JA-NDSC Bridge Contracts.pdf

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity:

Department of Veterans Affairs (VA) Office of Procurement, Acquisition and Logistics Strategic Acquisition Center (SAC) Spotsylvania Ave, STE 400 Fredericksburg, VA 22408

2. Description of Action:

The proposed action is to award nine Fixed Price Indefinite Delivery Indefinite Quantity (IDIQ) bridge contracts for Veteran dialysis services in the community. Individual requirements will be authorized for Veteran care in the community by qualified medical personnel and assigned by community care coordinators for dialysis care in accordance with Veteran proximity to care and specified modality.

This Justification and Approval (J&A) will facilitate the award of nine IDIQ bridge contracts (six-month base and a six-month option) to prevent a lapse in critical dialysis services in support of the Veterans Health Administration (VHA) Office of Integrated Veteran Care (IVC), while the follow-on acquisition is competitively procured. The current National Dialysis Services Contracts (NDSC), listed below, will expire on September 30, 2024, and the follow-on procurement effort will be awarded before the bridge contracts expire.

CONTRACT PROVIDER

VA791-19-D-0013 American Renal Associates VA791-19-D-0014 Atlantis Healthcare Inc.

VA791-19-D-0016 Central Florida Kidney Center VA791-19-D-0018 DaVita Inc VA791-19-D-0019 Dialysis Clinic Inc VA791-19-D-0020 Dialysis Newco, Inc.

VA791-19-D-0021 Fresenius Medical Care Holdings, Inc.

VA791-19-D-0026 RSA - Guam VA791-19-D-0030 US Renal Care, Inc.

3. Description of Supplies or Services:

The VHA NDSC provides dialysis services performed in all areas of the United States, the District of Columbia, Puerto Rico, Guam, the U.S. Virgin Islands, American Samoa, and the Commonwealth of the Northern Mariana Islands. The current dialysis capability within Veterans Affairs Medical Centers (VAMCs) and the Community Care Network

Justification & Approval – National Dialysis Services Bridge Contracts

(CCN) is insufficient to address the needs of the entire Veteran population that require dialysis services.

Healthcare providers in the community offer dialysis services nationwide for Veterans as authorized by the VAMCs. The NDSC contractors deliver, supervise, and monitor dialysis services for chronic hemodialysis (outpatient), home hemodialysis, chronic peritoneal (outpatient) dialysis, Acute Kidney Injury (AKI), and training sessions for home-based hemodialysis and peritoneal dialysis. The contractor facilities are located within the geographic areas of the referring VAMCs and are readily accessible to the Veteran patient population within the Veteran Integrated Service Networks (VISNs).

The healthcare provided is delivered in a manner consistent with the needs of the Veterans and standards of quality delivered to non-VA patients. The contractor facilities are licensed by the Centers for Medicaid & Medicare Services (CMS) in the applicable State, Territory, or Commonwealth of the United States or the District of Columbia.

The NDSC provides critical healthcare services to Veterans who are unable to receive dialysis care from the VAMCs. Approximately Veterans are currently receiving dialysis services through the NDSC contracts. A gap in contractual coverage would have catastrophic results. Dialysis services are not optional for Veteran patients with chronic or acute renal failure. It is imperative that no lapse in contractual coverage occurs, as any delay in dialysis service will cause mental/physical distress, discomfort, and potential loss of life.

4. Statutory Authority Permitting Other Than Full and Open Competition:

The statutory authority permitting other than full and open competition is 41 U.S.C. § 3304(a)(2) as implemented by the Federal Acquisition Regulation (FAR) Section 6.302-2 entitled, “Unusual and Compelling Urgency.”

5. Rationale Justifying Use of Cited Statutory Authority:

The NDSC community dialysis services bridge contracts are vital to ensure continuity of care for some of our country’s most vulnerable Veterans while the follow-on procurement is underway, which will be fully compliant with the MISSION Act. The follow-on procurement will adhere to all applicable legislative, executive orders, OMB guidance, and Federal/VA acquisition regulatory guidance. VA is also contemplating the restructuring of the current dialysis contracts to be more in line with CCN.

The NDSC bridge contracts have considered the requirements of the MISSION Act which provides flexibility for variances from Medicare rates. In the MISSION Act, in 38 U.S.C. S.§ 1703 (h)(6)(i), Congress specifically included a carve-out related to rates paid for medical services. Dialysis rates for care in the community reflect rates that are similar to those of CMS to the extent practicable as provided by the MISSION Act legislation.

