P03 CO-Signed_PM_Part813.106_SSJ_MPT-SAT_Megadyne ESUs_523-21-4-7821-0173 (002) SIGNED DR (002).pdf

VHAPM Part 813.106 Page 1 of 2 Revision 02 Eff Date: 03/31/2020

DEPARTMENT OF VETERANS AFFAIRS

Justification for Single Source Awards IAW FAR 13.106-1 For

Over Micro-Purchase Threshold but Not Exceeding the SAT ($250K)

Acquisition Plan Action ID: 36C241-21-AP-02968

1. Contracting Activity: Department of Veterans Affairs, Regional Procurement Office East (VISN 1), VAMC

Jamaica Plain. PR #: 523-21-4-7821-0173

2. Brief Description of Supplies/ Services required:

This is a sole source justification procurement of six (6) Megadyne brand Electrosurgical Units (ESUs). ESUs are used extensively for precision surgical procedures at the VA Boston Healthcare system. Six (6) ESUs are required to replace Megadyne Electrosurgical Units (ESU) that are approaching end of life. Several of the existing Megadyne electrosurgical units (ESU) are currently end of support. If these ESUs fail, they cannot be fixed in house. The vendor cannot guarantee parts/services to repair devices approaching obsolescence. The replacement ESUs are critical to the VABHS mission of maintaining excellence in the provision of healthcare for our Veterans. Failure of multiple existing units would severely impact surgical operations at VA Boston. Clinical engineering recommends replacing the unsupported units with newer models that are supported and have parts available.

The estimated value of the proposed action is $ 37,134.00.

3. Unique characteristics that limit availability to only one source, with the reason no other supplies or services can be used:

The ESUs are proprietary to Megadyne/Ethicon. There are two (2) Megadyne ESU resellers in the market.

Neither reseller responded to pre-solicitation postings on Contract Opportunities. This requirement was posted to SAM.gov under 36C24121Q0789 on 09/06/21 and again as an Intent to Sole Source on 09/13/21 under the same PIID. To date there has been no response or inquiry to either.

The pricing offered to the VA by the OEM (Original Equipment Manufacturer) offers a deep discount of 14.3%.

The OEM is offering a $1000.00 discount per unit, saving the Government $6000.00 in total. The Megadyne Market Price is $6,995.00 per unit. Google searches provided no comparison pricing as the Megadyne MEGEN1 is proprietary to the OEM. Reseller prices in 2020 ranged from $6900.00 to $13,954.00. The Megadyne 2020 Market Price was $6,785.15.

The ESU will require six (6) 3M Bipolar Footswitch units. These units are not available in the market via general online resellers. They are distributed via 3M and resellers as accessories to manufacturers of ESU units, as a system compatible accessory. Considering the value of offered by the current Megadyne Pricing, and the need to replace the aging ESUs, it would not be efficient or cost effective to segregate the footswitches from the current request. Any delays in receipt would adversely impact deployment of the new ESUs to patient care. The footswitches are priced at $1164.00 through Megadyne.

It is critical that the ESUs and the foot switches arrive simultaneously. Separating the procurement for a nominally-valued accessory would be inefficient as delays in receipt of product from different vendors, would adversely impact patient care. This would also negate the cost savings afforded by the Megadyne/Ethicon discount.

Megadyne, the LB OEM is the only source who has responded to the procurement request.

VHAPM Part 813.106 Page 2 of 2 Revision 02 Eff Date: 03/31/2020

4. Description of market research conducted and results or statement why it was not conducted:

Contracting conducted extensive market research IAW FAR 10.001:

Process: Market Research was conducted in the traditional manner by excluding mandatory sources, by researching available mandatory National Contracts, and by researching non-mandatory GSA FSS Schedule contracts.

FAR 8.002-Mandatory Sources:

VAAR 810.001-70 Compliance with VFCP (Veteran’s First Contracting Program): A VetBiz search was conducted using NAICS: 334510 and the Keywords: Electro Surgical Generator.

One hundred and five (105) VIP-Verified, SDVOSB vendors were identified as being “potentially capable.” None responded to the Sources Sought not the Intent to Sole Source.

VAAR 813.003-70(c) VFCP, Rule of Two, and Fair & Reasonable Offers: The Rule of Two (2) for cannot be met. No OEM-Authorized SDVOSB distributors responded to a request for sources for the Megadyne Electrosurgical Generator.

VAAR 819.202-2 Preference for SD/VOSBs: There appeared to be no SD/VOSB interest for the Megadyne ESU requirement.

38 USC 8127(d) Rule of Two: The Rule of Two (2) cannot be applied. There was no SD/VOSB response to the Contract Opportunities Sources Sought Notice.

FAR 8.004-Non-Mandatory Contract Vehicles: There are no Contract Vehicles: mandatory or non-mandatory, that specifically offer the Megadyne ESU.

FSS Contracts: Johnson and Johnson holds a FSS Contract: V797D-30072 on Schedule 65 IIA;

SIN A-41. The Megadyne ESU does not appear to be on that contract. There are twenty-three (23) contractors who hold FSS Schedules for Schedule 65 II A: Medical Equipment and Supplies;

SIN A-41: Electrosurgical Apparatus. Only GEO-MED, a SDVOSB can distribute for Megadyne/Ethicon. GEO_MED did not respond to the Sources Sought.

FAR: 19.202-2: Preference for Small Businesses: The SBA DSBS was searched first with hopes of maximizing SB participation to the maximum extent practicable. A search was conducted using NAICS:

334510 and the Keywords: Electro-Surgical Gen. There were seventeen (17) results. GEO-MED was not listed on the SBA DSBS search. None of the other SB vendors are Megadyne distributors.

FAR 13.106-1(b)(1): The request will be below SAT. This is a brand name, sole source requirement that is proprietary to the LB OEM, Megadyne Inc (Ethicon). There were no responses to the Sources Sought. There were no responses to the Intent to Sole Source (09/13/21). Megadyne did provide two

(2) SDVOSB distributors the previous year. Their prices were not reasonable in comparison to OEM pricing;

neither distributor responded to requests for additional discounts. Small Business representation for Megadyne products is extremely limited in the market, as evinced by FPDS. There have been two (2) VA awards for ESU units directly to Ethicon, the LB parent for Megadyne Inc. There have been 656 awards to Megadyne, Inc. for Megadyne ESU Units. No awards were identified for Geo-Med LLC or Rhyfel Inc., the only SDVOSB, OEM-Authorized distributors.

5. Contracting Officer's Certification: Purchase is approved in accordance with FAR13.106-1(b). I certify that the foregoing justification is accurate and complete to the best of my knowledge and belief.

Requestor Date:

Title Location

Name Date:

Contracting Officer

Location

BENJAMIN J.

FORD 1661320

Digitally signed by BENJAMIN J.

FORD 1661320

Date: 2021.09.20 14:44:27 -04'00'

Deborah L.

Reardon 350203

Digitally signed by Deborah L.

Reardon 350203 Date: 2021.09.20 15:49:11 -04'00'