Award Notice - DERMS bridge - Sole Source Justification and Approval.pdf

PM Part 813.5 SAP for Certain Commercial Items Page 1 of 5 Original Date: 08/30/17 Revision 03 Date: 02/11/2021

DEPARTMENT OF VETERANS AFFAIRS

SOLE SOURCE JUSTIFICATION UNDER SIMPLIFIED PROCEDURES FOR CERTAIN COMMERCIAL ITEMS IN

ACCORDANCE WITH FAR 13.5

Acquisition Plan Action ID: 36C776-21-AP-2056

Contracting Activity:

Department of Veterans Affairs (VA), Veterans Health Administration (VHA), Regional Procurement

2237: 130-21-2-5164-0073

Nature and/or Description of the Action Being Processed:

This procurement is for the VHA Deployment of Equipment Recertification, and Management of Surge Capacity (DERMS) Program for managing the refurbishment, redistribution, and decompression of critical medical equipment in support of COVID-19 in accordance with FAR 13.5 Simplified Procedures for Certain Commercial Items and specifically FAR 13.501 Special Documentation Requirements, where acquisitions conducted under Simplified Acquisition Procedures are exempt from the requirements of FAR Part 6, but still require a justification using the format of FAR 6.303-2.

This service is required by the Procurement & Logistics Office (P&LO), Equipment Life Cycle Management (ELCM) office to assist the VA Program Manager (PM) with continued management and decompression of assets VHA wide. PCAC awarded a sole source contract 36C776-20-C-0019 to Handle Global (dba Healthcare Asset Network, Inc.) on April 2, 2020, under and compelling circumstances. The period of performance could not extend beyond one year, and the period of performance ends April 7, 2021. This effort will establish a short-term bridge contract as a continuation of existing operations until full program development for VHA utilization program can be established, and a long-term support contract can be awarded. This effort will be awarded as a new, firm-fixed price contract on a sole source basis to Handle Global.

The estimated value of this procurement action is $4,204,102.40. These services are considered performance-based severable services that are available in the commercial marketplace. This effort is a short-term bridge between the original contract awarded under and compelling authority and the comprehensive follow-on.

The period of performance consists of a three-month base period and one three-month option period, if necessary, as follows:

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

PM Part 813.5 SAP for Certain Commercial Items Page 2 of 5

Revision 03 Date: 02/11/2021 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 the Use of the Authority Cited Above (applicability of authority):

At the time of award of the current contract, VHA embarked on a 5,000 ICU bed expansion plan to prepare for significant surge in critical care patients, requiring a significant increase in equipment procurements to meet that surge. Medical equipment manufacturers were unable to meet the demands of VA and private sector hospitals given the significant increase in demand, creating a critical shortage of required medical equipment. The DERMS contract was awarded to ensure that repairable medical equipment in the system could be utilized and redeployed as needed, to supplement the increased demand for new equipment.

The awarded contract also included services for the decompression of excess equipment at the end of the surge. This service has been used by a number of VISNs resulting in 71,000 cubic feet returned to medical centers for other uses, namely PPE storage.

Due to PPE supplier shortages, sites and VISNs have been required to stockpile necessary PPE at levels equal to or greater than 60 days of stock on hand. This has resulted in a significant increase in needed storage space for these stockpiles. Sites have embraced the decompression services under the DERMS contract because it allows them to store the large stockpile of PPE needed to ensure continued COVID-19 operations by freeing up critical space rather renting space off site or at sister VA medical centers.

An ongoing effort to develop a system wide utilization program, incorporating the refurbishment and decompression services, as well as comprehensive sorting and sales has been slow due to continued COVID-19 crisis support resulting in th management positions, as well as provide a robust team to review and analyze the spend analysis.

The VHA P&LO ELCM office, which is the office responsible for developing these requirements, is contemplating an additional 17 FTEE. Due to issues with competing P&LO requirements for resiliency, slow classification of positions, and limited qualified staff on certificates, the Utilization Program is currently at 12% staffing, with only 2 dedicated Utilization Program FTE. An additional one (1) FTE is anticipated to be onboard in the late summer of 2021, but that is still only 18% staffing. The requirements development is well underway but will not be completed in time to solicit for a long-term contract.

Continuation of the decompression work is extremely important PPE storage in support of COVID-19 operations, as well as for the successful implementation of a VHA Utilization Program, which in turn will continue to support COVID-19 operations.

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Revision 03 Date: 02/11/2021

Should the DERMS program experience a lapse with this activity, the existing equipment stored and in process with the vendor may have to be returned to a facility prior to contract expiration, and sites will be left with less critical space for storage of PPE critical to COVID-19 operations. In addition, VAMCs would be required to revert to local decompression, tying up valuable resources that could be used to ensure effective supply chain operations during a declared crisis.

Award to a vendor other than the incumbent would result in a significant increase in operating costs estimated at a minimum of $775,000 because the vendor would be required to rent new warehouse space, hire staff, establish processes including communications strategies, help desk services, etc.

The new vendor would also have to accept all existing equipment in the decompression process, resulting in increased storage and handling costs to the government.

Accordingly, Handle Global is the only firm capable of providing the supplies and services described ministration experiencing substantial duplication of cost that could not be expected to be recovered through competition and unacceptable delays in fulfilling its requirements.

6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable:

A Notice of Intent to Sole Source was posted to beta.SAM on March 9, 2021 under 36C77621Q0163 to survey the marketplace for the short-term bridge. The notice described the scope of work for management and decommissioning of the equipment as well as the short period of performance.

The due date for responses was March 15, 2021. No responses were received by the deadline for submission.

Additionally, the P&LO did consider alternate means of obtaining this support through use of existing medical center space, regional readiness center space, and temporary PPE distribution center space; however, these options would all result in decreased COVID-19 operational readiness.

The point of the DERMS Program is to increase operational readiness.

7. Determination by the CO that the Anticipated Cost to the Government will be Fair and Reasonable:

The anticipated cost of the contract action is expected to be fair and reasonable. The estimated price is based on the current contract pricing with Handle. The throughput for the bridge has been estimated based on contractual data and corresponding pricing. Upon receipt of a quote, price analysis will be conducted to ensure the awarded price is fair and reasonable.

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

Market Research Was Not Conducted:

The Vendor Information Pages (VIP) database was queried to determine if the Rule of Two could be met. VIP was queried with NAICS 811219 and 322 results were returned. These 322 vendors were emailed a courtesy notice about the posted Notice of Intent to Sole Source.

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 inquiries from interested parties. No vendors, including SDVOSB/VOSB vendors, responded to the Notice of Intent to Sole Source.

PM Part 813.5 SAP for Certain Commercial Items Page 5 of 5

Revision 03 Date: 02/11/2021

c. Director of Contracting:

I certify the justification meets the requirements for other than full and open competition.

Richard Dahmen Date Director of Contracting Program Contracting Activity Central

d. VHA RPO HCA Review and Approval:

I have reviewed the foregoing justification and find it to be complete and accurate to the best of my knowledge and belief and approve for other than full and open competition.

Terry L. Spitzmiller Date Executive Director Regional Procurement Office Central (VHA)

Richard C.

Dahmen 199197

Digitally signed by Richard C.

Dahmen 199197 Date: 2021.03.29 10:00:41 -04'00'