FAR 6_JA_OVER_SAT_Rim Country_final.pdf

VHAPG Part 806.3 OFOC Page 1 of 6 Revision: 04 Effective Date: 12/15/25 Acquisition ID#: 36C262-26-AP-3204

DEPARTMENT OF VETERANS AFFAIRS

Justification and Approval (J&A) For

Other Than Full and Open Competition (>SAT)

Acquisition Plan Action ID: 36C262-26-AP-3204

1. Contracting Activity: The Department of Veterans Affairs (VA), Veterans

Integrated Services Network (VISN) 22, Phoenix VA Healthcare System (PVAHCS) is the requiring activity. This acquisition is being executed by Network Contracting Office (NCO) 22.

2. Nature and/or Description of the Action Being Approved: This document serves as the justification for Other Than Full and Open Competition to establish a follow-on sole-source contract for Community Nursing Home (CNH) Services with Rim Country Rehab, Inc. This will be a Firm Fixed Price (FFP), Indefinite Delivery Indefinite Quantity (IDIQ) with Economic Price Adjustment (EPA) contract. The procurement is conducted using Acquisition of Commercial Products and Commercial Services, located at Revolutionary FAR Overhaul (RFO) 12.201-1, Simplified procedures. The justification follows the documentation format of RFO 6.103-1(b), with the statutory authority based on 10 U.S.C. 3204 and 41 U.S.C.

3304, which creates the expectation that qualified Veterans will receive CNH services in their community. Veterans Health Administration (VHA) policy permits CNH services, at the VA’s expense, by providing nursing home care to Veterans in licensed nursing facilities.

3. Description of Supplies/Services Required to Meet the Agency’s Needs: The VA CNH Program is designed to assist Veterans and their families in making the transition from an episode of hospital care, nursing home care, or domiciliary care to the community. The primary goal of the CNH program is to maintain or restore the Veteran to the highest level of health and well-being attainable. VA often has a particular need for specialty care services in the CNH program. The services provided will ensure VA patients receive comprehensive nursing home care tailored to their medical, nursing, and psychosocial needs. This includes room, meals, standard nursing care, and other services such as physician visits, lab work, and x-rays, all provided at the same frequency as for other patients. The resulting contract has an estimated total value of $9,000,000.00 for the duration of five years. The contract period runs from June 1, 2026, to May 31, 2031, with five one-year ordering periods and an Option to Extend Services for no more than 6 months via RFO 52.217-8. The IDIQ limit is set at $9,000,000.00.

Total Estimated Annual Cost for facility:

Ordering Period 1 $1,800,000.00 Ordering Period 2 $1,800,000.00

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Acquisition ID#: 36C262-26-AP-3204

Ordering Period 3 $1,800,000.00 Ordering Period 4 $1,800,000.00 Ordering Period 5 $1,800,000.00

The estimated total value of the contract over the 5-year period is $9,000,000.00.

IDIQ Limit: $9,000,000.00.

4. Statutory Authority Permitting Other than Full and Open Competition:

Competition is restricted on this procurement for the reason below:

(X) (1) Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements per 41 USC §3304(a)(1) as implemented by

RFO 6.103-1;

( ) (2) Unusual and Compelling Urgency per 41 USC §3304(a)(2) as implemented by RFO 6.103-2;

( ) (3) Industrial Mobilization, Engineering, Developmental or Research Capability or Expert Services per 41 USC §3304(a)(3) as implemented by RFO 6.103-3;

( ) (4) International Agreement per 41 USC §3304(a)(4) as implemented by RFO 6.103-4

( ) (5) Authorized or Required by Statute per 41 USC §3304(a)(5) as implemented by RFO 6.103-5;

( ) (6) National Security per 41 USC §3304(a)(6) as implemented by RFO 6.103-6;

( ) (7) Public Interest per 41 USC §3304(a)(7) as implemented by RFO 6.103-7;

5. Demonstration that the Contractor’s Unique Qualifications or Nature of the Acquisition Requires the Use of the Authority Cited Above (applicability of authority): A sole-source award to Rim Country Rehab is necessary because the facility currently serves six (6) Veterans residing in the Payson, AZ immediate geographic area. Disrupting patient care by relocating Veterans to a new facility would cause undue burden on them and their families, potentially interrupting treatment plans and increasing financial and emotional hardship. Competing the requirement would likely cause delays and substantial cost duplication for the government.

