Attachment 1 FAR 13.5 Sole Source Justification - Over SAT.pdf

VHAPG Part 813.5 Simplified Acquisition Procedures for Certain Commercial Items Attachment 1: Request for Sole Source Justification Template >SAT-$7.5M under FAR13.5

Effective Date: 02/01/2022 Page 1 of 5

DEPARTMENT OF VETERANS AFFAIRS

SOLE SOURCE JUSTIFICATION UNDER SIMPLIFIED PROCEDURES FOR CERTAIN COMMERCIAL

ITEMS IN ACCORDANCE WITH FAR 13.5

Acquisition Plan Action ID: 36C259-24-AP-2448 RPOW Tracker No.: FY24-NCO 19-2260

1. Contracting Activity: Department of Veterans Affairs, Regional Procurement Office West, Network

Contracting Office 19, Services 4 Contracting team (6162 S. Willow Drive, Greenwood Village, CO 80111) on behalf of Engineering Service, VA Western Colorado Healthcare System (WCHCS), also known as the Grand Junction VA (2121 North Ave., Grand Junction, CO 81501).

2237: Received email from Bradley McCollam, Capital Asset Manager on 02/05/2024 stating non-recurring maintenance (NRM) funds in association with the Plus Up project 575-16-105 will be requested from the Office of Capital Asset Management (OCAM) at time of award and the exact amount will be transferred for obligation.

2. Nature and/or Description of the Action Being Processed: The boiler plant construction project

(project 575-16-105, contract 36C25922C0013) has experienced several setbacks which has brought about the need to continue renting the current temporary mobile boilers on site. This procurement is for the continued boiler rental and maintenance services of the current two 650 horsepower (21,758 lbs. of 115 PSIG steam per hour) mobile boilers mounted in enclosed trailers currently on station. This requirement also includes continued rental of the current mobile control room trailer on site during these final stages of the boiler plant construction (project 575-16-105, contract 36C25922C0013), which is expected to be completed by the end of August 2024. The mobile boilers are owned by Ivan Ware & Son, LLC dba Ware, Inc. and manufactured in the U.S. The mobile control room trailer is owned by WilScot and also manufactured in the U.S. Ware is subcontracting with WilScot to pay their rental fees.

Upon completion of the boiler plant construction project WCHCS will begin the commissioning process. Historically, this process and working through any associated issues has taken up to two years. The estimated period of performance will be for one (1) six-month base period with one (1) three-month option period beginning 09/01/2024 and ending 05/31/2025. This will allow enough time to fully complete the commissioning process, with the shorter option period better allowing for the option to not exercise the next option period versus having to terminate for the Government’s convenience. The estimated total value of the procurement is $566,585.30. The resulting contract will include FAR 52.217-8 Option to Extend Services, and if exercised the 52.217-8 option will be exercised at the same rates as those in effect under the contract at such time as the contract is extended.

This is an ongoing requirement with the previous contract having been awarded to SGJV, LLC under 36C25922C0048 as a base year + 1 option year with a period of performance of 3/1/2022 – 8/30/2024 for a total value of $2,113,867.39. The current contract also includes a fence rental, which is owned by Greenland Enterprises. This will be removed by SGJV, LLC (Saw Greenland Joint Venture) when the contract expires and is not included on the new contract going forward. The incumbent is not interested in continuing with this work for the Government which is why this is a request to sole source this contract to Ware, Inc.

