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Control Number:

Source Selection Information - See FAR 2.101 and 3.104-4

Justification for an Exception to Fair Opportunity

Federal Acquisition Regulation (FAR)16.505 (b)(2)(ii)(B)

1. Identification of the Agency and Contracting Activity: Defense Health Agency (DHA), DHA Contracting Activity (DHACA), Managed Care Contracting Division (MC-CD), Aurora, Colorado.

2. Nature and/or Description of Action being Approved: The U.S. pharmaceutical industrial base poses a critical vulnerability due to its heavy reliance on foreign sources for Active Pharmaceutical Ingredients (APIs), Key Starting Materials (KSMs), and finished dose manufacturing. Consequently, the Department of War (DoW) requires independent technical, regulatory, and economic due diligence assessments of proposed manufacturing solutions to support the domestic production of military-essential medications. The proposed action is the award of a firm-fixed-price, sole-source contract to Accenture Federal Services LLC. This action will secure urgent strategic consulting, supply chain mapping, and operational execution services required to establish domestic manufacturing capabilities (on shoring) for critical APIs.

The Department of War relies on DLA Troop Support to sustain critical Class VIII (Medical) materiel for Combatant Command (CCMD) OPLANs. Current intelligence and supply chain indicators reveal immediate, unmapped vulnerabilities in the raw materials and APIs required to manufacture life-saving therapeutics (e.g., trauma medications, antibiotics). Department of War (DLA & DHA) would remain strategically blind to impending supply disruptions, severely degrading the Combat Support Agency's (CSA) ability to proactively stockpile or shift sourcing.

The contemplated action will be awarded as a task order under the existing IDIQ contract referenced below. The contract ordering vehicle Defense Logistics Agency, JETS IDIQ, Accenture, SP4709-24-D- 0079, NAICS Code 541519.

3. Description of Supplies/Services and Estimated Value: Under this requirement, Accenture Federal Services LLC (the contractor) will deliver comprehensive, data-driven due diligence assessments and supply chain mapping reports focused on securing the military pharmaceutical supply chain and supporting domestic manufacturing initiatives. The estimated total value for these services is

Task 1: Proposal assessment. The contractor shall review proposal(s) provided by the Government to identify strengths, weaknesses, financial risks, hidden capability gaps, and unsupported or unsubstantiated assumptions to determine the viability of domestic onshoring

(b)(4)

(b)(4)

(b)(4) (b)(4) (b)(4) (b)(4) (b)(4) (b)(4) (b)(4)

(b)(4)

(b)(4)

(b)(4) (b)(4)

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Source Selection Information - See FAR 2.101 and 3.104-4 initiatives. The contractor shall evaluate the offeror�s proposed strategies across the following critical domains:

Manufacturing approach and finished dose manufacturing strategy Technology readiness level (TRL) Facility strategy (including greenfield vs. brownfield asset utilization) Regulatory approval strategy and FDA compliance pathways (Recommended Add) API and KSM dependencies and sourcing strategies Intellectual Property (IP) and licensing/Freedom to Operate (FTO) Status (Recommended

Add) Supply chain assumptions, transportation, and geographic risks Environmental permitting and hazardous waste mitigation plans (Recommended Add) Capital expenditure (CapEx) and Operating cost (OpEx) assumptions Schedule and milestone assumptions (to include construction, commissioning, and FDA validation)

Task 2: Technical feasibility assessment. The contractor shall conduct a comprehensive Technical Feasibility Assessment to verify whether the offeror�s proposed manufacturing models, facilities, and timelines can realistically support the domestic production of military-essential medications. The contractor shall evaluate and deliver findings on the following areas:

Production Viability Capacity & Volume Audit Scheduled & Timeline Realism Regulatory Feasibility

Task 3: Economic and financial assessment. The contractor shall conduct a comprehensive economic and financial assessment of the referenced government provided proposal, Exhibit A.

The contractor shall develop independent estimates for the cost per kilogram of API, cost per finished dosing unit, and the total program cost. Additionally, the contractor shall develop break-even analyses and Return on Investment (ROI) models. Following these estimates, the contractor shall perform a cost-competitiveness analysis, comparing the projected domestic production costs against current foreign-sourced production baselines. Finally, the contractor shall propose relevant economic incentives and market interventions to ensure long-term viability, including, but not limited to, loans, direct capital awards, long-term offtake agreements, and strategic procurement commitments.

Task 4: Recommendation. Requires the synthesis of thousands of data points regarding supply chain illumination, API chemical synthesis viability, and complex financial ROI modeling generated during Tasks 1 through 3. Based on the findings from the technical, economic, and supply chain assessments (Tasks 1�3), the contractor shall provide a formal, substantiated advisory recommendation for each proposal. The contractor shall deliver a clear Course of Action (COA) advising the Government whether to:

1. Proceed with the project as proposed;

2. Proceed with specific, documented modifications or risk-mitigation strategies;

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Source Selection Information - See FAR 2.101 and 3.104-4

3. Pause to conduct additional, targeted analyses; or

4. Do not proceed.

All recommendations must include a supporting rationale and a summary of key decision drivers.

Period Period of Performance Estimated Value Type of Funding Base Period 10 weeks from TO O&M

Total

4. Exception to Fair Opportunity: FAR 16.507-6(b)(1) (RFO)

The agency need for the supplies or services is so urgent that providing a fair opportunity would result in unacceptable delays.

