Justification and Approval_THRIVE_TRMS.pdf

Justification and Approval For Other Than Full and Open Competition

TO: Justin T. DiVenanzo, Supervisory Contracting Officer

THROUGH: Robin Martz, Director, Health Office

FROM: Michelle Kouletio, Activity Planner, Health Office

CC: Deborah Broderick, Agency Competition Advocate, Deputy Director, CTS

DATE: February 8, 2021

SUBJECT: Justification for Other than Full and Open Competition under the Expedited Procedures Package for USAID HIV/AIDS activities under the President’s Emergency Plan for AIDS Relief

REFERENCE: THRIVE Transforming Rwanda Supply Chain Activity

The U.S. Agency for International Development’s (“USAID”) Mission to the Republic of Rwanda (“USAID/Rwanda”) Health Office requests that the Supervisory Contracting Officer (“SCO”) approve this justification and approval for use of other than full and open competition (“J&A”) pursuant to the authorities under the Expedited Acquisition Assistance Procedures (“EPP”) for USAID HIV/AIDS activities under President’s Emergency Plan for AIDS Relief (“PEPFAR” and, together, the “HIV/AIDS EPP”), approved on December 31, 2019, and valid through December 31, 2024.

Tab 1 of the HIV/AIDS EPP, entitled “Authorization for Use of Other Than Full and Open Competition in the Award or Modification of Contracts Under the President’s Emergency Plan for AIDS Relief,” includes the Determination and Findings (“D&F”) that outlines the Administrator’s determination that PEPFAR activities compliance with full and open competition requirements would impair foreign assistance objectives. SCO approval of this J&A constitutes the justification required by ADS 302 to exercise the authority outlined in the D&F.

a) Nature and/or description of the action being approved.

The USAID/Rwanda Health Office requests that the SCO execute a sole source contract to the Rwanda Medical Supply Ltd (“RMS”), a Government of Rwanda (“GOR”) commercial parastatal, as determined by the USAID/Rwanda Resident Legal Officer (“RLO”) on January 13, 2021. This J&A covers both the negotiation and execution of a single award Indefinite Delivery, Indefinite Quantity (“IDIQ”) contract and all task orders issued thereunder.

b) A description of the supplies or services required to meet USAID’s needs (including the estimated value).

The SCO approved the Activity Planner’s recommendation to negotiate a single award IDIQ contract to cover RMS’s services related to the procurement, warehousing, distribution and management of all in-country logistics associated with USG-funded health commodities targeted for Rwandan beneficiaries.

Accordingly, USAID intends to issue task orders for specific commodities as they are approved throughout the contract’s period of performance.

Task Order 01 will include the procurement of HIV/AIDS commodities approved in the PEPFAR Country Operational Plan (“COP”) 2020. USAID would procure other health commodities in subsequent task orders.

While RMS will procure and distribute some non-PEPFAR health commodities under this contract, including for the President’s Malaria Initiative (“PMI”) and family planning programming, over 80% of the commodities procured will be HIV/AIDS commodities (including lifesaving HIV antiretroviral (“ARV”) medication), therefore determining use of the HIV/AIDS EPP. The Activity Planner developed an Independent Government Cost Estimate (“IGCE”) as the maximum contract ceiling for this IDIQ contract.

c) Identification of statutory authority permitting other than full and open competition.

Pursuant to the authority provided in 40 U.S.C. §113, USAID Acquisition Regulation (“AIDAR”) 706.302(a)(2) provides that “[f]ull and open competition need not be obtained when it would impair or otherwise have an adverse effect on programs conducted for the purposes of foreign aid, relief, and rehabilitation.” AIDAR 706.302(b) sets forth when the agency may use this authority. In this case, 706.302-70(b)(3)(ii) states that the authority applies to “[a]wards for countries, regions, projects, or programs for which the Administrator of USAID makes a formal written Determination and Findings (D&F), that compliance with full and open competition procedures would impair foreign assistance objectives, and would be inconsistent with the fulfillment of the foreign assistance program.” As noted above, on December 31, 2019, the Administrator approved the HIV/AIDS EPP, which remains valid through December 31, 2024. The EPP includes the D&F that authorizes the use of other than full and open competition when issuing HIV contracts under PEPFAR. See Attachment 1 to this J&A.

d) A discussion of the proposed contractor’s unique qualifications or the nature of the acquisition that requires use of the authority cited.