Effective Date: 02/01/2022 Page 2 of 5

3. Description of Supplies/Services Required to Meet the Agency’s Needs: This procurement is for the continued rental of two Ware mobile boilers, to include maintenance, services, inspection, and testing per Environmental Protection Agency (EPA), Boiler Efficiency Institute (BEI), and Veterans Affairs (VA) standards, as well as the rental of one control room trailer. These mobile boilers and control room will continue to serve as the temporary boiler plant for the duration of the construction and commissioning of the permanent boiler plant. Ware mobile boilers are currently on site and functional, to remove them would endanger the Facility’s ability to provide steam to the Main Hospital. Steam is required to maintain operational status of the hospital functions including surgeries, sterilization, cooking, and heating. The current VA boilers are 11 years past their operational life space and are in the process of being replaced. Temporary boilers are the only means to maintain hospital operations during this boiler plant construction project. The mobile boilers fill a Veteran’s Health Administration (VHA) requirement to maintain N+1 on boiler capacity to reduce the risk of ever being without steam. There is no way to maintain steam production with the current plant during the boiler plant construction project. These mobile boilers and control trailer are needed until the completion and commissioning of the newly constructed permanent boiler plant.

4. Statutory Authority Permitting Restricted Competition:

FAR 13.5 Simplified Procedures for Certain Commercial Items. The statutory authority for applying the Simplified Procedures for Commercial Items of FAR 13.5 is 41 U.S.C. § 1901 and is implemented by FAR 13.106-1(b)(2) for restricting competition on this procurement. Competition is restricted on this procurement for the reason below:

(X) Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements

( ) Unusual and Compelling Urgency ( ) Industrial Mobilization, Engineering, Developmental or Research Capability or Expert

Services ( ) International Agreement ( ) Authorized or Required by Statute ( ) National Security ( ) 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): The VA Western Colorado Healthcare System is currently operating two leased Ware mobile boilers as the permanent boilers have far exceeded their life cycle and are unsafe to operate due to their age and condition. To remove the temporary mobile boilers and control trailer would leave the Facility without steam and force them to divert all Veterans to community hospitals and transport current patients to the Denver and Salt Lake City VA Medical Centers, incurring additional costs to the Government. If a new vendor was selected who wanted to utilize a different set of boilers, there would be no way to connect them without first removing the current temporary boilers due to the space constraint of the Facility and location of the boiler plant main steam distribution infrastructure. There is no feasible way to transition to another set of boilers and maintain steam to the hospital at the same time. In addition to the above, any transference of the temporary boilers to a different contractor would add further delays to the construction project for the permanent boilers. Maintaining the current Ware boilers on station would both provide the N+1 requirement and save the significant costs associated with mobilization and demobilization. This is intended to prevent the hospital from falling into a situation where there is no operating boiler, and the hospital is forced to cease operations.

Effective Date: 02/01/2022 Page 3 of 5

For the past 24 months under contract 36C25922C0048, VHA has been renting two Ware 650 HP Super High Efficiency Mobile Boilers from SGJV, LLC a Service-Disabled Veteran Owned Small Business (SDVOSB). As the boilers are manufactured and owned by Ware and must be serviced by a trained and certified Ware technician, SGJV, LLC has subcontracted all preventative maintenance and repairs of the boilers to Ivan Ware & Son, LLC dba Ware, Inc. When approached with the need for continued services, SGJV, LLC declined to renew the boiler rental and maintenance contract due to scheduling conflicts with other commitments.

By awarding to the Ivan Ware & Son, LLC dba Ware, Inc. who is already performing the maintenance and repair services and is intricately familiar with not only the boilers, but the Grand Junction VA campus as well, the Government would save the additional funds required for re-competition and thus avoiding duplicating the cost of delivery, installation, activation, commissioning, and removal at an estimated total of $604,003.43. This dollar amount is based off the VA Form 10-6238 Construction Program – Estimate Worksheet Summation provided by the previous COR (see P02 Estimated Duplication of Cost Savings). This estimate does not include any costs associated with a possible hospital shutdown.

The Contracting Officer (CO) has determined Ware, Inc. is the only contractor capable of providing the supplies and services described in Section 3 above without the Government experiencing substantial costs that could not reasonably be expected to be recovered through competition and any unacceptable delays in fulfilling its requirements; which could include shutting down the hospital until such time as new mobile boilers and control room trailer are in place and functioning at 100% capacity.

