Determination and Findings _Consolidation _MQS2-NG_Redacted.pdf

DEFE:\SE HEALTH AGENCY

DEFE:\SE HEAL TH AGE'.\CY COl\TRACTING ACTIVITY

ENTERPRISE MEDICAL SERVICES CONTRACTING DIVISIO1'

-H30 ST Al\LEY ROAD, SCITE 208

.JOINT BASE SAN ANTONIO, FORT SA:\1 HOlJSTOl\, TEXAS 78234

Determination and Finding - Consolidation of Contract Requirements Medical Q-Coded Support & Services - Next Generation Program

1. Agency/Contracting Activity: Enterprise Medical Services Contracting Division (EMS-CD)

2. Nature and/or Description of Action being approved: The EMS-CD seeks approval to consolidate the Medical Q-Coded Services (MQS) and Medical Support Services (MSS) programs under the Medical Q-Coded Support & Services - Next Generation (MQS2-NG) program .

3. Background: The MQS and MSS programs are two DHA strategic sourcing vehicles for the purchase of professional medical services and medical support services in support of medical treatment facilities (MTFs) across the Military Health System (MHS). The DHA has a new requirement for the establishment of a single strategic sourcing platfonn capable of providing professional medical services and medical support services to support the MHS. The MQS2-NG program. is the DHA ·s new strategic sourcing platform designed to consolidate the MQS and MSS programs, continue the standardization of MHS medical and dental contracts, and improve the efficiencies of the DHA in a market-based and enterprise wide buying approach. The services acquired under the MQS2-NG program will include all services within the service codes identified in the Product and Service Code (PSC) Manual shown in the below chart.

Service Code Q - Medical Type Q20I General Medical Q30I Laboratory Testing (Personnel only) Q401 Nursing Q403 Evaluation/Screening Q503 Dental 050 l-Q502 and Q504-O527 Medical/Surgical Q601 Medical Codin_g & Auditing Q602 Medical Records

Q603 Medical Transcription

0701 Specialized Medical Suppo11 (i.e., billing, referral)

Q702 Technical Medical Support (i.e., medical logistics) Q801 Medical Appointing Services

Q802 Clerical Medical Support Q999 Other

4. Citation of the appropriate statute and/or regulation upon which the determination and findings (D&F) is based: In accordance with the Federal Acquisition Regulation (FAR) 7.107-2(a). consolidation may provide substantial benefits to the Government. However, because of the potential impact on small business participation, before conducting an acquisition that is a consolidation of requirements with an estimated total dollar value exceeding $8 million, the senior procurement executive (SPE) or chief acquisition officer (CAO) shall make a written determination that the consolidation is necessary and justified in accordance with 15 U.S.C. 657q. after ensuring that-

(1) Market research has been conducted;

Consolidation of Contract Requirements Determination Medical Q-Coded Suppmt & Services - Next Generation (MQS2-NG) Program

(2) Any alternative contracting approaches that would involve a lesser degree of consolidation have been identified;

(3) The detennination is coordinated with the agency's Office of Small Disadvantaged Business Utilization or the Office of Small Business Programs;

(4) Any negative impact by the acquisition strategy on contracting with small business concerns has been identified; and

(5) Steps are taken to include small business concerns in the acquisition strategy.

5. Market Research : The Government conducted extensive market research over the past 18 months to determine the best strategy to meet mission requirements. Based on the findings of market research, the Government determined that market-based and enterprise wide buying approaches were better suited for the needs of the MHS. Market research included the following:

a. The MQS2- NG Integrated Product Team (IPT) researched numerous industry reports that were obtained from IBIS World, an independent publisher of U.S. industry research covering more than 700 different market sectors. For the health care sector. the MQS2-NG !PT reviewed 8 reports covering the following market segments :

(I) Industry Reports: Primary Care Providers. Specialty Care Providers. Dent ists, Psychologists and Social Workers, Hospitals (Medical and Surgical). Teleheaith Services.