For the follow-on procurement, VHA recognized the need to enhance oversight of community clinical quality and ensure optimal coordination of care between dialysis facilities, nephrologists, and the VA provider. Furthermore, VA is re-examining the overall requirement as a whole to determine the best strategy based on recent industry feedback from Requests for Information (RFIs), which has also caused additional delays in the follow-on procurement timeline. Once awarded, there is a three-month minimum implementation period for the reauthorization of care. With the approaching expiration of the current NDSC IDIQ contracts (final date of performance 9/30/2024), it is imperative that the VA establish these bridge IDIQ contracts for continuity of essential dialysis services, without which VA would lack contractual vehicles to provide dialysis services to Veterans in the community while the long-term transition to CCN is underway.

The Program Office will ensure that the follow-on contracts are in compliance with the MISSION Act as well as all applicable legislative, executive orders, and Federal/VA acquisition regulatory guidance.

The VAMCs lack the capacity necessary to address the Veteran population requiring dialysis; therefore, utilizing Government personnel is not feasible. Further, there is insufficient network adequacy within the CCN contracts at this time. If this action is not approved, the result would be a break in services that would jeopardize Veterans’ healthcare in the community, impacting their safety and adversely impacting healthcare providers and the public.

The current NDSC contractors are immediately capable of meeting the contractual language and have the required capabilities and facilities to provide the necessary dialysis services for Veterans without interruption or degradation of the quality of care.

The incumbent contractors have demonstrated the requisite expertise, management, responsiveness, and experienced personnel critical to providing seamless, uninterrupted service of current delivery of dialysis services. Since the contract awards in March 2019, the NDSC contractors have provided dialysis services to over Veterans.

For the reasons stated, the award of bridge contracts to the current NDSC contactors is necessary to avoid disruption of life-saving dialysis services to Veterans. Approval of these bridge contracts will prevent a catastrophic impact to VA’s ability to provide and support world-class patient care to our nation’s Veterans.

6. Description of Efforts to Solicit Offers from as Many Sources as Practicable:

Notice of this J&A will be publicized in accordance with FAR Subpart 5.2. No efforts to solicit potential sources for this bridge action were conducted as the bridge contracts are to be awarded to incumbent NDSC contractors in order to sustain the care being rendered to the Veterans currently authorized care under each of the nine providers. This action ensures vital continuity of care for the Veterans receiving dialysis services in the community. The Veterans’ dialysis services should not be interrupted in a bridge action, allowing the VA to issue an award for the follow-on procurement effort. Further, the VAMCs would not have time to re-authorize care before September 30, 2024, for the Veterans under different providers. The effort to award a fully competitive action for these services is underway within the IVC-led Integrated Project Team (IPT). Additionally, market research is ongoing, including multiple Requests for Information (RFIs) to solicit as many interested sources as possible. It is anticipated that there are multiple vendors both interested in and capable of providing the required services under the follow-on competitive procurement.

7. Fair and Reasonable Price Determination:

The Contracting Officer has conducted an analysis and determined that the anticipated cost to the Government is fair and reasonable in accordance with FAR 15.404-1(b)(2)(ii) historical pricing.

8. Market Research:

As noted above, market research for the follow-on acquisition of NDSC is underway to maximize competition. The VHA IVC Program Manager has implemented an IPT with all stakeholders. Three RFIs were issued with multiple respondents, and there are multiple sources in addition to the existing contractors that are capable of satisfying the agency’s requirements under the NDSC program follow-on competitive procurement.

Based on the market research effort, maximum competition for the follow-on acquisition is anticipated.

9. Other Facts:

The bridge NDSC IDIQ contracts will consist of a six-month base period and a six-month option period to ensure no lapse in critical dialysis services for Veterans receiving care via the National contracts while the follow-on procurement proceeds and to enable providers sufficient time to complete the required reauthorization of care process under the new contract(s) once they are awarded.

The Government, Veterans, their family members, community providers, and the public would be seriously injured without the continuity of these critical dialysis services. The services performed by the NDSC contractors are essential to accomplishing the VA mission of delivering critical dialysis services to Veterans in the community.

10. Sources Expressing Interest:

The nine dialysis providers listed above are currently contracted for dialysis services and expressed interest in bridge contracts to ensure the continuity of critical services.

Additional sources are interested in the follow-on competitive acquisition as indicated by ongoing market research.