C01 - Sole Source Justification - FY25 Salary Survey_Redacted (1).pdf

Acquisition ID#: 36C776-25-AP-2523

DEPARTMENT OF VETERANS AFFAIRS

SOLE SOURCE JUSTIFICATION UNDER SIMPLIFIED PROCEDURES FOR CERTAIN COMMERCIAL

ITEMS IN ACCORDANCE WITH FAR 13.5

Acquisition Plan Action ID: 36C776-25-AP-2523

1. Contracting Activity: Department of Veterans Affairs (VA), Veterans Health Administration (VHA), Program Contracting Activity Central (PCAC), 6100 Oak Tree Blvd, Suite 490, Independence, OH 44131. Purchase Request Number: TBD

2. Nature and/or Description of the Action Being Processed: This procurement is for expert compensation consulting related services and support 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.

VHA utilizes different pay systems of varying complexity, some of which are market-based, requiring utilization and analysis of third-party data to establish salaries and/or pay schedules. This market-based data is used to assess VA’s competitive position in each local labor market area and allows VA facilities to make informed, consistent, accurate, and timely compensation decisions for a wide variety of critical occupations providing direct patient care to Veterans. VA is challenged in its ability to easily assess the health care labor market conditions without purchasing from a third-party due to challenges in obtaining current quality data from competing entities due to anti-trust regulations. This requirement includes the purchasing of calendar year 2025 salary surveys, support with fiscal year 2026 survey participation, and software solution/SaaS database support.

This is an individual Sole Source Justification. It is anticipated that a Firm Fixed Price Purchase Order will be awarded for one (1) 12-month base year.

3. Description of Supplies/Services Required to Meet the Agency’s Needs: The contractor shall assist VHA in identifying a list of approximately 50 national and regional salary, benefits, and productivity/staff ratio surveys to participate in and receive survey data from and establish an agreement with each third-party survey provider, maintain and publish a calendar to submit timely VHA employee salary and other compensation data on VHA’s behalf, purchase surveys on behalf of VHA, and apprise VHA as to when each third-party survey deliverable will be received.

The contractor shall collect and provide VHA employee survey and benefits data on behalf of 152+ VA medical centers, in different local labor market areas to third party survey providers on behalf of the VHA. Using large VHA electronic employee data files, the contractor shall extract, analyze, benchmark jobs based on VA job descriptions, and provide employee specific salary and benefit data including duty station locations to different third-party survey sources on VHA’s behalf. Each third-party survey may require data analysis of employee salaries for clinical, professional, administrative, technical, clerical, trade, engineering, security, or other healthcare occupations and will cover any duty station location within the VA Health Care System. This includes locations throughout the continental United States (CONUS), Alaska, Hawaii, and U.S. territories to include Puerto Rico, Guam, American Samoa, and the U.S. Virgin Islands.

In order to perform appropriate job matching/benchmarking and participate in surveys on behalf of VHA, the contractor must have extensive knowledge of VHA healthcare occupations; knowledge of VHA’s unique grade and salary structure; and a thorough understanding of the various qualification standards for each VHA healthcare occupation.

The contractor shall collect the third-party salary survey results and provide the results in a cloud-based database. Results must include the aggregate market data and analysis and create market comparisons for national and regional salary data. The contractor shall develop appropriate market analysis and market comparisons for occupations eligible for pay pursuant to 38 U.S.C. §§ 7401-7474. The contractor shall provide the compensation data for all positions surveyed to include, minimum, median, maximum, and mean salary amounts for each position, minimum, median, and maximum ranges when available, and total cash compensation amounts. The total compensation shall include premium pay and differential amounts, recruitment and/or relocation benefits paid, educational assistance/debt reductions incentives (including student loan repayment programs), and other monetary benefits typically paid by employers. The contractor shall also obtain information on any other work/life benefits paid or offered to non-federal employees.

In order for VA to utilize national third-party survey data, upon purchase of the surveys, the contractor must provide geographic differentials to extrapolate and report survey data for each individual VA local labor market area, using recognized industry standards and survey methodology comparable to the methodology used by the Bureau of Labor Statistics (BLS). A differential or percentage is calculated and applied to national survey data. The contractor shall develop and provide reports which allow VA to apply the determined geographic differentials to aggregate and individual national survey data sets for all established duty station locations.

Contractor will assist VHA in clearly defining and aligning employees to career paths through career tracks and job leveling to support competitive benchmarking and compensation validation. Employee data will be mapped and integrated into the cloud-based survey data solution and VHA’s Human Capital Management System (HR Smart). The Contractor will analyze VHA’s current pay structures and provide potential redesign options that will promote fair and competitive compensation compared to the external market.

