Nasal Swab IBX justification_and_approval_Redacted.pdf

Justification and Approval (J&A) for Other Than Full and Open Competition

FOR OFFICIAL USE ONLY

March 2018 FOR OFFICIAL USE ONLY Page 2 of 6

I. Contracting Activity.

The United States Air Force (USAF), Air Force Material Command (AFMC), Air Force Life Cycle Management Center (AFLCMC), PEO Digital (HB), Foreign Military Sales Division (HBN), Contracting Officer (HBNK) 11 Eglin Street, Bldg. 1618 Hanscom AFB, MA 01731-2100 is the contracting activity.

II. Nature and/or description of the action being processed.

This Justification and Approval (J&A) for Other Than Full and Open Competition is intended to result in a new contract to Hardwood Products Company LP, doing business as Puritan Medical Products Company LLC (hereinafter, Puritan) to expand its production capacity for flock nasal swabs.

An Undefinitized Contract Action (UCA)(Contract No. FA8730-20-C-0056) with a Not-To-Exceed (NTE) ceiling of $51,150,000 was awarded to Puritan on 30 July 2020. This is a commercial contract.

The contract type is Firm Fixed Price (FFP). The period of performance is 8 months from the date of UCA award, 30 July 2020 to 30 March 2021.

III. Description of supplies/services required to meet agency needs.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed into law on 27 March 2020. The Department of Health and Human Services (DHHS) was tasked with expanding facilities and capacity for pharmaceuticals, personal protective equipment (PPE), injection and vaccine delivery systems, and other remedies to combat the COVID-19 pandemic. DHHS does not have the resources nor capacity to conduct all of the procurements necessary to respond to the COVID-19 pandemic. Accordingly, DHHS and DoD entered into an Interagency Agreement in furtherance of assisted acquisitions pursuant to the Economy Act. A determination and finding (“D&F”) and an interagency agreement Form 7600A were executed to reflect the capabilities DoD, including the USAF, is able to provide in order to help DHHS fulfill its requirements under the CARES Act. The Interagency Agreement and D&F, and accompanying Form 7600B, providing the funding for the instant requirement, support the instant assisted acquisition between DHHS (requesting agency) and the United States Air Force (servicing agency).

The supplies/services required are in support of the Industrial Base Expansion (IBX) of the production of flock nasal swabs. The flock nasal swabs provide better specimen collection and elution than other types of nasals swabs: polyester, foam and cotton. Flocking is the process of applying multi length fibers (i.e., flocking) to an adhesive-coated surface to provide for enhanced sample collection. The contractor is required to expand production from 5 million swabs a month to 50 million swabs a month. The acquisition requires the contractor procure the following machines:

• 6 Automated Packaging machines (OEM - MULTIVAC International)

The contractor will be required to perform all the assembly, integration, and testing of the machines. The contractor will also be required to make facility modifications that include but are not limited to:

• HVAC particulate and UV filtration

• Electrical

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• Pressurized air supply

• Floor finishes

• White Room and Ante Room

• Gowning Area

• QC Laboratory

• Warehouse space

• Laundry area

• Floorplan design for maximum production equipment efficiency and worker movement

• Office areas

Additionally, Puritan will be procuring an 80,000 square foot production facility in Pittsfield, Maine and utilizing their own capital investment funds. The period of performance is eight (8) months from the date of UCA award. The CLIN structure will include a single Parent CLIN 0001 and SubCLINs for purposes of invoicing. The SubCLINs are initially based on the contractor's spend plan but are subject to change through negotiations and definitization of this effort. The estimated value of this acquisition is $51,150,000. This action is funded with FY20 3080 CARES Act funding appropriation.

IV. Statutory authority permitting other than full and open competition.

The statutory authority permitting other than full and open competition is10 U.S.C. 2304(c)(2), as implemented by Federal Acquisition Regulation (FAR) 6.302-2(a)(2) Unusual and Compelling Urgency and 10 U.S.C 2304(c)(3) as implemented by FAR 6.302-3(a)(3) - Industrial mobilization;

engineering, developmental or research capability; or expert services.

V. Demonstration that the contractor's unique qualifications or nature of the acquisition requires the use of the authority cited above (applicability of authority).

Pursuant to the authority cited in Section IV above, the following two subsections will address the elements that justify use of each authority.

Unusual and Compelling Urgency IAW FAR 6.302-2(a)(2), full and open competition need not be provided for when the agency's need for the supplies or services is of such an unusual and compelling urgency that the Government would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits bids or proposals, full and open competition need not be provided for.

The COVID pandemic currently has 18.8M confirmed cases world-wide which have resulted in 706,000 deaths. In addition, COVID-19 has had massive impacts to the United States and global economy. US Gross Domestic Product (GDP) has shrunk 32.9% in the 2nd quarter of 2020. To put that number into perspective, the largest decline experienced during the Great Recession was 8.4% and the largest decline in history was 10% in 1958. As of June reporting, the US unemployment rate is 11.1%. According to the Bureau of Labor Statistics monthly job report, the US has lost more than 40 million jobs primarily due to COVID impacts.

