P03.Attachment 1 Exception to Fair Opportunity CO SIGNEDdmdc.pdf

Attachment 1: Request for Exception to Fair Opportunity Memo

Effective Date: 12/30/2025 Page 1 of 4 Revision: 03 Acquisition ID#: 36C263-26-AP-3312

DEPARTMENT OF VETERANS AFFAIRS

Justification and Approval

For

Exception to Fair Opportunity Memo

Acquisition Plan Action ID: 36C263-26-AP-3312

1. Contracting Activity: Department of Veterans Affairs, Network Contracting Office 23 located at

1303 5th Street, Suite 300 Coralville, IA 52241, in support of Veterans Integrated Service Network

(VISN 23).

2237-499-26-4-6765-0096

2. Description of Action:

A firm fixed price task order off NAC FSS HTME contract VA797H17D0022 with Philips North America to cover 6 months. The proposed sole source task order against NAC FSS HTME contract VA797H17D0022 is for a 6 months firm-fixed price (FFP) service maintenance agreement on specific Philips Medical Systems imaging equipment at VISN 23 facilities.

3. Description of Supplies or Services:

Veterans Integrated Service Network 23 requires a contract for the maintenance and service of all Philips imaging equipment located in the network. The contractor shall furnish all labor, transportation, parts, test equipment, tools, and expertise necessary to maintain the imaging equipment. This is a request for a VISN-wide service agreement on Philips imaging modalities. There must be multiple levels of service contract coverage (full, partial, co-op…) available on all the imaging modalities that need coverage. Multiple options must also be selected where needed (i.e., extended labor hours, extended PM hours, etc.). A full gamut of remote capabilities is also required:

Remote desktop, software upgrades, support, education/expertise, and security. This contract will be effective for 6 months upon date of award. The estimated total cost is $800,259.02.

4. Statutory Authority: The statutory authority permitting an exception to fair opportunity is Section 41 U.S.C. 4106(c) as implemented by the Federal Acquisition Regulation (FAR) 16.505(b)(2)(i):

( ) FAR 16.505(b)(2)(i)(A): The agency need for the supplies or services is so urgent that providing a fair opportunity would result in unacceptable delays.

(X) FAR 16.505(b)(2)(i)(B): 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 16.505(b)(2)(i)(C): 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 16.505(b)(2)(i)(D): It is necessary to place an order to satisfy a minimum guarantee.

Effective Date: 12/30/2025 Page 2 of 4 Revision: 03 Acquisition ID#: 36C263-26-AP-3312

( ) FAR 16.505(b)(2)(i)(E): For orders exceeding the simplified acquisition threshold, a statute expressly authorizes or requires that the purchase be made from a specified source”. The statutory authority permitting an exception to fair opportunity for this action is 38 U.S.C. 8127(c), known as the Veterans First Contracting Program which provides the authority to directly contract with a Service-Disabled Veteran-Owned Small Business (SDVOSB) or a Veteran-Owned Small Business

(VOSB).

5. Rationale Supporting Use of Authority Cited Above:

Philips is the proprietary manufacturer of this equipment and is the only source able to meet the specific requirements/characteristics for servicing/maintaining it. These are “direct replacement” parts/components for existing equipment. This is for a support contract for existing equipment which includes remove capabilities for service and support. The Philips Imaging equipment included in this contract are Food and Drug Administration (FDA) approved medical equipment items, therefore 3rd party vendors have not been able to obtain the necessary proprietary software and parts to be able to maintain the equipment. A major requirement for this service agreement is the ability to provide specific tasks through a remote connection. They are listed below:

1). Remote Desktop Capability – The ability to remotely enter the desktops of the modalities to initially troubleshoot any issues is necessary. Service technicians must request permission initially and will provide real-time support through the remote desktop.

2). Remote Software Updates – The ability to remotely provide and implement software updates is another crucial remote requirement. Instead of shipping software through the mail, waiting for it to arrive, and dealing with downtime to install the update, the amount of time is significantly reduced by removing the physical mailing of the updates. This reduces downtime and has less effect on patient care.

3). Remote Monitoring/Support System – To ensure proper function and efficiency, a remote monitoring system of the imaging modalities is necessary. The imaging modalities cannot be constantly monitored through in-house means. Therefore, a remote system needs to be available that closely monitors equipment parameters and performance, proactively detecting issues and correcting them before any major problem occurs. This provides an efficient support system that does not take time or resources away from inhouse staff.

4). Remote Clinical & Technical Education/Expertise – Available remote education for both the clinical and technical staff is also crucial. These educational sessions need to be built based on customer needs and must be flexible with the schedules of our staff. These remote education sessions eliminate the need for a fixed cost schedule and the travel required for sessions at vendor facilities, reducing time lost and cost.

There are service keys that allow the technicians to repair issues with the equipment. The substantial number and cost of these imaging modalities requires a great deal of speed when there is any issue with the equipment. These keys are not immediately available to

Effective Date: 12/30/2025 Page 3 of 4 Revision: 03 Acquisition ID#: 36C263-26-AP-3312 secondary providers potentially contributing to extended downtime of critical hardware.

Immediate access to service keys allows for faster resolution of issues.

There are also proprietary upgrades, both hardware and software, to the imaging modalities that are only provided through the Original Equipment Manufacturer (OEM).

Since these upgrades are proprietary, other providers do not have access to any information about them. Therefore, they cannot install or maintain the equipment once these upgrades are available. The OEM is the only source with the correct knowledge to properly service the imaging equipment. All vendors had the fair opportunity to be considered for the imaging modalities when they were first procured.

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. There is no competition anticipated for this acquisition. In accordance with FAR 5.301 and 16.505(b)(2), this action will be synopsized at award on the System for Award Management (SAM) and the justification will be made publicly available.

7. Actions to Increase Competition:

In situations involving complex medical equipment, it is difficult to remove barriers to competition because the OEM is the only qualified company capable to provide the repair and maintenance of its own specialized medical equipment. This is especially true where proprietary software, specific diagnostics tools, and specialized electronics are used to maintain the diagnostic imaging medical equipment in accordance with OEM specifications. Unless the manufacturer chooses to license its software and authorize local service providers to maintain the Philips diagnostic imaging medical equipment, the only alternative would be to replace the existing equipment with a more generic brand.

Considerations for new equipment will be made when the existing equipment reaches the end of its life cycle span.

The Government will continue to conduct market research to ascertain if there are changes in the marketplace that would enable future actions to be competed.

8. Market Research:

SBA DSBS was queried for certified SDVOSB and certified VOSB vendors capable of providing for this requirement. No SDVOSB or VOSB matching the required criteria were found. An email sent to Philips North America to inquire if they had small business partners that could potentially provide this service.

Philips responded stating that only Philips is able to provide the required services needed to satisfy this requirement.

9. Other Facts:

Effective Date: 12/30/2025 Page 4 of 4 Revision: 03 Acquisition ID#: 36C263-26-AP-3312

Sole source letter is included with the market research report.

10. Determination that Anticipated Cost is Fair and Reasonable: A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable: (insert the methods that will be used to determine a fair and reasonable price).

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

Joshua Imdacha Date Contracting Officer NCO 23 Network Contracting Office

12. 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 $900K): I certify the justification meets requirements for other than full and open competition.

Michael Casper Date NCO 23 Services Branch Chief https://dvagov.sharepoint.com/sites/VHAProcurement/VHAPG/VHAPG_Part_816.505.aspx