FA865620C0025_BD_JA_Redacted.pdf

Justification and Approval (J&A) for Other Than Full and Open Competition

FOR OFFICIAL USE ONLY

March 2020 FOR OFFICIAL USE ONLY Page 2 of 7

APPROVAL (AFFARS 5306.304(a) )

Date PEO / Head of Procuring Activity / Designated Alternate Signature

March 2020 FOR OFFICIAL USE ONLY Page 3 of 7

I. Agency and Contracting Activity.

The Air Force Life Cycle Management Center (AFLCMC), Armament Directorate (EB), Rapid Acquisition Cell (RAC) Eglin AFB, FL 32542 is the contracting activity for this Individual Justification and Approval (J&A) for Other Than Full and Open Competition. This action was executed as assigned by the Joint Acquisition Task Force (JATF) as part of the Line of Effort 1 team and on behalf of Department of Health and Human Services (HHS).

II. Nature and/or description of the action being approved.

This Individual Justification and Approval (J&A) is for the award of a new contract to Becton, Dickinson and Company's (BD) to onshore and expand production of their point-of-care (POC) COVID-19 test set manufacturing and supply chain to the United States (US). Due to the unprecedented nature of the COVID-19 Pandemic, the Government has identified the need for rapid (within minutes) diagnostic testing capability. Due to the current need significantly exceeding the current manufacturing capacity, the US Government identified the need to invest in a multitude of testing capabilities to ensure Americans have access to rapid and accurate tests. The Food and Drug Administration (FDA) has issued a number of Emergency Use Authorizations (EUA) with BD receiving one. The HSS and other US Government agencies have identified an opportunity to expand testing capacity for both the Quidel and BD antigen POC tests. Quidel has already been awarded a contract for expansion efforts and this contract will ensure uninterrupted production of the BD Veritor System for Rapid Detection of SARS-CoV-2 production expansion. A Firm Fixed Price $24M contract (FA865620C0025) was awarded to BD on 30 July 2020 under the Air Force Program Executive Officer (PEO) for Weapons, Eglin AFB, Florida. BD is located at 7 Loveton Circle, Sparks, Maryland.

III. Description of supplies/services required to meet agency needs (including the estimated value).

The Air Force Life Cycle Management Center (AFLCMC), Armament Directorate (EB), awarded a $24M contract to BD to design, procure and implement the necessary production facility and equipment purchases to on-shore and expand by more than 100% the production of the BD Veritor System for Rapid detection of SARS-CoV-2 test sets.

IV. Statutory authority permitting other than full and open competition.

The contracting action covered by this Individual J&A falls within the authority found at 10 U.S.C.

2304(c)(2), as implemented by Federal Acquisition Regulation (FAR) 6.302-2 (a)(2) - Unusual and compelling urgency.

V. Demonstration that the contractor's unique qualifications or the nature of the acquisition requires use of the authority cited above (applicability of authority).

Delay in award of this contract in turn, reduces and delays testing capacity for the nation, hampering the

March 2020 FOR OFFICIAL USE ONLY Page 4 of 7 nation's ability to quickly isolate patients and trace contacts which could ultimately lead to additional cases and increased deaths. Based on HHS's and FDA's thorough assessment of BD's current capability as evidenced by HHS's approval for this contract action and FHA's approval of the EUA for the Veritor system, BD is uniquely qualified to provide antigen testing to assist in combating COVID-19 to achieve HHS's minimum goal of testing 2% of the population each month.

On 31 December 2019, a cluster of pneumonia cases of unknown origin was reported in Wuhan, China.

China reported the novel coronavirus (COVID-19) the following month as the cause of the outbreak.

The virus spread in such a rapid fashion that the World Health Organization declared a global pandemic on 11 March 2020. The US has since suffered the largest domestic outbreak and highest death count on the planet with total cases standing at over 5.4 million and deaths at over 170,000 as of the date of this document. Since the pandemic began in March 2020, the federal government approached the COVID-19 response as locally executed, state-managed, and federally supported. Teams designated by state governors have worked with subject matter experts from HHS and the Federal Emergency Management Agency (FEMA) to develop plans that set state-specific targets for SARS-CoV-2 testing. The plans build on the extensive technical assistance that has been provided, including additional detail and specificity. According to an HHS press release, HHS has requested that each state create a plan to test at a minimum of 2% of the population per month, which would equate to at least 6,602,087 Americans being tested each month.

In response to the impact on the United States, the FDA has issued a number of EUA aimed at tackling Polymerise Chain Reaction (PCR) and Antibody testing technology and production needs to meet demands across the country. In order for the FDA to issue an EUA, the HHS must issue a declaration that circumstances exist justifying the authorization, in this case, a public health emergency was declared. In order for a product to be considered for EUA, it must be approved by the FDA to “may be effective" in the ability to prevent, diagnose or treat serious or life-threatening diseases or conditions.

The product must have evidence of effectiveness, more potential benefits than risks and be no known, adequate, approved or available alternatives of the product. There have been 94 different COVID-19 tests as of the date of this document that have been granted an FDA EUA in response to the coronavirus pandemic striking the US. The large majority of these tests may only be performed in a clinical laboratory setting capable of performing high or molecular complexity tests. There are only two (2) FDA EUA antigen POC and 4 FDA EUA molecular POC tests that have been granted a waiver to the clinical laboratory requirement and may be performed in a patient care setting and provide rapid (within minutes) results. The two companies to receive FDA EUA for antigen POC testing are Quidel and BD and the four molecular POC test companies are Cue Health Systems, Abbott Diagnostics, Mesa Biotech and Cepheid.

