JA-22-JCRD-099 - 500M COVID Test Kits - 12 Jan 2022_Redacted.pdf

Control No: JA-22-JCRD-099

FAR Part 6 Justification and Approval for Other than Full and Open Competition

1. Contracting Activity: U. S. Army Contracting Command – Aberdeen Proving Ground (ACC-APG), Joint COVID-19 Contracting Division (CCAP-CR), 4672 Integrity Court, Aberdeen Proving Ground, MD 21005.

2. Description of Action: The United States Government (USG or Government) has an urgent requirement for 500 Million rapid Antigen (Ag)-based diagnostic tests indicated for non-prescription home use that are Food and Drug Administration (FDA) approved, 510(K)-cleared, or have Emergency Use Authorization (EUA) to detect the SARS-CoV-2 virus, which causes COVID-19. This requirement will be used to detect and combat the spread of COVID-19 within the United States. The Department of Defense (DoD) intends to pursue multiple contract awards with responsible suppliers under this class J&A in order to meet the total Government requirement by March 2022. The DoD intends to solicit two classes of companies for rapid diagnostic test kits with selection based on competition for the lowest price until the requirement is satisfied, up to a maximum of 250 Million tests from a single vendor:

Class I: Manufacturers and current authorized distributors of FDA EUA approved COVID-19 rapid antigen tests; and

Class II: Manufacturers and current authorized distributors of FDA Rapid Acceleration of Diagnostics (RADx) or Independent Test Assessment Program (ITAP) accelerated EUA approval products for which an EUA is pending and reasonably expected to be issued by 17 January 2021.

These COVID-19 rapid tests will be provided upon request to individuals within the United States for home use to quickly detect exposure and infection of an individual with COVID-

19. Based upon current modeling data, the United States faces a shortfall in availability of an estimated 500 Million COVID-19 tests by approximately 21 January 2022. Early identification of COVID-19 infection is crucial to timely treat and isolate infected individuals and to reduce the widespread infection of the population in the United States.

The anticipated contract type for each contract is Firm Fixed Price, with three firm fixed priced options for shipping to , and one firm fixed price option for additional tests equal to 5% of the quantity awarded to any individual contractor. These efforts are entered into by the DoD and ACC-JCRD on behalf of the Assistant Secretary for Preparedness and Response (ASPR) HHS, in accordance with the Memorandum of Understanding between HHS and the DoD regarding DoD Acquisition Support, signed 20 May 2021; and at the request of the Executive Office of the President by memorandum dated 21 December 2021. The DoD will be the contracting agency. This requirement will be fully funded utilizing Section 2401 of the American Rescue Plan Act (no year funds).

3. Description of Supplies/Services: This requirement is to purchase approximately 500 Million rapid Antigen (Ag)-based diagnostic tests indicated for non-prescription home use that are Food and Drug Administration (FDA) approved, 510(K)-cleared, or have Emergency Use Authorization (EUA). One test kit is defined as all materials needed to take a sample and obtain a diagnostic result; kits requiring multiple sterile swabs or reagents are considered to be one (1) test kit. One, two, or four test kits will be included in a single package. Deliveries of the product are required at least at 10% of the quantity at 10 calendar days, 40% additional at 30 calendar days, and the remainder at 60 calendar days from award for a total delivery period of two months.

4. Authority Cited: 10 U.S.C. 2304(c)(2), as implemented by FAR 6.302-2, “Unusual and Compelling Urgency”

5. Reason for Authority Cited: 41 U.S.C. § 1903, Special Emergency Procurement Authority, is authorized because the President of the United States made an emergency determination under the authority of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. § 5121- 5207 (the "Stafford Act"), and the American Rescue Plan Act of 2021, in response to the COVID-19 pandemic on 13 March 2020. COVID-19 and variants thereof continue to rapidly spread throughout the United States leading to hospitalization and death of individuals across the country. FAR 6.302-2 allows for other than full and open competition based on urgent and compelling circumstances. This action satisfies the requirements of FAR 6.302-2 because of (a) the urgent threat COVID-19 poses to both national security and the public health and (b) early detection and identification of COVID-19 infection increases the probability of survival through timely medical intervention and reduces the spread of the virus through early preventative measures to slow and reduce community spread. The SARS-CoV-2 omicron variant now makes up the majority of COVID-19 cases in the U.S., driving a massive increase of infections that threaten to strain hospitals and disrupt daily life. According to data from the Centers for Disease Control and Prevention, Omicron represented 95% of all sequenced COVID-19 cases in the U.S. Omicron is driving up cases, at least in part, due to its ability to partially evade the immunity generated by vaccines and cause breakthrough infections in large numbers. In the United States, hospitalizations are rising, with 98,000 Americans hospitalized with severe Covid-19, according to a seven-day average of data from the Department of Health and Human Services as of 03 Jan 2022, up 32% from the previous week.

The USG cannot adopt standard procurement times to an acquisition of this urgent public health nature. The United States faces a shortfall in availability of an estimated 500 Million COVID-19 tests by 21 January 2022 and, in order to combat the spread of COVID-19, additional supply of tests is urgently needed to ameliorate the shortfall. Even a short timeline of 60 days to award these contracts is unacceptable because it would place the contract award date beyond the final date of product delivery required to effectively address this urgent public health need. For example, the standard procurement timeline is 270 calendar days for a full and open procurement of this value, however through streamlining efforts and commercial procurement procedures for a limited competition, a 30 calendar day solicitation timeframe, and allowing 7 calendar days for pre-solicitation approvals, 14 days for source selection, and 7 days for final approval and required congressional notifications, would represent a highly expedited timeline for a 60-day procurement cycle. It is estimated that the absence of approval for this urgent action would cause a delay of at least 30 to 240 calendar days to compete the action on either a limited or full and open competition basis.

