JA -Canon Maintenance FINAL 28 May 26_Redacted.docx

CUI

Control Number: FY26-0709

Justification and Approval (J&A) for Other than Full and Open Competition Revolutionary Federal Acquisition Regulation (FAR) Overhaul (RFO) Part 12 Implemented by Class Deviation 2026-O0017, Revision 1

1. Identification of the Agency and Contracting Activity: Defense Health Agency (DHA), DHA Contracting Activity (DHACA), Healthcare Contracting Division (HCD) – Southeast, Branch 6 (Europe).

2. Nature and/or Description of Action being Approved: Landstuhl Regional Medical Center (LRMC) is seeking to establish a sole-source contract for essential medical imaging device maintenance services with Canon Medical Systems, USA for two Government owned Computed Tomography (CT) devices. These devices have historically been supported through a maintenance contract. Request approval to award a new non-competitive four-year (base and three one-year options to include FAR 52.217-8) Firm-Fixed Price (FFP) definitive contract with Canon Medical Systems, USA.

3. Description of Supplies/Services and Estimated Value: This is a recurring non-personal service requirement, to the incumbent Canon Medical Systems, USA., to support full-service maintenance to cover scheduled services, preventative maintenance, and unscheduled services (repairs) on Canon CT devices. The service will be for the maintenance and calibration of two (2) devices installed in the LRMC Radiology Department. This contract is required to ensure LRMC can provide critical imaging services to all departments throughout the medical center in support of providing healthcare to military members, family members and other patients throughout the LRMC footprint.

Total

4. Statutory Authority Permitting Other Than Full and Open Competition: Title 41 United State Code (U.S.C.) Section 1901, Simplified acquisition procedures as implemented by RFO FAR 12.201-1, Simplified procedures as identified in RFO FAR 12.102 Restricting Competition.Controlled by: Defense Health Agency (DHA) Controlled by: HCD-East/Europe CUI Category(ies): Sole Source Limited Dissemination Control: FED Only

5. Rationale Justifying Use of Authority Cited: In accordance with RFO FAR 12.102, agencies must document decisions to restrict competition. These mission critical maintenance services for the CT devices can only be obtained from the original manufacturer, Canon Medical Systems, USA.

Canon utilizes proprietary software and technology that is integral to the functionality and maintenance of its imaging devices. The following limitations exist for third-party servicing:

a) Software Exclusivity: The system software, licensed solely for the use with Canon products, grants access and control over critical system functions. The proprietary software is not available to, or usable by, any third-party entities.

b) Secure Maintenance Access: The software controls access/passwords protocols required for system updates and modifications during preventative maintenance, ensuring authorized servicing and safeguarding system integrity.

c) Specialized Customer Engineers (CEs): Canon trains CEs per manufacturer standards and upon successful completion of system training receives certification accordingly. They also provide proprietary documentation and diagnostic tools that support them in troubleshooting Canon systems, allowing for expedited repair times. Canon CEs also have a network of support engineers and specialists.

d) Specialized Software Capabilities: All CEs and Specialists can be networked through a proprietary remote connectivity tool, InnerVision Plus, which allows for enhanced troubleshooting, error log review and image review. Additionally, InnerVision Plus provides a high-level of proprietary Cybersecurity tools that protect the system from malware and viruses. Canon is the original equipment manufacturer. Therefore, it can perform the scheduled maintenance and repairs on the devices.

e) Inventory Network: Canon offers a network of more than forty (40) Forward Parts Depots, across the USA, that house system replacement parts inventory. Replacement parts can be ordered and delivered expeditiously to minimize system downtime. Furthermore, Canon Medical Systems USA utilizes proprietary remote diagnostic capabilities (such as InnerVision). This allows USA-based Tier-III and Tier-IV engineering experts to remotely monitor system health, perform software calibrations, and proactively identify failing components prior to a hard down-time event. When a physical part is required, this remote triage ensures the exact proprietary part is ordered the first time, eliminating diagnostic guesswork and subsequent shipping delays to the Outside the Continental United States (OCONUS) environment.

While Canon’s primary Forward Parts Depots are located across the USA, Canon Medical Systems USA manages the coordinated international logistics required to expedite these proprietary components to OCONUS treatment facilities. Through established global supply chains and prioritization for critical military medical infrastructure, Canon ensures that components are routed rapidly to LRMC, minimizing the operational impact of transatlantic shipping.

The specific devices requiring specialized services includes:

1. Aquilion 64; Computed Tomography Scanning System (S/N: JDA1072183)

2. Aquilion One; Computed Tomography Scanning System (S/N: 6LB1962032) This is a follow-on maintenance services contract. For the current purchase order # W9114F23P0037, a pre-solicitation (synopsis) notice was posted Beta SAM.gov on 07 February 2023. After surveying the local and US market, it was determined through technical evaluation from the clinical engineering department that only Canon offered the required maintenance support needed to meet standards set forth in the Performance Work Statement (PWS). While the current contract was competed, only one quote was determined technically acceptable and current market research did not reveal any additional sources with the capability of providing the support to the required devices in accordance with manufacturer’s specifications.

