P03 36C241-26-AP-0036 Except Fair Opp PACS FS.pdf

Exception to Fair Opportunity Memo

Effective Date: 03/15/2023 Page 1 of 5 Revision: 02 Acquisition ID#: 36C241-26-AP-0036

DEPARTMENT OF VETERANS AFFAIRS

Justification and Approval

For

Acquisition Plan Action ID: 36C241-26-AP-0036

1. Contracting Activity: Department of Veterans Affairs, NCO1 VISN 1 Medical Centers (Manchester, Northampton, Providence, Togus, West Haven, West Roxbury and White River Junction).

2237: 523-26-2-2697-0004

2. Description of Action: This procurement is for commercial Radiology Picture Archive Communication System (PACS) including hardware, software, support, and training in support of all VISN 1 VA Medical sites. This will be awarded as a firm fixed price task order for one (1) year against Four Points Technologies NASA SEWP contract NNG15SD22B in accordance with Revolution FAR Overhaul (RFO) FAR 16.507-2 Fair opportunity procedures and RFO FAR 16.507-6 Exceptions to fair opportunity.

Estimated Value: $4,573,521.92

Period of Performance: 01/01/2026 – 12/31/2026

3. Description of Supplies or Services: This contract that is currently active for the PACS supplies and services is a five (5) year VISN 1 contract awarded to Four Points Technologies against NASA SEWP Order NNG15SD22B 36C24121F0001. The Period of Performance (PoP) of NNG15SD22B 36C24121F0001 ends December 31st, 2025. The VISN-wide Philips VUE PACS is utilized for viewing, interpretation, and archiving high tech digital medical images from various sources within radiology, including but not limited to; radiography, ultrasound, computed tomography, nuclear medicine, magnetic resonance imaging, and interventional radiology. The system consists of “backend” hardware such as servers, switches, archives, and Redundant Array of Inexpensive Drives (RAID) storage, interface hardware such as workstations, diagnostic quality monitors, and input devices, and administrative hardware such as workstations, scanners, and digitizers. The software component is the primary distinguishing feature of Philips VUE PACS. It is the proprietary Food and Drug Administration (FDA) 512k approved functionality that enables diagnosis and manipulation of complex medical imaging studies. This software also allows for integration with various other FDA medical devices such as voice recognition systems, imaging modalities, and advanced image manipulating programs (Artificial Intelligence). The Philips PACS is also a bi- directional interface for the Hospital Information System (HIS) and the Radiology Information System (RIS), which together make up the Electronic Medical Record (EMR).

HCIS marketplace lease or cost-per-study models are the most common vehicles for PACS acquisitions. The approach for comprehensive support and decreased impact on capital purchase

Effective Date: 03/15/2023 Page 2 of 5 Revision: 02 Acquisition ID#: 36C241-26-AP-0036 enables the ability to stay current with emerging technology while decreasing budgetary impacts. If executed properly with a non-obsolescence agreement, a PACS lease provides a single point of contact/responsibility for up-time, performance, and future proofing.

Due to the complex nature of PACS and the multitude of ever-changing integrations and communications, continual support and software development is required. Even small interruptions in service can critically impact patient care and diagnosis. The PACS must meet the following core requirements:

Centralized Image Management: Provide a centralized, lossless DICOM image database accessible across all VISN 1 sites.

Seamless Access: Enable automated image query and retrieval from any VISN 1 location, with display times not exceeding eight (8) seconds.

Advanced Diagnostic Tools: Include a comprehensive suite of intuitive, specialty-supporting diagnostic tools that deliver accurate and reproducible results.

Third-Party Integration: Support integration with voice recognition dictation systems, advanced image reconstruction tools, and both current and emerging AI applications.

High Availability: Ensure system uptime of 99.99% through robust hardware and software support.

State-of-the-Art Maintenance: Maintain hardware and software at current industry standards to support optimal diagnostic performance.

Training: Provide ongoing and on-demand training to ensure users remain proficient with all system features.

4. Statutory Authority: The statutory authority permitting an exception to fair opportunity is Section 41 U.S.C. 4106(c) as implemented by the RFO Federal Acquisition Regulation (FAR) 16.507-6(b):

( ) FAR 16.507-6(b)(1): The agency’s need for the supplies or services is so urgent that providing a fair opportunity would result in unacceptable delays.

(X) FAR 16.507-6(b)(2): Only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized.

( ) FAR 16.507-6(b)(3): The order must be issued on a sole-source basis in the interest of economy and efficiency because it is a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order.

( ) FAR 16.507-6(b)(4): It is necessary to place an order to satisfy a minimum guarantee.

Effective Date: 03/15/2023 Page 3 of 5 Revision: 02 Acquisition ID#: 36C241-26-AP-0036

( ) FAR 16.507-6(b)(5): For orders exceeding the simplified acquisition threshold, a statute expressly authorizes or requires that the purchase be made from a specified source.

( ) FAR 16.507-6(b)(6): For DoD, NASA, and the Coast Guard, the order satisfies one of the exceptions permitting the use of other than full and open competition listed in part 6.103 (10 U.S.C. 3406(c)(5)).

The public interest exception must not be used unless Congress is notified in accordance with 10 U.S.C. 3204(a)(7).

