15-00009).

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

This is a justification and approval for a non-competitive modification of Task Order Number AID-OAA-TO-15-00009 (“Task Order 2” or “TO2”) under GHSC-PSM. Task Order 2 is a Cost-Plus-Fixed Fee (CPFF) term contract with a total estimated cost (TEC) of $2,565,147,030. The TO2 period of performance was originally April 20, 2015 with a completion date of April 19, 2020.

On February 9, 2016, the period of performance was extended to November 28, 2020 to account for 223 days of contract performance lost due to the stop work orders resulting from the Government Accountability Office (GAO) protest and the subsequent case filed with the Court of Federal Claims.

On October 23, 2019, TO2 period of performance was extended until November 28, 2023, based on the approved Action Memorandum dated July 15, 2019. Because the initial Indefinite Delivery Indefinite Quantity (IDIQ) was competitively awarded, TO2 could be extended within the ordering period without requiring competition. The extension also increased the TEC to $2,565,147,030, and increased the level of effort (LOE) to 4,485,064 hours in support of field operations, and 1,126,480 hours in support of Headquarters operations.

On July 18, 2023, TO2 period of performance was extended again until November 28, 2024, based on the approved Action Memorandum dated December 22, 2022. The extension ensured the continuity of services during the follow-on supply chain design and award period. The extension increased the LOE to 4,565,982 hours in support of field operations, and retained 1,126,480 hours in support of Headquarters operations.

The proposed action is to: 1) extend the period of performance (PoP) from November 28, 2024 to November 28, 2026; 2) increase the TEC by $830,339,575 from $2,565,147,030 to $3,395,486,605 ;

3) increase the LOE in support of field operations by 1,765,128 hours from 4,565,982 hours to 6,331,110 hours; and 4) increase the LOE in support of headquarters operations, central procurement, and headquarters support to field programs by 156,864 hours from 1,126,480 hours to 1,283,344 hours. Under this action Chemonics will continue to provide procurement and supply chain management of malaria commodities for USAID-supported countries.

The USAID GHSC-PSM project promotes an uninterrupted supply of health commodities to prevent suffering, save lives, and create a brighter future for families across the globe. GHSC-PSM Task Order 2 directly supports the Office of Infectious Disease Malaria Division’s priority to increase the availability, accessibility, and appropriate use of quality-assured, essential malaria commodities by providing products and technical assistance to governments and other key public and private sector players, to improve forecasting and supply planning, procurement, distribution, quality assurance, service delivery, repair and maintenance, and demand generation. The project procures and delivers malaria commodities to 31 U.S. President’s Malaria Initiative (PMI)-partner countries and provides supply chain technical assistance/distribution assistance through field offices in 22 supported countries. Malaria commodities procured and delivered under GHSC-PSM TO2 include, but are not limited to, insecticide-treated nets (ITNs), malaria pharmaceuticals, malaria rapid diagnostics tests, and laboratory supplies.

This work directly supports the following PMI objectives:

Objective 1: Global Commodity Procurement and Logistics Objective 2: Systems Strengthening Technical Assistance Objective 3: Global Collaboration to Improve Long-Term Availability of Health Commodities

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

Based on the current TO2 burn rate, the additional supplies and services USAID expects to order over the 24 month extension requires a TEC increase by $830,339,575 from $2,565,147,030 to $3,395,486,605. The LOE in support of field operations will need to increase by 1,765,128 hours from 4,565,982 hours to 6,331,110 hours, and the LOE in support of headquarters operations, central procurement, and headquarters support to field programs will need to increase by 156,864 hours from 1,126,480 hours to 1,283,344 hours.

Malaria prevention and control is a major focus of the U.S. Government (USG) foreign assistance objectives. PMI, launched in 2005, is the USG’s program to reduce the burden of malaria and mortality by accelerating delivery and scale-up of proven prevention and treatment malaria interventions. PMI is an interagency initiative led by USAID and implemented with the Centers for Disease Control and Prevention (CDC). It is overseen by the U.S. Global Malaria Coordinator, who is advised by an interagency Advisory Group, comprising representatives of USAID, CDC, Department of Health and Human Services, Department of State, Department of Defense, the National Security Council, and the Office of Management and Budget. Implementation of the Initiative is closely coordinated with the efforts of partner governments and national and international partners, including the non-governmental and private sectors.

In recent years, PMI operated in 24 countries throughout sub-Saharan Africa and three programs (four countries) in the Greater Mekong Subregion (GMS) in Asia. In 2023, PMI expanded to include two additional countries (Togo and The Gambia) and converted Burundi from a USAID-malaria country to a PMI country, bringing the total to 27 countries in sub-Saharan Africa. Each of these programs relies heavily on the availability of malaria commodities. GHSC-PSM TO2 is tasked with supplying all malaria commodities (with the exception of commodities for indoor residual spraying [IRS]) for use in the aforementioned programs. TO2 procures non-IRS malaria commodities for all PMI countries and provides supply chain systems strengthening assistance in 22 countries in sub-Saharan Africa and the Greater Mekong subregion of Southeast Asia.

