JOFOC_for_FBO.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION UNDER

FAR 13.501(a)(2), Simplified Procedures for Certain Commercial Items

1. Contracting Activity. USDA, ARS, Western Business Service Center, 800 Buchanan Street, Albany, CA 94710

2. Nature/Description of Action. Award an ARS-wide Blanket Purchase Agreement (BPA) for purchase of RS

II and Sequel sequencing equipment, reagents necessary for preparing samples for sequence by synthesis runs, and service agreements, from Pacific BioSciences of California, Inc.

3. Description of Supplies/Services. The BPA will include commercial pricelists for products and services related to the RS II and Sequel instruments, their corresponding reagents, and maintenance contracts listed on the attached pricelists. ARS scientists estimate approximately $800,000 per year will be procured, with a total of $4 million, for the base year and four option years. Currently, each equipment, reagent and service maintenance agreement requires either a formal or informal JOFOC approvals. The BPA will reduce the annual number of JOFOCs significantly.

4. Statutory Authority. FAR 6.302-1, Only one responsible source and no other supplies or services will satisfy agency requirements. This procurement is in accordance with Subpart 13.5, Simplified Procedures for certain commercial items, In accordance with 41.U.S.C. 1901.

5. Demonstration of Contractor’s Unique Qualifications and/or Product’s Unique Features. Pacific

Biosciences is the sole manufacturer and distributor of the Pacific Biosciences RS II and Sequel Systems, and their associated library preparation, polymerase, sequencing reagents, and software. The systems are held by numerous patents owned by Pacific Biosciences.

Pacific Biosciences Sole Source Specifications for Sequel TM systems states “the system sequences individual DNA molecules using a proprietary sequencing-by-synthesis approach. The instrument exclusively processes SMRT® Cells and reagents, creating a scalable platform for sequencing with single-molecule resolution. The Sequel System is covered by numerous patents owned by or licensed to Pacific Biosciences. …. Pacific Biosciences is the only authorized vendor of the Sequel System and associated library preparation, polymerase, sequencing reagents and service contracting in…the United States… [The] sequencing instrument offers an entirely new performance envelop and a new economic paradigm that is expected to expand the market for DNA analysis by enabling new applications beyond what is possible today.”

The systems are unique in the following respects, critical to genome assembly and it is mission-critical for the ARS researchers to have the most accurate and efficient tools available to them. The outstanding features of the Pacific Biosciences genome analyzers are:

• The ability to sequence DNA that has not been amplified by PCR. This helps in the reduction of errors and prevents redundancy which would impact overall output.

• Extremely long reads with an average of 10-15K and as long as 40K. In comparison, the Illumina platform can only produce 600 bp read lengths while the Roche 454 or Ion torrent produce variable read lengths of 200-1200 bp.

• Detection of base modifications such as DNA methylation. In general, with one SMART cell, enough DNA sequence is obtained of length and amount that a whole genome assembly of a bacteria can be accomplished with few gaps, in most instances. This is partially achieved by the long read lengths which cover gaps missed by other technologies.

• High quality assemblies: research in Genome and Bioinformatics Research Unit, ARS, Stoneville, MI, and HudsonAlpha* have shown that high quality assemblies on tetraploid species (peanut and cotton) can be achieved. Such high quality assemblies have not been produced (i.e. published) by vendors of other DNA sequencers that use shotgun sequencing approaches.

*HudsonAlpha is a private sector genome analysis research firm with whom scientists at GBRU collaborate.

Need for proprietary maintenance contracts (“PacBio Standard Service contract):

• As highly advanced DNA sequencers, with robotics, high capacity informatics with specialized software, extremely sensitive detection equipment and micro liquid delivery systems, they require constant, specialized maintenance. Service contracts include software updates, offsite monitoring of the system, and onsite visits within a short time frame.

• Technical assistance support is also provided. As the manufacturers, Pacific Biosciences is the only vendor that can provide the necessary services for the sequencers.

• Any other service provider working on the equipment would void its warranty.

Need for proprietary reagents (See Reagent Kits and SMRT Cells):

• Due to the highly specialized nature of the experiments being conducted by USDA, only Pacific

Biosciences reagents can be used on Pacific Biosciences equipment. The reagents and related consumable supplies are patent-protected or license protected formulas, owned by Pacific Biosciences. The RSII and Sequel instruments require Pacific Biosciences cells to operate properly.

These disposable parts are manufactured solely by Pacific Biosciences.

• Any other reagent product used on the equipment would void its warranty.

• There are no resellers of these products.

In summary, the Pacific Biosciences reagents and equipment are not interchangeable with other systems.

The placement of any other sequencing reagent on the PacBio instruments would void any warranty or service issued under a PacBio maintenance agreement.

Continuation of existing work utilizing Pacific Biosciences equipment is required for scientific validity:

• Significant USDA scientists are fluent in Pacific Biosciences products and equipment. Several laboratories have invested a significant funding to equip and provide reagents for their systems: it is important to maintain system consistency. If another brand system was available to be procured, USDA would realize substantial duplication of costs by purchasing new equipment, and training staff. These costs are not anticipated to be recovered through competition.

6. Federal Business Opportunities (FedBizOps) Announcement/Potential Sources. A Sources Sought announcement was posted 3/24/2017. There were no responses. A Notice of Intent to Award to a Sole Source (DRAFT) is attached.

7. Determination of Fair and Reasonable Cost. Pricing will be evaluated according to “prices at which the same of similar items have previously been sold”, FAR 15.404-1(b)(1) and (2)(ii) “comparing the proposed prices to historical –prices paid”.

Pacific Biosciences will update their BPA with pricing and new products.

Examples of reasonable pricing, historically:

The PacBio RSII @ $700K compares to the Illumina HiSeq 3000 @ $700K, procured in 2016. Each system has unique capabilities based on output amounts and sequence reads. But, the Pac Bio RSII system has a greater read length than the Illumina 3000 system (Illumina’s 50-150 bp compared to RSII’s 10,000- 40,000 bp). This is critical to genome assembly and for genome analysis.

Furthermore, the PacBio Sequel @ ~$350K, has ~4X greater capacity compared to the RS II, though the read length average is closer to 8000-14,000 compared to the 10,000-14,000 of the RS II or 50-150 bp of the Illumina HiSeq 3000, which only further supports the technical superiority and value of the Pacific Biosciences equipment .

Service contract typically run between 10-20% of machine costs within the scientific equipment community and the prices of such services offered by Pacific Biosciences fall within that range.

8. Market Survey. A Sources Sought announcement was posted March 24, 2107 requested responses by 10 April 2017. No responses were received.

9. Additional Support. None.

10. Other Interested Sources. None

11. Actions Taken to Remove Barriers to Future Competition. Genome and Informatics Research Unit, Stoneville, scientists routinely monitor emerging technology, considering new technology to support their research. When technology becomes available to satisfy the agency’s requirements, it is considered. The ARS scientists continue to inquire, test and evaluate competitive manufactures’ equipment.

Name and Title of Reviewer: