Draeger J_A 5.2.22 -_Redacted.pdf

Date: May 2, 2022

SOLE-SOURCE JUSTIFICATION UNDER SIMPLIFIED PROCEDURES FOR CERTAIN COMMERCIAL

ITEMS IN ACCORDANCE WITH FEDERAL ACQUISITION REGULATION (FAR) 13.5

1. Identification of the agency and contracting activity: The Defense Health Agency (DHA), Central Markets Contracting Division, Colorado Springs.

2. Nature and/or Description of Action being approved: Sole-source contract with Draeger, Inc. (Draeger) under simplified procedures for certain commercial items included in FAR 13.5.

3. Description of Supplies/Services: Services are for scheduled preventive maintenance visits and unscheduled repairs on the following government owned surgical/dental equipment:

five (5) Dräger Apollo anesthesia units; two (2) Dräger Fabius Tiro anesthesia units; seven

(7) Dräger D-Vapor 2000 vaporizers; seven (7) Dräger Vapor 2000 Sevoflurane vaporizers;

and two (2) Dräger Scio gas measurement units. The contract type contemplated is Firm Fixed Price. The period of performance would be a base plus (4) four one-year options.

4. The statutory authority permitting sole source: Acquisition of commercial items conducted pursuant to FAR Subpart 13.5 in accordance with 41 U.S.C. 1901 Simplified Acquisition Procedures.

5. Rationale Justifying Use of the Statutory Authority Cited: Draeger is the only source that provides service maintenance and repairs for the listed Government-Owned equipment due to the proprietary nature of this equipment. Draeger has patent rights and proprietary ownership of its products, parts, and services and does not authorize nor train third parties to service its equipment. The use of an unauthorized Draeger technician or non-manufactured Draeger part could lead to equipment failure or malfunction, possible patient injury or death, lawsuits against the hospital and potential loss of hospital accreditation.

This utilization of such untrained and uncertified sources would present a significant liability and risk to the Government.

6. Efforts to Obtain Competition: A notice will be publicized as required by FAR 5.2 and sources interested in responding will be reviewed by the DHA Contracting Officer.

7. Determination that Anticipated Costs to the Government will be Fair and Reasonable: The Contracting Officer will determine that the anticipated cost to the Government will be fair and reasonable by reviewing Draeger’s published price lists and historical prices paid IAW with FAR 15.404-12(b). Historical prices are available by reviewing previous Department of Defense awards via the Electronic Data Access (EDA) tool.

8. A description of the market research conducted and the results or the reason market research was not conducted.

The Government first reviewed Draeger’s website at https://www.draeger.com and GSA schedule contract 36F79718D0369 to determine if there are any small business resellers or dealers authorized to perform services on Draeger equipment. The website did not contain any information. The GSA Schedule that listed Draeger for equipment only contained one authorized dealer. The company is HMS Technologies, Inc. (HMS), a Certified Service Disable Veteran-Owned Small Business. According to HMS’s Director of Business Development, the partnership with Draeger has ended. The relationship between Draeger, and HMS was a prime (HMS)/subcontractor (Draeger) relationship. HMS was never trained or authorized to perform services or repairs on Draeger equipment. If repairs or service was required then HMS would subcontract the work to Draeger.

The DHA Contracting Officer contacted Draeger’s Vice President of Government Sales, and asked if there are any authorized dealers that can perform the services outlined in section 3 of this document. At this time, there are no authorized dealers and any future partnerships would be strictly a prime (Other than Draeger)/subcontractor (Draeger) arrangement. Mr. Sullivan stated that Draeger is unwilling to train or authorize third parties to perform maintenance or repairs because errors can result in patient injury or death and they are unwilling to accept the risk to their patients or reputation.

Based on the results of this market research it was determined that Draeger is the only source available to perform the required services.

9. Any other facts supporting the use of sole-source.

The equipment referenced in section 3 above is highly specialized, anesthesia units used to sedate and ventilate patients during surgery. Each piece of equipment item is classified, by the FDA, as a Class 2 medical device unit and must adhere to rigid control standards established by the equipment manufacturer. Equipment must be maintained, tested, and inspected according to manufacturer specifications. Accreditation Association for Ambulatory Health Care requires that the hospital maintain records of equipment testing and maintenance in order to maintain accreditation. Anesthesia units must pass daily function tests before they can be used in surgery.

The Government is unwilling to utilize unauthorized 3rd parties for maintenance or repair services. The use of an unauthorized technician or non-manufactured Draeger part could lead to equipment failure or malfunction, possible patient injury or death, lawsuits against the hospital and potential loss of hospital accreditation. This utilization of such untrained and uncertified sources would present a significant liability and risk to the Government.

Additionally, if anesthesia equipment malfunctions, the surgery department would not be permitted to perform surgery as scheduled, which would lead to a cancellation.

10. A listing of the sources, if any, that expressed, in writing, an interest in the acquisition.

Draeger. has expressed an interest. If any additional interest is expressed after the notice described in section 6 of this document has been published, the government will verify that the entity is certified by Draeger to perform these services. Upon this verification, then this section 10 will be amended to include the additional sources.

11. A statement of any actions the agency will take to remove or overcome any future barriers to competition.

Prior to any follow-on efforts being established, additional market research will be performed to determine if Draeger has any changes to their policy regarding 3rd party maintenance and repairs. The Government will also provide further scrutiny to the maintenance and service limitations established by manufacturers before the acquisition of new anesthesia and ventilation equipment.

Certification

Acquisition Initiator:

I certify that the facts and representations under my cognizance that are included in this justification and that form a basis for this justification are complete and accurate.

Signature Date

Contracting Officer:

I certify that this justification is accurate and complete to the best of my knowledge and belief.

I hereby approve the use of a sole-source proposed contractual action pursuant to the authority of 41 U.S.C. 1901.

Signature Date

Date: 2022.05.10 09:21:53 -06'00'