Approved_J&A.pdf

JUSTIFICATION AND APPROVAL (“J&A”)

ACTION MEMORANDUM

DATE: February 21, 2017

TO: Michael Ashkouri, Supervisory Regional Contracting Officer

THRU: Enilda Martin, Acting Health Office Director

FROM: Isaac Choge, Contracting Officer’s Representative, Health Office

REF: Contract Number AID-674-Q-13-00002 with Right to Care (“RTC”) for the Voluntary

Medical Male Circumcision (“VMMC”) Service Delivery II activity

SUBJECT: Justification and Approval (J&A) for Other than Full and Open Competition

Approval is requested for the use of other than full and open competition pursuant to the authorities provided under the Action Memorandum entitled “Expedited Acquisition and Assistance Procedures for USAID’s Activities and Programs Related to the Prevention, Care, and Treatment of HIV/AIDS” (the “HIV/AIDS Expedited Procedures Package” or “HIV/AIDS EPP”), approved by the USAID Administrator on February 11, 2014 and effective through December 31, 2019. Approval of this J&A constitutes the justification for other than full and open competition required by Tab 1 (D&F for the Authorization of Less than Full and Open Competitive Procedures in the Modification or Award of Contracts) of the HIV/AIDS EPP Action Memorandum.

a) Nature and/or description of the action being approved.

This is a request to approve a non-competitive extension of the period of performance of contract number AID-674-Q-13-00002 with Right to Care from March 31, 2017 to September 30, 2017 to allow USAID to continue to place orders under this requirements contract. During this extension period, RTC will continue to implement the services described in the contract’s statement of work, which include the provision of Voluntary Medical Male Circumcision and related services in South Africa. An extension to the period of performance will enable USAID to place additional orders for services within the terms of this requirements contract. The estimated number of VMMC service packages to be required under the contract during the extension period is approximately 105,000 units total, consisting of 73,714 units in urban locations at the agreed upon fixed unit price of $108.50, and 31,592 units in rural locations at the agreed upon fixed unit price of $118.50. This would increase the contract price by approximately USD $11.7 million from $70,815,368.92 to $82,515,368.92.

b) A description of the supplies or services required to meet USAID’s needs (including the estimated value).

With an estimated 6.8 million South Africans living with HIV, South Africa has the largest number of people infected with HIV in the world.1 On average 1,300 South African adults become infected with HIV each day2, and nearly 400 South Africans die each day from AIDS-related illness3. USAID receives

1 UNAIDS,HIV and AIDS Estimate, South Africa 2014, http://www.unaids.org/en/regionscountries/countries/southafrica 2 L.C.Simbayi, South African National Prevalence, Incidence and Behavior Survey, Human Science Research Council. 2014 funding from the U.S. President’s Emergency Plan for AIDS Relief to support HIV/AIDS prevention, treatment, and related interventions that support the Government of South Africa’s (“GoSA”) health programs.

Studies have shown that VMMC reduces men’s risk of acquiring HIV infection from heterosexual intercourse by an average of 53 percent. VMMC also benefits women over time by decreasing the number of HIV-infected men in the population, thereby reducing the probability that women encounter HIV-infected male sexual partners. Recognizing the important potential of VMMC to dramatically reduce the number of new HIV infections in the country, South African President Jacob Zuma and the National Department of Health (“NDoH”) have prioritized the scale-up of high volume, safe VMMC for HIV prevention. As a result, there is an urgent need to scale up the HIV prevention response in South Africa through the expansion of safe Voluntary Male Medical Circumcision, and USAID is committed to supporting the GoSA’s efforts in this regard.

Currently, USAID/Southern Africa (“USAID/SA”) supports approximately 350 VMMC clinical sites in the provinces of Free State, Gauteng, KwaZulu Natal, Limpopo, Mpumalanga, and North West either through fixed, outreach or mobile services in public, private and non-governmental facilities. The specific locations were identified as having low rates of VMMC and high HIV prevalence. USAID/SA currently delivers VMMC services through this contract, which was designed to implement an activity called “Voluntary Medical Male Circumcision (VMMC) Service Delivery II”. The contract is a requirements type contract awarded on September 2, 2013 to RTC through a competitive process. The activity is funded by PEPFAR and supports HIV prevention in South Africa and the achievement of PEPFAR 3.0 results.

