C01 JA FAR Part 8_20251022_final cm_fd_jms_redacted 1.pdf

DEPARTMENT OF VETERANS AFFAIRS

Office of Procurement, Acquisition and Logistics (OPAL)

Strategic Acquisition Center (SAC) 5202 Presidents Ct, Suite 103

Frederick, MD 21703

LIMITED-SOURCES JUSTIFICATION

(1) Identification of the agency and the contracting activity, and specific identification of the document as a "Limited-Sources Justification."

This justification for limited sources is executed by the Strategic Acquisition Center (SAC), on behalf of the Department of Veterans Affairs (VA) Medical Supply Program Office (MSPO).

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

The proposed action is for a six (6) month firm-fixed-price (FFP) follow-on task order with an option for an additional six (6) months to provide critical support services to the VA Medical Supply Program Office (MSPO) with an option to Extend Services for up to six (6) months. This effort is being conducted under the authority of the Multiple Award Schedule Program; the proposed effort will be awarded under the General Services Administration (GSA) Federal Supply Schedule (FSS) 47QRAA18D001P to Deloitte Consulting, LLP, 1919 N Lynn Street, Arlington, VA 22209-1742.

The approval is for a Federal Supply Schedule (FSS) follow-on task order to provide critical support services to the MSPO. These services are essential for the sustainment and oversight of the Medical/Surgical Prime Vendor (MSPV) program, ongoing program management, and driving operational efficiencies in support of the Veterans Health Administration (VHA). This action is driven by the need to maintain continuity, leverage the incumbent contractor's extensive experience, and ensure seamless operations that directly impact the quality of care provided to Veterans.

(3) A description of the supplies or services required to meet the agency�s needs (including the estimated value).

The required services include a comprehensive suite of program management, strategic sourcing, clinical integration, and technology support activities designed to maintain and enhance MSPO supply chain operations. These services cover four key focus areas:

the Clinical Product Tool (CPT) Managed Service, Clinically Driven Strategic Sourcing (CDSS), Program Management, and Enterprise Modernization, Automation, and Innovation. Specifically, the contractor will provide:

CPT Managed Service: Incorporating automated processes, clinical review documentation, and contract management to create a reliable and efficient system for managing medical supply requirements. This service is estimated to be approximately 26,880 hours for the base period and approximately 10,185 hours for the option period.

CDSS: Assisting with developing and refining supply requirements, managing clinician-driven technical evaluation panels, and conducting pilot programs for Custom Packs. This service is estimated to be approximately 6,332 hours for the base period and approximately 1,306 hours for the option period.

Program Management: Enabling effective stakeholder coordination, performance monitoring, and risk management to mitigate supply chain risks and ensure compliance. This service is estimated to be approximately 22,015 hours for the base period and approximately 15,855 hours for the option period.

Enterprise Modernization: Supporting the adoption of advanced technologies, including artificial intelligence and process automation, to enhance supply chain processes. This service is estimated to be approximately 3,045 hours for the base period and approximately 1,150 hours for the option period.

The estimated value of this acquisition is over the combined base and option period. With the inclusion of FAR 52.217-8 Option to Extend Services, the total value, if exercised for a full six months, is estimated to be .

The greatest portion of level of effort is associated with the sustainment and transition services for CPT in the base period of performance for 6 months. Through that period of time the contractor will work with VA O&IT to transfer the tool. In addition, in the base period, the contractor will develop custom packs in support of CDSS. The Agency anticipates both of these significant efforts will be largely concluded by the end of the 6-month base. For Program Management, the contractor will continue to provide Program Management Support for a significant level of effort in the base period with a reduced level of effort in the option period if exercised as the Agency continues to reduce its need for continued support. Likewise, the majority of enterprise modernization will occur in the base period with a significant reduction (roughly half) the same level of effort in the option period.

(4) The authority and supporting rationale (see 8.405-6(a)(1)(i) and (b)(1)) and, if applicable, a demonstration of the proposed contractor�s unique qualifications to provide the required supply or service.

The authority for this limited-sources justification is FAR 8.405-6(a)(1)(i)(C), In the interest of economy and efficiency, the new work is a logical follow-on to an original Federal Supply Schedule order provided that the original order was placed in accordance with the applicable Federal Supply Schedule ordering procedures. The original order must not have been previously issued under sole source or limited source procedures. The current order was competed under 36C10G20Q0022.

The incumbent contractor possesses a unique understanding of the VA�s procurement and distribution systems, including the Clinical Product Tool (CPT), National Contingency Response Tool (NCRT), and MSPV Gen-Z contracts. As the developer, Deloitte is the only entity familiar with and able to sustain CPT.