6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable: The Contract Specialist searched GSA, eCAT, Mandatory Strategic Contract List contracts, and SAC contracts but no contractor was found that could fulfill the requirement. Market Research also included an examination of the acquisition history of this service at this hospital as well as other VA hospitals. WCHCS went through the competitive process in April 2020 to award the current contract. The boilers now on station are owned by the manufacturer, Ware, Inc., and thus there are limited entities who could provide the maintenance and repair on equipment not owned by the VA.

The market research conducted was limited due to the sole source nature of this requirement as identified above. The Rule of Two was not met for SDVOSB. Although the Rule of Two was met for Small Business (SB), utilization of a different contractor will result in unnecessary duplication of costs and significant interruption to care for Veterans due to hospital closure.

The Contract Specialist successfully published Request for Information (RFI) to Contract Opportunities requesting capabilities statement as well as certificate showing repair technicians are certified by Ware to service and repair Ware mobile high-pressure steam boilers with responses due NLT 5:00pm MST on 5/3/24; received two (2) responses. One from Accentz, Inc. a Woman Owned Small Business (WOSB) and one from Power Mechanical, Inc. a Small Business (SB). However, both stated they would be furnishing new boilers and control room trailer for rent. Neither one could produce authorization or proof of certification to service and repair the Ware steam boilers currently on site as requested in the RFI. This indicates that the VA Rule of Two in accordance with (IAW) 38 U.S.C. 8127 would not be met.

Effective Date: 02/01/2022 Page 4 of 5

7. Determination by the CO that the Anticipated Cost to the Government will be Fair and Reasonable: The final contract price is determined to be fair and reasonable by a comparison of historical pricing listed on FPDS for similar services. Contracting Officer also compared the pricing offered to the price paid during contract 36C25922C0048 and determined the price being paid by the Government is fair and reasonable for this procurement in accordance with FAR 13.106-3(a) and

FAR 13.5.

Proposed Monthly Rental (boilers and control room trailer) $39,527.00 / mo.

Proposed Maintenance and Repair Services $23,426.92 / mo.

Total $62,953.92 / mo.

36C25922C0048 Monthly Rental (boilers, fence and control room trailer) $43,091.24 / mo.

36C25922C0048 Preventative Maintenance only $13,207.32 / mo.

36C25922C0048 Repair Services paid via modifications (divided by 12) $22,356.46 / mo.

Total $78,655.02 / mo.

8. Description of the Market Research Conducted and the Results, or a Statement of the Reasons

Market Research Was Not Conducted: As described in Section 6 above, market research, in accordance with FAR Part 10, was conducted by synopsis of the proposed acquisition, advising industry of the pending acquisition, and soliciting information from interested parties. The Rule of Two under SDVOSB total set-aside was not met. The Rule of Two under Small Business total set-aside was met.

9. Any Other Facts Supporting the Use of Other than Full and Open Competition: There are no additional supporting facts.

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

Ivan Ware & Son, LLC dba Ware, Inc.

UEI: QXMJJ74REMM7

3401 Bashford Avenue CT Louisville, KY 40218

ACCENTZ, Inc.

UEI: VEWPLY1UA1T5

6695 S Quemoy Cir Aurora, CO 80016

Power Mechanical, Inc.

UEI: N672N7MEP4J5

4811 Commerce Dr Newport News, VA 23607

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: Not applicable as the permanent boiler plant will be completed and commissioned during this contract.

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, Effective Date: 02/01/2022 Page 5 of 5 which are included in the justification, are accurate and complete to the best of my knowledge and belief.

Karen Kaaoush Date Acting Chief of Engineering VA Western Colorado Healthcare System

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

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

Heather Clemons Date Contracting Officer NCO 19, Supply-Services Western Tier

b. One Level Above the Contracting Officer (Required over SAT but not exceeding $750K): I certify the justification meets requirements for other than full and open competition.

Jason Thomas Date Chief, Division 2

NCO 19

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