(2) Procurement Reports: Permanent Medical Staffing, Temporary Medical Staffing

Each of these IBIS World industry and procurement reports provided data on specific market segments, to include the market outlook and forecast. The MQS2-NG !PT used these industry reports to gain a better understanding of the market demographics and perfonnance in the industry . In addition, the MQS2-NG IPT reviewed the Department of Labor"s Bureau of Labor Statistics. Occupational Outlook Handbook for health care, which was a good source for median pay and employment trends in 46 labor categories within the industry.

b. Structured interviews with both the MQS and MSS contractors. The interview questions were designed to determine capabilities in terms of organizational structure, technology. and staffing ratios .

Although the current contractors operate primarily in a buying environment that provides services at individual MTFs (MTF-centric). their knowledge and insight ofindust1y practices was a starting point for the team to develop a Request for Information (RF!) on vendor capability.

c. RF!. A RFI designed to assist the !PT with understanding the capabilities of vendors who provide medical staffing and recruiting services was released for public input in November 2020. The collection and analysis of this data provided the team with a greater understanding of vendor capabilities . The respondents to the RF! are vendors in the MQS2-NG market who provide services as Prime contractors, sub-contractors, or teaming partners. The data showed that 90% of respondents have operated as a Prime contractor and 73% have operated as sub-contractors under MQS/MSS. Although not by design. the respondents to the RFI all had experience providing staffing services to the Government. The following is a summary of what the team captured in the RFJ:

• 89% of the respondents were small businesses.

Controlled Unclassified Information - Source Selection Information - See FAR 2. l O I and 3. 10-1- Page 2 of5

Medical Q-Coded Suppo11 & Services - Next Generation (MQS2-NG) Program

• 82% of respondents reported a functional, hierarchical or horizontal organizational structure

• 91 % of respondents use an Applicant Tracking System (A TS)

• 45% of respondents use a Programmatic Recruiting Platform (PRP): 71 % of the large businesses and 41 % of the smal I businesses

• 45% of the respondents use a Vendor Management System (VMS)

• 69% of the respondents had an organizational certification: 86% of the large businesses and 65% of the smal I businesses

• 4 respondents have active contracts under both the MQS and the MSS programs

5. Alternative Contracting Approach.

a. The MQS2-NG !PT reviewed several strategic contracts to gain an understanding of where there were opportunities for improvement from their level of perfonnance and any potential for the use of best practices on the next generation contract. The contracts were predominantly multiple award indefinite delivery. indefinite quantity (ID/IQ) contracts. This which indicates that the nature of health care makes it virtually impossible to precisely predict the quantity. location and delivery dates for medical service requirements at the MTFs. In addition, the data shows the following:

(I) The majority of the contracts were commercial contracts, which suggests the requirements for MQS2-NG are similar to services available in the commercial market.

(2) With the exception of the Clinical Support Agreements (CSAs). all of the contracts were indefinite delivery/indefinite quantity (ID/IQ) contracts. This suggests the Government knows they have requirements. but did not know definitively when. where or how much was needed at time of award.

(3) All but one contract used fim1-fixed price (FFP) as a pricing methodology with the exception of travel as a reimbursable cost, which suggests the requirements for staffing services in stable.

(4) All but three of the contracts were set-aside for small business.

(5) Only three of the contracts had not-to-exceed (NTE) rates, which suggest that pricing is accomplished at the Task Order level.

(6) All but one had a 5-year ordering period.

b. Federal Supply Schedule (FSS), Multiple Award Schedule (MAS) Program: The MQS2-NG !PT reviewed the FSS MAS as a potential contracting vehicle for the MQS2-NG acquisition in lieu of developing a new solicitation. While the FSS 621 I MAS Program had several advantages, it has several significant drawbacks for the MQS2-NG acquisition. It is a buy-as-you-go approach. which makes it difficult to enforce any high-level standardization on the MQS2-NG acquisition as well as control requirement creep through demand management. The MQS2-NG [PT determined that the FSS MAS would not be an option based on the following:

(I) The MAS Program is not standardized; whereas developing a strategic contract will allow commonality for similar requirements. adopt best clinical and business processes. and gain cost efficiencies.