The table below outlines the Public Law requiring the use of the Third-Party Survey data as well as the number of professionals requiring the data.

Pay system requiring the use of Third- Party Survey Data

Number of VHA Healthcare Professionals requiring Third-Party Survey data (as of 4/1/2025)

38 USC § 7431* (Physicians, Dentist, Podiatrists, Optometrists)

33,552

38 USC § 7451** (Registered Nurses, Advanced Practice Nurses, Certified Nurse Anesthetists, Physician Assistants)

96,430

38 USC § 7455*** (Hybrid T38 employees, GS Healthcare Workers)

126,829

*38 U.S.C. § 7431 requires the health care labor market for the specialty or assignment of the physician, podiatrist, optometrist or dentist be considered when determining total pay for these occupations and this includes the biennial salary reviews which are required by law. VHA requires current third-party survey data to conduct the analysis required by statute and to pay competitive salaries to healthcare providers. Additionally, VA Policy requires that two or more national surveys be consulted for the Physician, Dentist, Podiatrist and Optometrist Steering Committee, which is also a requirement outlined in 38

USC 7431.

**38 U.S.C. § 7451 requires medical center directors to utilize third-party industry surveys to provide nurses and physician assistants competitive pay as well as to meet statutory reporting requirements outlined in the statute.

***38 U.S.C. § 7455 provides flexibility to VHA to recruit and retain other healthcare professionals through special salary rates. An increase in basic pay for healthcare professionals paid from the general schedule may be authorized to provide competitive pay, achieve adequate staffing, and recruit personnel with specialized skills. Competitive pay is defined in 38 U.S.C. § 7455 as “competitive with, but not exceeding, the amount of the same type of pay paid to the same category of personnel at non-Federal facilities in the same labor market.” Third party survey data is required to ensure pay does not exceed what local healthcare establishments organizations pay employees in within the same labor market area.

The Total Estimated Value of this requirement is , and the Period of Performance for the work will be one year from award, estimated 30 September 2025 – 29 September 2026.

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): Deloitte Consulting, LLP is the only firm capable of providing the supplies and services described in Section III above without the Veteran’s Health Administration experiencing substantial duplication of cost that could not be expected to be recovered through competition and unacceptable delays in fulfilling its requirements. During FY 2024, contract number 36C77624C0050 was awarded on April 11, 2024, to Deloitte Consulting LLP. In April 2025, the VA, with consultation from the Department of Government Efficiency (DOGE) representatives, did not exercise the option year, and the contract ended on April 14, 2025.

It was originally thought that an in-house solution could be developed to meet the needs of VHA. However, after consulting with IT on system requirements, it was determined the development of an in-house solution is not feasible. The only task that could potentially be completed in-house is the participation and maintenance of the survey cycle, which would require 5 FTE. It was later determined that the contract was critical in that it allowed VA to analyze real-time data and competitively recruit and retain exceptional Physicians, Nurses, Psychologists, and more. Without up-to-date data for a wide range of professions, VHA will experience challenges in ensuring pay is commensurate with the healthcare labor market, which will negatively impact recruitment and retention. VHA will be forced to continue utilizing 2024 data which is outdated and not a good representation of current compensation trends. VHA is requesting to re-establish the contract for one year. Without a current replacement, VHA anticipates the following downstream impacts: Loss of talent - Increased turnover for occupations providing direct patient care to Veterans; Difficulty recruiting – Increase in the length of time positions remain vacant and decrease in highly qualified applicants; and Increased costs - Increase in high-cost staffing contracts and the expense to recruit and train new employees. The VA requires access to the survey data database that was included in the past contract. Without the database to analyze and organize data, VHA Compensation professionals have reverted to spending numerous hours searching through many spreadsheets. VHA developed a Compensation Analysis Tool that compares survey data directly to employee salary, reducing the time it takes for Compensation professionals to prepare analyses to enable senior leaders to make data-driven compensation decisions will become obsolete without purchased third party survey data and has been a key component in the development of data-driven national compensation strategies in VHA.

This contract is being sought with Deloitte for continued development and utilization of the salary survey data database, which was previously modified by Deloitte to meet VHA’s unique pay systems and pay schedule policies outlined in VA Handbook 5007. Competition would significantly delay the re-implementation of a database as it would require a contractor to either build a suitable replacement or substantially modify an off-the-shelf product.

