JOFOC P03 36C242-25-AP-1811 Final EXE.pdf

VHAPG Part 813.5 Simplified Acquisition Procedures for Certain Commercial Items Attachment 1: Request for Sole Source Justification Template >SAT-$7.5M under FAR13.5

Effective Date: 11/15/24 Page 1 of 5

REVISION: 01

Acquisition ID#: 36C242-25-AP-1811

DEPARTMENT OF VETERANS AFFAIRS

SOLE SOURCE JUSTIFICATION UNDER SIMPLIFIED PROCEDURES FOR CERTAIN COMMERCIAL

ITEMS IN ACCORDANCE WITH FAR 13.5

Acquisition Plan Action ID: 36C242-25-AP-1811

1. Contracting Activity: Department of Veterans Affairs, VISN 02, Bath VA Medical Center

76 Veterans Avenue, Bath, NY 14810.

Procurement request no. 528-25-3-8889-0014.

2. Nature and/or Description of the Action Being Processed:

This procurement is for a new firm-fixed-price Combined Power and Heat (CHP) Maintenance requirement in accordance with FAR 13.5 Simplified Procedures for Certain Commercial Items and specifically FAR 13.501 Special Documentation Requirements, where acquisitions conducted under Simplified Acquisition Procedures are exempt from the requirements of FAR Part 6, but still require a justification using the format of FAR 6.303-2.

Network Contracting Office (NCO) 2 intends to award a sole-source contract to Martin Energy Group Services LLC. (MEG), 70150 Hwy 50, Tipton, MO 65081, to provide services to maintain the Combined Heat and Power (CHP) plant’s reciprocating engine generator and associated equipment located at the Albany VA Medical Center. This acquisition will be conducted using sole source procedures, based on a market survey which demonstrated that no other business concerns could fulfill this requirement. MEG is the sole authorized service contractor and regional distributor for the CHP System consisting of an MTU engine generator, heat recovery and heat rejection system and related control software.

3. Description of Supplies/Services Required to Meet the Agency’s Needs:

This requirement is to provide full scheduled and unscheduled maintenance services for the reciprocating engine and generator package, CHP controls, integrated heat exchangers, radiators and associated equipment to ensure continued proper operation of the Combined Heat and Power (CHP) system. The Factory Protection Plan shall include scheduled maintenance parts as needed pursuant to the current MEG Standard Maintenance Schedule. It shall also include unscheduled maintenance parts and labor as needed to ensure proper functionality of the combined heat and power generator.

As part of the service, the facility will require access to MEG Energy’s Call Center, including 24/7 access to Technical Support. There will also be a need for system software upgrades as they are released by MEG Energy with remote monitoring of CHP system via internet. The contractor shall be responsible for providing monthly reports on performance and annual performance tests. The contract will be a firm fixed price maintenance agreement for one year with four option years.

Base year: July 1, 2025 to June 30, 2026 = $204,955.00

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Acquisition ID#: 36C242-25-AP-1811

Option year 1: July 1, 2026 to June 30, 2027 = $211,104.00 Option year 2: July 1, 2027 to June 30, 2028 = $217,437.00 Option year 3: July 1, 2028 to June 30, 2029 = $223,960.00 Option year 4: July 1, 2029 to June 30, 2030 = $230,679.00 Total estimated contract value = $1,088,135.00

4. Statutory Authority Permitting Restricted Competition:

FAR 13.5 Simplified Procedures for Certain Commercial Items. The statutory authority for applying the Simplified Procedures for Commercial Items of FAR 13.5 is 41 U.S.C. § 1901 and is implemented by FAR 13.106-1(b)(2) for restricting competition on this procurement. Competition is restricted on this procurement for the reason below:

( X ) Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements

( ) Unusual and Compelling Urgency ( ) Industrial Mobilization, Engineering, Developmental or Research Capability or Expert

Services ( ) International Agreement ( ) Authorized or Required by Statute ( ) National Security ( ) Public Interest

5. Demonstration that the Contractor’s Unique Qualifications or Nature of the Acquisition Requires the Use of the Authority Cited Above (applicability of authority):

This is an ongoing requirement to provide preventive maintenance on stated equipment.

Martin Energy cogeneration systems in Upstate NY are serviced solely by MEG as sole authorized service contractor and regional distributor for the Albany area. In their signed Original Equipment Manufacturer (OEM) letter as submitted by the customer, MEG states that the generator has a proprietary control system, and that the technician-level password for operation and safety settings used for full support and service is not available to persons outside of MEG. Additionally, MEG has proprietary rights of the software. MEG technicians are OEM factory trained and certified to service the MTU engine generator set and balance of plant components in this region. Accordingly, Martin Energy Group Services LLC is the only firm capable of providing the supplies and services described in Section III above without the Veteran’s Health Administration experiencing substantial duplication of cost that could not be expected to be recovered through competition. Any service performed by a vendor that is not OEM certified and trained to maintain the cogeneration system would jeopardize the 40,000 hour warranty on the system and potentially damage this equipment which is valued at $1,040,000. Also, loss of use due to improper servicing could potentially cost the medical center at least $3,000.00 per week in additional utility costs.

