CUVET Phase II JA_20240905_Redacted.pdf

DEFENSE THREAT REDUCTION AGENCY

8725 JOHN J. KINGM AN ROAD, STOP 6201

FORT BELVOIR, VA 22060-6201

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

Amendment #0001

1. Nature and/or Description of Action

The Defense Threat Reduction Agency (DTRA) contracting activity intends to execute a sole source contract on behalf of the Biological Threat Reduction Program (BTRP) of the Cooperative Threat Reduction (CTR) Program, with the Faculty of Veterinary Science, Chulalongkorn University (CUVET) in Thailand without using full and open competition. This effort is entitled “Phase Two CUVET Nakorn Pathom (NP) Biosafety and Biosecurity Upgrades and Facility Renovations” and is a follow-on to the recently completed Phase One Upgrades at the same facility.

The U.S. Department of Defense (DoD) has partnered with the Government of Thailand through the BTRP since 2014. This partnership has focused on securing and consolidating select agents;

enhancing Biosafety and Biosecurity (BS&S) standards; and strengthening Thailand’s abilities to detect, diagnose, surveil, and report emerging and re-emerging diseases of international security concern.

CUVET’s NP Training Center, situated approximately 60 km from Bangkok, has served as the main facility for practical trainings in farm animals and diagnostic services for more than 50 years. The center consists of a veterinary teaching hospital, veterinary diagnostic laboratory, isolation units, and livestock teaching farms. The laboratory diagnostic laboratory provides diagnostic services (virology, bacteriology and pathology units) and consultation for both livestock and companion animals. The laboratory is also used extensively for training of veterinary students. Improvement of biosafety and biosecurity capabilities at this facility is a top priority of the BTRP. BTRP’s aim is for the NP center renovation program to provide an example of best practices in biosafety and biosecurity not only for students within Thailand but for the region as well.

Under Phase One of this project, the biosafety/biosecurity systems of the demonstration farms, veterinary teaching hospital and diagnostic laboratory were significantly enhanced. This included infrastructure improvements at the large animal hospital on site, the diagnostic laboratory, and the isolation unit. Equipment such as autoclaves and animal carcass bioreactors were provided.

Portions of the aging waste management system were renovated and upgraded. Finally, physical security was enhanced by construction of a fence around the perimeter of the facility and vehicle disinfection tunnels at the entrance points.

The expected Period of Performance will be a total of 27 months. The estimated total price for this effort is , based on a detailed Independent Government Cost Estimate (IGCE) which is derived from previous, similar efforts in Thailand and, most importantly, actual costs from Phase One of the project.

The estimated cost has been revised higher in Amendment #0001 of this document, from to . This revision is due to the Government’s updated understanding of the cost to complete the requirement, gleaned via a site visit by the requiring activity to CUVET, which took place after the initial approval of this justification and prior to the issue of the solicitation. As a result of the site visit, two additional tasks have been added to the scope of work, and three months added to the period performance, resulting in additional costs that have been captured in an amended IGCE.

2. Description of the Supplies/Services Required

Established in 1935, CUVET is the leading veterinary teaching school in Thailand. CUVET has three campuses including one in Bangkok (the main campus), a large animal hospital and training station in Nakorn Pathom (the subject of this effort), and a ruminant research and training station in Saraburi province (currently under construction).

The work to be performed under this contract includes the following:

Campus-wide waste management system improvements, building on those provided in Phase One.

Renovation of the teaching animal hospital infrastructure (floor plan improvement:

anesthesia room, surgical operating room for small animal, surgical operating room for large animal, emergency room, Outpatient Department room, outpatient dispensing room, and inventory control & supply room). This includes re-structuring the facility to separate companion animals from livestock, which is a critical feature to prevent contamination between the two populations.

Installation of a simplified solar and backup power system to reduce operating costs and to ensure continuity of operations, and security of pathogen samples, in the event of a power outage.

Additional biosafety equipment Installation of a Closed Circuit Television system to improve facility and personnel security.

