Justification and Approval AMO.pdf

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

Pursuant to FAR Subpart 6.302-5

1. Contracting Activity: Department of Veterans Affairs Strategic Acquisition Center

10300 Spotsylvania Avenue Suite 400 Fredericksburg VA 22408

2. Description of Action:

The purpose of this Justification and Approval (J&A) action is to permit the noncompetitive extension of the national contract vehicle currently in place with VA119-17-D-0010 AMO Sales and Services, Inc. to ensure continued ordering access and availability of surgical implants.

The J&A action is necessary to allow VA clinicians and veterans continued access to a robust supply chain for ordering and delivery of prosthetics surgical implants during the COVID-19 pandemic emergency. The resulting noncompetitive contract extension, to be executed via modification, will be strictly for a base ordering period of 6 months and one (6 month) option ordering period; this equates to a total maximum allowable 12 months/1 year extension to the contract ordering period;

12/1/2021 – 5/31/2022 and one six-month option period 6/1/2022 – 11/30/2022.

The modification to extend the ordering period on the national contract will be executed only for those items, at the previously agreed upon rates, that are currently available on contract during the final ordering period.

3. Description of the Supplies or Services including Estimated Values:

The supplies to be acquired via the J&A action consist of various types of prosthetics surgical implants needed for a variety of prosthetics related surgeries and patient treatment and include only items from the following product lines:

• Surgical implants in support of Prosthetics

These product lines encompass a variety of different items considered prosthetics surgical implants, to include auxiliary products (screws, anchors, plates etc.) and instrumentation sets required for use by clinicians performing the implant surgery, which may be required by a VA Clinician for a Veteran patient’s treatment. The exact number and exact type of prosthetics surgical implants that are on the national contract vehicle is constantly changing based on clinicians’ requirements for patient treatment and advances in technology; currently throughout the entirety of the prosthetics national contract vehicle portfolio there are over 200,000+ individual prosthetics surgical implant line items.

The estimated dollar value of this J&A action is The estimated dollar value is based on FY20/21 sales of the prosthetics surgical implants on the current national contract vehicle. The IGCE value is based on the monthly average of sales exclusively on FY21 since it is most representative of the projected surgical implant market environment in FY21-22. Like FY20, FY21-22 is likely to be partially impacted by COVID-19 and experience a reduced surgical implant spend due to restrictions on elective procedures in VA Medical Centers. The estimated dollar value of , is derived based on the average monthly sales during FY20/21 against this contract. The average monthly sales were calculated to be

All prosthetics surgical implants to be made available under this J&A and executed via modification of the national contract vehicle ordering period have previously been reviewed based on product usage, product form/function, and product pricing by VHA Prosthetics and Sensory Aid Service (PSAS) and the Strategic Acquisition Center (SAC).

4. Statutory Authority:

The statutory authority permitting other than full and open competition is Title 41 United States Code (U.S.C.) 3304(a)(5) and 38 U.S.C. § 8123 implemented by the Federal Acquisition Regulation (FAR) subpart 6.302-5(a)(2)(i) and VA Acquisition Regulation (VAAR) 806.302-5 (b) (1) entitled, “Authorized or Required by Statute”.

5. Rationale Supporting Use of Authority Cited Above:

VHA Directive 1081.01(1) dated October 29, 2018, establishes policy, procedures, and responsibilities for the use of Title 38 United States Code (U.S.C.) 8123 authority for the procurement of prosthetic implants, without regard to any other provision of law. In accordance with 38 U.S.C. § 8123, "the Secretary may procure prosthetic appliances and necessary services required in the fitting, supplying, and training and use of prosthetic appliances by purchase, manufacture, contract, or in such other manner as the Secretary may determine to be proper, without regard to any other provision of law."

Additionally, 48 CFR § 806.302-5(b)(1) states that full and open competition need not be provided “[f]or contracts for orthopedic and prosthetic appliances and related services including research, cite 38 U.S.C. 8123. (38 U.S.C. 8123).” The prescribing clinician will provide the necessary clinical evidence to support medical need for specialized Prosthetic surgical implant and supporting equipment for the Veteran who is eligible, referred, and approved for care.

