Mail Manfiest_Sole_Sources_Justification 36C77027A0001 Redacted.pdf

VHAPG Part 808.405-6 Limiting Sources Revision: 02 Effective Date: 03/02/2026

36C770-27-AP-0063 Acquisition ID#:

SOLE SOURCE JUSTIFICATION

Over SAT

RFO PART 8.401(b)

GSAR 538.7104-3(b)(1)(i)

Acquisition Plan Action ID: 36C770-27-AP-0063

(1) Contracting Activity: Department of Veterans Affairs, VISN 15, located at 3450 S 4th Street Trafficway, Leavenworth, KS, in support of the Consolidated Mail Outpatient Pharmacy (CMOP).

(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).

Network Contracting Office (NCO) 15 is requesting a bridge Blanket Purchasing Agreement (BPA) under other than full and open competition due to urgency, with Federal Express Supply Chain (FSC). The bridge will ensure continuity of critical prescription delivery services pending resolution of GSA stay issued for the follow on award that resulted in a stop work under Contract No. 47QFAA26A0001.

In July of 2025 VA CMOP agreed to fund GSA to establish a new contract for the VA to use for mail manifesting services. GSA issued RFP 47QFAA25K0006 for the VA on January 30, 2026, and closed on March 17, 2026. Competitive bids were received from two (2) firms, FSC and Accent Controls, Inc. (ACI). After evaluation a contract was awarded to FSC on June 30, 2026.

Subsequent to the award, ACI requested and received an oral debrief (July 8), then issued pre-notice of legal challenge on July 10, leading GSA to issue a stop-work order to FSC. GSA then proactively notified both vendors of further actions on July 21. GSA is still anticipating their proactive resolution to the ACI challenge to take 60 days or more to resolve.

The proposed bridge contract would have an initial period of performance of six-month period from October 1, 2026, to March 31, 2027, with up to two three-month extensions at the Government’s discretion. This bridge action is essential to avoid service disruption while GSA proceeds with their resolution to the stay order issued and resolve potential legal challenges that may occur following the pre-emptive actions.

Order against: GSA MAS Contract Number: GS-03F-0169X expires 8/14/2031 Name of Proposed Contractor: Federal Express Supply Chain Street Address: 100 papercraft Park City, State, Zip: Pittsburgh, PA 15238

(3) Description of Supplies or Services:

The estimated value of the proposed bridge action is

The Department of Veterans Affairs (VA) operates seven Consolidated Mail Outpatient Pharmacy (CMOP) facilities nationwide, which collectively fill approximately 84% of all prescription orders for VA Medical Centers (VAMCs) and Community Based Outpatient Clinics (CBOCs). CMOP also supports Indian Health Service (IHS) pharmacies and may serve additional Federal partners in the future.

Currently, CMOP is running at full production, processing over 500,000 prescriptions daily.

The majority (89%) of these prescriptions are shipped using a specialized mail manifesting process through FSC. FSC was the incumbent contractor under Contract No.

36C77020A0009 and as noted above is the awardee under the recent long term award Contract No. 47QFAA26A0001.

This process enables shipments to be regionally sorted and routed directly to USPS sites, leveraging a Negotiated Service Agreement (NSA) to secure reduced bulk delivery rates unavailable through standard channels. FSC is presently the only vendor on the GSA Mass Award Schedule (MAS) with the scale and infrastructure to meet the VA’s delivery and efficiency requirements. The remaining 11% of shipments, requiring different handling, are managed under TRANSCOM Next Generation Delivery Service (NGDS) contracts.

CMOP depends on an advanced mail manifesting service to ship (89%) of the 500,000 prescriptions daily to Veterans nationwide. Of all VA prescriptions delivered to patients, 89% require a specialized carrier service capable of processing and distributing approximately 365,000 packages per day between each of the seven CMOP locations.

To meet complex logistical needs and ensure uninterrupted patient care, the carrier must operate regional facilities close to the current CMOP locations that handle large-scale package separation and distribution. Roughly 50% of all shipments are delivered by the vendor directly to local USPS sites serving Veterans, while the remainder are routed to centralized USPS facilities for final delivery. This approach is both more direct and more reliable than if CMOP shipped through USPS alone, as USPS is unable to efficiently sort and deliver the volume of prescriptions within required timeframes.

