J.1 SOO - PSA Diagnostics.pdf

RFP No. 7200AA22R00037

Attachment J.1 ‐ STATEMENT OF OBJECTIVES (SOO)

C.1. TITLE

Procurement Service Agent (PSA) Lab, Diagnostics and Molecular Diagnostics (PSA Diagnostics)

C.2. PURPOSE

The United States Agency for International Development (USAID) is the U.S. Government’s

(USG’s) principal implementing organization for international development assistance. The purpose of this procurement is to provide comprehensive procurement‐related services for the

USAID Bureau for Global Health HIV/AIDS program under the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR) related to the procurement of HIV/AIDS diagnostic commodities, instruments, and related services to ensure uninterrupted service delivery for programs.

Procurement approaches will transition procurement of commodities and other peripheral services to all‐inclusive agreements, including vendor managed inventory (VMI), and services targeted based on host governments needs in PEPFAR countries. Transitions are aimed at leveraging greater testing volumes from other donors, improving data connectivity among testing instruments, improving reporting of Key Performance Indicators (KPIs), and advancing of

PEPFAR countries to sustainable laboratory diagnostic strategies.

This procurement will serve the needs of PEPFAR, but may also include other Global Health programs, including but not limited to family planning, malaria, and other infectious diseases.

C.3. BACKGROUND

USAID’s global health efforts are focused to prevent child and maternal deaths, control the

HIV/AIDS epidemic, control and eliminate malaria, increase and sustain access to safe, voluntary, high‐quality family planning and reproductive health care, and combat infectious diseases. The Agency’s procurement and delivery of quality‐assured health commodities and provision of technical assistance to strengthen health supply chains and pharmaceutical management systems are cornerstones for achieving these priorities.

This procurement is part of the Next Generation Global Health Supply Chain Suite of Programs

(NextGen). NextGen is the follow‐on to the current Global Health Supply Chain Program. By providing commodities and systems strengthening technical assistance NextGen seeks to transform supply chains for global health programs and achieve three principal goals:

(a) Maximize the availability, quality, and affordability of medicines and other health products and achieve better health outcomes for the populations served;

(b) Advance the resiliency and sustainability of locally managed procurement and supply chains in the countries in which USAID works; and

(c) Increase value for the U.S. taxpayer and reduce the chances of waste, fraud, and diversion even further.

The activities of NextGen will be guided by offices in USAID’s Bureau for Global Health, Regional

Bureaus, and Missions, and the President’s Emergency Plan for AIDS Relief (PEPFAR), and

President’s Malaria Initiative (PMI). For additional information about the work of USAID in global health, please see usaid.gov/global‐health; PEPFAR, state.gov/pepfar/; PMI, pmi.gov.

C.4. EMERGING PUBLICH HEALTH THREATS

General.

In 2019, the U.S. Government released the Global Health Security Strategy to outline its approach to strengthen global health security — including accelerating the capabilities of targeted countries to prevent, detect, and respond to infectious disease outbreaks. USAID supports these efforts globally by strengthening the capacities of partner countries to reduce the risk and impact of emerging infectious disease threats and outbreaks. This has involved the agile response to serious global threats including Ebola, Zika, and COVID‐19.

USAID supports a broad range of emerging public health threats, humanitarian emergencies, and/or new, unique, or catastrophic events. In some circumstances, the nature or scale of one or more emerging public health threats may require USAID to procure essential health commodities to respond to vital needs. In the case of these situations, this PSA may require rapid adjustments to supplies and services to support in‐scope program needs leveraging current testing volumes and all‐inclusive procurement schemes. At the direction of USAID, the contractor may be required to go into surge.

Option to Exercise Surge Support.

The Contracting Officer will provide written notice to the Contractor at least five (5) calendar days prior to any unilateral exercise of the Surge Option. In the event the Government does elect to exercise the Surge Option, surge support will be under Contract Line Item Number

0007, 1007, and 2007 (CLINs) for the relevant task areas identified in the PWS. All emerging public health threats development needs are subject to the same coordination, documentation, and process requirements as outlined in Section C.8.

C.5. OPERATIONAL PLANNING AND SEQUENCING OF AWARDS DURING THE TRANSITION

PERIOD

The NextGen program comprises a number of interrelated acquisitions. Since these contracts will not be awarded simultaneously, if the COR determines that the completion of any deliverable specified in Section F is dependent upon the award of a separate NextGen contract, a due date will be set after such contract is awarded.

In addition, if the COR determines that the Contractor cannot complete any function as described in the contract because other involved NextGen awards are not yet operational, the

Contractor will include in their Mobilization and Transition Plan an alternative means of accomplishing the function until the involved NextGen awards become operational.