The original FSS order was competed, and the resulting task order contract included the development of CPT by the incumbent contractor. Initially, the tool began as

STEP in approximately 2017. Since then, and through the FSS task order, the contractor has made significant developments and enhancements to the STEP tool in response to the Agency's evolving needs, ultimately creating CPT as an all-encompassing tool for MSPV. Through this development, CPT has become critical for various functions essential to MSPV operations, including maintenance of the MSPV product list, MSPV service level election forms, prime vendor oversight tools (such as commercial agreement compliance and prime vendor order number status compliance), and facility core lists. These core lists are distribution stock-in requests for approximately 160 individual accounts servicing more than 1,300 locations across the country, enabling next-day delivery for recurring medical and surgical supply needs. Given that CPT now includes the core lists, its continued performance and sustainment are crucial for ongoing operations. Any failure to maintain CPT on an uninterrupted basis could severely impair the ability to receive next-day delivery of MSPV supplies nationwide, potentially necessitating reliance on government purchase cards as a failsafe, which would be less efficient, more costly, and add risk of non-compliant and gray-market items.

As one of the largest, most widely used contracts in the Agency, deep understanding of how MSPV functions across the various departments it supports is necessary for operation and sustainment of the CPT tool and overall program support. Contractor personnel must not only be technically savvy to sustain the tool, but they must also have a thorough understanding of the MSPV Statement Of Work, MSPO as an organization, VHA logistics operations, and application of the Public Law to support the Program Office. The contractor's familiarity with VA policies, including Public Law 115-407 and the legal landscape, positions them uniquely to continue delivering value without the need for extensive retraining or onboarding for approximately 6 months.

The continuation of the logical follow-on contract for CPT, which houses the MPSV Product List consisting of approximately 38,000 items is essential and cannot be economically justified through competition, particularly since it is being significantly reduced and transitioned. The Program Office has assessed that at least 6 months of continued sustainment services are essential for the successful transition of the tool to the VA Office of Information Technology (O&IT). Given the intricate nature of CPT, transitioning to a new contractor would necessitate an extensive 6-8 month period to ensure they are fully capable of providing the required services�a process already accounted for in the current logical follow-on plan to enable transition of the tool to O&IT. The incumbent contractor, who originally developed CPT, is uniquely positioned with the requisite knowledge and experience to execute these critical transition services seamlessly. Engaging a new contractor would not only double the transition period but also introduce significant risks of disruptions and inefficiencies, rendering the process unworkable. Therefore, maintaining continuity through the incumbent contractor is both the most pragmatic and economically feasible approach to ensuring uninterrupted and effective transition services for CPT.

Additionally, attempting to compete this action introduces an unacceptable risk of failure due to the complexity of CPT and its extensive use in maintaining MSPV operations nationwide. The intricate knowledge and experience required to manage and transition such a crucial tool cannot be easily or swiftly transferred to a new contractor, thereby underscoring the importance of retaining the incumbent contractor for these essential services.

This action is driven by the need to maintain continuity, leverage the incumbent contractor's extensive experience, and ensure seamless operations that directly impact the quality of care provided to Veterans making the incumbent contractor the best choice to provide the required services, ensuring continuity and minimizing the risk of disruptions.

Failure to continue services with the incumbent contractor increases agency risk in substantial duplication of cost to the Government that is not expected to be recovered, and unacceptable delays in fulfilling the agency�s requirements. There is no other vendor that is able to mobilize and perform this requirement without a lapse in performance.

(5) A determination by the ordering activity contracting officer that the order represents the best value consistent with 8.404(d).

The Contracting Officer has determined that awarding the follow-on task order to the incumbent contractor represents the best value for the government. A critical element of this determination is the recognition that any new contractor would require approximately six months to fully understand the existing system, including the Clinical Product Tool (CPT) and how it operates within the VA�s highly complex supply chain infrastructure. As this contract is designed for a one-year period�comprising a six-month base period plus a six-month option period�the most cost-effective solution for providing the best value to the government is to continue utilizing the same contractor that developed the CPT.

This approach will ensure that the VA avoids the inefficiencies and potential risks associated with onboarding a new contractor, enabling continued progress and uninterrupted support to the MSPV program. The costs associated with bringing in a different contractor would result in at least six months of lost efficiency, valued at approximately . This amount represents not only the financial impact of inefficiencies but also the potential delay in critical operations during the transition period. By continuing with the logical follow-on contract with the incumbent contractor, the program office can ensure a seamless transition and avoid these substantial costs, realizing significant savings.

