Bridge_J A_-_redacted.docx

J&A Number: 15-10341

Part 1 - Sole Source Approval Document Format

CLASS JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity.

Naval Medical Logistics Command (NMLC), Acquisitions Management & Analytics Directorate, Code 05, 693 Neiman Street, Fort Detrick, Maryland 21702, acquiring on behalf U.S. Naval Hospital Okinawa, Japan and U.S. Naval Hospital Yokosuka, Japan.

2. Description of the Action Being Approved.

The government intends to establish an IDIQ Firm Fixed Price type bridge contract with Alutiiq Pacific, LLC, the contractor currently providing the required non-personal medically related administrative support services at U.S. Naval Hospital Okinawa and U.S. Naval Hospital Yokosuka. The current contracts that require bridge services are N68836-12-D-0002 and N68836-15-D-0007.

3. Description of Supplies/Services.

NAVSUP’s Inter Service Supply Support Operations Program (ISSOP) is ending 30 September 2015. On 06 January 2015 the Deputy Surgeon General gave Naval Medical Logistics Command (NMLC) the responsibility of contracting medical administrative support services; however requirements were not identified, defined, and assumed by NMLC until mid-February. The required services were previously sole sourced under the Small Business Administration’s (SBA) 8(a) program and must remain in the 8(a) program. NMLC initiated procurement for these services in March 2015. An offer letter was submitted to the SBA on behalf of Three Star MedPro Tech JV, LLC on 12 May 2015. NMLC received an acceptance letter from the SBA on 10 June 2015. The SBA typically responds within 5 working days of receipt but the SBA had many questions about the consolidation of this sole source requirement with a previously competed 8(a) procurement for U.S. NH Guam. The previous procurement’s scope covered a very wide variety of services to support the customer and only a small portion, the medically related administrative support services, was being carved out and assigned to NMLC. NMLC determined this new mission a new requirement since the scope was dramatically changed but SBA considered the requirement to be within the same scope as the previous contract. After much discussion with the SBA, NMLC determined to discontinue the consolidation efforts. This resulted in an unanticipated, unforeseeable several-week delay.

NMLC requested pricing from Three Star MedPro Tech JV, LLC (Three Star) on 10 June 2015 and Three Star submitted their initial proposed pricing on 23 June 2015. Three Star’s initial proposed pricing was almost six times greater than NMLC’s Independent Government Cost Estimate (IGCE). Due to confusion regarding Affordable Care Act requirements and regulations applicable to an overseas environment, NMLC entered into negotiations with Three Star with the anticipation that any misunderstanding could be resolved and the contractor’s revised pricing would be determined fair and reasonable. After three revised pricing submissions, the most recent of which was received on 16 July 2015, Three Star’s proposed pricing was still approximately three times greater than NMLC’s IGCE, which was based on historical pricing, and cannot be determined fair and reasonable. As a result, additional negotiations or remediation by a third party (i.e. DCAA or SBA) were sought after which led to additional delays. Being that the selected contractor demonstrated past performance with services in an OCONUS location it was unanticipated and unforeseeable that the proposed pricing for this acquisition would be so questionable.

Since the contracting officer could not reach a fair and reasonable price with the proposed sole source 8(a) vendor the SBA rescinded the requirement. Due to new and uncertain developments under the Affordable Care Act and the uncertainty of how these changes will impact the labor market in an OCONUS environment, NMLC determined that this procurement will be better suited in a competitive environment under the Small Business Administration (SBA) 8(a) program. A competitive market should yield the true market value of the services required and is in the best interest of the Government. An SBA competitive 8(a) set-aside contract for various medical administrative support services at U.S. MTFs throughout Japan will be procured with an approximate award date of 04 January 2016. The competitive 8(a) contract will include services required on the bridge contract. The competitive 8(a) requirement is for a 60-month ordering period and services are anticipated to commence 1 March 2016. The quantities under the new competitive 8(a) contract have been calculated to include these requirements being bridged.

The total estimated dollar value of the acquisition is $2,526,355.41.

Appropriations:

General Defense Health Program (DHP) Medical Home Port (MHP)

4. Statutory Authority Permitting Other Than Full and Open Competition.

10 U.S.C. 2304(c)(1), One source or limited sources.

5. Rationale Justifying Use of Cited Statutory Authority.

The Government has an insufficient number of medically related administrative support workers to fulfill the requirement and therefore, procurement of these services under a contract is vital. The Government has a need for these to continue without any disruption that would negatively impact the environment within the hospital to properly conduct patient care. The contractors are required to provide specialized information to all active duty, military and civilian providers, and beneficiaries, provide patient records and referrals, and interact with patients and department staff. Without these services it is reasonable to assume that patient safety will suffer because patients and providers will not be able to get the information they need and departments will not be run efficiently, thus directly affecting patient care.

Since the circumstances giving rise to this situation were unavoidable by NMLC and there is not enough time to competitively procure these services to avoid a lapse of services a bridge contract is required. An IDIQ Firm Fixed Price type contract will be issued to bridge the current contracting vehicle for medically related administrative support services. Requirements needed will be awarded under delivery orders. The Government intends to sole source a contract to the incumbent contractor, Alutiiq Pacific, LLC, that is currently providing these services at U.S. Naval Hospital Okinawa and U.S. Naval Hospital Yokosuka.

Alutiiq Pacific, LLC, as the incumbent contractor, will be able to provide a smooth transition between the contracts, as they will not need to recruit workers because they already have services in place. This would also limit the impact of administrative burden on the Government processing new candidate packages and providing orientation. The incumbent already has an intimate knowledge of the contract requirements as well as the hospital operating procedures which will require very little, if any, contract start up time.

It is not practicable to obtain competition in this circumstance. Being that these services expire in such short notice (four weeks) it would be unreasonable to think that a contractor would be able to sufficiently recruit workers, familiarize themselves with the local marketplace, MTF policies, points of contact, and scope of work within the amount of time left to avoid a lapse in service or disruption to the hospital.

6. Description of Efforts Made to Solicit Offers from as Many Offerors as Practicable.

A notice of intent to sole source for this requirement was issued on the FedBizOpps website on 7 August 2015. If capability statements are received in response to the notice the Contracting Officer will evaluate the capability statements and determine if the responding sources have the capability to perform the required work.

No additional market research was conducted because it is not practicable for the reasons discussed in paragraph 5 above, for any company other than Alutiiq Pacific, LLC to provide the required supplies and services.

7. Determination of Fair and Reasonable Cost. The contracting officer has determined the anticipated price to the Government of the supplies/services covered by this J&A will be fair and reasonable.

8. Actions to Remove Barriers to Future Competition.

A Small Business Administration (SBA) competitive 8(a) set-aside contract for various medically related administrative support services at U.S. Naval Hospital Okinawa, U.S. Naval Hospital Yokosuka, and any associated branch clinics throughout Japan will be procured with an approximate award date of 04 January 2016. The competitive 8(a) contract will include services required on the bridge contract. The competitive 8(a) requirement is for a 60-month ordering period and services are anticipated to commence 1 March 2016.