Rim Country Rehab, the current incumbent, offers both a secure dementia and secure Severe Mental Illness (SMI) ward. This is the only CNH/skilled nursing facility (SNF) in this area that offers a secure SNF option, with the next nearest CNH offering similar services over 1.5 hours from Payson. These units have additional psychiatric oversight including visiting mental health providers and teams to ensure Veteran’s cognitive/mental health is appropriately planned, cared for, and given intervention for increased behaviors such as exit-seeking/wandering for patients with dementia and verbal/physical outbursts due to severe mental illness. The facility meets VA quality of care standards and is certified by the Centers for Medicare and Medicaid Services (CMS).

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Acquisition ID#: 36C262-26-AP-3204

Relocating these six (6) Veterans would incur transportation costs and require placement in another facility, while causing a disruption in treatment for patients in need of acute psychiatric care. Additionally, Veterans and/or their spouses would need to be agreeable to the move, and likely many would refuse due to locality. An analysis of inpatient care costs reveals that each Veteran placed at a facility incurs a general expenditure rate (due to location) of approximately $100,000 per month, excluding any specialty care services. Further challenges include difficulty placing Veterans and some expected refusals and hospitalizations due to care needs and available CNH placements.

Further ramifications of such a move are there are no adequate or viable options to ensure full compliance with the statutory requirements for contract nursing home care. Moreover, possible relocation could cause decreased access to legally required care and negative impact to hospital flow to include: length of stay, hospital mortality due to delayed discharges and hospital re-admissions, increased unnecessary hospitalization, and emergency room utilization due to decreased bed capacity in the community.

Facilities of this nature are extremely limited, making Rim Country Rehab an essential resource for the PVAHCS for Veterans residing in Payson and the surrounding area. Its selection is driven by its unique capacity to support Veterans with complex psychiatric needs that require a secure dementia or SMI ward.

Veterans and their families, in coordination with VA clinicians, have a choice in selecting a nursing home, and continuing with the local incumbent preserves this aspect of patient choice and saves in cost.

A sole-source award is consistent with the VA’s strategic goals to ensure timely, accessible, and high-quality care for its beneficiaries. As prescribed in VHA Notice 2020-32 titled Community Nursing Home Program and VHA Handbook 1143.2, the CNH Program has maintained two cornerstones: (1) some level of Veteran choice in choosing a nursing home close to the Veteran's home and family and (2) a unique approach to local oversight of CNHs.

6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as possible (including whether a notice was or will be publicized as required by RFO Part 5 and, if not, which exception under RFO Part 5 applies): Although this requirement falls under the CNH program, which permits direct placement based on the clinical needs and preferences of the Veteran, the VA remains committed to promoting competition to the maximum extent practicable. Accordingly, efforts were made to assess the availability of alternative sources capable of meeting the Government’s requirements.

Payson, AZ is a small city located in a wilderness area in Arizona’s Rim Country. It is approximately a 90-minute drive to the Greater Phoenix metropolitan area, with other towns not within close geographical proximity; therefore, skilled nursing facilities are somewhat scarce.

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Acquisition ID#: 36C262-26-AP-3204

To support this determination, market research was conducted using NAICS Code 623110 via the Small Business Administration (SBA) Small Business Search. The search yielded 122 Small Businesses for the State of Arizona. Of these, five are SDVOSBs and 1 is VOSB only. Five of these SDVOSB/VOSB vendors are in the Phoenix metropolitan area and one does not have an available address.

A search of nursing facilities for the Payson, AZ area on medicare.gov revealed two vendors: Rim Country Health & Retirement Community (Rim Country Rehab, Inc.)

and Payson Care Center, which has a Veterans Care Agreement (VCA) with the PVAHCS. Rim Country has an active SAM registration, while Payson Care Center is inactive in SAM. A further search of nursing facilities on medicare.gov for Heber, AZ (55 miles from Payson) revealed five (5) nursing homes: the two in Payson, Haven of Show Low, Haven of Lakeside, and Winslow Campus Care. The distances of these towns from Payson are 90, 99, and 90 miles, respectively.