The contracting office currently is in final proposal review with contract awards anticipated no later than 19 January 2022. Such a delay could result in many more individuals unknowingly spreading COVID-19 and an increase in deaths due to delayed infection identification and care. Other than full and open competition is necessary to ensure the United States sustains the capability to detect the virus while the demand for testing drastically exceeds the available capacity.

This procurement was competed to the maximum extent practicable as required by FAR 6.302-2(c)(2). The solicitation was sent to sources identified by market research as being in the best possible position to meet the requirements of this procurement. Even with the limited competition, the USG anticipates it will be expending all of its resources allocated to this acquisition to evaluate the proposals within the timeline required to meet the U.S. public health needs.

6. Efforts to Obtain Competition: Competition will be sought to the maximum extent practicable among the list of vendors identified to have the capabilities to provide compliant product within the expedited timelines required to meet the Government requirements. All offers received will be evaluated for compliance and then sorted from low to high unit price.

Once the quantity of 500M tests (with no single offer exceeding 250M tests, excluding the 5% option) is realized by compiling the lowest per unit price, the awardees will be determined and contracts will be awarded until the total estimated quantities and/or funding is exhausted. As stated above, the Government cannot adopt standard procurement timelines to this acquisition due to the extreme urgency of getting supplies in a timely manner. This acquisition aims to rapidly procure an estimated 500M test kits with all deliveries complete within 60 days of each award planned by 19 Jan 2022 or sooner. If the USG is unable to procure all 500M tests through this limited competition, then the USG will procure the remaining quantity of tests through one or more sole source awards to a vendor/vendors that the USG identifies as being most capable of providing a compliant product within the expedited timelines required to meet the USG’s continuous and urgent need.

Subcontracting Competition: No potential subcontracting opportunities exist under this requirement at this time due to the rapid nature of the requirement beyond subcontracting to a supply manufacturer.

7. Actions to Increase Competition: Based upon market research there are currently multiple companies available that can either manufacturer or source the required tests. The Government has reviewed the capacity available within the marketplace and has determined that the competition will yield a low-price technically acceptable solution. If an enduring requirement is certified in the future, all possible effort will be undertaken to pursue full and open competition.

8. Market Research: The USG, specifically through the internal partnership of the FDA and HHS, has multiple methods to stay connected with industry. HHS conducts in-depth market research through Tech Watches, Industry Days, interviews with individuals knowledgeable of industry trends and requirements, and through in-depth market research of companies or product-specific research. Further, a Request for Information was posted to SAM.gov on 22 December 2021 to identify interested sources that may be capable of providing the required supplies, with 65 responses received. The market data was reviewed by HHS/FDA subject matter experts to identify potential companies that could meet the Government requirements with product FDA cleared, approved, or authorized to be marketed in the US in the time available without unnecessary delay.

Technical teams from HHS/National Institutes of Health (NIH)/FDA reviewed the information provided by the companies in response to the market research, in addition to any other information available internal to the agencies, to identify companies who proposed EUA cleared product (or where an EUA was pending with NIH); who proposed which met the technical requirements; and who, based upon the information available, could, with a reasonable degree of confidence, meet the urgent delivery timelines of this requirement.

This review of potential companies resulted in the following two classes being identified as potential companies for this action:

To date, 21 companies have been identified by HHS/NIH and DoD that could potentially meet the Government requirement. The following companies have FDA EUA approval for COVID-19 antigen tests (J&A Class I):

Contractor Name EUA Cleared (Y/N)

EUA

Pending?

(Y/N)

Product Meets Requirements (Y/N)

Quantity on Hand

Manufacturing location

Y NA Y USA

Y NA Y China

Y Testing Y USA

Y N Y USA

Y NA Y South Korea

Y NA Y USA

and Brazil

Y N Y Australia

Y NA Y USA

Y NA Y USA

Y NA Y Unknown

Y NA Y US and Hong Kong

Y NA Y USA

Y NA Y China

Y NA Y USA

Y NA Y USA

Y NA Y USA

Y NA Y USA

Y N Y USA

Y N Y Switzerland

Y N Y USA

Y Y Y Subsidiary is USA;

Parent company is

Canadian

Further, the following companies are participants in the NIH RADx or ITAP programs for expedited EUA approval which have a reasonable probability of EUA by the target award date (J&A Class II):

Contractor Name EUA Cleared (Y/N)

EUA

Pending?

(Y/N)

Product Meets Requirements (Y/N)

Manufacturing Location

N Y Y USA

N Y Y USA and South Korea

N Y Y USA

N Y Y USA and Mexico

N Y Y South Korea

Y NA Y USA

N Y Y USA

N Y Y USA

N Y Y Japan

9. Interested Sources: A Request for Information was posted on 22 December 2021 with 58 responses received. The FDA, HHS, and DoD reviewed the RFI responses and incorporated that information into its market research. However, as discussed above, due