JA SCMC_Redacted.pdf

CONTROL NUMBER VA-24-00003606

JUSTIFICATION FOR AN EXCEPTION TO FAIR OPPORTUNITY

1. Contracting Activity: Department of Veterans Affairs (VA) Office of Procurement, Acquisition, and Logistics Technology Acquisition Center 23 Christopher Way Eatontown, NJ 07724

2. Description of Action: The proposed action is for a sole source Firm-Fixed Price (FFP) Task Order (TO) that will be issued under Transformation Twenty-One Total Technology Next Generation (T4NG) Indefinite Delivery Indefinite Quantity (IDIQ) Contract Number VA118-16-D-1007 with Booz Allen Hamilton, Inc. (BAH), to provide operations and maintenance support for the existing Department of Veterans Affairs (VA) Supply Chain Master Catalog (SCMC) Software as a Service (SaaS) solution.

3. Description of the Supplies or Services: Supply Chain Data and Informatics Office (SCDIO) requires continued operations and maintenance for the VA SCMC until it is fully migrated into the VA Enterprise Cloud (VAEC). The VA supply chain manages all aspects of the supply and equipment flow from identification through fulfillment. VA’s supply chain tracks all VA medical commodities, prosthetic devices (including durable medical equipment), expendable equipment, non-expendable materials, and non-clinical products. Currently, the VA’s supply chain is not integrated with other VA data systems/processes and is supported by multiple discrete/antiquated systems. This leads to incomplete and inadequate finance, inventory, and purchasing analytics making it hard to efficiently manage the supply chain. These products and analytics need to be accessed by VA supply chain staff through a single interactive master catalog like the SCMC. Catalogs reduce time taken by staff to identify and procure an item on contract.

This benefits clinical staff and ultimately the Veteran. Catalogs also improve patient safety by reducing uncertainty in identifying and procuring correct items. Finally, catalogs reduce costs by leading users to contracts that leverage VA enterprise spend for better pricing.

The SCMC provides an authoritative source for items and services on VA contracts, through the approved Global Health Exchange (GHX) (formerly Prodigo) Marketplace.

The SCMC is a searchable, user-friendly application for contracting, logisticians, clinicians, and their direct support staff to locate products and services on VA contracts.

Additionally, contract and other non-public VA supply chain data is harmonized, enriched, and standardized, using the GHX-Prodigo Legacy Database, and given back to VA to be hosted in a Structured Query Language (SQL) database. This data, along with data from other sources are used to create tools, reports, and other products across VA. The SCMC is familiar as training has been provided to approximately 15,000 total users across the Enterprise.

The SCMC conducts weekly and monthly processes for new data ingestion and receives data outputs of raw and harmonized, enriched, and standardized data that go into the SQL database. The SCMC collects the new/modified contract data within electronic Contract Management System (eCMS) and publishes it in the GHX Marketplace, so users and stakeholders have the most updated information VA can

VA Supply Chain Master Catalog (SCMC) Operations and Maintenance Support Control Number VA-24-00003606 provide. Part of the data output includes an automated data extraction report that feeds the SQL database. This report supports data analytics and is shared across the Enterprise. The SCMC has achieved over 6,000 Users and 300,000+ Searches. The value of the SCMS to these Users is critical to ensure they have the most accurate and updated information.

The Contractor shall provide all resources necessary to accomplish the tasks and deliverables, to include project management, operations and maintenance, assessment and authorization, help desk support, and service level agreements for VA’s existing SCMC SaaS. This SaaS utilizes GHX Marketplace software currently hosted by BAH in a Microsoft Azure Gov Cloud environment. The procurement will also include an optional task for SCMC Migration to VAEC, which will take an estimated 10 months to complete once exercised., This Task Order (TO) will be concluded after the SCMC has been migrated into VAEC. VA will simultaneously begin the acquisition of GHX services that align to supply chain modernization efforts to be hosted within VAEC. VAEC hosting eliminates the need for Vendor hosting, improving efficiency and reducing costs.

The Period of Performance (PoP) for this proposed action consists of one 12-month base period, two (2) 6-month option periods and the SCMC Migration to VAEC optional task. The overall PoP of this proposed action shall not exceed 24 months.

The total estimated value of the proposed action is inclusive of all option periods and the optional task.

