J and A_AID-OAA-TO-15-00009.pdf

JUSTIFICATION AND APPROVAL FOR OTHER THAN FULL AND OPEN

COMPETITION (J&A)

TO: Atul Gawande, Assistant Administrator, Bureau for Global Health

VIA: Rita Habib, Contracting Officer, M/OAA

FROM: Paul Mahanna, Office Director, GH/ID

DATE: October 12, 2022

SUBJECT: Justification and Approval (J&A) for Other than Full and Open Competition to Modify Contract #AID-OAA-I-15-00004/AID-OAA-TO-15-00009, Global Health Supply Chain-Procurement and Supply Management (GHSC-PSM) Task Order 2 Malaria

1. This document sets forth the facts and rationale justifying the use of other than full and open competition, in accordance with AIDAR 706.302-70(b)(3)(i) and class deviation #M/OAA-DEV-AIDAR-20-04c. This document was prepared by GH/ID/MAL for the GHSC-PSM malaria task order (contract AID-OAA-I-15-00004/AID-OAA-TO-15-00009).

2. The nature and/or description of the action being approved:

This is a request to approve a modification of Task Order Number AID-OAA-TO-15-00009 (TO2) under GHSC-PSM. This award is a Cost-Plus-Fixed Fee (CPFF) term contract with a total estimated cost (TEC) of $2,565,147,030. The TO2 period of performance was originally April 20, 2015 with a completion date of April 19, 2020.

On February 9, 2016, the period of performance was extended to November 28, 2020 to account for 223 days of contract performance lost due to the stop work orders resulting from the Government Accountability Office (GAO) protest and the subsequent case filed with the Court of Federal Claims filed by John Snow, Inc., the predecessor awardee under Supply Chain Management System.

On October 23, 2019, TO2 period of performance was extended again until November 28, 2023, based on the approved Action Memorandum dated July 15, 2019. Because the initial Indefinite Delivery Indefinite Quantity (IDIQ) was competitively awarded, the TO2 could be extended within the ordering period without requiring competition. The extension was meant to ensure the continuity of services during the follow-on supply chain design and award period. The extension also increased the TEC to $2,565,147,030, and increased the level of effort (LOE) to 4,485,064 hours in support of field operations, and 1,126,480 hours in support of Headquarters operations.

While task orders should generally rely on FAR 16.5 justifications, as noted under ADS 302.3.4.5(d), if the order is outside the ordering period or scope of the IDIQ, AIDAR 706.302 may be an appropriate justification to restrict competition. In this case, it is suitable because the IDIQ ordering period ended on November 23, 2020 and therefore the modification to extend the task order falls outside the IDIQ ordering period.

The proposed action is to: 1) extend the period of performance (PoP) from November 28, 2023 to November 28, 2024; 2) increase the LOE in support of field operations by 705,864 hours from 4,485,064 hours to 5,190,928 hours; and 3) increase the LOE in support of headquarters operations, central procurement, and headquarters support to field programs by 122,808 hours from 1,126,480 hours to 1,249,288 hours. Under this action Chemonics will continue to provide procurement and supply chain management of malaria commodities for USAID-supported countries. There is no need for a total estimated cost (TEC) increase given the current TEC of $2,565,147,030 is sufficient for the additional requested 12 months of activities.

The USAID GHSC-PSM project, Single Award IDIQ Contract promotes an uninterrupted supply of health commodities to prevent suffering, save lives, and create a brighter future for families across the globe. GHSC-PSM Task Order 2 (TO2) directly supports the Office of Infectious Disease Malaria Division’s priority to increase the availability, accessibility, and appropriate use of quality-assured, essential malaria commodities by providing products and technical assistance to governments and other key public and private sector players, as relevant, to improve forecasting and supply planning, procurement, distribution, quality assurance, uptake planning, service delivery, repair and maintenance, and demand generation. The project procures and delivers malaria commodities to 28 U.S. President’s Malaria Initiative (PMI)-supported countries and one USAID-malaria supported country and provides supply chain technical assistance/distribution assistance through field offices in 22 supported countries. Malaria commodities procured and delivered under GHSC-PSM TO2 include, but are not limited to, insecticide-treated nets (ITNs), malaria pharmaceuticals, malaria rapid diagnostics tests, and laboratory supplies.