The Office of the Global AIDS Coordinator (“S/GAC”) set forth ambitious global targets for PEPFAR to transition 70% of funding to local partners as direct primes. For the past several years, USAID/Rwanda has discussed with S/GAC the transition of procurement and distribution of HIV commodities from an international prime partner (i.e., Chemonics International’s management of the Global Health Supply Chain--Procurement and Supply Management “GHSC--PSM”) contract to a local partner (i.e., RMS) in support of the PEPFAR global policy. S/GAC approved over $8 million in COP 2020 resources (for FY 2021 implementation) for the first HIV commodity procurement through RMS, to purchase life-saving HIV treatment medication for distribution across Rwanda.

RMS’s predecessor entity, the Medical Procurement and Production Division (“MPPD”) of the Rwanda Biomedical Center (“RBC”), served as the primary supplier in Rwanda of essential medicines for the health sector directly to 30 district pharmacies, referral hospitals, and other public health institutions.

With the technical assistance and support of USAID over the past five years, MPPD evolved from a government entity to a commercial parastatal through its separation in August 2019 from the GOR and its Cabinet-appointed leadership one year later in August 2020. MPPD’s mandate consisted of ensuring the availability of quality and cost-effective essential medicines to the Rwandan population. Most program commodities in Rwanda flowed through MPPD; the system was highly effective with availability of program commodities consistently at 95 percent or higher at district hospitals and health centers, and an order fill rate by MPPD also above 95 percent. Evolving from the merger of MPPD and 30 district pharmacies into one commercial parastatal, RMS transformed into the only in-country organization capable of delivering the required services of this activity at a national scale. For these reasons, RMS is uniquely qualified to provide the required services.

The Global Fund, the other large donor in Rwanda’s health sector, also funds RMS for its health commodity procurement and distribution requirements. Working together with the same in-country supply chain operator reduces the risks of duplication of health program commodity procurement and nationwide distribution efforts. USAID’s proposed direct contracting with RMS will reduce parallel supply chains in Rwanda. An integrated supply chain system increases efficiencies for all health commodity donors in Rwanda, could reduce reporting burden at facility level, and will increase accountability.

e) A description of efforts made to ensure that offers are solicited from as many potential sources as is practicable.

As described above in paragraph (d), RMS possesses the unique capability to procure and distribute health commodities in Rwanda given it's organizational mandate and the existing marketplace. As a result, the Activity Planner concluded that soliciting offers from other sources is not practicable for this acquisition.

f) A determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

USAID anticipates savings in program management costs over the lifetime of the award due to the transition from an international to a local partner and consolidation of activities into one prime partner.

This proposed transition of commodity procurement and related services from the GHSC-PSM contractor RMS aligns with both USAID’s Journey to Self-Reliance and PEPFAR’s transition to local partner initiative efforts. Direct contracting with the newly established RMS will improve supply chain efficiencies by supporting flexible and efficient procurement and distribution of health commodities, will streamline and reduce costs for the U.S. government, and will further Rwanda in its journey to self-reliance as RMS becomes more responsive to public needs.

The design team will develop an IGCE for each task order based on current market rates and historical costs incurred by the RMS. This IGCE will serve as the basis for the Contracting Officer to determine that the anticipated costs under this prospective award would be fair and reasonable, and in the best interest of the U.S. government. Prior to signing the award, the Contracting Officer.will conduct cost analysis in accordance with FAR 15.404.

g) A description of the market research conducted (see FAR Part 10) and the results or a statement of the reason(s) market research was not conducted.