5. Rationale Supporting Use of Authority Cited Above: The currently installed Philips PACS system across VISN 1 is leased through Four Points Technology via NASA SEWP order NNG15SD22B 36C24121F0001. At the end of the lease all PACS equipment will be returned to Four Points Technology. The Original Equipment Manufacturer (OEM), Philips, confirmed that due to the complexity of a VISN-wide PACS, the replacement and installation of these systems by any other vendor other than Four Points Technology would be costly and time consuming, historically taking between 3 to 12 months and cost between $12-14 Million. In addition, no other known vendors have a partnership with Philips and lease the required equipment.

Due to the highly complex and specialized nature of PACS, this requirement requires the utilization of the Philips VUE PACS family of products system; without this sole source requirement the resultant contract will add additional cost to the government and is essential in avoiding substantial delays in patient care. If VISN 1 were to implement a brand-new system that was not the Philips VUE PACS family of products, it would require multiple complex integrations and interfaces in addition to migration of the current historical archive of images and reports. VISN 1 requires that existing PACS equipment remain physically in place to avoid requirement for tandem systems to run simultaneously.

An award made to a different incumbent or PACS system would pose the following issues:

Implementation of a new PACS system in tandem with the current incumbent would be necessary. This would require a duplication of services, support and payments during a transition period. A parallel system would require an additional project to expand the current server room or create a new one which is not a financially feasible alternative.

Current estimates for a new server room that could potentially accommodate current and future needs is approximately $4,000,000 and is not part of current construction plans.

A new incumbent would require the migration of data from the current archives (both operational and disaster recovery) which would result in additional costs, delays, and potential loss of data to the VA. The estimated cost for a vendor to move the approximately 450 terabytes of data is around $1M.

The other associated costs with a migration from one PACS provider to a new PACS provider is roughly $2M. A PACS migration could take up to two (2) months to a year to fully complete, pending the capability of a new incumbent.

Effective Date: 03/15/2023 Page 4 of 5 Revision: 02 Acquisition ID#: 36C241-26-AP-0036

The robust teaching file system in Philips/Carestream PACS is not directly transferable to other commercially available PACS. Award to a new incumbent would require reconstitution of the teaching files manually, or development of a third-party software to translate the files to the new system. The latter, if possible, would represent an additional contract cost equal to or greater than the general migration cost, estimated to be at least $1M.

6. Efforts to Obtain Competition: Market research was conducted, details of which are in the market research section of this document. This effort did not yield any additional sources that can meet the Government’s requirements. An intent to sole source has been posted and received no responses to date. There is no competition anticipated for this acquisition. In accordance with RFO FAR 5.301 and RFO 16.507-6 this action will be synopsized at award, and the justification will be made publicly available.

7. Actions to Increase Competition: The Government will continue to conduct market research to ascertain if there are changes in the marketplace that would enable future actions to be completed.

8. Market Research: A small business (SB) query of the Dynamic Small Business Search (DSBS) database using key word “PACS” and NAICS 541519 returned 13 results. A query of the GSA eLibrary using keyword “Philps PACS” returned 8 results, further filtering SDVOSBs and VOSBs resulted in 0 vendors. A query in FPDS using keywords “Philips PACS Services” returned 143 results of which Philips and Four Points are 2 of the top providers. There isn’t sufficient evidence that any other vendor can meet the minimum requirement without incurring significant cost and delays to the Government. A market survey sent to the OEM Philips confirmed Four Points is the sole provider leasing the required supplies and services.

Based on the market research performed, it is in the best interest of the government for this requirement to be procured via sole source to SDVOSB Four Points Technology.

9. Other Facts: N/A

10. Technical and Requirements Certification: I certify that the supporting data under my cognizance, which are included in this justification, are accurate and complete to the best of my knowledge and belief.

Richard Prokop Radiology PACS Administrator Date

NCO 1

Ri h d P k

12/10/2025

Effective Date: 03/15/2023 Page 5 of 5 Revision: 02 Acquisition ID#: 36C241-26-AP-0036

11. Determination that Anticipated Cost is Fair and Reasonable: Contract NNG15SD22B 36C24121F0001 was awarded to Four Points Technology and prices were found fair and reasonable.

NASA SEWP has already determined the prices of supplies and fixed-price services under schedule contracts to be fair and reasonable.

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

Ashley Kenyon Date Contracting Officer

NCO 1

13. Approvals in accordance with VHAPG Part 816.505 Indefinite Delivery Contracts: Ordering.

a. 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.

Sheryl Anthony Date Branch Chief

NCO 1

HIGHER LEVEL APPROVAL (Required for orders over $750,000):

b. VHA Advocate for Competition/Head of Contracting Activity (HCA) REVIEW AND APPROVAL (over $750,000 to $15 million): I have reviewed the foregoing justification and find it to be complete and accurate to the best of my knowledge and belief and approve for other than full and open competition.

Date

Gerald F. Jacobs Executive Director, Regional Procurement Office East VHA Head of Contracting Activity (HCA)

ASHLEY

KENYON

Digitally signed by ASHLEY

KENYON

Date: 2025.12.10 09:00:34 -05'00'

SHERYL ANTHONY Digitally signed by SHERYL ANTHONY Date: 2025.12.10 09:09:58 -05'00'