A multitude of efforts have taken place across a number of federal agencies to identify and procure various types of COVID-19 tests including PCR and antibody tests to meet respective demands. There is a general and immediate need to expand overall testing capacities across the US. The COVID-19 pandemic has created a requirement for additional near term diagnostic testing capability which significantly exceeds current manufacturing capacity of sample collection and processing consumables.

March 2020 FOR OFFICIAL USE ONLY Page 5 of 7

VI. Description of efforts made to ensure that offers are solicited from as many potential sources as practicable, including whether a notice was or will be publicized as required by subpart 5.2 and, if not, which exception under

FAR 5.202 applies.

In accordance with FAR 5.202(a)(2), FAR 18.103 and FAR 18.104, the Contracting Officer did not submit the notice required by FAR 5.201 because the Contracting Officer has determined that the proposed contract action is made under the conditions described in FAR 6.302-2 and the Government would have been seriously injured if the agency complied with the time periods specified in FAR 5.203.

VII. Determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

The Contracting Officer ensured the negotiated price/cost was fair and reasonable. BD has estimated the effort will expand production of POC testing to reach 4M test kit/month by September 2020 and 8M test kits/month by February 2021. BD provided a cost schedule that is largely comprised of machinery and equipment and facility expansion. Although the commercial exception to requesting certified cost and pricing data applies to this effort, the Contracting Officer utilized various price analysis techniques provided under FAR 15.403-3 and the DoD Guide for Acquiring Commercial Items to ensure negotiated price/cost was fair and reasonable. The steps taken included: (1) Comparison of the proposed prices to historical prices paid, whether by the Government or other than the Government, for the same or similar items. This method may be used for commercial items including those “of a type” or requiring minor modifications (2) Comparison of proposed prices with prices obtained through market research for the same or similar items.”

VIII. Description of the market research conducted and the results, or a statement of the reasons market research was not conducted.

There have been 94 different COVID-19 tests as of the date of this document that have been granted an FDA EUA in response to the corona virus pandemic striking the United States. The large majority of these tests may only be performed in a clinical laboratory setting capable of performing high or moderate complexity tests. There are only two (2) antigen tests that have been granted a waiver to the clinical laboratory requirement and may be performed in a patient care setting and provide rapid (within minutes) results. The first company to receive EUA was Quidel Corporation on 09 May 2020 for the Quidel Sofia 2 SARS Antigen Fluorescence Immunoassay (FIA). The second company to receive EUA was BD on 02 July 2020 for the BD Veritor System for Rapid Detection of SARS-CoV-2.

The National Institute of Health, under HHS, issued Quidel a letter contract valued up to $71M (contract 75N92020C00013) to support the expansion of Quidel's manufacturing capacity in San Diego for its

March 2020 FOR OFFICIAL USE ONLY Page 6 of 7 diagnostic assays that test for SARS-CoV-2 Antigen using the Sofia FIA platform. The letter contract has only obligated $3M so far, but is expected to be definitized by September 2020. Under the letter contract investment, Quidel will be able to expand their production capacity from 84M cassettes per year to over 220M cassettes per year, increasing their capacity by 260%. The expansion of Quidel's manufacturing capacity is just once piece of the US Government's testing strategy in response to the pandemic.

HHS also identified the need to expand BD's production capacity of COVID-19 rapid POC tests. On 13 July 2020, the HHS Steering Committee approved BD's proposal for the BD Veritor POC COVID-19 test kit production expansion initiative to on shore production and increase production to 2M test kits per week.

This effort results from months of requirements definitions and market research in an ever-changing medical landscape addressing the COVID-19 global pandemic conducted by the COVID-19 Joint Acquisition Task Force (JATF) supporting the HHS. This effort is a single requirement out of a multitude of COVID-19 related responses by the DoD on behalf of the JATF and HHS.

See Market Research Report for additional information.

IX. Any other facts supporting the use of Other Than Full and Open Competition.

Because current US production of COVID-19 diagnostics tests is inadequate to meet the need for testing, there exists an immediate need to increase production capability for COVID-19 diagnostics tests. Capacity must be increased and reserve must be rebuilt as soon as possible to prepare for any potential, immediate spikes in demand, and for near and distant future needs. This effort results from months of requirements definitions and market research in an ever-changing medical landscape addressing the COVID-19 global pandemic conducted by the JATF supporting the HHS. This effort is a single requirement out of a multitude of COVID-19 related responses by the DoD on behalf of the JATF and HHS. The United States is under a state of health emergency and only the most expeditious and rapid solutions will suffice.

Requirements for this effort were identified by HHS and a sole source decision resulted from this information citing the unusual and compelling need to increase testing capacity across the country. This data showed that the BD Veritor is the best option to address COVID-19 testing needs in the most expeditious and efficient manner available.

X. List of any sources that expressed, in writing, an interest in the acquisition.

See section VIII

XI. A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before making subsequent acquisitions for the supplies or services required.

In the absence of an emergency situation, such as the COVID-19 pandemic, the Air Force will publicize similar contract actions to increase competition, broaden industry participation and assist small business concerns.

March 2020 FOR OFFICIAL USE ONLY Page 7 of 7

XII. Certification by the Contracting Officer.

As evidenced by my signature above, I have determined this document to be both accurate and complete to the best of my knowledge and belief.

XIII. Certification by the technical/requirements personnel.

As evidenced by my signature above, I have determined this document to be both accurate and complete to the best of my knowledge and belief.