The contract aims to support the GoSA’s efforts to improve health outcomes for South Africans and to reduce HIV infections through the targeted provision of VMMC services. The activity was developed in line with the GoSA National HIV/AIDS Strategic Plan for South Africa 2012-2017 and has the following objective: to provide high quality, high volume, cost-efficient VMMC services in South Africa to males aged 15-344 through fixed, outreach and mobile VMMC sites in rural and urban districts identified in collaboration with USAID/SA and GoSA. The contractor RTC delivers a comprehensive package of VMMC services in accordance with World Health Organization (“WHO”) standards and guidelines and internationally recognized best practices.

During the extension period from March 31, 2017 to September 30, 2017, the contractor will continue to provide VMMC services in the six provinces within which it operates. The estimated number of VMMC service packages to be required under the contract during the proposed extension period is approximately 105,000 (73,714 units in urban locations at the agreed upon fixed unit price of $108.50 and 31,592 units in rural locations at the agreed upon fixed unit price of $118.50. for a total amount of approximately USD $11.7 million, which would increase the current contract price from $70,815,368.92 to $82,515,368.92.

c) Identification of statutory authority permitting other than full and open competition.

On February 11, 2014, the USAID Administrator approved the HIV/AIDS Expedited Procedure Package.

The EPP is valid until December 31, 2019. The EPP provides authorization for exceptions to competition in the modification and award of contracts, grants, and cooperative agreements in support of USAID’s

3 UNAIDS,HIV and AIDS Estimate, South Africa 2014, http://www.unaids.org/en/regionscountries/countries/southafrica 4 Males under 15 years may be circumcised if in compliance with GoSA regulations, the client has proper informed consent forms, the young man understands the procedure, and will tolerate it when done under local anesthesia. Males over 34 years may also be circumcised through the project. However, no activities should take place to increase demand among individuals younger than 15 or older than 34 years.

HIV/AIDS activities and programs in order to avoid the impairment of U.S. foreign assistance and foreign policy objectives pursuant to AIDAR 706.302-70.

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

RTC is a local South African non-governmental organization that received the referenced award on September 20, 2013 through a full and open competitive process. The contract included a one-year base period and two one-year options, which were both exercised. Additionally, USAID exercised a six-month option provided under 52.217-8 Option to Extend Services. The contract with RTC is currently scheduled to end on March 31, 2017. The Contractor has performed well to date, and its efforts have significantly contributed to the achievement of USAID/SA’s health sector development goal and the USG PEPFAR

3.0 results in South Africa. The Contractor has established itself as a prominent implementing partner in support of the USG and GoSA HIV prevention efforts. In addition, RTC has become globally recognized as a leader in the delivery of VMMC services.

USAID has designed the next phase of its support for the GoSA’s VMMC program: the “Voluntary Medical Male Circumcision (VMMC) Service Delivery III”. A full and open competitive procurement process was initiated in August 2016 for this new activity, and it is in the final stages of the procurement process with an anticipated award in approximately March 2017.

Linked to the winter in South Africa and a traditional seasonal norm for demand of VMMC services due to migration and cultural practices, the months from April through August are referred to as the “high season” for VMMC services. During this time period, there is a marked increase in demand for and provision of VMMC services compared to other times during the year. The timing of the award of a new contract for VMMC service delivery is planned for the beginning of the “high season” for VMMC service delivery in South Africa.

Prior to being able to actually embark on delivery of VMMC services, several key steps will be required for a new contractor to become fully operational. A new contractor will need to physically establish a presence “on the ground”, and put into place service delivery agreements with each of the VMMC sites.

Simultaneously, extensive relationship building will need to be done immediately by a new contractor to establish a working relationship with the GoSA NDoH provincial and district level leadership. A new contractor will also need to negotiate memorandums of understanding with facilities, and build rapport with traditional community-based leadership.