6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable:

As a sole source acquisition, based on the unique characteristics presented above, MEG is the sole source for servicing the MEG cogeneration system. Market research showed that

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Acquisition ID#: 36C242-25-AP-1811

MEG is the sole distributor of the equipment, has proprietary rights and has the capability to meet the Governments specific requirement for the Albany VAMC CHP system.

7. Determination by the CO that the Anticipated Cost to the Government will be Fair and Reasonable:

The determination by the Contracting Officer that the anticipated cost to the government will be considered fair and reasonable: The Contracting Officer will determine fair and reasonable pricing prior to award and option periods being exercised. In addition, the contracting officer reviewed the independent government cost estimate (IGCE) and estimates identified in acquisitions for similar products and services, price was found to be fair and reasonable in comparison. The current expiring base plus four (4) contract (36C24220P0504) for this service was also determined to be fair and reasonable and was priced at option year 4 at $197,069.00, making the base year of this new contract estimated at $204,995.00 only $7,926.00 more than the previous contract’s Option Year 4.

8. Description of the Market Research Conducted and the Results, or a Statement of the Reasons

Market Research Was Not Conducted:

Market research was conducted for the purpose of determining other viable sources in the open market with the ability to perform the same type of services. The market survey results are that MEG is the sole authorized service contractor and regional distributor for the Martin Energy cogeneration system. As such, no other company can meet this requirement. As per the VA Rule of Two, a search in SBA’s Veteran Small Business Certification (VetCert) and SBA’s Dynamic Small Business Search (DSBS) database was conducted to identify Service Disabled Veteran Owned Small Business (SDVOSB) or Veteran Owned Small Business (VOSB) using NAICS code 238220 and keywords “Combined Heat and Power.” This resulted in 0 vendors identified.

9. Any Other Facts Supporting the Use of Other than Full and Open Competition:

Not Applicable

10. Listing of Sources that Expressed, in Writing, an Interest in the Acquisition:

Based on the unique characteristics presented above, as it is within the threshold required for dissemination through the GPE, this acquisition was announced through a Special Notice of Intent to Sole Source on SAM.gov, the Government Point of Entry (GPE) on February 26, 2025 to March 10, 2025, which yielded no responses.

11. A Statement of the Actions, if any, the Agency May Take to Remove or Overcome any Barriers to

Competition before Making subsequent acquisitions for the supplies or services required:

As it has been determined that this is a sole source provider, no actions may be taken to overcome barriers for this acquisition. However, should it be determined that Albany VAMC has a future requirement for this type service, the Contracting Officer will once again conduct a market survey to determine if any business can provide the service maintenance package for the CHP System. Additionally, it is difficult to remove barriers to competition in

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REVISION: 01

Acquisition ID#: 36C242-25-AP-1811 this procurement unless MEG provides third party vendors with factory trained technicians in the Albany area.

12. Requirements Certification: I certify that the requirement outlined in this justification is a Bona Fide Need of the Department of Veterans Affairs and that the supporting data under my cognizance, which are included in the justification, are accurate and complete to the best of my knowledge and belief.

Thomas Martone Date Maintenance Supervisor Samuel S. Stratton VA Medical Center

13. Approvals in accordance with the VHAPM Part 806.3 OFOC SOP:

a. Contracting Officer or Designee’s Certification (required): I certify that the foregoing justification is accurate and complete to the best of my knowledge and belief.

Natalie Acevedo Date Contracting Officer

NCO 2

b. One Level Above the Contracting Officer (Required over SAT but not exceeding $750K): I certify the justification meets requirements for other than full and open competition.

Joseph Cellino Date Supervisory Contract Specialist Services Team 1 Branch Chief VHA RPO-E/Network Contracting Office (NCO) 02 https://dvagov.sharepoint.com/sites/VHAProcurement/VHAPM/VHAPM_Part_806.3.aspx

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Acquisition ID#: 36C242-25-AP-1811

c. VHA RPO HCA Review and Approval: I have reviewed the foregoing justification and find it to be complete and accurate to the best of my knowledge and belief and approve ($750K to $7.5 million (or $15.0 million for acquisitions described in FAR 13.500(c)) for other than full and open competition.

Gerald Jacobs Date Executive Director – Regional Procurement Office East VHA Head of Contracting Activity (HCA)