This work directly supports the following PMI objectives:

Objective 1: Global Commodity Procurement and Logistics Objective 2: Systems Strengthening Technical Assistance Objective 3: Global Collaboration to Improve Long-Term Availability of Health Commodities

3. Description of the supplies or services required, including an estimated value:

Based on the current TO2 burn rate, the additional supplies and services do not require TEC increase as the current TEC of $2,565,147,030 is sufficient for the additional requested 12 months of activities. The LOE in support of field operations will need to increase by 705,864 hours from 4,485,064 hours to 5,190,928 hours, and the LOE in support of headquarters operations, central procurement, and headquarters support to field programs will need to increase by 122,808 hours from 1,126,480 hours to 1,249,288 hours.

Malaria prevention and control is a major focus of the U.S. Government (USG) foreign assistance objectives. PMI, launched in 2005, is the USG’s program to reduce the burden of malaria and mortality by accelerating delivery and scale-up of proven prevention and treatment malaria interventions. PMI is an interagency initiative led by USAID and implemented with the Centers for Disease Control and Prevention (CDC). It is overseen by the U.S. Global Malaria Coordinator, who is advised by an interagency Advisory Group, comprising representatives of USAID, CDC, Department of Health and Human Services, Department of State, Department of Defense, the National Security Council, and the Office of Management and Budget. Implementation of the Initiative is closely coordinated with the efforts of partner governments and national and international partners, including the non-governmental and private sectors.

Currently, PMI operates in 24 countries throughout sub-Saharan Africa and three programs (four countries) in the Greater Mekong Subregion (GMS) in Asia. In addition, USAID supports one additional malaria country program. Each of these programs relies heavily on the availability of malaria commodities. GHSC-PSM TO2 is tasked with supplying all malaria commodities (with the exception of commodities for indoor residual spraying [IRS]) for use in the aforementioned programs. TO2 procures non-IRS malaria commodities for all PMI and USAID malaria countries and provides supply chain systems strengthening assistance in 22 countries in sub-Saharan Africa and the Greater Mekong subregion of Southeast Asia.

GHSC-PSM TO2 was awarded on April 17, 2015 and ends on November 28, 2023. The TEC of TO2 is $2,565,147,030. While the follow-on design and solicitation of the NextGen contracts are underway, the expected award dates will result in insufficient overlap and a gap in malaria commodity procurement and delivery services resulting in an interruption of malaria prevention and treatment services. The last date of order entry for some countries is fast approaching, depending on the lead time to the destination. With a TO2 end date of November 28, 2023, USAID presumes the last order arrival by September 30, 2023, to allow for all residual costs to be invoiced, booked, and paid for by the contract end date. The average order lead times for malaria commodities range from 35-51 weeks and are calculated from the time the order is entered into GHSC-PSM’s ordering system to the time the goods are delivered to the country. These lead times are long for malaria products because the products need to be freshly manufactured for each order. Given a new award will not be in place between now and the last order entry dates, USAID needs an extension to avoid a gap in service. A gap would result in the interruption of USAID/PMI’s provision of life-saving malaria commodities. Antimalarial pharmaceuticals are necessary to treat malaria, and insecticide-treated mosquito nets are necessary for the prevention of malaria by protecting the user from being bitten by a mosquito carrying the malaria parasite. These TO2 commodities are critical to the reduction of malaria morbidity and mortality. According to the 2021 World Malaria report, there were 241 million cases of malaria and 627,000 deaths from malaria in 20201.

4. Statutory authority permitting other than full and open competition:

This action is requested under the authority of AIDAR 706.302-70 Impairment of foreign aid programs (b)(3)(i) which states “An award for which the Assistant Administrator responsible for the project or program makes a formal written Determination and Findings (D&F), that compliance with full and open competition procedures would impair foreign assistance objectives, and would be

1 World malaria report 2021. Geneva: World Health Organization; 2021.

inconsistent with the fulfillment of the foreign assistance program.” No other authority provided under FAR 6.302 or AIDAR 706.302 is suitable.

5. A demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition that requires use of the authority cited:

The principal reason for the extension to GHSC-PSM TO2 is to avoid impairment of the foreign policy objective of ensuring that there is no disruption in the availability, accessibility, and appropriate use of quality-assured commodities for the prevention and treatment of malaria by providing commodities and technical assistance to country programs during USAID’s transition from the GHSC Program to the NextGen follow-on. PMI is the second largest procurer of malaria commodities worldwide, providing a significant portion of supported countries’ life-saving treatment, diagnostic and prevention commodities. A break in the provision of key malaria commodities would result in increased malaria cases and malaria deaths. It is imperative that the NextGen follow-on contractors have adequate time to assume 100% responsibility for USAID’s global health commodity supply chain from the incumbent contractor.

