J and A_AID-OAA-TO-15-00010.pdf.pdf

TAB 2 -

JUSTIFICATION AND APPROVAL FOR OTHER THAN FULL AND OPEN COMPETITION (J&A)

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

VIA: Eduardo Elia, Contracting Officer, M/OAA

FROM: Shyami DeSilva, Acting Office Director, GH/PRH

DATE: January 31, 2023

SUBJECT: Justification and Approval (J&A) for Other than Full and Open Competition to Modify Contract #AID-OAA-I-15-00004/AID-OAA-TO-15-000010, Global Health Supply Chain-Procurement and Supply Management (GHSC-PSM) Task Order 3 Family Planning

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/PRH/CSL for the GHSC-PSM Family Planning/ Reproductive Health (FP/RH), Task Order 3 (contract AID-OAA-I-15-00004/AID-

OAA-TO-15-000010).

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

This is a request to approve a modification of Task Order AID-OAA-TO-15-000010 (TO3), under the GHSC-PSM project. This award is a Cost-Plus-Fixed Fee completion (CPFF) term contract with a total estimated cost (TEC) of $672,319,913. TO3 was awarded on April 17, 2015 with the completion date November 28, 2020.

The initial task order period of performance (PoP) was April 20, 2015 to April 19, 2020. On February 9, 2016, the PoP was extended to November 28, 2020 to account for 223 days of contract performance lost due to the stop work orders resulting from the GAO protest and the subsequent case filed with the Court of Federal Claims.

On November 19, 2019, the TO3 PoP was extended again to November 28, 2023, based on the approved Action Memorandum dated July 15, 2019. Because the initial IDIQ was competitively awarded, the TO3 could be extended within the ordering period without requiring competition.

The extension was meant to ensure the continuity of services during the GHSC-PSM follow-on contract design and award period. The extension also reduced the TEC to $672,319,913, and increased the LOE to 3,193,571 hours in support of field operations, and 747,000 hours in support of Headquarters operations.

The actions proposed here are to: 1) extend the PoP from November 28, 2023 to November 28, 2024; 2) increase the LOE in support of field operations by 776,027 hours from 3,193,571 hours to 3,969,598 hours; 3) increase the total estimated cost by $83,086,601 from $672,319,913 to $755,406,514. Under this action, Chemonics will continue to provide procurement and supply chain management technical assistance for family planning and reproductive health (FP/RH) commodities for USAID-supported countries.

The USAID GHSC-PSM project, Single Award Indefinite Delivery Indefinite Quantity (IDIQ) Contract promotes an uninterrupted supply of health commodities to prevent suffering, save lives, and create a brighter future for families across the globe. There are five Task Orders (TOs) under the IDIQ: TO1 which provides commodities and technical assistance related to HIV/AIDS, TO2 which provides commodities and technical assistance related to malaria, TO3 which provides commodities and technical assistance related to FP/RH, TO4 which provides commodities and technical assistance related to maternal and child health, and TO5 which provides cross-element technical assistance for the Kenya Mission as a bilateral award.

GHSC-PSM TO3 directly supports the Office of Population and Reproductive Health’s priority to ensure access and long-term availability of a wide range of high-quality contraceptives and family planning/reproductive health commodities for women, men, and youth to choose through public and private services. By providing these commodities and technical assistance to country governments and other key public and private sector stakeholders, improvement would be reflected in forecasting and supply planning, procurement, distribution, quality assurance, and other supply chain functions. The project procures and delivers FP/RH commodities to 25 USAID supported countries and supports 16 countries with field offices that provide supply chain technical assistance/distribution assistance.

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

Based on the current TO3 burn rate, the additional supplies and services require a TEC increase of $83,086,601 to absorb the additional requested 12 months of activities. The LOE in support of field operations will need to increase by 776,027 hours from 3,192,571 hours to 3,969,598 hours, and the LOE in support of headquarters operations, central procurement, and headquarters support to field programs will remain the same at 747,000 hours.

In FY22, TO3 operated in 22 countries throughout sub-Saharan Africa (inclusive of Madagascar), 5 countries in Asia, and 1 country in Latin America/Caribbean with the mandate to supply FP/RH commodities and/or provide technical assistance. Each of these programs relies heavily on the availability of FP/RH commodities. It is expected that most or all of these programs will continue to require TO3 services during the proposed extension period.