This need for non-competitive extension of the current contract ordering period envelops prosthetics surgical implants; the use of specific surgical implants is based solely upon a patient’s need and the physician's determination of medical necessity during a medical or surgical service(s) and/or procedure(s) at any of the

Veterans Affairs Medical Centers (VAMCs). A physician's decision to use a particular manufacturer's surgical implant is based on the technical characteristics of the implant and that it is expected to produce a higher quality of life for the patient or achieve certain therapeutic results.

Most surgical implant products are unique and proprietary to that individual manufacturer. The use of a particular manufacturer's surgical implant requires highly specialized training on the part of the physician. Once trained and comfortable with a manufacturer’s surgical implant, the physician will likely use that manufacturer's products for the duration of his or her career.

The purpose of this national contract vehicle is to directly support veteran patient care, relating to and through, the ordering of prosthetics surgical implants. The national contract vehicle facilitates the prescribing clinician’s ability to provide the most optimal care by having access to an ordering vehicle for specific prosthetics surgical implant items that have been technically reviewed to ensure compliance with laws and regulations and are available for ordering at pre-determined fair and reasonable pricing. The national contract vehicle directly contributes to clinician efficiency in the veteran patient care process by saving time, money and reinforcing adequate technical safeguards.

The national contract vehicle was originally established via other than full and open competition by way of the statutory authority of 38 (U.S.C) 8123 which remains applicable to the products covered under the J&A. The national contract vehicle is for a period of performance of 12/01/2016-11/30/2021. The final ordering period under this contract happens to directly coincide with the ongoing COVID-19 pandemic. This pandemic has affected the national contract, and the efforts to establish new national contracts directly and severely.

The national contract vehicle is a compelling part of the VA prosthetics’ surgical implant supply chain contributing directly to patient care. In this role, the national contract vehicle has a process in which it is refreshed, on a bi-annual basis, to ensure access to the most current products available in the marketplace at the best available pricing. Due to the ongoing COVID-19 pandemic there has been an ongoing direct impact to the contract refresh process during the final ordering period. As part of executing the product refresh process, a technical review must be completed for each product before it can be added to the national contract vehicle. The technical review is done by a group of VA clinicians who are subject matter experts regarding prosthetic surgical implants. The clinicians support the technical review in addition to their roles providing direct veteran patient care.

The ongoing COVID-19 pandemic has directly impacted the clinician’s ability to execute the technical review as part of the refresh process. Throughout the pandemic there existed, at one time, a backlog of 473 products pending review that have been delayed due to clinician’s commitment of time to patient care during the COVID-19 pandemic.

Without question VHA’s preference during the ongoing COVID-19 pandemic is that clinician time is devoted to direct veteran patient care. Under the current COVID-19 operating procedures, other duties normally assigned to clinicians, such as the technical review of new surgical implants, is negatively impacted due to additional time devoted to patient care and lack of additional clinician resources during the pandemic emergency.

PSAS and SAC have been working hand in hand since the implementation of the current national contract vehicle on monitoring performance and actively planning how best to execute future national contract vehicles. All planning efforts to date have identified this unusual risk and have also indicated that due to the importance of the national contract vehicle and its role in the prosthetics surgical implant supply chain that the risk to lapse in coverage would be detrimental to the Government and to VA patient care. The COVID-19 pandemic, and the procedures in which clinicians must operate due to this unusual circumstance, will essentially not allow the execution of a new national contract before the expiration of the current ordering period. The extension of the ordering period sought via this J&A will ensure continuity in the current supply chain and eliminates the risk of failure to the prosthetics surgical implant supply chain on which veteran patient care relies.

Due to the noted specifics around the current ordering period for the national contract vehicle, the unacceptable risk to a lapse in available ordering vehicle, and the ongoing COVID-19 pandemic, it is incumbent upon the VA to ensure the availability of the current national contract via an extension to support a robust prosthetics surgical implant supply chain in support of veteran patient care. To maintain a robust and successful prosthetics surgical implant supply chain approval of this J&A for other than full and open competition is required.