Furthermore, as this action will result in a FSS order, the government has already determined the contractor's prices to be fair and reasonable. The Contracting Officer will review and ensure that the prices are in accordance with FSS pricing schedules. In addition, the Contracting Officer will also seek additional discounts from the contractor as prescribed by FAR 8, ensuring that the government receives the most competitive pricing available.

(6) A description of the market research conducted among schedule holders and the results or a statement of the reason market research was not conducted.

The Contracting Officer has conducted market research required by regulation commensurate for a logical follow-on in light of the foregoing concerns. This market research involved a review of current Federal Supply Schedule (FSS) vendors capable of performing the required services. The Contracting Officer also took into consideration small businesses through the use of various tools including the SBA certification database, GSA e-library, Dynamic Small Business Search, System for Award Management, and Federal Procurement Data System. The Agency considered the results of the searches in light of the immediate need for the continued support services and the flexibilities afforded through the FSS for logical follow-on contracts.

The SAC and MSPO previously conducted an extensive market research effort in anticipation of a long-term, competitive action and determined that an extensive transition period of at least 6 months would be essential to ensure a seamless hand-off from one contractor to another. As a part of that consideration the contract included transition services through the end of the performance period. The Agency had planned to allow for such a transition period and was preparing to move forward with a competitive procurement based on the initial market research it conducted through an Integrated Product Team (IPT). However, external events outside the Agency's control ultimately led to the cancellation of the competitive procurement during that time. Since then, the Program Office has gained approval to transfer CPT to VA O&IT for long-term sustainment of the tool. In addition, the Agency has determined to reduce the level of effort over time for the support services.

Consequently, the Agency must award a follow-on contract for transition and sustainment services to ensure the continued operability of CPT. This follow-on contract is critical to maintaining uninterrupted services and transitioning effectively to the Office of Information Technology (O&IT) without risking operational stability or incurring significant efficiency losses.

Due to the complex nature of the service, the requirement to have a contract in place by early December 2025, and the significant lead time required for any new contractor to become familiar with VHA�s supply chain system and the CPT, Deloitte has been identified as the only vendor capable of meeting the immediate need. Other potential vendors would require approximately 6 months of transition time to continue services uninterrupted, reinforcing the decision to limit the sources for this task order.

(7) Any other facts supporting the justification.

MSPV is a $2.5 billion-per-year program serving more than 1,300 VA facilities. It involves managing a product list of over 38,000 items through hundreds of VA suppliers, including Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) and Veteran- Owned Small Businesses (VOSBs). This program is critical to VHA operations, and the Clinical Product Tool sustained by this support contract is essential for MSPV.

Operational Continuity: The incumbent contractor�s continued involvement is essential to maintain the momentum of critical supply chain initiatives such as the CPT tool enhancements, tools in support of MSPV Gen-Z contract oversight, and strategic sourcing activities.

Regulatory Compliance: The MSPV program requires compliance with the Trade Agreements Act (TAA), Buy American Act (BAA), and the Make PPE in America compliance. The contractor's expertise ensures adherence to these critical regulatory requirements.

Dependence on CPT: The operational success of the MSPV program is heavily contingent on the Clinical Product Tool (CPT) and all its applications. A lapse in contract coverage or a gap in knowledge and experience to sustain it places the MSPV program, and thereby the effective delivery of medical supplies to VA facilities, at significant risk of disruption.

Based on VA Office of Inspector General findings, MSPV is estimated to save VHA hundreds of millions of dollars through lower prices compared to open market prices for supplies and through significantly reduced distribution fees. Any disruption to CPT would invariably lead to increased costs through Government Purchase Card (GPC) and would contravene the Agency�s policy that MSPV is a mandatory contract for medical and surgical supplies.

(8) A statement of the actions, if any, the agency may take to remove or overcome any barriers that led to the restricted consideration before any subsequent acquisition for the supplies or services is made.

The Agency�s policy is to compete services to the maximum extent practicable. For that reason the Agency will plan on a competitive procurement if services are needed beyond a year, and it will concurrently work that action to allow competition for future support services (if needed). Limiting the follow-on to one year (with an option to extend services) allows the Agency the flexibility to conduct a competitive procurement should it need additional services beyond a year. The actions to broaden will include adequate advanced planning, vendor outreach and transparent solicitation processes.

(9) Evidence that any supporting data that is the responsibility of technical or requirements personnel (e.g., verifying the Government �s minimum needs or requirements or other rationale for limited sources) and which form a basis for the justification have been certified as complete and accurate by the technical or requirements personnel.