Justification for Other than FO Competition - Hydralazine.pdf

Justification for Other than Full and Open Competition

Federal Acquisition Regulation (FAR) 6.302-7

1. Identification of Agency and Contracting Activity, and specific identification of the document as a “Justification for other than full and open competition”.

The Department of Veterans Affairs (VA), Office of Acquisition and Logistics (OAL), National Acquisition Center (NAC) contracting office proposes to enter into a contract on a basis of other than full and open competition for Veterans Health Administration (VHA) Pharmacy Benefits Management (PBM), program office. This document sets forth the justification and approval for other than full and open competition for the acquisition described herein, under the authority of FAR 6.302-7 Public Interest.

2. Nature and/or description of the action being approved.

VHA PBM has identified Hydralazine Hydrochloride (HCL) injections as uniform preferred products for standardization. The purpose of this acquisition, along with other standardization contracts awarded by the NAC’s National Contract Service (NCS), Pharmaceutical Division, is to establish a national contract source for all VA users of this commercial drug product. The contracted product will be ordered and delivered via the VA Pharmaceutical Prime Vendor (PPV) program.

This procurement is part of a pilot program requested by VA OAL and the White House (WH) in 2023. OAL and WH’s goal is to award contracts to domestic manufacturers, with the hopes of strengthening supply chains and encouraging domestic manufacturing. While the goal of encouraging domestic manufacturing was originally articulated by the previous administration in Executive Order 14005, this Executive Order has not been rescinded by the new administration. VHA PBM submitted this procurement request to NCS with a requirement to limit competition to contractors offering product that is U.S.-made.

Although this procurement will not be using the provisions of the Trade Agreements Act as implemented by FAR Subpart 25.4, VA has opted to utilize the definition of a U.S.-made end product from this subpart. FAR 25.003 and FAR 52.225-5 define “U.S.-made end product” as an article that is mined, produced, or manufactured in the United States or that is substantially transformed in the United States into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was transformed.

VA will award a Firm-Fixed Price, Indefinite Delivery Requirements-type contract that is competitively negotiated with a base year and four pre-priced option years. This contract type best benefits the Government due to the minimal risk to the Government. The procurement is for commercial products minimizing the level of complexity of the procurement; the acquisition history for drugs is well-established, decreasing contractor risk; the exact times and exact quantities of future deliveries are not known at the time of contract award; and the procurement will be competed with expected results of competitive pricing.

VA will award to the lowest price technically acceptable and responsible offeror with a satisfactory record of past performance.

A single-award (Requirements) contract provides product consistency by ensuring that the same product (including physical specifications) can be provided for the entire contract period, which reduces the likelihood of patient medication errors and wouldn’t be possible with a multiple-award contract. All pharmaceutical national contracts contain special language regarding backorders/product shortages, which holds the contractor liable for any inability to supply the product during the contract period and ensure product availability throughout the contract period.

This Requirements-type contract type is common for pharmaceutical national contracts, and consistently results in significant cost savings for the Government.

The total estimated contract value of this acquisition exceeds the World Trade Organization Government Procurement Agreement (WTO GPA) and other thresholds listed in FAR 25.402. As stated in FAR 25.402(a)(1):

The Trade Agreements Act (19 U.S.C. § 2501, et seq.) provides the authority for the President to waive the Buy American statute and other discriminatory provisions for eligible products from countries that have signed an international trade agreement with the United States, or that meet certain other criteria, such as being a least developed country. The President has delegated this waiver authority to the U.S. Trade Representative. In acquisitions covered by the WTO GPA, Free Trade Agreements, or the Israeli Trade Act, the U.S. Trade Representative has waived the Buy American statute and other discriminatory provisions for eligible products. Offers of eligible products receive equal consideration with domestic offers.

As the Trade Agreements Act would apply to this acquisition due to the estimated contract value, the restrictions and policies under FAR Subpart 25.1 Buy American- Supplies, are not applicable to this acquisition. This acquisition is part of a pilot program with the intended goal of bolstering U.S. manufacturing, as OAL and WH consider it in the public interest to do so. This public interest is specifically highlighted in Executive Order 14005. Section One of Executive Order 14005 states, “The United States Government should, whenever possible, procure goods, products, materials, and services from sources that will help American businesses compete in strategic industries and help America's workers thrive.” This procurement seeks to fulfill this outlined policy by limiting sources of Hydralazine HCL injections to offerors of U.S. made end products. Because there is no guarantee that this program will accomplish the desired outcome, this product (Hydralazine HCL injections) was selected for this trial as the annual estimated quantities required are lower in comparison to other pharmaceuticals on National Contracts and comparable products are available on other contract vehicles, thus incurring a lesser risk should a contract award not be possible.