6. Efforts to Obtain Competition:

Prosthetics surgical implants are products that are unique to each company and typically proprietary in nature. Although there are similarities amongst products, specific surgical implant(s) form and function are mostly unique to individual manufacturers. Therefore, the general nature and current market conditions for prosthetics surgical implants themselves, are a barrier to competition.

The purpose of this J&A is for approval of an extension of the national contract vehicle, via other than full and open competition, for a period of time to allow the ongoing clinician response to the COVID-19 pandemic to subside to ensure adequate personnel for planning of the follow on contracts and support for the technical review. The extension of the ordering period on the current national contract vehicle will ensure VA is able to maintain a successful and robust prosthetics surgical implant supply chain until such time as a new contract vehicle can be established through use of technical evaluations of products that could be called upon for use in patient care as determined by a clinician on an individual patient treatment basis.

The requirement for the current national contract vehicle was based on a technical review of, and for, clinician determination of medical necessity and experience, and any effort to award a new national contract based on any individual factor, or combination of factors, not including a technical review by clinicians would be detrimental to clinician’s choice and the requirements for ensuring optimal patient care. As it relates to the follow on contract, the approval of the J&A and the subsequent extension to the current national contract, will allow for all necessary personnel to participate in identifying additional sources of supply in conjunction with those vendors who currently have a national contract. In accordance with FAR 5.301, this action will be synopsized at award on "Contract Opportunities" under beta.SAM.gov and this justification will be made publicly available. In the event that subsequent information is received as it relates to vendors who do not currently have a national contract, that information will be included as market research for the follow-on effort and will be evaluated against the requirements respectively.

Utilizing the authority as detailed in FAR 6.302-5, it is appropriate to extend the ordering period of the national contract vehicle via approval of this class J&A, for a period of 6 months with an additional 6 month option by way of other than full and open competition.

7. Determination of Fair and Reasonable Price:

The modification for extension of the ordering period on the national contract vehicle will utilize the products and pricing that are currently established and were previously determined fair and reasonable. Any new products that may be added via the refresh process will follow the procedures available to the contracting officer for determining pricing fair and reasonable as has been done throughout the life of the contract vehicle.

8. Market Research:

In accordance with Federal Acquisition Regulation (FAR) Part 10 and VA Acquisition Regulation (VAAR) 810, the VA is conducting market research to arrive at the most suitable approach to acquiring Prosthetics’ surgical implants and maintaining the necessary supply chain. This market research, which has been ongoing, will be completed when the clinical subject matter experts come together in fall 2021 to form the integrated program team (IPT) and execute the process to define the requirements.

The Government has a requirement for extending the period of performance on this national contract vehicle for prosthetics surgical implants by up to a maximum of 12 months, during which the Contractor will continue to perform the services of providing prosthetics surgical implants on an as needed basis, determined by clinicians for veterans patient care.

The proposed modification to extend the ordering period of the national contract vehicle will support VA Medical Centers in performing well qualified and necessary veteran patient care nation-wide. The period of performance for this action covers a six-month base period 12/1/2021 – 5/31/2022 and one six-month option period 6/1/2022 – 11/30/2022.

9. Other Facts:

No additional facts

10. A Listing of the Sources, if any, that Expressed an Interest in the Acquisition:

No additional action or data required.

11. Statement of Actions the Agency May Take to Overcome Barriers to Competition in the Future:

The purpose of the J&A action is to allow adequate time for the ongoing clinician responses to the COVID-19 pandemic; as the pandemic winds down clinician availability will open back up and will allow for the execution of the follow on national contract requirements to be executed. Under that effort, the intent is for the VA to work with its industry partners on the planning of the next generation of prosthetics surgical implants contract vehicles and how best to continue a robust and successful prosthetics surgical implant supply chain.

It is the Government’s intent to maintain the most successful, and robust, prosthetics surgical implant supply chain, in support of patient care, during the ongoing COVID-19 pandemic by extending the ordering period of the national contract vehicle under the authority of this J&A.