4. Statutory Authority: The statutory authority permitting an exception to fair opportunity is Section 41 U.S.C. 4106(c)(3) as implemented by the Federal Acquisition Regulation (FAR) 16.505(b)(2)(i)(C), entitled “The order must be issued on a sole-source basis in the interest of economy and efficiency because it is a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order.”

5. Rationale Supporting Use of Authority Cited Above: The proposed source is BAH, 1- 13 Christopher Way, Suite 101 Eatontown, NJ 07724. No other source, other than BAH, is able to meet the Government’s requirements as documented below.

The current TO was awarded to Liberty IT Solutions on July 11, 2019, as a result of a competitive action under the T4NG IDIQ contract. Since then, Liberty IT Solutions was acquired by BAH. This TO is set to expire on August 11, 2024. The resulting follow-on TO for this action will be awarded under BAH’s T4NG Basic Contract as no new TOs are being issued under the now defunct Liberty IT Solutions T4NG Basic Contract.

In 2019, VA issued a competitive procurement for a SCMC SaaS solution. As a result, the current SCMC SaaS solution, which consists of GHX/Prodigo software hosted in a Microsoft Azure Gov Cloud environment, was selected as providing the best value for VA. Following Authority to Operate (ATO) approval and configuration of the SCMC to meet VA-specific requirements, the solution was moved into production in 2020. The SCMC now has over 6,300 users throughout Medical Centers, VA/Veterans Health Administration (VHA) Contracting Offices, and the VA/VHA Central Office. Those users have logged in over 170,000 times and conducted over 315,000 searches. In addition to users accessing the SCMC, the data we received back from GHX has been cleansed, enriched with amplifying product information, and standardized, when applicable. This data then feeds the SCDIO Supply Chain Master Database (SCMD) that allows for increased analytics, reporting, and recommendations to offices across VA/VHA. The SCMC as a whole has been integrated throughout the VA and continues to grow. VA continues to require the services provided by the SCMC in order to support its mission.

Specifically, should the SCMC become unavailable to users, it would result in 6,300+ users unable to quickly and efficiently perform market research, price benchmarking, vendor selection, and have overall visibility of the 6,000+ Contracts and 900,000 items and services. This would lead to increased time spent searching for needed products, higher costs as use of VA wide procurement vehicles would decline, and reduced Veteran patient safety as the likelihood of ordering the wrong item would increase. It would also result in no cleansing, enrichment, and standardization of VA data from an industry leader, GHX, resulting in a limited SCMD functionality resulting in the issues described above. It would limit abilities for the VA Logistics Integration Platform (VALIP) and SCMC/SCMD to correct legacy data within IFCAP and supporting Modernization data efforts increasing patient safety risks and costs. It would also limit sharing with other Procurement and Logistics Office (P&LO) tools used across the VA, such as Clinical Product Review Committee (CPRC) Portal, Strategic Equipment Planning Guide (SEPG) Portal, Clinical Product Tool (CPT), and others. These limitations reduce efficiency while increasing risk and costs.

As detailed in Section 8, market research was performed in January 2024 to determine if there would be competition to support a procurement for continued SCMC operations and maintenance. While the original market research results indicated that competition was available for the procurement, during the solicitation process issues arose regarding an apparent exclusivity agreement between BAH and GHX that prohibited competition for the requirement. As a result, the solicitation was cancelled, and VA performed an additional review of its requirements for the SCMC. This review determined that to do anything else would, at a minimum, set VA and Veterans back a tremendous amount of time, money, and services. If the SCMC went offline on 8/11/2024, it would take the VA an estimated 12-24 months to establish a new Catalog, to include the acquisition, award, authority to operate, and setting up the new infrastructure and processes to become fully operational. The upfront costs associated with establishing a new Catalog to meet VA’s requirements is estimated to be in the range of $2-3 million dollars, and VA would still be required to pay an estimated $4-$5 million dollars in annual maintenance costs for a new Catalog. These estimates are based on previous acquisition history. Therefore, the upfront costs associated with establishing a new Catalog would not be recoverable through competition. Additionally, over 6,500 VA staff will need to be retrained on a new Catalog. Furthermore, during those 12-24 months, VA staff would not have access to a Catalog, resulting in limited visibility to items and services on a VA Contract, increased time to conduct Market Research, limited data standardization efforts across VA, and halt current efforts focusing on Catalog optimization and integration across VA. Therefore, it was determined that it would be in the best interest of the Government to migrate the SCMC into the VAEC rather than to continuing to procure the SCMC as a SaaS solution.

