P03. Single Source Justification FAR 13.5 - Siemens Building Automation System Service.pdf

SOLE SOURCE JUSTIFICATION UNDER SIMPLIFIED PROCEDURES FOR CERTAIN

COMMERCIAL ITEMS IN ACCORDANCE WITH FAR 13.5

Effective Date: 02/01/2022 Page 1 of 5 Acquisition ID#: 36C262-24-AP-4703

DEPARTMENT OF VETERANS AFFAIRS

Acquisition Plan Action ID: 36C262-24-AP-4703

1. Contracting Activity:

Department of Veterans Affairs, VISN 22, Network Contracting Office 22, in support of the Greater Los Angeles VA Healthcare System, West Los Angeles VA Medical Center.

2237: 691-24-3-5091-0098

2. Nature and/or Description of the Action Being Processed:

This procurement is for Siemens Building Automation System (BAS) services located at the Greater Los Angeles VA Healthcare System (GLAVAHCS) – West Los Angeles VA Medical Center in accordance with FAR 13.5 Simplified Procedures for Certain Commercial Items and specifically FAR

13.501 Special Documentation Requirements, where acquistions 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 Greater Los Angeles VA Healthcare System (GLAVAHCS) - West Los Angeles Medical Center, requires continued services from Siemens Industry, Inc. for the Siemens Apogee Building Automation System (BAS). To ensure continuity of services, the Network Contracting Office 22, Services Branch 3, intends to award a new, firm-fixed price contract to Siemens Industry, Inc. for maintenance and automation services for the Siemens Apogee Building Automation Systems for a period of four months. The proposed contract action will be awarded with an estimated value of $519,910.15.

3. Description of Supplies/Services Required to Meet the Agency’s Needs:

The Siemens Apogee Building Automation System is a critical system that controls the heating, ventilation, and air conditioning (HVAC) systems in multiple buildings at the facility. The BAS is essential for maintaining a comfortable and safe environment for patients, visitors, and staff. The BAS is an integrated system, and all components must work together seamlessly to maintain a stable environment. Failure of the system can result in temperature and humidity fluctuations that can negatively impact patient care and safety.

The services required to maintain the BAS include preventive maintenance, repair services, software updates, and replacement of faulty or obsolete components. Preventive maintenance is essential to ensure that the BAS is functioning correctly and prevent unexpected downtime. The contractor must have experience and expertise in maintaining Siemens Apogee BAS systems and be able to respond promptly to service calls. In addition, the contractor must have access to genuine Siemens replacement parts to ensure that the BAS remains in excellent condition.

The Estimated Period of Performance is June 2024 through September 2024.

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The Estimated Value of the acquisition is $519,910.15.

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

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

Requires the Use of the Authority Cited Above (applicability of authority):

Siemens Industry, Inc. has established itself as the sole provider capable of delivering the specialized maintenance services required for the Apogee Building Automation Systems. The Apogee system is a proprietary technology developed by Siemens, and as a result, Siemens possesses intimate knowledge and expertise in maintaining and servicing this system.

The unique qualifications of Siemens Industry, Inc. are directly related to the specialized nature of the Apogee system and the intricate technical requirements involved in its maintenance. The system comprises advanced automation and control components, requiring specialized skills, technical knowledge, and access to proprietary tools and software. Siemens has been the exclusive provider of maintenance services for the Apogee system at the Greater Los Angeles VA Healthcare System under the current contract.

The contractor's proprietary knowledge of the Apogee system, accumulated through years of experience and exclusive access to technical information, enables them to deliver high-quality maintenance services efficiently. Their unique qualifications minimize risks associated with system downtime, ensure optimal performance, and reduce potential disruptions to critical healthcare operations. Given the criticality and complexity of the Apogee system, utilizing Siemens' unique qualifications through is necessary to maintain uninterrupted operations and maximize the system's lifespan.

Accordingly, Siemens Industry, Inc. is the only firm capable of providing the services described in Section III above without the Veteran’s Health Administration experiencing substantial duplication of cost that could not be expected to be recovered through competition and unacceptable delays in fulfilling its requirements

6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable:

In accordance with FAR Part 10, a synopsis of the proposed acquisition (36C26224Q1275) was posted on 06/05/2024 to ensure that offers were solicited from as many sources as practicable. The synopsis provided a clear and concise description of the maintenance services required for the Siemens Building Automation Systems at the Greater Los Angeles VA Healthcare System. The synopsis included relevant information such as the nature of the requirement, the estimated value of the contract, the contract period, and the unique qualifications and certifications necessary for successful performance.

Effective Date: 02/01/2022 Page 3 of 5

The synopsis (36C26224Q1275) was posted on a government-wide point of entry, such as the System for Award Management (SAM) website, to maximize visibility and reach a wide range of potential offerors. Interested parties were invited to submit inquiries and request additional information regarding the acquisition.

One response was received from by an SBA Certified (VetCert) Service-Disabled Veteran Owned- Small Business – Arcis FM, LLC.

Arcis FM. LLC provided a capability statement describing how they could meet the requirement.