(2) The MAS program will not allow the MQS2-NG [PT to develop a strategic contract vehicle

Controlled Unclassified Information - Source Selection I nfonnation - See FAR 2.10 I and 3. I 04 Page 3 of5

Medical Q-Coded Support & Services - Next Generation (MQS2-NG) Program with tenns and conditions that leverage the experience gained from existing service contract vehicles.

(3) The MAS program contractor pool is expanding and constantly changing which may result in the loss of government corporate knowledge. This knowledge is common in large strategic contract vehicles awarded to a select number of contractors over a period of time.

(4) From a cost perspective. standardizing clinical and business practices and consolidating common medical services combats duplication; saving Government resources .

(5) Ability One Program: The team reviewed AbilityOne as a potential contracting vehicle for the MQS2-NG acquisition in lieu of developing a new solicitation. AbilityOne vendors do not provide Q Coded medical services or performance-based services to the Government

c. Based on the reviews of acquisition alternatives, the MQS2-NG !PT determined the best acquisition method was to develop a joint military depatiment-wide strategic contract vehicle for Q-coded services. Neither current military depatiment strategic contract vehicles nor any existing multiple-award contract can provide the capability for market-based or enterprise-wide buying that would meet the scope for DHA to obtain medical services .

6. Small Business Consideration/Coordination: The Government intends to solicit the requirement using two pools of vendors to account for market-based and enterprise-wide buying. The resulting program will include an unrestricted pool and small business pool. The inclusion of the unrestricted pool will allow for larger volume buys, value-added services, and shifting of contract resources to meet surge and short-term market requirements. The Procuring Contracting Officer will coordinate the proposed strategy via DD Form 2579, Small Business Coordination Record with the DHA Director of Small Business Programs prior to solicitation . MQS2-NG ordering procedures will require ordering activities to coordinate MQS2-NG task order proposal requests through their supporiing Office of Small Business and the Small Business Administration prior to award of an order under the program.

7. Impact of Acquisition Strategy on Small Business: This acquisition will be conducted under source selection procedures in accordance with FAR Part 12 and FAR Part 15. The MQS2-NG program will be comprised of Indefinite Delivery/ Indefinite Quantity (IDIQ) contracts awarded in two business size categories; small and unrestricted. The awarded IDIQs will form vendor pools aligned to support requirements in the five areas of responsibility (AORs) identified in the Performance Work Statement (PWS). The vendor pools are projected to include five to ten vendors in the small business size category and five vendors in the unrestricted businesses size category in each AOR. The unrestricted vendor pool may consist of both small and large vendors. Based on this strategy there is little to no anticipated impact on small business concerns as one of the vendor pools in each AOR will be composed solely of small business concerns with the potential for the inclusion of additional small business concerns in the unrestricted pool. The employment of on-ramping/off-ramping procedures over the ten-year ordering period is designed to provide the Government with a streamlined method of refreshing the vendor pools as needed. In addition, pursuant to 13 CFR l25.2(e)(6)(i). the MQS2-NG solicitation and resulting contract(s) will provide for further SB set-aside considerations at the time of order placement. Further.

coordination with the Office of Small Business and the Small Business Administration at the order level is expected to facilitate small business participation to the maximum extent practicable.

Controlled Unclassified Information - Source Selection [nfonnation - See FAR 2.101 and 3.104 Page 4 ofS

Consolidation of Contract Requirements Detennination Medical Q-Coded Support & Services - Next Generation (MQS2-NG) Program

Determination

Upon the basis of the findings above, I hereby determine, pursuant to the authority of l O U .S.C. § 2382, that the proposed consolidation of the requirements for professional medical services and medical support services to support geographical markets within the Defense Health Agency (DHA) and/or individual DoD Military Treatment Facilities (MTFs), or medical requirements funded with Defense Health Program (DHP) dollars . or other federal agencies with healthcare missions and respective agency funding, within the 50 United States, District of Columbia. Puerto Rico. and Guam and other territories is necessary and justified.

CONCUR:

Director Office of Small Business Programs Defense Health Agency

APPROVED:

Component Acquisition Executive Defense Health Agency

Procuring Contracting Officer DHACA/ Enterprise Medical Services Contracting Division Defense Health Agency

Controlled Unclassified Information - Source Selection I nfonnation - See FAR ., _ 101 and 3 .104