Experience has taught us that there has to be a transition and overlap period of 18 months for the new contractor(s) to assume full responsibility. One of the lessons learned during the transition from the previous DELIVER contract to the GHSC Program was that the 12-month overlap was not sufficient for a flexible transition period to ensure a seamless supply of malaria commodities and services. A House Foreign Affairs Committee investigation into performance challenges early in the GHSC-PSM project noted that a longer overlap period would have helped manage the transition and recommended a longer period of overlap for future supply chain programs.2 The transition will be a gradual process, through which the new contractor(s) will be given increasingly greater responsibility while GHSC-PSM will continue to serve a role in ensuring adequate supplies needed to avert possible stock outs and/or meet other important requirements, resulting in the new contractor(s) eventually having 100% responsibility for the next iteration of USAID’s supply chain program.

To provide the needed flexibility, USAID is planning for an overlap period of 18 months, with the transition expected to begin in May 2023, to allow the new contractor(s) to plan, implement and complete an orderly transition by November 2024. GHSC-PSM TO2 will be transitioning activities to at least four of the NextGen awards (i.e., Comprehensive Technical Assistance for Health Supply Chain and Pharmaceutical Management (CompTA) IDIQs expected award date January 2023, with the Task Order awards expected later in 2023, and Procurement Service Agent-Malaria, Family Planning and Reproductive Health, Maternal and Child Health and Nutrition and Other Health Elements (Integrated PSA), In-country Logistics (ICL), and Qualifying Testing Issuing (QuTI) expected award dates in March 2023). The awards are unlikely to be made at the same time and the 18 months will allow transition of activities across the various awards based on staggered award dates. The longer flexible transition will permit incremental increases in the new contractors’ responsibilities and corresponding decreases in the current contractor’s responsibilities. USAID does not anticipate continuing its use of the GHSC-PSM TO2 contract once all transition activities are complete and all performance responsibilities are successfully handed over to the new NextGen

2 Committee on Foreign Affairs U.S. House of Representatives. Oversight Investigation: USAID Global Health Supply Chain Contract. 2018 contractor(s). The currently expected award dates for NextGen do not allow for the necessary 18-month transition period, which could result in an interruption in the Agency's provision of life-saving malaria commodities to patients unless the GHSC-PSM TO2 is extended to November 2024.

It is important to extend the period of performance and increase the LOE now to provide timely assurance to the Missions that these services will continue to be available to them as part of an orderly and seamless Bureau for Global Health (GH) and Mission transition to the NextGen contracts.

The current contractor is uniquely qualified to provide the necessary procurement and technical assistance services between November 2023 and November 2024 because the contractor has established procurement systems and subcontracts with suppliers of malaria commodities that will be needed over the course of the additional period of performance. As of September 2022, USAID will need a mechanism in place that can order and deliver bednets beyond November 2023. A gap in net delivery would lead to increased cases of malaria. In many PMI-supported countries, PMI is the only donor procuring insecticide-treated nets for routine distribution, and often PMI fills gaps in procurement of bednets for the mass campaigns supported by Global Fund, making it unlikely another donor could cover the gap left by delays in procurement from PMI. In addition, bednet distribution campaigns are time sensitive and are scheduled prior to the rainy season. Delays in delivery of the bed nets can disrupt the campaigns. A study estimated 663 million cases of malaria were averted between 2000 and 2015, and 68% of these cases were averted due to insecticide-treated nets3. In addition, the project has field offices established in 22 countries requiring supply chain technical assistance support from a USAID central mechanism. In addition to the time it would take for open competition, it would take an implementing partner up to a year to establish the needed procurement systems and competitively award contracts with suppliers and establish field offices.