3. Description of the supplies or services required to meet the agency’s needs

(including total estimated value).

Hydralazine HCL injections are a drug available in both branded and generic form used to treat high blood pressure. Hydralazine HCL injections are not available on a current national standardization contract. Hydralazine HCL injections are available under Federal Supply Schedule (FSS) contracts.

This procurement is only for VA, including Consolidated Mail Order Pharmacies (CMOPs). Federal Health Care Center (FHCC) and State Veteran Homes (Option 2 only) will be participants; however, no estimated annual quantities are included as the quantities are nominal. The estimated requirements are shown in the table below:

ITEM DESCRIPTION

PACKAGE

SIZE

(VIAL)

VA

ESTIMATED

ANNUAL

USAGE

(VIALS)

HYDRALAZINE HCL 20MG/ML

INJ, 1ML 1 82,630

4. The statutory authority permitting other than full and open competition.

The statutory authority permitting other than full and open competition is 41 U.S.C. § 3304(a)(7) as implemented by FAR 6.302-7, which authorizes, under certain conditions, contracting without providing for full and open competition when the agency head determines that it is not in the public interest in the particular acquisition concerned.

FAR 6.302-7(c)(1)(ii) indicates that a written determination to use this authority shall be made in accordance with FAR Subpart 1.7 by the head of the executive agency and that this authority may not be delegated.

Furthermore, FAR 6.302-7(c)(2) states: “Congress shall be notified in writing of such determination not less than 30 days before award of the contract.” Finally, FAR 6.302-7(c)(4) states: “This Determination and Finding (D&F) shall not be made on a class basis”.

5. Demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited.

The potential contractors under this acquisition do not have any special qualifications compared to other sources for Hydralazine HCL injections, as all prescription pharmaceuticals (such as Hydralazine HCL injections) sold in the United States are required to meet the same specifications and receive the same FDA inspections, regardless of country of origin. However, the potential contractors under this acquisition will propose products that are U.S.-made. OAL and WH’s goals for this pilot project are two-fold: 1) decrease supply chain disruptions by soliciting only U.S.-made products; and 2) encourage domestic manufacturing by limiting sources to U.S.-made products.

6. Description of the efforts made to ensure that offers are solicited from as many potential sources as is practicable, including whether a notice was or will be publicized as required by Subpart 5.2 and, if not, which exception under 5.202 applies.

The pre-solicitation notice and solicitation will be posted on SAM.gov as required by FAR Subpart 5.2, after this justification and approval is fully executed. Proposals from all contractors that offer U.S.-made products will be considered.

7. Determination by the Contracting Officer that the anticipated cost to the

Government will be fair and reasonable.

A determination of fair and reasonable pricing will be made prior to award in accordance with FAR 15.404-1(b)(2). Despite the limiting of competition to only sources with U.S.-made products, the Contracting Officer expects multiple offers to be received, which would allow for a comparison of offered prices received in response to the solicitation, in addition to the other price analysis techniques and procedures listed at FAR 15.404-1(b)(2).

8. Description of the market research conducted, the results, or a statement of the reason market research was not conducted.

Hydralazine HCL injections are not currently available under a National Contract.

Hydralazine HCL injections are available under FSS contracts.

Market Research information has been redacted.

9. Other facts supporting the use of other than full and open competition.

This pilot program is being pursued by request of VA OAL and WH in order to bolster the goals outlined in Executive Order 14005, which is outlined in section two of this document.

10. List of sources, if any, that expressed, in writing, an interest in the acquisition.

The Contracting Officer sent market research questionnaires to all identified potential sources in July 2023 and again in April 2025, after the pilot procurements were re-initiated by VA senior leadership.

Market Research information has been redacted.

11. Statement of actions the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services rendered.

While this acquisition will be limited to proposals offering U.S.-made products, this acquisition will be competed to the maximum extent practicable. Multiple sources with U.S.-made product are interested and capable of participating in this acquisition. Both the pre-solicitation notice and solicitation will be posted to SAM.gov so that any company that did not respond or was not interested or capable when initial market research was conducted will still be able to submit an offer.

Certification

The determination to limit competition as described in this document in accordance with FAR 6.302-7 Public Interest was approved by the Secretary of Veterans Affairs on June 25, 2025.