JOFOC_ PPE Distribution Henry Schein - final_Redacted.pdf

DEPARTMENT OF HEALTH & HUMAN SERVICES Office of the Secretary

Office of the Assistant Secretary for r Preparedness & Response

Washington, DC 20201

JUSTIFICATION DETAILS FOR

COVID-19 EMERGENCY

RESPONSE ACTIVITIES

The Department of Health and Human Services (HHS) issued a class Justification & Approval (J&A) in accordance with FAR § 6.303- 1(d) and 6.302-2, Unusual and Compelling Urgency, FAR § 8.405-6(a)(1)(A), Limiting Sources, and FAR § 16.505(b)(2)(i)(A), Exceptions to the Fair Opportunity Process for all contract actions to facilitate the recovery efforts necessary to address the 2019 Novel Coronavirus (COVID-19). The J & A is essential to respond to urgent requests for immediate support to respond to the expanding outbreak of the COVID-19 global pandemic.

This form must be completed for all actions to meet the requirement set forth in 5(a) of the Department of Health and Human Services (HHS) class J&A for the COVID-19 pandemic response issued via HHS Acquisition Alert 2020-08.

Actions taken under this authority shall include documentation of market research performed and prospective sources of supply and services.

Additionally, shall include evidence of the urgent and compelling nature of the particular action, reviewed and approved at a level above the Contracting Officer.

Identification of Program Office, Contracting Activity, and Proposed Requirement, Justification and Program Office Certification:

A. Program Office:

Division of Strategic National Stockpile 2945 Flowers Rd.

South Atlanta, GA 30341

B. Contracting Activity:

Health & Human Services Assistant Secretary for Preparedness and Response Office of Resource Management Contracts & Grants Division Strategic National Stockpile (SNS) Contracts Branch

C. 1. Identification of Requirement:

a. Nature of Action to be Approved:

Sole source acquisition of (Describe) 6.302-2 Urgent and Compelling:

In response to COVID-19, ASPR has procured a significant volume of pharmaceuticals, medical equipment, and PPE to ensure the nation’s readiness for this on-going pandemic. In procuring such a large volume for receipt as quickly as possible, the SNS has exceeded its warehouse capacity and requires an additional 80,000 pallet spaces for currently projected in-bound PPE & Testing Supplies. In addition, the government must enhance its distribution capability through the utilization of existing commercial distributor warehouses and customer networks. This requirement is for Vendor

Managed Inventory (VMI) and Distribution Services of Government furnished product (GFP). The GFP to be provided will be Personal Protective Equipment (PPE) and testing supplies the Government has recently procured in response to COVID-19 and will be delivered from both Government warehouses and direct from manufacturers. The vendor must store and manage this product in their geographically diverse distribution warehouses until notified by the Government of a request to immediately ship product direct to points of need. While we do not know the exact locations for distribution of this product at this time, a geographically diverse network of warehouses and existing customer accounts will allow the Government to immediately distribute critically needed medical supplies to those that need it.

D.1 Demonstration that the proposed contractor(s) unique qualifications or the nature of the acquisition requires use of the authority cited in the class J&A for the COVID-19 pandemic response.

a. Describe market research performed and prospective sources of supply and services:

While there are many vendors that can provide VMI and distribution services, the breadth, scope, and urgent timing of this requirement can only be met through vendors with an existing nationwide network of warehouses and a significant amount of US Healthcare facilities already in their distribution system for expedited distribution at time of need. Given the current increase in COVID cases, timing is critical to ensure implementation and the effectiveness of these services.

Program reached out to the big 5 US Medical Distributors:

. These 5 were chosen due to their existing infrastructure and network of accounts already created for many of the potential Points of Care which this product may be distributed to. This capability will allow the vendor(s) to quickly distribute product to points of care already loaded and validated in their systems. All 5 vendors were contacted to obtain their capability and willingness to provide these services.

responded that they do not have any additional capability at this time . had no immediate capability to support this effort.

expressed their interest and capability to meet this requirement. Additional market research discussions were conducted, resulting in the submission of a capability document and estimated pricing which were provided the week of November 9th. Both vendors provided their capability to only support 80,000 pallet positions each. Given the need to take advantage of distributors existing infrastructure, the program believes in awarding to ., with their current capability and willingness perform these services will be advantageous to the government to meet this urgent need. Currently, there are no existing contracts for this capability or level of service, and the Government is interested in obtaining services with multiple major medical product distributors to ensure the broadest coverage for distribution to points of care.

b. Proposed Vendor: Henry Schein, Inc.