5. Rationale Supporting the Exception to Fair Opportunity: In an memorandum, the Deputy Secretary of War directed the establishment of a Pharmaceutical Supply Chain Security Working Group (WG). Under the direction of the Assistant Secretary of War for Health Affairs (ASW(HA)), the WG will take the lead in mitigating the risks associated with foreign dependency on essential military medications. The WG is tasked with identifying critical vulnerabilities within the supply chain, formulating effective mitigation strategies, and delivering recommendations to Department of War Components. The memorandum provided that the ASW(HA) must provide, for USW(P&R) approval, the WG�s initial operation documents, including an initial Plan of Action and Milestones.

In light of the national security implications of this effort and the expressed Departmental desire for prompt action in conducting technical due diligence to illuminate supply chain vulnerabilities, DHA assesses that utilizing the fair opportunity process to select a vendor to deliver the tasks described above will result in unacceptable delays getting this project off the ground. Specifically, competing this technical evaluation task across the DLA JETS IDIQ would introduce a minimum 90-day administrative delay. Such a delay is unacceptable because it will cause the funding window to close, directly thwarting the Department�s mandate to rapidly reshore critical medical countermeasures and leaving the Joint Force vulnerable to foreign supply chain embargoes.

Based on market research, DHA is aware that Accenture Federal Services LLC (SP4709-24-D- 0079) is uniquely positioned to execute this assessment immediately. They currently possess the cleared Subject Matter Experts (SMEs), proprietary pharmaceutical supply chain mapping datasets, and established commercial-financial evaluation frameworks required to audit industrial onshoring proposals. Awarding to another vendor would require an unacceptable 60-day ramp-up period for personnel onboarding and the acquisition of commercial pharmaceutical intelligence tools, completely negating the Government's ability to meet the impending investment decision deadline. Nation-state cyber threats targeting military logistics require immediate remediation.

6. Other Facts:

(b)(4)

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Source Selection Information - See FAR 2.101 and 3.104-4

a. Procurement History:

(1) Is this a new requirement? Yes.

(2) If 6.a.(1) is No, was the action just prior to this one competed? N/A

(3) If 6.a.(2) is Yes, what has changed where this action cannot be competed? N/A

7. Actions to Remove or Overcome any Barriers to Competition: To remove or overcome barriers to competition for future acquisitions, the DoW will ensure that all data architecture, supply chain maps, and domestic manufacturing transition frameworks developed under this urgent contract are delivered with appropriate Government data rights. This will establish a baseline that can be provided to all potential offerors in future, long-term API management and manufacturing contracts, allowing for full and open competition once the immediate national security vulnerability is stabilized. To overcome barriers to competition for future acquisitions, DoW will require the delivery of all data architecture, supply chain maps, and transition frameworks with Government Purpose Rights (GPR). Securing these rights will ensure the Government is not locked in a proprietary solution. To actively foster future competition, the DoW will use these deliverables to draft a comprehensive, vendor-agnostic Performance Work Statement (PWS).

8. Market Research: The Offices of the Under Secretary of War for Research and Engineering (USW(R&E)) and the Under Secretary of War for Personnel and Readiness (USW(P&R)) jointly conducted a market scan of vendors commonly used for large underwritten loans made to large and small pharmaceutical companies operating in the United States by commercial banks. The offices jointly determined that there were few such vendors but only Accenture is capable of assessing such proposals with the combined technical and financial acumen to assess risk. The market research included a review of the JETS vendor pool, historical contracting data for similar pharmaceutical supply chain analytics efforts, and a capability assessment of vendors currently providing advanced data architecture and industrial base illumination to the Department of Defense.

9. Technical Certification:

I certify the supporting data under my cognizance, which are included in the justification, are accurate and complete to the best of my knowledge and belief.

Chief of Staff

OUSD P&R

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(b)(6)

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Source Selection Information - See FAR 2.101 and 3.104-4

10. Requirements Certification:

I certify the supporting data under my cognizance, which are included in the justification, are accurate and complete to the best of my knowledge and belief.

Director, Medical Industrial Base Policy

OUSW P&R

11. Fair and Reasonable Cost Determination:

I hereby determine the anticipated cost to the Government for this contract will be fair and reasonable.

Contracting Officer

DHA, MC-CD

(b)(4)

(b)(4) (b)(4)

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Source Selection Information - See FAR 2.101 and 3.104-4

12. Legal Review:

I have reviewed this justification and have found it to be legally sufficient.

General Counsel

OGC

13. Contracting Officer Certification:

I certify this justification is accurate and complete to the best of my knowledge and belief.

DHA, MC-CD

Review

I have reviewed this justification and find it adequate to support the exception to fair opportunity.

Concurrence

Chief of the Contracting Office

DHA, MC-CD

Competition Advocate DHA Contracting Activity (DHACA)

(b)(4)

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Source Selection Information - See FAR 2.101 and 3.104-4

Approval

Based on the foregoing justification, I hereby approve the procurement of independent technical, regulatory, and economic due diligence assessments of proposed manufacturing solutions to support the domestic production of military-essential medications in the amount of on an exception to fair opportunity basis pursuant to the authority of FAR 16.507-6(b)(1) (RFO), subject to availability of funds, and provided that the supplies or services herein described have otherwise been authorized for acquisition.

Competition Advocate DHA Contracting Activity (DHACA)