The incumbent contractor, Canon Medical Systems, USA has established the necessary infrastructure, processes, and personnel, ensuring continuity of services without delays. Their proven track record, familiarity with the mission, and ability to retain incumbent employees further solidify their position as the only viable source for this contract.

6. Efforts to Obtain Competition: To explore all available options, a sources sought notice was distributed on SAM.gov to identify potential vendors from 01 April to 13 April 2026. Two responses were received:

a) BiomedRX, 8306 Wilshire Blvd., Suite 777, Beverly Hills, CA 90211 – BiodmedRX replied to the sources sought notice on 10 April 2026, stating their capability of servicing advanced diagnostic imagining systems, to include Canon CT devices. Capabilities outlined preventative maintenance and calibration verification in accordance with OEM specifications, repair services by qualified field service technicians, OCONUS support and delivery of reports, documentation and records. The capability statement lacked documentation demonstrating BiomedRX’s authorization to access system software and provide software updates. BiomedRX was asked to provide documentation of the third-party vendor agreement with Canon, however, no response has been received to date. It is determined BiomedRX is not a valid source for these services.

b) Begini Howard Private Equity (BHPE), 10601 S. Western Ave, Oklahoma City, OK 73170 – BHPE replied to the source sought notice on 10 April 2026, providing limited information on their capability to provide the required services. A review of their website (www.bh.pe/government), shows their involvement in military specification packaging, supply chain logistics, parts manufacturing and marketing/data analytics. Due to the limited information provided by BHPE and the inability to discern existing medical equipment maintenance experience from their website, it is determined BHPE is not a valid source for these services.

Despite these efforts to identify alternative solutions, only Canon has been found capable and remains the sole provider of meeting the government's comprehensive maintenance requirements for these CT devices. This conclusion stems from the proprietary nature of the system's software, specialized tooling, and unique maintenance procedures—all of which are exclusively developed, controlled, and implemented by Canon Medical Systems, USA.

7. Actions to Increase Competition/Remove or Overcome any Barriers to Competition:

While the immediate need to maintain the operational integrity of the current CT devices necessitates a sole-source award to Canon, the agency is committed to exploring future options for greater vendor flexibility, moving away from reliance on exclusive maintenance contracts with single vendors. Given the current limited source availability, no further efforts to solicit competition will be undertaken for this procurement. However, should LRMC require continued Canon maintenance services in the future, a source sought notice will be posted on the SAM.gov. All responses will be evaluated to determine technical capability. This will help determine if any new vendors have entered the marketplace who possess the capabilities and authorizations to meet the government's specific needs.

The Government does competitively solicit acquisition of new devices for use at LRMC. The Aquilion 64 will be replaced by the end of the first option year of this contract with a Philps model and will no longer be serviced by this contract. The Aquilion One is anticipated to be replaced by the end of the third option year, the exact type to be determined through competitive procedures.

8. Market Research: Market research confirmed that Canon Medical Systems is the sole manufacturer and developer of the specific CT devices and the associated software, tooling, and maintenance procedures. This information was corroborated by a direct email received from Canon, which is on file. A Beta SAM.gov pre-solicitation notice (sources sought and notice of intent of award sole source) confirmed that Canon is the only vendor capable of providing the services.

9. Other Facts:

a. Procurement History:

(1) Is this a new requirement? No

(2) If 9.a.(1) is No, was the action just prior to this one competed? Yes. Contract, W9114F23P0037, was solicited as a competitive acquisition.

(3) If 9.a.(2) is Yes, what has changed where this action cannot be completed? Although the previous contract W9114F23P0037 was solicited via a competitive request for quote, the awardee, Canon USA, was the only quote received.

b. Additional Information: N/A

10. Interested Sources:

Incumbent: Canon Medical Systems, USA

The list below provides the sources from the issued pre-solicitation sources sought notice :

· BHPE, LLC – No related capabilities provided, determined not technically capable of providing the required services.

· BioMedRx Federal, Inc. – Not a certified third-party vendor for maintenance of Canon equipment, determined not technically capable of providing the required services.

Canon Medical Systems does not currently have any authorized resellers or service partners operating in the region who possess the necessary qualifications and authorizations.

11. Technical Certification:

I certify the supporting data under my cognizance, which are included in the justification, are accurate and complete to the best of my knowledge and belief.

12. Requirements Certification:

I certify the supporting data under my cognizance, which are included in the justification, are accurate and complete to the best of my knowledge and belief.

13. Legal Review:

I have reviewed this justification and have found it to be legally sufficient.

14. Contracting Officer Determination of Fair and Reasonable Pricing and Certification of Accuracy and Completion.

Fair and Reasonable Cost Determination:

I hereby determine the anticipated cost to the Government for this contract action will be fair and reasonable.

Basis for Determination: Due to the sole source nature of this procurement, methods described in RFO FAR 15.404-1, price analysis, will be used to determine the price fair and reasonable. Should price analysis not be sufficient, data other than certified cost and pricing data may be required using RFO FAR 15.403-1. Certified cost and pricing data is not required per RFO FAR 15.403(b)(3), as these services are determined commercial in nature.

Contracting Officer Certification:

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

CUI

Source Selection Information - See FAR 2.101 and 3.104-4

OCT 2024