135 DURYEA RD

MELVILLE, NY, 11747-3824,

UNITED STATES

c. Estimated Procurement Amount (including surge support optional tasks): $78,407,111.00.

The IGCE was developed using historical pricing comparison which included information received from the 5 industry leaders. Pricing was also reviewed for two previous issued awards to

E. 1. Provide evidence of the urgent and compelling nature of the particular action:

a. Explain This urgent requirement is a result of the public health emergency caused by COVID-19, which was declared a pandemic by the World Health Organization on March 11, 2020 and a National Emergency in the United States on March 13, 2020. As of November 30, 2020, CDC reported that there are approximately 13,760,186 Americans who have been infected with the virus and over 273,160 have died from COVID-19. PPE is the healthcare workers primary defense against COVID-19. With the on-going pandemic and current supply chain shortages, the SNS has and continues to deploy PPE supplies to points of need in continued support of these healthcare workers. As requests for product increase with the rise in cases, the SNS must immediately increase storage, management, deployment preparation and distribution capabilities in order to continue to meet such requests.

The US Government has and is continuing to procure large quantities of PPE, Medical Supplies, and Pharmaceuticals in order to continue supporting response efforts and save American lives. As the Government has and continues to drastically increase its product inventory, there is an urgent need to increase the VMI storage and distribution capability, specifically for PPE & Testing Supplies. The SNS does not currently have the capability to rapidly distribute the large volume of product procured for the COVID response to a substantial number of locations throughout the United States each day. The SNS must leverage U.S. based medical distributors with existing infrastructure and current capabilities. Without the additional pallet spaces available immediately under VMI, the Government would not have a location to manage this product and make it available for the pandemic response.

Without the existing distribution network, the Government would be unable to enhance current distribution capabilities and deliver immediately to points of need.

The Vendor shall provide VMI (logistical and supply chain support) for 80,000 pallets of GFP. The following Product may be provided as GFP;

Gloves Gowns Coveralls Goggles Face Shields Masks N95 Shoe/Boot Covers Swabs Media (stored and shipped at ambient temperature) Diagnostic Tests

VMI services shall operate in 3 Phases:

Phase 1: Product Receipt/Inventory;

Phase 2: Product Warehousing and Management;

Phase 3: Product Distribution

Without either the VMI or Distribution capability of Henry Schein, the Government would have to delay receipt of critically needed PPE and would be unable to rapidly distribute this product to a large number of points of care per day;

thus, not allowing the SNS to provide critically needed medical supplies to healthcare providers, and placing American Citizens health at increased risk.

Product distribution is at the core of our mission.

b. Other facts supporting sole source procurement if any:

Henry Schein has been identified as one of the only vendors with immediate capability to VMI 80,000 pallet positions of PPE & Testing Supplies with distribution to points of care within their existing network. Further, these vendors have an existing infrastructure of geographically diverse warehouses and network of preloaded points of care that can immediately begin performing under this requirement upon award. Due to the current COVID-19 Pandemic and large influx of PPE & Testing products to meet their customer needs, other vendors within the industry do not have sufficient capacity nor a vast preexisting network of points of care to meet the requirement. The Government must issue a sole source award to Henry Schein to meet this urgent need. Henry Schein is a leading global manufacturer, repackager, and distributor of medical and laboratory products. Their current customer base encompasses 90% of the current health care providers including hospitals, clinics, dental offices, and points of care, making them well positioned to have the location of need already within their customer network, thus reducing time until delivery. Additionally, with 5 “mega” distribution centers larger than 2M sq/ft and numerous additional distribution centers delivering more than 43 million packages per year to U.S. healthcare facilities in all 50 states and territories, Henry Schein has a proven ability to rapidly manage and distribute medical products across the entire United States.

F. Program Office Certification:

Technical / Requirements Certification: By my signature below, I certify that the supporting data being used under the class J & A and certify the justification is true and accurate to the best of my knowledge.

David M.

Kelley -S

Digitally signed by David M. Kelley -S Date: 2021.04.12 17:14:19 -04'00'

Program/Project Manager (P/PM) Date Digitally signed by Lawrence

Lawrence Mccoy -S Mccoy -S Date: 2021.04.13 09:06:33 -04'00'

Contracting Officer (CO) Date

Head Contracting Authority (HCA) Date

*Senior Procurement Executive (SPE) Date

*IAW Acquisition Alert 2020-04 SPE approval is required for actions exceeding $150 million.