C.6. DATA VISIBILITY TO IMPROVE PROCUREMENT, DELIVERY, AND PROMOTE AGILE AND

ADAPTIVE SUPPLY CHAINS

Offerors must present their existing Information Technology System (ITS) in their proposal submission with End‐To‐End visibility and ability to generate, collect, receive, share, analyze, and report on procurement data for tracking from supply planning and commodity order creation through arrival at defined delivery destinations. ITS must be able to facilitate management and continuous improvement of the value chain of PaaS through the adoption and use of technological innovation (to include GS1 Healthcare standards and master data management) and two‐way exchange with systems such as the NextGen Control Tower (to be determined at a later stage). Utilization of automated systems that maintain flexibility and data recovery capacities, facilitate faster turnaround times for any component of the procurement cycle, and from one component of the cycle to another. This allows Procurement teams to focus on more strategic relationship‐based activities. The ITS must include a performance monitoring system and be able to create ad hoc visualizations and reports as needed by USAID.

C.7. PROBLEM STATEMENT

PSA HIV/AIDS Diagnostics

PEPFAR is the world’s largest HIV/AIDS prevention, care, and treatment initiative and has saved more than 17 million lives in 50 countries. As a key implementing partner, USAID supports country‐led efforts to prevent and reduce new infections, provide cutting‐edge care and treatment, address the needs of vulnerable populations, and increase self‐reliance in controlling the epidemic.

The USAID Bureau for Global Health (GH) has procured health commodities for over 30 years.

Since 2005, USAID has procured and delivered more than 5,000 different products valued at over $8.5 billion to more than 50 countries.

GH currently uses two contracts for health commodities: Global Health Supply Chain ‐

Procurement and Supply Management (GHSC‐PSM), implemented by Chemonics International;

and Global Health Supply Chain ‐ Rapid Test Kits (GHSC‐RTK), implemented by Remote Medical

International (RMI).

PEPFAR has invested in expanding testing for viral load (VL) and early infant diagnosis (EID) as well as general diagnostic support and has successfully increased testing capacity and capabilities. USAID has led diagnostic laboratory network optimizations (DNO) and uses DNO tools to assess the capability and performance of laboratory services funded under PEPFAR.

These tools and analytics provide sufficient evidence on a country’s laboratory network to inform long‐term, transformative projects which will result in sustained change and measurable impact. The principal challenges in diagnostic services for PEPFAR programs are high levels of instrument failures, poor service level agreements, inventory management within laboratories, data connectivity gaps, and fragmented stakeholder coordination, which in turn leads to inconsistent availability and service interruptions. This procurement aims to directly address these challenges and transform laboratory service delivery in the countries that PEPFAR supports.

PEPFAR Laboratory Approach

In the past, PEPFAR ran independent laboratory procurement competitions for packages of services for each country because countries used different laboratory instruments and needed tailored service level agreements to maintain them. The PEPFAR diagnostic team has examined and now endorses halting of equipment procurement and moving to rental/leasing options for all countries under all‐inclusive agreements. GHSC‐PSM issued a competitive Request for

Proposal (RFP) for six of PEPFAR’s largest countries, constituting almost 85% of Viral Load testing demand and negotiated all‐inclusive molecular diagnostic service packages, including reagents, service and maintenance, equipment leasing, data visibility, connectivity solutions, etc. The remaining portion of PEPFAR’s testing demand was used to renegotiate core reagents and consumable pricing for all remaining countries, which began in 2019. This approach has proven to be an efficient alternative to equipment purchase and procurement of service level agreements. Savings are estimated at $20‐$25M in the first year of implementation (2020), with more than $16M in savings realized in just the third quarter of Calendar Year (CY) 2020.

Savings are expected to increase over time with improved service delivery, efficiency, and reduced service interruption due to instrument downtime.

Under the NextGen PSA Diagnostics procurement, the all‐inclusive approach will be expanded beyond the first 6 priority countries (Nigeria, Tanzania, Uganda, Zambia, Kenya, Mozambique) to more countries and with more partner governments leading the way to manage laboratory service contracts. This approach will lead to greater testing volumes from other donors, greater use of VMI, and improved data connectivity. Partner governments will begin to leverage established KPIs to improve their oversight responsibilities and begin to assume the management of framework contracts as part of USAID’s efforts to advance sustainable solutions.

C.8. PERFORMANCE OBJECTIVES

The objectives of this award is to leverage investment and private sector service delivery to redirect procurement from local government operating supply chains to laboratory network management and oversight driven through private sector solutions.