This competitive process is already underway for the NextGen awards. With the transition timeline unlikely to be completed by November 2023, it is critical that GHSC-PSM TO2 is allowed to begin to renegotiate and/or extend subcontracts now, and allow manufacturers to plan extended manufacturing schedules with sufficient lead time. In addition to the existing procurement systems and supplier subcontracts, the contractor provides shared services, such as freight and logistics and management information systems, across the four procurement related Task Orders. As the largest task orders, TO1 HIV and TO2 Malaria cover most of the costs of the shared services. In July 2022, TO1 HIV received approval to extend the period of performance to November 28, 2024 using the PEPFAR Expedited Procedures Package authorities. Since TO2 covers a significant portion of the shared services also needed by TO1, extending TO2’s period of performance to align with TO1 will allow continued sharing of critical services across the task orders and result in continued efficiencies as the two programs transition to NextGen. Finally, the GHSC-PSM TO2 and other GHSC contractors will need approximately three months for in-country and HQ office close-out during which no additional procurement or technical assistance will be undertaken.

A direct award to a local contractor was not considered given the nature of the global procurement work for 29 countries under this contract and the time needed to establish subcontracts with suppliers and quality control laboratories.

3 Nature. 2015 Oct 8;526(7572):207-211.

6. Description of the efforts made to ensure that offers are solicited from as many potential sources as practicable, including whether a notice was publicized as required by

FAR 5.2 [AIDAR 705.2].

Per AIDAR 705.202(b), advance notice is not appropriate or reasonable and offers were not solicited as this is an action proposing an extension of an existing contract.

The follow-on contracts to this contract and the other mechanisms of the Global Health Supply Chain (GHSC) Program are in the process of being competitively awarded under the Next Generation Supply Chain Suite of Programs (NextGen). Consequently, offers from other sources were not solicited.

In accordance with AIDAR 706.302.70(b) (Impairment of Foreign Aid Programs) GH has considered the option of awarding a separate contract using full and open competition, which could lead to USAID obtaining additional value or better contractual terms, but concluded that this is not a viable alternative. A cost benefit analysis shows that these potential benefits are offset by the cost associated with start-up and close-out of a new contract in such a short period of time. GH’s and the Office of Acquisition and Assistance (OAA)’s timeline analysis indicates that the earliest a new contract could be designed, competed, and awarded using full and open competition is June 2023.

This approach could jeopardize ordering under GHSC-PSM and cause a significant gap in procurement and delivery of life-saving health commodities. In addition, this competitively-awarded bridge contract would only be operational for a brief period before the follow-on contract is awarded. Therefore, USAID’s best and most viable option is to pursue an extension of the current task order through November 2024. The findings are supported by the Determination and Findings (D&F).

7. A determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable:

Based on an Independent Government Cost Estimate (IGCE) prepared by the COR and the costs incurred under the current contract, the Contracting Officer, in certifying this J&A, determines the anticipated cost to the government to be fair and reasonable. There is no change in the scope of work. All previously-incurred costs were determined to be fair and reasonable. No new types of costs are anticipated.

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 prior to awarding the Task Order and again prior to the design and competition of the NextGen awards. The targeted market research for the Task Order extension primarily consisted of consultations with USAID GH staff supporting the USAID PMI portfolio and OAA. Due to the scale and complexity of the program, no other mechanisms and vendors were identified that could quickly mobilize these specialized services for USAID.

9. Other facts supporting the use of other than full and open competition:

None.

10. Sources, if any, that expressed an interest, in writing, in the acquisition:

None.

11. The actions the Agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required:

No barriers currently exist for new entrants into this domain; however, USAID is competing the follow-on to the GHSC-PSM TO2 contract and all the other NextGen contracts for the same or similar services of the GHSC Program. The relevant NextGen contracts for the same or similar services’ expected award dates are as follows: CompTA IDIQs in January 2023 (with Task Order awards later in 2023), and Integrated PSA IDIQ, ICL and QuTI in March 2023.

12. Technical or Requirements Personnel Certification:

In accordance with FAR 6.303, I hereby certify that the technical statements included above and which form a basis for the justification are complete and accurate.

Christine Hershey, Technical Office Representative Date

13. Contracting Officer Certification:

In accordance with FAR 6.303, I hereby certify that the justification is accurate and complete to the best of my knowledge and belief.

Rita Habib, Contracting Officer Date

14. Approved:

Dr. Atul Gawande, Assistant Administrator, AA/GH Date a basis for the justification a e Hershey, Technical Office

12/20/2022

12/20/2022

12/20/2021

Rita Habib Digitally signed by Rita Habib Date: 2022.12.20 14:29:00 -05'00'

ATUL ATMARAM GAWANDE

(affiliate)

Digitally signed by ATUL ATMARAM GAWANDE (affiliate) Date: 2022.12.29 12:34:15 -05'00'