LSJ signed HCA 02.pdf

VHAPM Part 808.405-6 Limiting Sources Attachment 2: Request for Limited Sources Justification Format >SAT

VHAPM Part 808.405-6 Limiting Sources Page 1 of 7 Original Date: 08/30/2017 Revision 02 Eff Date: 02/21/2020

LIMITED SOURCES JUSTIFICATION

ORDER >SAT

FAR PART 8.405-6

Acquisition Plan Action ID:___36C256-20-AP-2881__________________

(1) Contracting Activity: Department of Veterans Affairs, VISN 16, Southeast Louisiana Medical Center, Surgery & Medicine Service Medical Center requests Network Contracting Office 16 new Ratification requests with purchase request numbers 629-18-4-7224-1192 and 629-19-3-7224-1542 combined.

(2) Description of Action: This acquisition is conducted under the authority of the Multiple- Award Schedule Program (41 U.S.C. 152(3) and 40 U.S.C. 501).

This is a request for Ratification payment for an unauthorized commitment of purchase of Olympus America Inc medical equipment flexible scope lease agreements and maintenance services. The Olympus scopes lease agreement is the result of a VHA policy to standardize and lease scopes rather than purchase for their Outpatient Clinic. The Southeast Louisiana Veterans Health Care System, (SLVHCS), VA Medical Center, New Orleans, Louisiana, is requesting a sole source, pursuing a vendor/contractor to provide the following materials, services, scopes, and supporting items on a lease agreement. This is a request for Ratification to services rendered for the period of performance May 1, 2018 through Aug 31 2018, and Oct 1, 2018, through Nov 30, 2018. The leasing of the Olympus medical equipment was for continuity of care and continued services when a new contract was not established upon expiration of a contract on April 30, 2018.

An integrated product team has determined that national standardization creates the best value, enhances the safety and quality of patient care, and results in reduced variability in the number of different processes required for endoscope setup, use, and reprocessing, thus reducing the potential for negative patient outcomes and errors.

Order against: FSS Contract Number: ___V797P-2065D____________________

Name of Proposed Contractor: Olympus America Inc

Street Address: 3500 Corporate Parkway

City, State, Zip: Center Valley, PA 18034

Phone: 901-359-6830

VHAPM Part 808.405-6 Limiting Sources Page 2 of 7 Original Date: 08/30/2017 Revision 02 Eff Date: 02/21/2020

(3) Description of Supplies or Services:

The estimated value of the proposed action is $ 1,837,396.49

This is a request for Ratification of an unauthorized commitment for payment of $1,837,396.49 for the period of performances that began 1 May 2018, through 31 August 2018, and a second period of performance 1 October 2018, through 25 November 2018, for several of Olympus America Inc’s medical equipment scope leases and maintenance services. Services were rendered and accepted by SLVHCS without a contract during this period of performances that was a result of an unauthorized commitment (UAC).

The UAC occurred as SLVHCS continued to provide for Veteran patients receiving medical care 24/7 for treatment, cancer evaluations, biopsies, level of care determinations, and post-operative care assessments. The facility had a bona fide need to use the leased equipment, which prevented the potential negative patient care outcomes during the expansion of patient care services and medical center activation.

The lease agreement was a critical requirement in the daily treatment of Veterans in diagnosing various types of ailments that require immediate attention and continuous screening. A shortfall in not having the lease agreement would have caused an impact in patient care that would have otherwise caused further ailments or death to our Nation’s Veterans.

(4) Identify the Authority and Supporting Rationale (see below and if applicable, a demonstration of the proposed contractor’s unique qualifications to provide the required supply or service.

FAR 8.405-6(a)(1)(A): An urgent and compelling need exists and following the ordering procedures would result in unacceptable delays:

FAR 8.405-6(a)(1)(B): Only one source is capable of providing the supplies or services required at the level of quality required because the supplies or services are unique or highly specialized;

VHA Policy has been established by the Deputy Undersecretary for Health for Operations and Management that all facilities must standardize on a specific scope lease contract. The objective of the national standardization was to mitigate the risk of different processes for cleaning and handling. The current competencies, equipment, training, and procedures are specific to the products utilized in the outpatient clinic.

SLVHCS had the Olympus scopes currently in the medical center and required the continuation of services. This requirement is for Ratification payment of an unauthorized commitment for the leasing and maintenance services. The Olympus medical equipment was already in use at the medical center, since 2015, and is the latest technology on the market. The unauthorized commitment was committed for continuation of services that prevented patient care stoppage during the medical center activation of the new hospital that was built in New Orleans.

SLVHCS required the usage of the Olympus scope for continuity of care. Olympus America Inc is the manufacturer of the scopes and had sole proprietary rights for providing the equipment

VHAPM Part 808.405-6 Limiting Sources Page 3 of 7 Original Date: 08/30/2017 Revision 02 Eff Date: 02/21/2020 and maintenance services. There are no other authorized technicians or distributors for this medical equipment.