However, continued operations and maintenance of the SCMC in its current iteration is necessary until the migration to VAEC is completed. In the interest of efficiency and economy, a logical follow-on task order will be issued to continue receiving the necessary operations and maintenance for the existing SCMC SaaS solution until it is migrated to VAEC over the next 12-24 months. Once the migration to VAEC is completed and the SCMC is no longer a SaaS solution, VA will have more flexibility and control regarding requirements for the individual components that make up the SCMC (i.e. user interface, database, hosting environment). This flexibility and control is due to eliminating the Exclusivity Agreement which would allow VA to contract directly with GHX without the additional costs associated with BAH, as noted in Section 7. This will become increasingly important to VA as it modernizes the supply chain. As such, in order to meet VA’s current and immediate need to continue operating and maintaining the SCMC, it is in the Government’s best interest to execute a logical follow-on TO to BAH, inclusive of an optional task to provide support for the migration of SCMC to the

VAEC.

6. Efforts to Obtain Competition: Market research was conducted, details of which are in the market research section of this document. This effort did not yield additional sources that can meet the Government’s requirements. There is no competition anticipated for this acquisition. In accordance with FAR 5.301 and 16.505(b)(2)(ii)(D), the award notice for this action will be synopsized on the Contract Opportunities Page and the justification will be made publicly available within 14 days of award.

7. Actions to Increase Competition: The Government is actively researching and developing a plan to manage the SCMC in-house by the Office of Information and Technology (OIT). By taking this action, the Government can eliminate the intermediary (BAH) by reclassify this product from a Software as a Service (SaaS) to COTS software hosted in the Government cloud and re-open competition for support of this product, as well as any ancillary services, to multiple vendors. By bringing the SCMC into VAEC, OIT will have the infrastructure and resources to manage a Catalog more economically and not be dependent on a Vendor to host. Additionally, VA will complete market research to determine what Vendors can provide a Catalog to VA in the VAEC.

8. Market Research: This effort was originally solicited under Fair Opportunity procedures on the T4NG IDIQ contract. The Government issued a Request for Information (RFI) in January 2024 through the Contract Opportunities site via SAM.gov and prime contractors on the T4NG IDIQ contract. Responses were reviewed by VA Subject Matter Experts (SMEs) from the VHA and OIT. Four vendors responded to the RFI. None of the respondents recommended that VA consider alternate software solutions to meet SCMC needs. Three of the four respondents were deemed capable of performing the effort: BAH, Cognosante MHV LLC (Cognosante), and GHX. However, GHX specifically noted in its response that it intended to partner with a Prime contractor for this effort. BAH and Cognosante, both T4NG Prime Contractors, indicated in their respective responses an ability to collaborate with the GHX. During the solicitation process the VA Technology Acquisition Center (TAC) received a letter of concern indicating that there was an exclusivity agreement between BAH and GHX that would preclude competition for this effort. After reviewing the concerns and discussing the requirements with VHA and OIT, it became apparent that continuing to procure these SCMC requirements as a SaaS solution was not in the best interest of the Government. The solicitation was cancelled on May 24, 2024. Although none of the RFI respondents indicated that alternate software solutions were available to meet VA’s SCMC needs, additional market research was performed to determine if there were viable alternate software products available in the marketplace. This research revealed that the GHX Marketplace is unique due to the configuration and specifications that have been put in place throughout the Marketplace as well as the business processes/logic of data flow between VA and the Vendor. The GHX Marketplace is engrained with VA specific data attributes that have been updated over the years to include 25+ Tags that identify Contract and Item specifics to include contract and Item attributes such as AbilityOne, Prosthetics, MSPV, Sterile and Latex Free. These attributes impact procurement decisions and clinical safety. For these reasons there are no alternative products available in the marketplace that would be able to replace the current SaaS solution to meet VA’s needs.

9. Other Facts: None

Approval

In my role as procuring activity Advocate for Competition, based on the foregoing justification, I hereby approve the acquisition of VA Supply Chain Master Catalog (SCMC) Operations and Maintenance Support on an other than fair opportunity basis pursuant to the authority cited in Section 4 above, subject to availability of funds, and provided that the property and services herein described have otherwise been authorized for acquisition.

Date

7/31/2024