The process also hinges on the vendor’s ability to pay USPS postage fees upfront at the point of delivery. The VA subsequently reimburses the vendor only after delivery to the patient is confirmed. In FY26 alone, VA reimbursed in postal costs paid directly by the vendor FSC to USPS.

A key requirement is that the vendor must maintain a robust tracking system that seamlessly interfaces with both VA and USPS tracking platforms. This ensures end-to-end visibility, accountability, and compliance for all prescription deliveries.

(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.

RFO 8.401(b) Refers Agencies to GSAR 538.7104-3(b)(1)(i): Orders placed or BPAs established against FSS contracts are exempt from the requirements in FAR part 6. However, an ordering activity must justify its action when awarding on a sole source basis in accordance with this subsection. (b) Exceeding the SAT. (1) Statutory exceptions. The statutory exceptions supporting the placement of an order or establishment of a FSS BPA that exceeds the SAT on a sole source basis are: (i) The need is of such unusual urgency that following the procedures would result in unacceptable delays in fulfilling that need;

An urgent and compelling need exists due to the stay order issued against the follow on award VA was relying on to issue replacement task orders starting October 1, 2026 which would replace the current task orders set to expire September 30, 2026. No other solution can be implemented to ensure there is no lapse in service.

(5) Describe Why You Believe the Order Represents the Best Value consistent with GSAR 538.7102-2(d) Ordering Activities are not required to – (2) Make a fair and reasonable price determination for FSS products, services, or solutions at the order level or BPA level as FSS contract pricing has been determined fair and reasonable.

The high-volume, time-sensitive nature of CMOP prescription fulfillment necessitates a specialized vendor with advanced manifesting and sorting capabilities. Only a select group of vendors possess the infrastructure required to efficiently process and deliver the large volume of packages generated by CMOP, further constrained by the need for temperature-controlled, secure facilities to maintain prescription integrity and patient safety.

Additionally, as noted above, the agency currently only has a short-term need for the services while GSA resolves issues with the awarded contract. FSC, as the incumbent, is currently performing services and is already geographically aligned with CMOP.

Importantly, no other firms have been identified to already be geographically aligned with CMOP locations to be considered viable for this short-term need.

CMOP’s distributed network of facilities across the U.S. operates dynamically shifting workloads between sites to optimize for timely, efficient delivery. This model requires a distribution partner with an equally robust and flexible logistics network and the IT capability to interface seamlessly with both VA and USPS tracking systems.

Though the current stay order has created a short-term need, the agency is unable to currently perform the services in house even for this period. Specifically, VA does not possess internal systems that can directly integrate with USPS tracking, and USPS does not offer the reliability or infrastructure necessary for timely prescription delivery without commercial partnership. Implementing such IT solutions and internal manifesting capabilities would require significant time and investment. While a few large vendors apart from FSC might theoretically meet these criteria, none can support the VA’s needs without a lengthy transition period of up to 90 days and none hold a GSA FSS award where prices are already negotiated and considered fair and reasonable. Due to ongoing stay order issued by GSA, FSC remains the only vendor fully capable of providing uninterrupted service while meeting all technical, logistical, and compliance requirements.

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

Additional market research did not reveal other solutions, and the agency still believes award can be made under long-term solicitation after the stay order is resolved. This long-term solicitation was fully supported by market research conducted by GSA whose initial findings are in this contracts briefcase and will be available when the GSA award file is transferred. RFP 47QFAA25K0006 was issued on January 30, 2026, and closed on March 17, 2026. There were no challenges to the set-aside decision or underlying market research for the long-term solicitation. GSAR 538.7104-3(b)(1)(i) The need is of such unusual urgency that following the procedures would result in unacceptable delays in fulfilling that need is an exception to competition requirements. No other firms have been identified to be geographically aligned with CMOP locations to be considered viable for this short-term need. No other existing Government wide contract or commercial solutions is available to implement before the need date of September 20, 2026, to avoid a lapse in service.

(7) Any Other Facts Supporting the Justification:

Switching mail manifest operations to TRANSCOM NGDS contracts would not only increase costs by an month, but would also strain the CMOP infrastructure, which is not equipped to prepare packages per NGDS guidelines at the volumes and handle the associated automated sorting, labeling, and weighing requirements accomplished under the mail manifesting program. Moreover, approximately 5% of packages (roughly 107 million) would need to be reverted back to VA hospitals for direct patient delivery due to NGDS address limitations, further impacting operational efficiency and Veteran service.

(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: