Attachment 3 - Single Source Justification.pdf

This is a Simplified Acquisition Single-Source Justification document for a federal contract acquisition under $350,000 by the Department of Health and Human Services, Indian Health Service (IHS).

The acquisition concerns two requisitions (IHS1525685 and IHS1528590) for provision, implementation, and support of a secure, web-based HIPAA-compliant electronic billing and insurance eligibility management system. The system must accept medical and dental electronic claims (single and batch), transmit claims to Medicaid, Veterans Administration, and private insurers, provide real-time eligibility verification, perform automated validation and error detection, support corrections and resubmissions, and deliver customer support Monday through Friday, 8:00 AM to 7:00 PM Pacific Time. Associated documentation, training, and implementation services are included, with no monthly or annual maintenance fees unless specifically authorized in contract line items. The base period of performance runs from October 1, 2026 through September 30, 2027. The estimated procurement value is redacted. The recommended single source is Change Healthcare Operations, LLC, located at 3055 Lebanon Pike Suite 1000, Nashville, Tennessee.

The justification identifies "only one source (unique capabilities)" as the rationale for sole-source acquisition under FAR 12.102(a). The narrative emphasizes that combined technical, legal (HIPAA/BAA), and operational support requirements—including payer connectivity, encryption of protected health information, role-based access controls, audit logging, and Business Associate Agreement execution—significantly limit the qualified vendor pool. The Government asserts that only vendors with existing approved payer connections, demonstrable HIPAA compliance with encrypted storage and transport capabilities, and standardization on an Agency-approved system can meet minimum needs without substantial, time-consuming custom development. The document was signed by Project Officer Kenneth Stearns, Project Officer's Immediate Supervisor Laura Herbison, and Contracting Officer Sheila Sells on September 14, 2026.