NCO-19 JOFOC - CNH Larchwood Inns HCA APPROVED_Redacted__Redacted.pdf

Effective Date: 02/01/2022 Page 1 of 4

DEPARTMENT OF VETERANS

SOLE SOURCE JUSTIFICATION UNDER SIMPLIFIED PROCEDURES FOR CERTAIN

COMMERCIAL ITEMS IN ACCORDANCE WITH FAR 13.5

Acquisition Plan Action ID: 36C259-23-AP-1130

RPOW JOFOC Tracker: # FY24 - NCO 19 - 211

1. Contracting Activity: Department of Veterans Affairs Network Contracting Office (NCO) 19, 6162

S. Willow Drive, Suite 300, Greenwood Village, Colorado 80111, in support of the VA Western Colorado Health Care System and Extended Care Services (GEC) located at 2121 North Avenue, Grand Junction, Colorado, 81501.

2. Nature and/or Description of the Action Being Processed: This procurement is for the establishment of a sole source firm-fixed-price Indefinite Delivery Indefinite Quantity (IDIQ) contract for Community Nursing Home (CNH) services for the VA Western Colorado Health Care System (WCHCS) and Geriatric and Extended Care Services (GEC) in Grand Junction, Colorado.

This procurement will be processed in accordance with FAR 13.5 Simplified Procedures for Certain Commercial Items and specifically FAR 13.501 Special Documentation Requirements, where acquisitions conducted under Simplified Acquisition Procedures are exempt from the requirements of FAR Part 6, but still require a justification using the format of FAR 6.303-2. The award action will result in a new 5-year (60-month) sole source firm-fixed-price IDIQ contract to Larchwood Inns Inc.

This action is funded with a 1358 so there is no associated 2237.

3. Description of Supplies/Services Required to Meet the Agency’s Needs: The CNH will provide all facilities and services to support short and long-term care for eligible Veterans. These services include but are not limited to rehabilitation, nursing, and clinical care in accordance with the Performance Work Statement (PWS). Larchwood Inns Inc. has met all requirements under the VHA Notice 2022-32, and VHA Notice VHA Notice 2023-07 Community Nursing Home Program (CNHP), and VHA Field Guidebook, Specialty Programs Section 1.2, Geriatric Extended Care (GEC). Additionally, they are certified under The Centers for Medicare and Medicaid Services (CMS) and licensed by the State of Colorado. This will be a 5-year IDIQ (60 months) contract. The total estimated price and maximum ceiling amount of this procurement is . The contract will include the clause at FAR 52.217-8 Option to Extend Services. If exercised for up to 6 months, the 52.217-8 option will be exercised at the same rates as those in effect under the contract at the time of contract extension. The estimated period of performance will be February 1, 2024, through January 31, 2029.

4. Statutory Authority Permitting Restricted Competition:

FAR 13.5 Simplified Procedures for Certain Commercial Items. The statutory authority for applying the Simplified Procedures for Commercial Items of FAR 13.5 is 41 U.S.C. § 1901 and is implemented by FAR 13.106-1(b)(2) for restricting competition on this procurement.

Competition is restricted on this procurement for the reason below:

(X) Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements

( ) Unusual and Compelling Urgency ( ) Industrial Mobilization, Engineering, Developmental or Research Capability or Expert

Services ( ) International Agreement ( ) Authorized or Required by Statute

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( ) National Security ( ) Public Interest

5. Demonstration that the Contractor’s Unique Qualifications or Nature of the Acquisition

Requires the Use of the Authority Cited Above (applicability of authority): Currently, there are no Veterans being treated and housed at Larchwood Inns Inc. Larchwood Inns Inc., is qualified to provide quality specialty care to our Veterans and are in a position to accept Veterans for placement.

Although there are four (4) other VA contracted facilities in the Grand Junction 81506 zip code, there are current concerns due to quality of care at two of the facilities that have resulted in admissions holds. The other two facilities cannot accept Veterans at this time due to bed capacity. In accordance with FAR 13.5, this requirement for community nursing home services will be a sole source 5-year (60 months) Indefinite-Delivery Indefinite-Quantity Contract (IDIQ) contract to Larchwood Inns Inc.