FAR 8.405-6(a)(1)(C): In the interest of economy and efficiency, the new work is a logical follow-on to an original Federal Supply Schedule order provided that the original order was placed in accordance with the applicable Federal Supply Schedule ordering procedures. The original order must not have been previously issued under sole source or limited source procedures.

FAR 8.405-6(b): Items peculiar to one manufacturer:

A patent, copyright or proprietary data limits competition. The proprietary data is:

These are “direct replacements” parts/components for existing equipment.

The material/service must be compatible in all aspects (form, fit and function) with existing systems presently installed/performing.

(5) Describe Why You Believe the Order Represents the Best Value consistent with FAR 8.404(d) to aid the contracting officer in making this best value determination:

The Olympus scopes were currently in use at SLVHCS and the unauthorized commitment occurred when a new contract was not awarded upon the expiration of the previous contract.

SLVHCS determined to continue the leasing and maintenance services and Olympus continued to provide the equipment. The costs charged to SLVHCS during the UAC period of performance were charged at the same rate as the previous contract that had expired on April 30, 2018.

SLVCHS Leadership determined the stoppage of patient care would force the facility to outsource the medical procedures of the affected patients as well as eliminate the continuity of their care with the Veteran’s provider. The chart below is the Fiscal Year (FY) 18 Center for Medicare Services reimbursement rates. Based on the total number of procedures per day for seven months without a contract, or continuation of services, SLVHCS’s estimated community care cost would have been $13,265,896.00.

Procedure Specialty Cost, Community Procedure only

Physician's Fee Total Cost Total number of procedures per day Total Cost/per week Total cost/7 months

Cystourethroscopy Urology $3,706.03 $291 $3,996.91 4 $79,938.20 $2,238,269.60 EGD w biopsy , Esophagogastroduodenosc opy, flexible

GI $2,743.26 $401 $3,144.30 12

$188,658.00 $5,282,424.00

Flexible fiberoptic endoscopic Evaluation ENT $1,247.14 $211 $1,458.52 8 $58,340.80 $1,633,542.40 Laryngoscopy, flexible ENT $2,341.00 $391 $2,732.00 10 $136,600.00 $3,824,800.00 Bronchoscopy Pulmonary $2,341.00 $391 $2,732.00 3 $40,980.00 $286,860.00 Total Cost $504,517.00 $13,265,896.00

VHAPM Part 808.405-6 Limiting Sources Page 4 of 7 Original Date: 08/30/2017 Revision 02 Eff Date: 02/21/2020

Prior to the UAC, that began 1 May 2018, Olympus America was providing the services since 2015, under contract #V797P2065D, VA256-15-F-0360, funding document 629-15-1-0106-0001.

Due to the activation of the newly built New Orleans hospital, the requirements related to the opening of the new medical center and patient treatment, there remained a requirement for a complete endoscopic system, supporting medical equipment, preventative maintenance, endoscopic scopes, medical towers, and repair services so that SLVHCS could continue providing medical care, emergency care, and treatment to the Veterans.

During the previous contract SLVHCS had received small discounts from the FSS Schedule pricing on the contract. The chart below is a snapshot of that comparison used to support the standard of work.

Price comparison example that indicates SLVHS was paying less than the FSS during the 2015 contract:

Item description FSS Contract SLVHCS Contract Difference

OTV-S, Cam Head $14,668.44 $14,000.00

PEF-V Transnasal Scope $15,180.00 $14,572.80

ENF-GP Laryngo Fiber scope $6,633.15 $6,626.88

Cost $36,481.59 $35,199.68 $1,281.91

The costs charged to SLVHCS during the UAC period that began for May 1 2018 – Aug 31, 2018 and Oct 1, 2108 through Nov 30, 2018 were the same as the costs charged under the previous contract. Based on the historical costs and the FSS Schedule V797P-2065D, the costs are deemed fair and reasonable.

(6) Describe the Market Research Conducted among schedule holders and the results or a statement of the reason market research was not conducted.

Prior to the UAC, Olympus America was providing the services since 2015 (contract V797P2065D, VA256-15-F-0360, funding 629-15-1-0106-0001). Due to the activation of the newly built hospital, requirements related to the opening of the new medical center and patient treatment, The vendor’s price was determined to be fair and reasonable based on the requirements for a complete endoscopic system, supporting medical equipment, preventative maintenance, endoscopic scopes, medical towers, and repair services so that SLVHCS could continue providing medical care, emergency care, and treatment to the Veterans. The FSS contract provided ability to lease an all-inclusive endoscopic model plus its standard set of auxiliary support items, warranty, in-service training, and refresher training on

VHAPM Part 808.405-6 Limiting Sources Page 5 of 7 Original Date: 08/30/2017 Revision 02 Eff Date: 02/21/2020 equipment/software upgrades. To facilitate the attainment of the acquisition objectives, we needed to utilize the existing system.