Development of BS&S training and standard operating procedures guide.

3. Statutory Authority

The statutory authority for this non-competitive action is derived from 10 United States Code (U.S.C.) 3204(a)(l), as implemented by FAR 6.302-1(a)(2)(iii), Only One Responsible Source.

Pursuant to FAR 6.302-1(a)(2)(iii), it has been determined there is only one responsible source and no other supplies or services will satisfy agency requirements.

4. Applicability of Authority

As documented in the justification for Phase One, and demonstrated during performance of that contract, CUVET is the only known performer with the following combination of attributes: A.

existing, and proven, exemption for payment of Value Added Tax (VAT) and other taxes, B.

ability to most effectively coordinate and deconflict renovations and upgrades with critical ongoing operations, and C. status within Thailand which will facilitate obtaining necessary approvals and permits in a timely manner. Each of these attributes will be elaborated upon below.

A. As the BTRP program expands in Southeast Asia one of the biggest hurdles has been lack of exemptions for paying VAT and other foreign taxes. The Office of the Secretary Defense (OSD) and CTR have a policy to avoid payment of foreign taxes. This has adversely impacted the ability to further the BTRP mission in countries, such as Thailand, where it has proven problematic, or impossible, to obtain tax exemptions. Without a performer who has a proven tax exemption in Thailand, BTRP will be unable to fulfill this requirement.

CUVET has a unique ability to procure and receive equipment and services without paying VAT or import duties. CUVET has this exemption through their status as a public educational institution in Thailand. CUVET’s parent organization, Chulalongkorn University, has successfully demonstrated the ability to operate exempt from taxes on previous DTRA contracts and other agreement vehicles. Given the policy to pay no foreign taxes on assistance provided to partner nations, CUVET provides one of the very few known performers able to comply with this OSD mandate. There is one other known BTRP performer on an Information Technology effort which appears to have tax exempt status in Thailand. However, this performer did not respond to the Sources Sought Notice (see section 5 below) and would still incur additional time, cost, and risk as detailed in paragraphs below. An attempt by any other performer to obtain tax exempt status would be a lengthy process with a high risk of failure. This risk assessment is based on DTRA’s previous unsuccessful experience in seeking tax exemptions. Failure of a potential performer to obtain tax privileges would only become apparent after substantial USG investment up front and result in a complete loss of that investment.

B. As the primary stakeholder, CUVET is in the best position to deconflict the renovation work with critical ongoing operations, and training, at their NP facility. As the integrator for this effort, CUVET will minimize the risk of any interference with continuity of operations during this project. This continuity is all the more critical and essential to success of the overall effort. Given the sensitivities, inserting a new and unproven performer into this situation presents an unacceptable risk. Contracting with an organization other than CUVET for this effort would significantly raise cost, schedule, and performance risk. As detailed below, just the time for design and approvals would increase significantly with an estimated cost impact of approximately , in addition to the possibility that approvals could not be obtained at all. In addition, an alternate provider would be required to mobilize and demobilize which would take an approximate total of six months based on experience with other overseas projects. Using the monthly cost calculated in the Independent Government Cost Estimate, this would equate to an additional estimated cost of . Requiring an unknown third party to integrate into CUVET’s ongoing schedule would cause further delays of unknown length but are estimated to cost an additional per month of indeterminate delay. The increased estimated costs and duplicative costs are not anticipated to be recovered through competition. In addition to increased costs and duplication of efforts, the delays pose several real-world impacts including extending the current risks presented by a population of sick animals at the facility in close proximity to the surrounding community with a lack of physical safeguards.

In addition, delayed implementation of internal quarantine facilities, and proper workflow, prolongs the risk of contamination between livestock and companion animals.

C. Chulalongkorn University is one of the leading universities within Thailand. As an organization within Chulalongkorn, CUVET enjoys considerable prestige and status within Thailand in both the human and animal health sectors. This status will be an asset when pursuing the necessary approvals and permits to complete this work. Most significantly, this includes internal approvals within the University itself. These internal approvals can take anywhere from three to 18 months based on two previous contracts with Chulalongkorn University. These timeframes are based on drawings and designs which are prepared by university architects who are familiar with the internal requirements and prepare their documents accordingly. Since the requirements are internal to Chulalongkorn, they are not known to be published anywhere for the general public. A commercial provider would be working towards unknown requirements when preparing designs and drawings for approval. This would considerably extend the time required for both the preparation and multiple rounds of the approval process. Based on two previous contracts with Chulalongkorn, the average time required to both prepare and approve design documents is 13 months. It is reasonable to assume an alternate performer working to meet opaque requirements and navigate an unfamiliar process would a significantly longer period of time. Based on the average monthly cost of performance calculated in the Independent Government Cost Estimate, it is estimated that this extended drafting and approval period would equate to an additional in costs. This is assuming the alternate performer would even be successful in navigating the process, which is not assured. In addition, the additional time required would also increase the window during which the biological risks presented by this facility are not being addressed. This includes co-mingling of companion animals and livestock which is known to be a significant risk to veterinary BS&S. Competing the requirement is not expected to mitigate the additional costs incurred and/or the schedule risks described above.

5. Effort to Solicit Potential Sources

A Notice of Intent detailing the requirement and citing BTRP’s intention to pursue this sole source authorization was published to SAM.gov on 6 November 2023. The notice remained open for 15 days and invited any interested parties, capable of performing this requirement, to provide information regarding their capabilities. No responses were received to this notice which confirms the results of Market Research indicating that no other performers are capable of performing this effort in the same manner as CUVET.

6. Fair and Reasonable Costs The final price of this contract action to the Government will be determined to be fair and reasonable based on the IGCE and cost and/or price analysis. Chulalongkorn University has been a performer under multiple DTRA contracts, and agreement vehicles, since 2015. Previous experience has demonstrated that Chulalongkorn University is able to effectively leverage relatively low price levels in the region resulting in good value to the USG. This value is compounded by the fact that Chulalongkorn University is non-profit and applies minimal overhead charges to their direct charges. The Contracting Officer has preliminarily concluded that contract negotiations are expected to lead to a fair and reasonable price and their signature on the resultant document will constitute the determination required by FAR 6.303- 2(b)(7).

7. Market Research

In accordance with FAR Part 10, market research has been conducted for this acquisition. The research sources consisted of prior acquisition information, a review of internet resources, and interviews with experts in the field. This research found no sources capable of meeting this requirement other than CUVET. While commercial entities exist which are fully capable of performing laboratory renovations and biosecurity improvements, none are known to have demonstrated tax exempt status with the exception of the current BTRP performer described in paragraph 4(a). This performer did not respond to the Sources Sought notice and would still be subject to the increased delays and risks detailed above which are estimated to double the price of the project with a significant increase in performance risk. No entity, other than CUVET, has the combined attributes detailed in Section 4 of this document. These attributes are critical to successful performance and using a performer which lacks them presents an unacceptable level of risk to BTRP. In addition, a Notice of Intent detailing the requirement and citing BTRP’s intention to pursue this sole source authorization was published to the SAM.gov on 6 November 2023. The notice remained open for 15 days and invited any interested parties, capable of performing this requirement, to provide information regarding their capabilities. No responses were received to this notice.

8. Other Facts

None.

9. Interested Sources

As noted previously, a Notice of Intent detailing the requirement and citing BTRP’s intention to pursue this sole source authorization was published to the SAM.gov on 6 November 2023. The notice remained open for 15 days. No responses were received which confirmed the conclusion reached by market research that no other sources are available.

10. Subsequent Actions

Follow-on activities related to this effort are not currently contemplated by DTRA. There are no plans for a Phase Three of this project and the requirement will be complete at the conclusion of Phase Two. In the event that additional requirements of this type do arise after contract completion, BTRP will independently evaluate them at that time.