On 13 Mar 2020, the President declared a national emergency, under section 501 (b) of the Stafford Disaster Relief and Emergency Assistance Act 42 USC 512 J-5207 (the "Stafford Act"), recognizing

March 2018 FOR OFFICIAL USE ONLY Page 4 of 6 the threat that the novel coronavirus, known as SARS-CoV-2, poses to national security. On 25 Mar 2020, Under Secretary of Defense for Acquisition and Sustainment Ms. Ellen Lord established the COVID-19 Joint Acquisition Task Force (JATF). Led by the Principal Deputy Assistant Secretary of Defense, Ms. Stacy Cummings, the JATF team includes acquisition professionals from multiple DoD Agencies, and is synchronizing and supporting acquisition execution to combat the COVID-19 pandemic. JATF is supporting the Federal Emergency Management Agency (FEMA) and the Department of Health and Human Services (DHHS) in the fight against COVID-19. On 27 April 2020, the Head of the Contracting Agency for DHHS, Assistant Secretary for Preparedness Response, signed a Determination and Findings in accordance with the authority of the Economy Act (31 U.S.C. I 535), as implemented in subpart 17.5 of the Federal Acquisition Regulation (FAR), for DHHS to enter into an inter-agency agreement for acquisition assistance with the Department of Defense (DoD).

AFLCMC/HBN has been tasked to support DHHS in the fight against COVID-19 by providing acquisition support for an Industrial Base Expansion of flock nasal swabs. Flock tip nasal swabs are a nasopharyngeal swab. Flocking is the process of applying multi length fibers (i.e., flocking) to an adhesive-coated surface to provide for enhanced sample collection, making this the preferred type by healthcare providers for COVID-19 rapid testing because they provide better specimen collection and elution than the other types of swabs: foam, cotton and polyester. Currently, the demand for flock tip nasal swabs far outpaces the current supply. This effort will allow the contractor to expand production from 5 million flock nasal swabs a month to 50 million a month.

Capacity must be increased and reserves must be rebuilt as soon as possible to prepare for any potential, immediate spikes in demand, and for near and distant future needs. The emergent need for the nasal swabs also includes replenishing and maintaining of the Strategic National Supply (SNS). The current need is to have 130M nasal swabs by December 2020 allocated to the SNS, so that the United States can support on-going testing needs and be better prepared for any future national emergency needs.

Puritan was selected for this award as a result of a white paper submission, proposing an expansion to their current production capacity to meet the demands of this pandemic through the DHHS TechWatch portal. That white paper was evaluated and selected by DHHS and the JATF. They are not the only source of flock nasal swabs, but they are the only domestic manufacturer.

Industrial Mobilization

IAW FAR 6.302-3(a)(2)(i), full and open competition need not be provided for when it is necessary to award a contract to a particular source to maintain a facility, producer, manufacturer, or other supplier available for furnishing supplies or services in case of a national emergency or to achieve industrial mobilization.

The goal of this effort is two-fold; (1) to immediately expand flock tip nasal swab production capacity, and (2) to strengthen the U.S. Industrial Base by maintaining the required domestic capability for production of critical supplies per FAR 6.302-3(b)(1)(iv). Demand for COVID testing has grown exponentially since March 2020. At the start of the pandemic, approximately 5,000 tests

March 2018 FOR OFFICIAL USE ONLY Page 5 of 6 were being done per day, which equates to a demand for 5,000 swabs a day. Presently, daily COVID tests conducted have reached over 2 million tests a day. That number is expected to continue to grow. Current production has not been able to keep with demand, which has limited the number of tests performed daily. The U.S projected demand for flock nasal swabs by December 2020 is 81M swabs per month, with surge capability to 145M swabs a month. Partnering with a domestic manufacturer such as Puritan will allow the U.S. to combat the current COVID-19 crisis and be better prepared for future health emergencies as a result of increased domestic capacity.

VI. Description of efforts made to ensure that offers are solicited from as many potential sources as practicable.

DHHS has invited anyone with ideas or technology to address the COVID-19 pandemic to submit white papers as part of their market research. DHHS then reviews the white paper and will set up an interchange meeting with the submitter to determine if they can assist in the COVID-19 pandemic and establish a potential contractual path forward.

A notice of contract action was not issued in accordance with FAR 5.202(a)(2).

VII. Determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

The Contracting Officer has determined the anticipated cost to the Government will be Fair and Reasonable. The Contracting Officer will utilize other than cost or pricing data and price analysis techniques described in FAR 15.4 to ensure the negotiated price is fair and reasonable. The Government will also perform a technical evaluation of the proposal.

VIII. Description of the market research conducted and the results, or a statement of the reasons market research was not conducted.

DHHS conducts continuous market research through their TechWatch portal, inviting interested parties to submit a white paper to DHHS for further consideration. Due to the urgent nature of this pandemic a wide net was cast to try to address all the areas of interest in combating COVID-19 and attract all potential offerors who may have solutions to support combating COVID-19.

TechWatch portal: https://www.medicalcountermeasures.gov/Request-BARDA-TechWatch-Meeting

IX. Any other facts supporting the use of Other Than Full and Open Competition.

N/A

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

Puritan, the sole U.S. manufacturer for flock nasal swabs, submitted their white paper to DHHS for consideration.

XI. A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before making subsequent acquisitions for the supplies or services required.

In the absence of an emergency situation, such as the COVID-19 pandemic, the Air Force will

March 2018 FOR OFFICIAL USE ONLY Page 6 of 6 publicize similar contract actions to increase competition, broaden industry participations, and assist small business concerns.

XII. Certification by the Contracting Officer.

As evidenced by my signature above, I have determined this document to be both accurate and complete to the best of my knowledge and belief.

XIII. Certification by the technical/requirements personnel.

As evidenced by my (our) signature(s) above, I (we) certify that any supporting data contained herein, which is my (our) responsibility, is both accurate and complete.