6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable: Source Sought notice, 36C25923Q0190, was posted on March 30, 2023, and closed April 13, 2023. The notice requested basic contractor information from interested parties and their size classification including HUBZone, 8(a), small business, or large business. A search of the Medicare Nursing Home Compare website https://www.medicare.gov/nursinghomecompare/search.html resulted in seven (7) nursing homes within a 25-mile radius of Grand Junction, CO. One (1) of the results is the planned contractor Larchwood Inns Inc. There are currently zero (0) Veterans being housed and treated at Larchwood Inns Inc. Larchwood Inns Inc., is qualified to provide quality specialty care to our Veterans and are in a position to accept Veterans for placement. Although there are four (4) other VA contracted facilities in the Grand Junction 81506 zip code, there are current concerns due to quality of care at two of the facilities that have resulted in admissions holds. The other two facilities cannot accept Veterans at this time due to bed capacity. The other two (2) facilities in the search have not been vetted as viable options at this time. A search of Veteran Small Business Certification (VetCert) using the NAICS code 623110 returned 121 results, only two (2) of the VetCert businesses are located in the state of Colorado. These VetCert business are unable to provide skilled nursing home care. A search utilizing Dynamic Small Business Search (DSBS) with NAICS code 623110 and zip code 81506, was conducted with no results. A redacted Justification for Other than Full and Open Competition (JOFOC) will be posted on Contract Opportunities. There will be no further actions taken to facilitate competition for this acquisition.

7. Determination by the CO that the Anticipated Cost to the Government will be Fair and Reasonable: The anticipated cost is expected to be fair and reasonable. This determination is based on the Medicaid rates that are established by each state based on the national average. The VA Geriatrics and Extended Care Office through the VHA Procurement Guide (VHA PG) and VA pulse publishes an annual maximum allowable percentage that are applied to each Resource Utilization Group, Version IV (RUGS IV) category. The RUGS IV category identifies the different levels of treatment/care. The Medicaid rate is added to the add-on percentages to determine the basic per diem rate, then the basic per diem rate is applied to each RUGS IV category. The basic per diem rate and the additional VA add-on percentage make up the per diem rate price paid for each Veteran. The line-item structure will illustrate the basic rate and the per diem rate for each RUGS IV category which is made up of the basic rate and the VA add-on percentage for each level of care. After researching the current Medicaid and RUGS IV rates, the CO will determine if the results are fair and reasonable when the add-on percentage agreed upon by both parties is at or under the maximum allowable percentage established by VA. The add-on percentages do not change through the life of the contract.

8. Description of the Market Research Conducted and the Results, or a Statement of the Reasons Market Research Was Not Conducted: As described in Section 6 above, a search of the Medicare Nursing Home Compare website https://www.medicare.gov/nursinghomecompare/search.html resulted in seven (7) nursing homes within a range of a 25-mile radius within the zip code of 81506.

One (1) of the results is the planned contractor Larchwood Inns Inc. Although there are four(4) other

Effective Date: 02/01/2022 Page 3 of 4 qualified facilities in the Grand Junction 81506 zip code, those nursing homes are currently under investigations for abuse allegations and are no longer viable option for new admissions for VA care.

The remaining two (2) facilities have not been vetted through the VA process to establish them as viable options for the contract. A sources sought notice (36C25923Q0190) was posted to Contract Opportunities on March 30, 2023 and closed on April 13, 2023. No responses were received from other potential sources to the posting. A search of SBA Veteran Small Business Certification (VetCert) and Vendor Information Page (VetBiz) was conducted to determine if any potential Service-Disabled Veteran-Owned Small Business (SDVOSB) or Veteran-Owned Small Business (VOSB) offerors exists for this requirement. A search utilizing Dynamic Small Business Search (DSBS) produced (0) results. The results of the market research showed there are no SDVOSB/VOSB CNHs or other CNH facilities that can satisfy this requirement in the surrounding area. The CNH coordinator determines the number of CNHs that may be required in an area based on future needs.

9. Any Other Facts Supporting the Use of Other than Full and Open Competition There is no other supporting information not previously stated to support the use of other than full and open competition.

10. Listing of Sources that Expressed, in Writing, an Interest in the Acquisition: No other community nursing homes have expressed interest in providing services in this area. The potential contractor, Larchwood Inns Inc. has expressed interest in providing services to the VA and care to the future Veterans that would be housed there.

11. 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:

Actions that are being taken to foster competition for future acquisitions of these services being acquired are being done by the CNH Coordinators. In accordance with the VHA Office of Integrated Veteran Care (IVC) Field Guidebook, the CNH Program Office will review the Medicare Nursing Home Compare scores for a sample of CNHs. The selection of the CNH is determined by whether the CNH has the resources, and program requirements available to meet the Veterans' needs. The CNH Coordinator will review the Medicare Nursing Home Compare scores to determine if they are eligible for a contract. The Contracting Office and CNH Program Office will continue to canvas the market for new CNH entrants capable of meeting program requirements.

12. 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 and belief.

Date

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13. Approvals in accordance with the VHAPM Part 806.3 OFOC SOP:

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

b. One Level Above the Contracting Officer (Required over SAT but not exceeding $750K): I certify the justification meets requirements for other than full and open competition.

c. VHA RPO HCA Review and Approval: I have reviewed the foregoing justification and find it to be complete and accurate to the best of my knowledge and belief and approve ($750K to $7.5 million (or $15.0 million for acquisitions described in FAR 13.500(c)) for other than full and open competition.