The goal of this award is to expand all‐inclusive molecular contracts to all PEPFAR countries, develop VMI implementation approaches, and transition contract management to host governments or local PSAs in a sustainable stepwise approach. Countries may progress at different rates along this continuum, so the Contractor’s approach should be able to support implementation of traditional supply chain approaches, all‐inclusive contracting, and contract transitions across many countries at different stages of the development. The approach must support USG investments in the development of local laboratory service delivery and sample transport.

The Contractor’s strategy for completing contracting activities should consider close coordination with USG decision makers and local leadership.

The Contractor’s approach can build upon the previous GHSC‐PSM award, adding more value components to existing service packages, and ultimately working toward the transition of all‐ inclusive SLA contracts to local PSAs or partner governments.

C.8.1 Objective 1: Execute and Expand All‐Inclusive Agreements

The Contractor’s approach to execute and expand all‐inclusive framework agreements with conventional, point of care (POC) and near‐POC molecular, flow cytometry and other diagnostic manufacturers and suppliers of laboratory services and commodities should streamline procurement processes and represent best value to USG and PEPFAR countries.

OBJECTIVE: Development of a solutions‐based approach that is able to transition traditional commodity‐based supply chain functions to a service driven approach under all‐inclusive service level agreements. Approaches should reduce risk and achieve maximum benefit of services under agreements that shall be approved by the local government and USG prior to implementation or execution. Solutions include data collection and the defined management approaches to position USG and the Contractor to monitor the implementation of the all‐ inclusive agreements and established KPIs, noting that this information will be shared with the

Control Tower, and other NextGen contractors as required.

Countries that currently do not have all‐inclusive SLAs, will continue to operate as they currently do through traditional supply chain systems with the expectation that the NextGen

TA, ICL and other NexGen contractors will support efforts on general logistics, information sharing directly or via Control Tower, but will move away from these supply chain approaches overtime.

Rapid HIV test kits are not part of this award, which focuses on instrument‐based testing only. Other diagnostics tests that are part of the PEPFAR laboratory strategy will include viral load for HIV and early infant diagnosis (EID), but may also include HCV, HPV, TB, etc.

Baseline ‐ Currently 6 countries managed under PEPFAR have all‐inclusive agreements, which include a mix of Roche, Abbott, Hologic and Cepheid (Nigeria, Uganda, Tanzania, Zambia, Mozambique, and Kenya).

Target ‐ Advance all‐inclusive schemes to the remainder of PEPFAR supported countries over the course of the 10‐year period of performance. Expand additional service aspects within all‐ inclusives to standardize service level agreement content across all countries.

Years 1‐2: 30% additional coverage and standardization

Years 3‐5: 60% additional coverage and standardization

Years 6‐10: 100% additional coverage and standardization

C.8.2 Objective 2: Implement Vendor Managed Inventory

OBJECTIVE: Further develop a strategic sourcing approach and management processes for supply chain related activities for laboratory procurements that will build on Objective 1, adding

VMI solutions as part of supply chain evolution across all countries. Approaches should reduce risk and achieve maximum benefit of direct delivery and commodity management at end user laboratories by vendors, reducing USG risk and achieving continuity of reagents and consumables, with reduced service interruptions

Baseline ‐ Currently 0 countries managed under PEPFAR have VMI aspects to their all‐inclusive agreements across all manufacturers.

Target ‐ Advance all‐inclusive schemes to include VMI components under PEPFAR supported countries over the course of the 10‐year period of performance.

Years 1‐2: 1 or more countries advancing to VMI under all‐inclusive agreements

Years 3‐5: 3 or more countries advancing to VMI under all‐inclusive agreements

Years 6‐10: 6 or more countries advancing to VMI under all‐inclusive agreements

C.8.3 Objective 3: Transition All‐Inclusive Agreements to Host Governments

OBJECTIVE: Transition of all‐inclusive agreements to host governments or local PSAs. Solutions should ensure sustainability and support the host government or local PSAs to transition and provide support during the transition period and the post transition period as needed.

Baseline ‐ Currently 1 country managed under PEPFAR have transitioned all‐inclusive agreements to a local PSA or host government (Uganda, local PSA MAUL).

Target ‐ Transition all‐inclusive contracts to host governments or local PSAs, that include VMI components under PEPFAR supported countries over the course of the 10‐year period of performance. Targets are cumulative over the period of performance.