GHSC-PSM TO2 was awarded on April 17, 2015 and the current end date is November 28, 2024.

TO2’s current TEC is $2,565,147,030. USAID is replacing the current Global Health Supply Chain Program with the Next Generation Global Health Supply Chain Suite of Programs (NextGen) and the solicitations for the NextGen contracts are underway. However, the currently expected award dates for those contracts would result in insufficient overlap and a gap in malaria commodity procurement and delivery services resulting in an interruption of malaria prevention and treatment services. Due to the current end date for TO2 and the long lead times for malaria commodities, the project can no longer guarantee procurement and delivery before the end of the project and is putting orders on hold if they are due to be delivered beyond the current period of performance.

With a TO2 end date of November 28, 2024, USAID presumes the last order arrival by August 31, 2024, to allow for all residual costs to be invoiced, booked, and paid for by the contract end date.

The average order lead times for malaria commodities range from 46-56 weeks and are calculated from the time the order is entered into GHSC-PSM’s ordering system to the time the goods are delivered to the country. These lead times are long for malaria products because the products need to be freshly manufactured for each order. Given a follow-on award has not been made, and it will take time for the new project to start up, USAID needs an extension to avoid a gap in service in order for the project to continue placing orders. A gap in service will result in the interruption of USAID/PMI’s provision of life-saving malaria commodities. Antimalarial pharmaceuticals are necessary to treat malaria, and insecticide-treated mosquito nets are necessary for the prevention of malaria by protecting the user from being bitten by a mosquito carrying the malaria parasite.

These TO2 commodities are critical to the reduction of malaria morbidity and mortality. According to the 2023 WHOWorld Malaria Report, globally there were an estimated 249 million cases of malaria and 608,000 deaths from malaria in 2022 . In addition to a hold being put on orders with1 delivery dates beyond the period of performance, the project is unable to include these orders in volume negotiations with ITN suppliers, which may result in higher prices.

1 World malaria report 2023. Geneva: World Health Organization; 2023.

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

This action is requested under the authority of AIDAR 706.302-70(b)(3)(i) which states “An award for which the Assistant Administrator responsible for the project or program makes a formal written determination, with supporting findings, that compliance with full and open competition procedures would impair foreign assistance objectives, and would be inconsistent with the fulfillment of the foreign assistance program.”

5. Nature of the acquisition that requires use of the authority cited:

The principal reason for the extension to GHSC-PSM TO2 is to avoid impairment of the foreign policy objective of ensuring that there is no disruption in the availability, accessibility, and appropriate use of quality-assured commodities for the prevention and treatment of malaria by providing commodities and technical assistance to country programs during USAID’s transition from the GHSC Program to the NextGen follow-on. PMI is the second largest procurer of malaria commodities worldwide, providing a significant portion of supported countries’ life-saving treatment, diagnostic and prevention commodities. A break in the provision of key malaria commodities would result in increased malaria cases and malaria deaths.

It is imperative that the NextGen follow-on contractors have adequate time to assume 100% responsibility for USAID’s global health commodity supply chain from the incumbent contractor.

Experience has taught USAID that a transition and overlap period of at least 18 months is required for the new contractor(s) to assume full responsibility. One of the lessons learned during the transition from the previous DELIVER contract to the GHSC Program was that the 12-month overlap was not sufficient for a flexible transition period to ensure a seamless supply of malaria commodities and services. A House Foreign Affairs Committee investigation into performance challenges early in the GHSC-PSM project noted that a longer overlap period would have helped manage the transition and recommended a longer period of overlap for future supply chain programs. The transition will be a gradual process, through which the new contractor(s) will be2 given increasingly greater responsibility while GHSC-PSM will continue to serve a role in ensuring adequate supplies needed to avert possible stock outs and/or meet other important requirements, resulting in the new contractor(s) eventually having 100% responsibility for the next iteration of USAID’s supply chain program.

To provide the needed flexibility, USAID is planning for an overlap period of at least 18 months, with the transition expected to begin in May 2024, to allow the new contractor(s) to plan, implement and complete an orderly transition by November 2026. GHSC-PSM TO2 will be transitioning activities to at least four of the NextGen awards -- Comprehensive Technical Assistance for Health Supply Chain and Pharmaceutical Management (CompTA) IDIQs awarded January 2024, with the Task Order awards expected later in 2024; Procurement Service Agent-Malaria, Family Planning and Reproductive Health, Maternal and Child Health and Nutrition and Other Health Elements (Integrated PSA) expected in May 2024; In-country Logistics (ICL) expected in December 2024; and

2 Committee on Foreign Affairs U.S. House of Representatives. Oversight Investigation: USAID Global Health Supply Chain Contract. 2018

Qualifying Testing Issuing (QuTI) expected in May 2024. Given the commodity procurement lead times associated with malaria commodities, and the projected award dates for these NextGen awards and expected start up period, an extension for TO2 is needed until November 2026. This extension will provide a minimum period to allow for these and other NextGen awards to be made, start-up of operations of the new awards, and a transition period of at least 18 months. Most importantly, GHSC-PSM will begin placing last orders for countries approximately 18 months prior to the proposed extension date of November 2026, to ensure that final deliveries are made prior to the end of period of the extension. This aligns with the lead time necessary for the incumbent to place orders with suppliers, for suppliers to make commodities ready at places of origin and to complete the international transportation necessary to deliver those shipments to partner countries. This will better enable a seamless transition to the NextGen procurement service agents and technical assistance awards.