USAID/Rwanda consulted with the GOR’s Ministry of Health and the RBC on USAID’s support of RMS's transition to a commercial parastatal. The privatization and transformation of MPPD into RMS constituted a key priority for the Minister of Health. RMS, as the primary public sector commodity procurement entity in Rwanda, has a unique ability to provide an entire range of HIV, malaria, family planning and other critical health commodities for the country’s public sector health facilities.

According to market research, RMS is the only entity capable of delivering these services as a result of the scope and scale. At present, the private sector is too fragmented to deliver the services at the level needed.

RMS will essentially begin with all of the resources of the former MPPD, including warehousing, vehicles, staff, decentralized locations (i.e., District Pharmacies) and existing information and data systems. The Global Fund is another donor with critical interest in health commodity procurement and distribution with subcontracting to RMS. It supports donors in Rwanda in terms of finding cost efficiencies in anticipation of donor resource declines for HIV in the future.

In addition to consultations with outside stakeholders on USAID’s support to RMS for health commodity procurement and distribution, USAID/Rwanda engaged a global consultant to support a strategic business plan to ensure RMS is set up to be a high performing organization to address key challenges within Rwanda’s supply chain system. The USAID design team also reviewed assessments and audits of Rwanda’s supply chain conducted by Chemonics/PSM, Ministry of Health, and Office of the Auditor General to ensure documented lessons and recommendations were incorporated into the design of this activity.

h) A listing of the sources, if any, that expressed, in writing, an interest in the acquisition.

None.

i) A statement of the actions, if any, USAID may take to remove or overcome any barriers to competition before any subsequent acquisition of the supplies or services required.

In support of USAID’s Journey to Self-Reliance and PEPFAR’s transition to local partner initiatives, USAID/Rwanda focuses implementation through and capacity building of local organizations.

Contracting with RMS will contribute to a more sustainable, country-led national supply chain. While at this time RMS has a unique capability to procure the goods and services required by USAID/Rwanda’s Health Office to implement its lifesaving health programming, USAID will conduct an analysis of the market and local context to determine whether competition is appropriate in future activities.

RECOMMENDATION

The Activity Planner recommends that the SCO approve this J&A pursuant to the above authorities. This approval constitutes the justification for other than full and open competition required by Tab 1 of the above-referenced D&F.

CERTIFICATION

The requirement for technical certification at FAR 6.303-1(c) is fulfilled through:

a. The signature of the Technical Officer below certifying the specific supporting data for this J&A;

and

b. The HIV/AIDS EPP, approved on December 31, 2019, and valid through December 31, 2024.

Technical Officer:

I hereby certify that the supporting data which form a basis for the justification are complete and accurate to the best of my knowledge and belief.

Planner Signature Date Signed by Planner

Michelle Kouletio, Program Support Team Leader USAID/Rwanda Health Office

MICHELLE LYN

KOULETIO

(affiliate)

Digitally signed by MICHELLE LYN KOULETIO (affiliate) Date: 2021.02.12 22:52:55 +02'00'

APPROVAL

SCO Signature Date Signed by CO

Justin T. DiVenanzo Supervisory Contracting Officer Director, Office of Acquisition and Assistance USAID/Rwanda and USAID/Burundi

PROGRAMMATIC CLEARANCE

Cleared via email January 20, 2021

Robin Martz Date Director, Health Office, USAID/Rwanda

Cleared via email January 22, 2021

Maria Kim Date Director, Program Office, USAID/Rwanda

RESIDENT LEGAL OFFICER CLEARANCE

Cleared via email January 22, 2021 Stephanie Altman Date Regional Legal Officer, USAID/Rwanda

Attachment 1: Action Memorandum to Approve the Expedited Procedures Package for PEPFAR, Signed on December 31, 2019

Justin Troy DiVenanzo

Digitally signed by Justin Troy DiVenanzo Date: 2021.02.12 14:23:19 +02'00'