Years 1‐2: 0 countries

Years 3‐5: 3 or more countries

Years 6‐10: 6 or more countries

C.9 TECHNICAL PERFORMANCE INDICATORS

Overall technical contract performance as defined within the MEL Plan will track progress of the

PWS implementation, how well results are achieved against annual workplan activities and timelines. The QASP will measure how defined quality and performance standards are achieved in accordance within the established PWS benchmarks. Award fee determination will be based on measurement of technical performance, based on indicators which are appropriate to specific commodity and laboratory services related to advancing PWS activities which could include components of the MEL Plan. As directed by USAID, the Contractor can continue to use indicators under the current GHSC contracts and add indicators as the all‐inclusive procurement strategy increases to higher service levels, including VMI, and transition of all‐inclusive agreements to partner governments or local PSAs. Performance Indicators include but are not limited to:

(a) Traditional supply chain and advancing all‐inclusive agreements: Establish measures of traditional supply chain laboratory commodity delivery approaches to ensure that commodities are delivered at the committed volumes and are on time. Establish measures to advance countries beyond traditional supply chain commodity delivery approaches to all‐inclusive service driven schemes, that include direct delivery of commodities at service delivery points, reducing service interruptions.

(b) Advance VMI approaches: Implementation of VMI at regional or country level under the terms of all‐inclusive service level agreements.

(c) Contract transitions: Transfer of all‐inclusive agreements to partner governments;

(d) Commodity CLIN cost controls: Measures of cost savings from negotiated global procurements, VMI strategy, and other processes.

C.10 OPERATING CONSTRAINTS

C.10.1 Transition and Mobilization

Timeline

The timing of the NextGen procurements was designed to provide overlap with the existing programs, to facilitate and ensure a smooth transition. Since each contract will start and end at different times, the Contractors should be inherently flexible and show adaptation to existing constraints, novel challenges, and future unknowns in both the HQ‐based and country‐level (if applicable) design and implementation of the transition. This new contract is expected to operate in parallel with the current GHSC‐PSM contract as part of transitioning to the new award. The full transition is expected to take approximately 9 months, no longer than 12 months.

Transition‐In

The In‐coming contractors are responsible for taking a proactive and collaborative approach towards the transition of responsibilities from the incumbent contractors while ensuring an uninterrupted supply of commodities, a continuous provision of technical assistance, continuous product quality assurance, and a complete knowledge transfer between the existing implementing partners and the new implementing partners. All existing and new contracting parties will collaborate towards a successful transition under the guidance and recommendation of USAID.

Transition‐Out

When the contract expires, the PSA Diagnostics contractor must provide the transition support to any new contractor(s) that will take over the support for the NextGen SC program, this may include information, plans and documentation and/or any other knowledge transfer. USAID expects the Contractor to operate with transparency and in the best interest of the program.

USAID will provide guidance to the transition as needed. This will support a smooth transition to those activities and work with the incoming contractor(s).

C.10.2 Relationship to Other Activities and Redundancies

While some of the procurements that are planned for NextGen are designed to be program‐ specific, others will be cross‐cutting. For additional background information about the NextGen

Supply Chain Program, please see the NextGen Webpage and Attachment J.14

C.10.3 Risk Management

Supply chains and pharmaceutical management systems face a variety of risks across all levels of the health system, including theft and fraud, product quality issues, manufacturer/supplier issues, improper procurement processes, product loss through fire, damage or flooding, and others. Some of those risks are particularly widespread in low and middle income countries

(LMICs) and/or public sector systems. The Contractor will be expected to monitor and manage their own supply chain risks in collaboration with other NextGen contractors.

C.11.GENDER CONSIDERATION

USAID’s ADS 205 Integrating Gender Equality and Female Empowerment in USAID’s Program Cycle (https://www.usaid.gov/sites/default/files/documents/205.pdf) provides guidance on pursuing more effective, evidence‐based investments in gender equality and female empowerment and on incorporating these efforts into USAID’s core development programming. As determined applicable by the COR, the contractor may be asked to submit post‐award a project‐wide gender equality strategy, vision, or action plan, with specific actions to operationalize it reflected in annual work plans. The strategy, vision, or action plan should identify key gender‐equality‐related issues (i.e., gaps or barriers in supply chains towards issues of equity and equality) that the project could appropriately address and identify specific, practical steps that the project can take to address them, which would be articulated in annual work plans.

C.12. ADDRESSING CLIMATE CHANGE

(i) The Contractor should design and implement activities in a manner that supports USAID and

U.S. Government priorities to address climate change, including reducing greenhouse gas emissions and improving climate‐related supply chain resilience.

(ii) As required by USAID, the Contractor must provide analysis related to the generation of greenhouse gas emissions from contract activities and climate resilience in USAID‐supported supply chains and develop strategies with specified goals to reduce greenhouse gas emissions and strengthen climate resilience.

(iii) The Contractor will be required to provide climate‐related reporting, including the estimated amount of greenhouse gas emissions generated from performance of the contract and, as applicable, any reductions achieved, and activities undertaken to improve supply chain climate resilience in USAID‐supported countries. This requirement is further defined in Section

F.10.

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