Due to the unique capacity to support Veterans with complex psychiatric needs that require a secure dementia or SMI ward, Rim Country Rehab remains the only known facility capable of meeting both the clinical and geographic requirements of the VA.

In accordance with RFO 6.301(b), Availability of the justification, this action will be synopsized at award on SAM.gov, and the approved justification will be made publicly available to ensure transparency.

While competition was considered, the specialized nature of the services, the scarcity of providers to service the psychiatric needs of patients through a secure dementia or SMI ward, and the need to maintain continuity of care for this vulnerable Veteran population necessitates a sole-source award in this instance.

7. Determination by the Contracting Officer (CO) that the Anticipated Cost to the

Government will be Fair and Reasonable: Per RFO 12.204(a) Price Reasonableness, the Medicare rates that are anticipated will be paid under the IDIQ contract are determined by Veterans Affairs Central Office (VACO). A discount percentage off the VACO Medicare Benchmark Rates will be negotiated. The negotiated percentage to the VACO Benchmark Rates will remain constant throughout the life of the contract. The rates are adjusted only when VACO updates the Medicare Benchmark Rates at the end of each government fiscal year and will be effective the start of the next government fiscal year. The rates are adjusted annually and will be modified in accordance with the Economic Price Adjustment clause. The rates offered are anticipated to be determined fair and reasonable by the CO prior to award based upon the published rates and negotiated percentages.

8. Description of the Market Research Conducted and the Results, or a Statement of the Reasons Market Research Was Not Conducted: Market research was conducted in accordance with RFO Part 10 - Market Research and VAAR Part 810 - Market Research to determine the availability of qualified sources

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Acquisition ID#: 36C262-26-AP-3204 capable of meeting the Government’s requirement for CNH services, which includes a secure dementia or SMI ward.

As described in Section 6 above, market research, at SBA’s Small Business Search and medicare.gov for facilities that can provide the services needed in the Payson, AZ area resulted in a scarcity of providers. A review of the market research, the acquisition history, and the need to support Veterans with complex psychiatric needs that require a secure dementia or SMI ward, results in Rim Country Rehab, a Small Business, remaining the only known facility capable of meeting both the clinical and geographic requirements of the VA.

9. Any Other Facts Supporting the Use of Other than Full and Open Competition:

Rim Country Rehab has been providing consistent care to Veterans for several years in this geographical area and to those who are currently living in the facility.

The CNH Coordinators have retained the survey reports for Rim Country Rehab for the past several years.

10. Listing of Sources that Expressed, in Writing, an Interest in the Acquisition:

Rim Country Rehab, located at 807 W. Longhorn Rd., Payson, AZ 85541

11. 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: Market Research will be a continuous process to help identify new possible sources for these types of services needed within the PVAHCS geographical area.

12.Requirements Certification: I certify that the requirement outlined in this justification is a Bona Fide Need of the Department of Veterans Affairs and that the supporting data under my cognizance, which are included in the justification, are accurate and complete to the best of my knowledge and belief.

Lindsey N. Bush Geriatric Extended Cares (GECS) Supervisor Phoenix VA Health Care System

13. Approvals in accordance with the VHAPM Part 806.3 OFOC SOP:

a. Contracting Officer Certification (required): I certify that the foregoing justification is accurate and complete to the best of my knowledge and belief.

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Acquisition ID#: 36C262-26-AP-3204

William T. Cook Contracting Officer Network Contracting Office 22

b. One Level Above the Contracting Officer (Required over SAT but not exceeding $900K): I certify the justification meets requirements for other than full and open competition.

Flora J. Ceponis Branch Chief, Specialized 1

Network Contracting Office 22

c. Director of Contracting Review and Approval: I approve the justification for other than full and open competition for HCA review and approval.

Sabrina J. Smith Director of Contracting Network Contracting Office 22

d. VHA RPO HCA Review and Approval: I have reviewed the foregoing justification and find it to be complete and accurate to the best of my knowledge and belief and recommend approval (if over $90 million) or approve ($900K to $90 million) for other than full and open competition.

Curtis M. Jordan Executive Director, Regional Procurement Office West Head of Contracting Activity (HCA)