In analyzing the various steps necessary for a new contractor to become operational, USAID has come to realize that there is a very real risk that services will be significantly disrupted as the contractor under the new award attempts to rapidly initiate and ramp up its service delivery efforts. USAID is concerned that expecting a new contractor to be able to meet the large demand for services brought by the VMMC “high season” is not realistic. This year represents a particularly important one for achieving results in HIV prevention as South Africa strives to bring the HIV/AIDS epidemic under control. A loss of momentum during this crucial period for VMMC service delivery could significantly impede USAID’s and the GoSA’s ability to stem the HIV epidemic, and potentially result in increasing risk of HIV infection in both male and female populations in South Africa. Any reduction in USAID’s ability to adequately support the GoSA and achieve results could have a detrimental effect on the disease burden in South Africa, and consequently in the Southern Africa region.

The NDoH has recently reiterated its concern about a potential decrease in service provision and has asked that USAID ensure continuity of VMMC services, given the important contribution USAID makes to the national VMMC program and targets. USAID currently supports approximately 80% of the current VMMC services in South Africa. To fulfill its commitments to supporting the GoSA’s NSP in the health sector and the critical objectives of USAID’s foreign assistance program in South Africa, as well as achieve PEPFAR 3.0 targets, USAID has realized that a longer overlap between the two contracts during the VMMC “high season” is necessary to sustain the current level of VMMC service delivery. Extending the current contract with RTC for an additional six months to continue service delivery during the VMMC “high season”, which takes place between the months from April to August, will avoid a serious gap and decline in VMMC service delivery. Having this six month overlap between the two contracts will allow for an adequate transition between the two contractors during a critical period of service delivery will support the USG’s and the GoSA’s efforts to prevent the spread of HIV/AIDS to at-risk populations in South Africa, and will ultimately save lives.

In accordance with Tab 3 of the HIV/AIDS EPP, this memorandum documents the specific circumstances under which the class justification is being used and explains the reasons for relying on the class justification instead of utilizing full and open competition. The utilization of the EPP’s authority in this case meets the criteria for its use since it addresses an urgent need to achieve ambitious targets set for HIV/AIDS prevention activities in South Africa. As set forth in the HIV/AIDS EPP, “expeditiously providing assistance in as responsive a manner as possible takes priority over other options that would delay such assistance,” and this is justified based on the factors described in this section. Furthermore, utilization of this authority meets the criteria set forth in Tab 3 of the HIV/AIDS EPP, which states that it may be utilized if the funding for the HIV/AIDS activities equals more than 50 percent of the total estimated cost of the contract.

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

This is a non-competitive extension of an existing award to allow the contractor to continue implementation; therefore offers were not sought from other sources.

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

This is a fixed-unit cost requirements contract. USAID anticipates that the Contractor will continue to deliver services at the agreed upon fixed-unit prices. Those unit prices were determined to be fair and reasonable at the time of award, and the Contracting Officer anticipates that the prices to the Government under the extension modification will be fair and reasonable.

g) 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.

Market research was conducted over the past months to assess the availability and capability of vendors to perform VMMC services, and to determine a current reasonable market rate for the delivery of VMMC services in South Africa. Market research indicates that local economic conditions have remained relatively stable over the past two years. According to a recent costing study that was conducted for VMMC services in South Africa, the estimated cost per MMC service package has remained consistent with the contract unit price negotiated at the time of award.

h) A listing of the sources, if any, that expressed, in writing, an interest in the acquisition.

N/A

i) A statement of the actions, if any, USAID may take to remove or overcome any barriers to competition before any subsequent acquisition of the supplies or services required.

As described above, subsequent planned interventions will be implemented through a new contract, which is undergoing a full and open competitive process. USAID anticipates that this new contract will be awarded in approximately March 2017. If USAID/SA identifies further requirements, it will make every effort to procure those through a competitive process when practicable.

ATTACHMENTS:

Memorandum entitled “Expedited Acquisition and Assistance Procedures for USAID’s Activities and Programs Related to the Prevention, Care, and Treatment of HIV/AIDS” (the “HIV/AIDS Expedited Procedures Package” or HIV/AIDS EPP)