GHSC-PSM TO3 currently ends on November 28, 2023. The TEC of TO3 is $672,319,913. The follow-on design and solicitation of the follow-on contracts are underway (i.e., the Next Generation Global Health Supply Chain Suite of Programs, NextGen). However, absent an extension in TO3, the expected award dates will result in insufficient overlap and a gap in FP/RH commodity procurement and delivery services resulting in interruption of services. The last date of order entry for some countries is fast approaching, depending on the lead time to the destination. USAID presumes the last order to arrive by September 30, 2023 to allow for all residual costs to be invoiced, booked, and paid for by the contract end date. For example, in the absence of a period of performance extension, the last orders entered for GHSC-PSM TO3 will occur on the following dates:

TO3 25-52 weeks (average lead time) – last order entry date 04/06/2023

These last order entry dates predate significant periods when the NextGen awards will be fully operational and able to accept and process orders.

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

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.

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 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 TO3 is to avoid impairment of the U.S.

Government’s foreign assistance objectives in global health, in particular to prevent child and maternal deaths and control the HIV/AIDS epidemic. Ensuring the availability of FP/RH commodities is a critical input to achieving these objectives. The proposed extension is needed to ensure that there is no disruption in ensuring access to a range of high-quality contraceptives and FP/RH commodities and supply chain technical assistance to country programs during USAID’s transition from the GHSC Program to the NextGen follow-on contracts. USAID is the second largest procurer of commodities worldwide in support of country FP/RH programs. A gap in the services provided by TO3 risks significant disruption in these critical, lifesaving programs. It is imperative that the NextGen follow-on contractors have adequate time to assume 100% responsibility for USAID’s FP/RHcommodity supply chain from the incumbent contractor. There is now an unacceptably high probability of not ensuring adequate time, which could result in an interruption of FP/RH supply of commodities to clients unless the GHSC-PSM TO3 is extended to November 2024.

Experience has taught USAID that there should be a transition and overlap period of 18 months for the new NextGen contractor(s) to assume full responsibility. One of the lessons learned during the transition from the previous USAID | DELIVER PROJECT contract to the current GHSC Program was that the 12-month overlap was not sufficient for a flexible transition period to ensure a seamless supply of FP/RH 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. The transition will be a gradual process, through which the new contractor(s) will be given increasingly greater responsibility while GHSC-PSM serves as “insurance” in the event that it is 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 FP/RH supply chain program.

In providing the needed flexibility, USAID is planning for an overlap period of 18 months, with the transition expected to begin in June 2023, to allow the new contractor(s) to plan, implement and complete an orderly transition by November 2024. GHSC-PSM TO3 will be transitioning activities to at least four of the NextGen awards, Integrated Procurement Service Agent (Integrated PSA), Comprehensive Technical Assistance, Qualifying Issuing & Testing (QuTI), and In-Country Logistics.

The awards are unlikely to be awarded 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 TO3 contract once all transition activities are complete and all performance responsibilities are successfully handed over to the new NextGen contractor(s). The proposed extension also accounts for the fact that the GHSC-PSM TO3 contractor will need approximately three months for in-country and HQ office close-out during which no additional procurement or technical assistance will be undertaken.

It is important to extend the period of performance and increase the LOE now to put the contractor on notice that its services will be required for a longer period; to allow sufficient time to negotiate the extension; avert premature staff departures and loss of capacity from the project; and, most importantly, to provide timely assurance to the Missions that these services will continue to be available to them as part of an orderly and seamless 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 FP/RH commodities that will be needed over the course of the additional period of performance. In addition, the project has field offices established in 16 countries requiring supply chain technical assistance support from a

USAID central mechanism. The contractor’s performance as per the last CPARS (ending April 2022), all metrics were “Satisfactory” or above.

While the competitive process for the NextGen awards is underway, it is impossible under TO3’s current end date to provide for the needed transition time. It is critical that GHSC-PSM TO3 is allowed to begin to renegotiate and 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 GHSC-PSM 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.

As TO2 and TO3 must share a portion of the services that is also needed by TO1, extending TO3’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 programs complete activities and transition to NextGen.

A direct award to a local contractor was not considered given the nature of the global procurement work for 25 countries under this contract and the time needed to establish subcontracts with suppliers and quality control laboratories.

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) Global Health Bureau (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 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 FP/RH 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 TO3 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.

John Vivalo, 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.

Eduardo Elia, Contracting Officer Date

14. Approved:

Dr. Atul Gawande, Assistant Administrator, AA/GH Date ohn Vivalo, Technic

2-9-2023

Eduardo G. Elia Digitally signed by Eduardo G. Elia Date: 2023.02.14 12:09:45 -05'00'

ATUL ATMARAM

GAWANDE (affiliate)

Digitally signed by ATUL ATMARAM GAWANDE (affiliate) Date: 2023.03.06 19:14:19 -05'00'