It is important to extend the period of performance and increase the TEC and LOE now to provide timely assurance to the Missions that these services will continue to be available to them as part of an orderly and seamless Bureau for Global Health (GH) and Mission transition to the NextGen contracts.

USAID needs a mechanism in place that can order and deliver bednets beyond November 2024. A gap in net delivery would lead to increased cases of malaria. In many PMI-supported countries, PMI is the only donor procuring insecticide-treated nets for routine distribution, and often PMI fills gaps in procurement of bednets for the mass campaigns supported by Global Fund, making it unlikely another donor could cover the gap left by delays in procurement from PMI. In addition, bednet distribution campaigns are time sensitive and are scheduled prior to the rainy season. Delays in delivery of the bed nets can disrupt the campaigns. According to the WHOWorld Malaria Report 2023, 2.1 billion malaria cases and 11.7 million deaths due to malaria have been averted globally between 2000 to 2022 due to malaria interventions and other factors that modify malaria disease transmission . Commodities are the core of these malaria interventions. In addition, the project has3 field offices established in 22 PMI partner countries requiring supply chain technical assistance support from a USAID central mechanism.

In addition to the time it would take for open competition, it would take an implementing partner up to a year to establish the needed procurement systems and competitively award contracts with suppliers and establish field offices. This competitive process is already underway for the NextGen awards. With the transition timeline unlikely to be completed by November 2024, it is critical that GHSC-PSM TO2 is allowed to begin to renegotiate and/or extend subcontracts now, and allow manufacturers to plan extended manufacturing schedules with sufficient lead time. Finally, the GHSC-PSM TO2 and other GHSC contractors will need approximately three months for in-country and HQ office close-out during which no additional procurement or technical assistance will be undertaken.

6. Description of the efforts made to ensure that offers are solicited from as many potential sources as practicable:

3 World malaria report 2023. Geneva: World Health Organization; 2023.

Given the nature of the action, solicitation of offers from other sources is not applicable.

Publication of a notice to amend the contract is not required per the determination at AIDAR §705.202(b). See Section 9 below for further justification.

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.

There is no change in the scope of work. All previously-incurred costs were determined to be fair and reasonable.

8. Description of the market research conducted, and the results or a statement of the reasons market research was not conducted:

In accordance with FAR 10.001, market research appropriate to the circumstances of this award extension was conducted. This research indicated that the only way to ensure continuity of services during the follow-on supply chain design and award period and not impair foreign assistance objectives is to extend the incumbent award to allow 18-month overlap with the follow-on award.

9. Other facts supporting the use of other than full and open competition:

USAID considered the option of awarding a bridge contract using full and open competition, which could allow the Agency to obtain additional value or better contractual terms, but concluded that this is not a viable alternative. Any potential benefits are offset by the associated risk to the program as a result of multiple transitions, as well as the cost of start-up and close-out of a new contract in such a short period of time. With a program that is established in 33 countries and serving 25 additional countries across the task orders, supported by a management information system that is operational and responsive to client countries’ needs, GHSC-PSM could not transition to a bridge contract in the near term without significant disruptions to the health commodity ordering and delivery, as well as provision of technical assistance. Other unacceptable risks that may threaten human lives (i.e., an impairment of a foreign aid objective) during a bridge contract and thus preclude other sources from practicably competing for this requirement include the risk of significant delayed deliveries, potentially leading to stock-outs in life saving commodities for combating malaria, untested quality control practices, and incalculable time and resources dedicated to establishing complex new subcontracts and training for a new ordering platform and/or information system.

In addition to the gaps in service noted above, there is also an inherent risk associated with unforeseen challenges and costs of multiple transitions. Each transition adds complexity and risk to the seamless supply chain of life saving commodities. Therefore, the best and most viable option is an extension of the current task order through November of 2026 to allow time for the NextGen awards discussed above to be awarded and for activities to fully transition.

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

None.

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

USAID is in the process of 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.

12. Technical or Requirements Personnel 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 complete and accurate.

______ _______________ ___1/8/2024_______________

Christine Hershey, Technical Office Representative 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 Date

CHRISTINE

Louise HERSHEY (affiliate)

Digitally signed by CHRISTINE Louise HERSHEY (affiliate) Date: 2024.03.12 11:01:18 -04'00'

Eduardo G. Elia Digitally signed by Eduardo G. Elia Date: 2024.03.13 14:33:37 -04'00'