NCO19-FY23-317 JOFOC 36C259-23-AP-3018 CNH CLANCY-ELKHORN HCA Approved copy_Redacted.pdf

Effective Date: 02/01/2022 Page 1 of 5

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-3018

RPOW JOFOC Tracker: # 2023-07-28T07:07:10

1. Contracting Activity: Department of Veterans Affairs, Networking Contracting Office

(NCO) 19, 6162 S. Willow Drive, Suite 300, Greenwood Village, Colorado 80111, in support of the VA Montana Health Care System (VAMHCS)/Geriatric and Extended Care Services (GEC) located at 3687 Veterans Dr, Fort Harrison, MT 59634.

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 Contract (IDIQ) for Community Nursing Home (CNH) services for the VA Montana Health Care System (VAMHCS) and Geriatric and Extended Care Services (GEC) in Clancy, Montana. 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 sole source firm-fixed-price Indefinite-Delivery Indefinite-Quantity (IDIQ) contract to Clancy Nursing and Rehab Center LLC, DBA Elkhorn Healthcare and Rehabilitation. This action is funded via 1358 so it does not have a 2237 associated with it.

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. The current contract, 36C25918D0245, expires on 30 September 2023. Clancy Nursing and Rehab Center LLC, DBA Elkhorn Healthcare and Rehabilitation has met all requirements under the VHA Notice 2022-32 and VHA notice 2022-04 under the 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 Montana. This will be a 5-year (60 months) Indefinite-Delivery Indefinite- Quantity Contract (IDIQ) contract. The estimated period of performance is 01 October 2023, through 30 September 2028. The total estimated value of this contract is $ . The Independent Government Cost Estimate (IGCE) amount, , will be the maximum ceiling value. The contract will include the evaluation of the clause at FAR 52.217-8 and will be exercised at the same rates as those in effect under the contract at the time the contract is exercised.

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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 ( ) 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 nine (9) Veterans being treated and housed at the Clancy Nursing and Rehab Center LLC, DBA Elkhorn Healthcare and Rehabilitation facility under the existing contract. Clancy Nursing and Rehab Center LLC, DBA Elkhorn Healthcare and Rehabilitation has consistently provided specialty care in a quality manner to our Veterans.

The Veterans at this facility cannot be moved without disrupting the continuity of care and undue stress to both the Veterans and family. The relocating of Veterans is not in accordance with VA policy/directive established by the Office of Geriatrics and Extended Care. 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 Clancy Nursing and Rehab Center LLC, DBA Elkhorn Healthcare and Rehabilitation.

6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable: A notice of intent to sole source, 36C25923Q0562, was posted on 08 June 2023. Contract Opportunities did not publish a close date. As of the typing of this JOFOC document there have been no interested vendors to provide a response to the Notice of Intent to Sole Source posting. A search of the Medicare Nursing Home Compare website https://www.medicare.gov/nursinghomecompare/search.html for the zip code 59634 yielded four (4) nursing homes within a 25-mile radius. One of the results is the incumbent, Clancy Nursing and Rehab Center LLC, DBA Elkhorn Healthcare and Rehabilitation. The other three (3) facilities from the search have not been vetted through the VA process to establish them as viable options for contract. The NAICS selected for this requirement is 623110, for Nursing Care Facilities for Skilled Nursing Facilities with a small business size standard of $34 Million. Searches of the SBA Dynamic Small Business and Vendor Information Page (VetBiz), utilizing zip code 59634 and NAICS 623110, were conducted but yielded no results. A search of Veteran Small Business Certification (VetCert) using the NAICS code 623110 returned 121 results. None of the entities found are in the State of Montana. A redacted Justification for Other than Full

Effective Date: 02/01/2022 Page 3 of 5 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 pricing is expected to be considered 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 rates 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 throughout 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 four (4) nursing homes within a range of a 25 mile radius within the zip code of 59634. One of the results is the incumbent, Clancy Nursing and Rehab Center LLC, DBA Elkhorn Healthcare and Rehabilitation. There are nine (9) Veterans being treated and housed at the Clancy Nursing and Rehab Center LLC, DBA Elkhorn Healthcare and Rehabilitation facility under the existing contract. Clancy Nursing and Rehab Center LLC, DBA Elkhorn Healthcare and Rehabilitation has consistently provided specialty care in a quality manner to our Veterans.

The Veterans at this facility cannot be moved without disrupting the continuity of care and undue stress to both the Veterans and family. The other three (3) facilities from the search have not been vetted through the VA process to establish them as viable options for contract.

A notice of intent to sole source, 36C25923Q0562, was posted on 08 June 2023. Contract Opportunities did not publish a close date. As of the typing of this JOFOC document there have been no interested vendors to provide a response to the Notice of Intent to Sole Source posting. A search of the SBA Small Business Dynamic site, Vendor Information Page (VIP) and SBAVetCert was conducted to determine if any potential Service-Disabled Veteran- Owned Small Business (SDVOSB) and Veteran-Owned Small Business (VOSB) offerors exist for this requirement. The results of the market research showed there are no SDVOSB/VOSB CNHs or other CNH facilities that can satisfy the requirement in the surrounding area. Clancy Nursing and Rehab Center LLC, DBA Elkhorn Healthcare and Rehabilitation currently has nine (9) veterans residing at their facility. Based on the CNH program requirements, the Veteran’s preference is taken into consideration when selecting a CNH. The CNH selection is based on the Veterans’ needs, proximity to home/residence, and family. The CNH Program Coordinator at the Medical Center reviews the Medicare compare score of various CNHs in each area to determine the feasibility to meet the Veteran’s needs.

The CNH coordinator determines the number of CNHs that may be required in an area based on future needs.

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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 current contractor, Clancy Nursing and Rehab Center LLC, DBA Elkhorn Healthcare and Rehabilitation, expressed interest in continuing to provide services to the VA and continue providing care to the Veterans 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 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 Program Coordinator is responsible for conducting market research to increase the number of available and qualified CNHs that can be available to Veterans. 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

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.

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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.