Additionally, through the contract, national healthcare compensation surveys are purchased centrally and made available to Medical Center Directors to meet the statutory requirements outlined in 38 U.S.C. § 7431, 7451, 7453, and 7455. Third-party industry salary surveys are the standard for compensation practices ensuring competitiveness in the healthcare market. They ensure objectivity, credibility, and in-depth analysis that supports data-driven decision making. Due to the cost of the data, contract support is crucial to assess VA’s competitive position in each local labor market area and allows VHA facilities to make informed, consistent, accurate, and timely compensation decisions for a wide variety of critical occupations providing direct patient care to Veterans. Not utilizing a centralized contract for this process will be a duplication of cost to the government that cannot be recovered through competition as Medical Centers will be required to purchase the data individually. Deloitte has already participated in the surveys on behalf of VHA and unacceptable delays will occur during the purchasing phase as a new vendor would have to establish agreements with the survey-data companies, which are already in place with the previous contract. This work involves identification and purchase of regional and national third-party salary survey data from approximately 50 sources, salary survey data collection and distribution to perform appropriate job matching/benchmarking, and participate in salary surveys on behalf of VHA, 152+ VA medical centers, which would also be a duplication of cost as this work has already been completed with the previous contract.

In addition to the salary survey data and database services, VHA and Deloitte were in the process of developing a new job architecture framework which supports the DOGE Workforce Optimization Initiative. Through job and employee mapping in collaboration with Deloitte, VHA began to identify overlapping positions, organize occupations into job functions and families in line with current structures in the healthcare market, establish clearly defined career tracks (progressions) for each occupation. Additionally, the job architecture development, along with pay structure analysis, will help VHA remain in compliance with the Equal Pay Act ensuring equal pay for equal work in the same labor market area and keep pace with healthcare industry standards. During the next option year of the contract, VHA and Deloitte were to begin the finalization and implementation phase of job architecture. The implementation of this work will help VHA to analyze the infrastructure post workforce reshaping efforts. VHA would experience substantial duplication in cost with a new contractor and be required to re-complete much of the work.

6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable: Thorough market research was conducted prior to the award of the initial contract to Deloitte in April 2024. The original market research for Contract 36C77624C0050 was completed from December 2022 to October 2023 and consisted of a VA Vendor Information Pages (VIP) Search, sources sought notice 36C77624Q0019, a VIP email blast of the sources sought notice, and a System for Award Management (SAM) search for entity records. Overall, seventeen (16) responses were received. The Program Office reviewed all sixteen (16) capability responses. It was determined that only the one (1) other-than small business, Deloitte Consulting, LLP, was capable of meeting the requirement. However, the requirement was procured utilizing full and open competition.

The solicitation for Contract 36C77624C0050 received four (4) responses. VA’s Source Selection Evaluation Board (SSEB) evaluated the proposals in accordance with the criteria as set forth in the Solicitation basis for award and the Source Selection Evaluation Plan. On April 11, 2024, the Contracting Officer and Selection Authority of the requirement determined the proposal submitted by Deloitte Consulting, LLP not only represented the best value to the Government based on the evaluation results documented in the Source Selection Decision Memo but that Deloitte Consulting, LLP, was the only technically acceptable proposal received. The other three (3) responses were determined unacceptable for multiple deficiencies.

The most recent market research steps include a search on the Small Business Administration (SBA) database, dsbs.sba.gov, for NAICS 541990 with key words “salary survey,” which yielded 0 results. A second search of NAICS 541990 with key words “compensation consulting,” yielded one return. A view of the company’s capability statement showed the company does not provide salary data. The System for Award Management (SAM) was searched for entity records and Deloitte Consulting LLP does not have any exclusions, and the registration expires July 23, 2026.

Additional details of all the efforts discussed can be found in the market research report in the contract file.

7. Determination by the CO that the Anticipated Cost to the Government will be Fair and Reasonable: The Contracting Officer will determine the price is fair and reasonable by comparing the quoted price to the Independent Government Cost Estimate per FAR 13.106- 3(a)(2)(vi)) and comparison to Option Year 1 pricing for the same services from contract 36C77625C0050.

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. Market research for the initial contract 36C77625C0050 included synopsis of the proposed acquisition, participation in industry days, advising industry of the pending acquisition and soliciting inquiries from interested parties.

Market research of the new contract included an updated check of the market to determine if any small businesses may be capable of meeting the requirement.

9. Any Other Facts Supporting the Use of Other than Full and Open Competition: None.

10. Listing of Sources that Expressed, in Writing, an Interest in the Acquisition: Deloitte Consulting, LLP, 1919 N. Lynn St. Arlington, VA, 22209