During the period of performance of the unauthorized commitment the vendor costs were under the FSS Schedule V797P-2065D and comparable to the costs charged under the previous contract #VA256-15-F-0360, providing for the same leasing and maintenance services. The Vets First Law does not apply in this application as Olympus is the manufacturer of the required medical equipment and sole proprietary of the services.

(7) Any Other Facts Supporting the Justification:

SLVHCS committed the UAC and continued the usage of the Olympus scope leasing services as determined the stoppage of patient care would force the facility to outsource the medical procedures of the affected patients as well as eliminate the continuity of their care with the Veteran’s provider. The chart below is the FY 18 Center for Medicare Services reimbursement rates. Based on the total number of procedures per day for seven months without a contract, SLVHCS’s estimated community care cost would have been $13,265,896.00.

Procedure Specialty Cost, Community Procedure only

Physician's Fee Total Cost Total number of procedures per day Total Cost/per week Total cost/7 months

Cystourethroscopy Urology $3,706.03 $291 $3,996.91 4 $79,938.20 $2,238,269.60 EGD w biopsy , Esophagogastroduodenosc opy, flexible

GI $2,743.26 $401 $3,144.30 12

$188,658.00 $5,282,424.00

Flexible fiberoptic endoscopic Evaluation ENT $1,247.14 $211 $1,458.52 8 $58,340.80 $1,633,542.40 Laryngoscopy, flexible ENT $2,341.00 $391 $2,732.00 10 $136,600.00 $3,824,800.00 Bronchoscopy Pulmonary $2,341.00 $391 $2,732.00 3 $40,980.00 $286,860.00 Total Cost $504,517.00 $13,265,896.00

SLVHCS Leadership and individual whom committed the UAC had believed that continuation of services was necessary for Veteran patients receiving medical care 24/7 for treatment, cancer evaluations, biopsies, level of care determinations, and post-operative care assessments. The facility had a bona fide need to use the leased equipment, which prevented the potential negative patient care outcomes during the expansion of patient care services and medical center activation. This ratification is requested based on the need for high-risk and emergent care for Veterans.

(8) A Statement of the Actions, if any, the agency may take to remove or overcome any barriers that led to the restricted consideration before any subsequent acquisition for the supplies or services is made:

Olympus scopes are part of a VHA Standardization program. The usage of the Olympus scopes is expected to remain in effect as part of this program and cannot be alleviated.

Olympus is the manufacturer of the medical equipment and has sole proprietary rights for providing the leasing and maintenance services with their own certified technicians. Due to sole proprietorship, Olympus America will remain as the sole source vendor, and this cannot be alleviated.

(9) Requirements Certification: I certify that the requirement outlined in this justification is a Bona Fide Need of the Department of Veterans Affairs and that the supporting data under my cognizance, which are included in the justification, are accurate and complete to the best of my knowledge. I understand that processing of this limited sources justification restricts consideration of Federal Supply Schedule contractors to fewer than the number required by FAR Subpart 8.4.

May 15, 2020

SIGNATURE DATE

Nathan Dion Administrative Officer Surgery Service / SLVHCS

NAME TITLE SERVICE LINE/SECTION

Southeast Louisiana Veterans Health Care System

FACILITY

(10) Approvals in accordance with the VHAPM Part 806.3 OFOC SOP: This part if filled out by Contracting Staff as part of the Justification

a. Contracting Officer’s Certification (required): I certify that the foregoing justification is accurate and complete to the best of my knowledge and belief.

CONTRACTING OFFICER SIGNATUREDATE

Dena Young, Contracting Officer Fayetteville, AR NCO 16__________

NAME AND TITLE FACILITY/NCO/PCO

b. One Level Above the Contracting Officer (Required over the SAT but not exceeding $700K):

I certify the justification meets requirements for other than full and open competition.

SIGNATURE DATE

Aaron Villalpando NCO 16 Director of Contracting

VHAPM Part 808.405-6 Limiting Sources Original Date:

08/30/2017 Revision 02 Eff Date: 02/21/2020

DENA A. YOUNG

142748

Digitally signed by DENA A.

YOUNG 142748

Date: 2020.07.24 16:18:31 -05'00'

Nathan J Dion 165242

Digitally signed by Nathan J Dion 165242 Date: 2020.07.24 15:45:18 -05'00'

VHAPM Part 808.405-6 Limiting Sources Page 7 of 7 Original Date: 08/30/2017 Revision 02 Eff Date: 02/21/2020

VHAPM Part 808.405-6 Limiting Sources Attachment 2: Request for Limited Sources Justification Format >SAT

HIGHER LEVEL APPROVAL (Required for orders over $700,000):

c. VHA RPO HCA Review and Approval (over $700,000 to $68 million): I have reviewed the foregoing justification and find it to be complete and accurate to the best of my knowledge and belief and approve for restricting consideration of the Federal Supply Schedule contractors to fewer than the number required by FAR Subpart 8.4.

DATE Terry L. Spitzmiller

Executive Director Regional Procurement Office Central (VHA)

VHATVHSpitzT Typewritten Text 09/24/2020