After further review, it was understood that Arcis FM. LLC is unable to provide direct access to the Siemens Building Automation system, unable to provide replacement parts required to repair the Siemens Building Automation System, and unable to perform migrations or upgrades to the Siemens Building Automation System. Considering the requirement of 24/7 on-site and off-site management and full coverage preventative maintenance of the building automation system (to include accessing the Siemens diagnostic panels, Siemens Apogee upgrades/migrations, and parts), it is not within the best interest of the Government to pursue competition in response to the one interested party.

7. Determination by the CO that the Anticipated Cost to the Government will be Fair and Reasonable:

The Contracting Officer has determined that the anticipated cost for this acquisition is fair and reasonable based on a thorough price analysis of historical pricing data of past procurements and comparison to the Independent Government Cost Estimate (IGCE).

Historical pricing data revealed the following:

In FY22, Network Contracting Office – 22 awarded a contract (36C26222C0155) to Siemens Industry, Inc. (SAM UEI: JZXZSN3BBL98) for identical services. The total contract value was $584,442.00 for a period of performance for six (6) months. This is equivalent to $97,407.00 per month.

In FY23, Network Contracting Office – 22 awarded a contract (36C26223P1679) to Siemens Industry, Inc. (SAM UEI: JZXZSN3BBL98) for identical services. The total contract value was $649,888.14 for a period of performance for five (5) months. This is equivalent to $129,977.628 per month.

The difference in monthly pricing between Fiscal Year (FY) 22 and 23 resulted in a 33.4376666975% pricing increase. It is reasonable to assume that the requirement in FY24 would have the same increase of price. Resulting in an increase of $43,461.486 from FY23’s pricing of $129,977.628 to $173,439.114.

The proposed estimated price for this acquisition is $519,910.15 for a period of performance of four

(4) months. This is equivalent to $129,977.5375 per month. A difference of .000069% to FY23. The pricing determined to be fair and reasonable in FY23 is closely identical to the pricing proposed for this acquisition.

The comparison to the Independent Government Cost Estimate revealed the acquisition to be $173,846.306 less than the IGCE value of $693,756.46.

Effective Date: 02/01/2022 Page 4 of 5

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, market research, in accordance with FAR Part 10, was conducted by synopsis of the proposed acquisition, advising industry of the pending procurement and soliciting inquiries from interested parties. One response was received from a Notice of Intent (36C26224Q1275), posted on 06/06/2024 by an SBA Certified (VetCert) Service-Disabled Veteran Owned-Small Business – Arcis FM, LLC.

Additionally, a review of recent market research results undertaken to meet similar or identical requirements identified two (2) contracts procured by the Department of Veterans Affairs within the last twenty four (24) months:

-36C26223P1679; awarded 06/28/2023.

-36C26222C0155; awarded 07/01/2022.

The market research resulting in the award of both contracts listed above revealed, the absence of competition and supported the use of Other Than Full and Open Competition in accordance with FAR 6.302-1.

In accordance with the “VA Rule of Two” and VAAR Class Deviation 810.001-70, the Veteran Small Business Certification (VetCert) database was queried to determine if two or more service-disabled veteran-owned businesses (SDVOSBs) and veteran-owned small businesses (VOSBs), utilizing the NAICS code 561210 – Facilities Support Services. A combined 2,688 Service-Disabled Veteran Owned Small Businesses (SDVOSB) and Veteran Owned Small Businesses (VOSB) were identified.

9. Any Other Facts Supporting the Use of Other than Full and Open Competition:

None.

10. Listing of Sources that Expressed, in Writing, an Interest in the Acquisition:

Siemens Industry, Inc. (SAM UEI: JZXZSN3BBL98) 1000 E. Deerfield Pkwy.

Buffalo Grove, Illinois 60089

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:

In order to remove or overcome any barriers to competition before making subsequent acquisitions for the services required, the agency may take the following actions:

Market Research: Conduct comprehensive market research to identify potential alternative sources of supply and determine the availability of other vendors capable of providing the required services.

This research will help ensure that the agency has a thorough understanding of the market and potential competition.

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

Industry Outreach: Engage in proactive industry outreach efforts to communicate the agency's requirements and upcoming acquisition opportunities to a wide range of potential offerors. This can include hosting industry days, participating in vendor conferences, and leveraging industry associations to reach a broader pool of interested and capable vendors.

Enhanced Competition: Encourage competition by utilizing competitive procedures, such as competitive negotiations, competitive range determinations, or requests for proposals, in subsequent acquisitions. These procedures allow for a more comprehensive evaluation of offers and provide an opportunity for interested vendors to present their qualifications and solutions.

Continuous Acquisition Planning: Continuously review and update the acquisition strategy and acquisition plan to reflect lessons learned from previous acquisitions and to incorporate any changes in the agency's requirements. This will help identify any unnecessary barriers or restrictions to competition and ensure that subsequent acquisitions are designed to maximize competition and value for the agency.

It is anticipated that a new acquisition shall be procured for the Siemens Apogee Building Automation Systems Maintenance Agreement at the Greater Los Angeles VA Healthcare System will be procured in FY25. The agency is committed to taking the necessary actions outlined above to remove barriers to competition and ensure a fair and open procurement process for subsequent acquisitions.

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

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

CONTRACTING OFFICER Date

NETWORK CONTRACTING OFFICE - 22

b. One Level Above the Contracting Officer) I certify the justification meets requirements for other than full and open competition.

CONTRACTING OFFICER Date

NETWORK CONTRACTING OFFICE - 22