P03-EFO-PACS.pdf

VHAPM Part 816.5—Indefinite-Delivery Contracts Original Date: 08/30/2017 Date: 03/11/2019 Rev 02

DEPARTMENT OF VETERANS AFFAIRS

Justification and Approval

For

Exception to Fair Opportunity Memo

Acquisition Plan Action ID: 36C249-20-AP-0962

1. Contracting Activity: Department of Veterans Affairs, Veterans Integrated Service Network 09, 626 Tennessee Valley Health System

PR# 626-20-2-2000-0039

2. Description of Action:

This requirement is to establish a follow-on base and options contract for Picture Archive and Communication System (PACS) for the Veterans Integrated Service Network 9 (VISN9).

3. Description of Supplies or Services:

The PACS system is a medical imaging technology which provides economical storage and convenient access to images from multiple modalities (source machine types). Electronic images and reports are transmitted digitally via PACS; this eliminates the need to manually file, retrieve, or transport film jackets, the folders used to store and protect X-ray film. The universal format for PACS image storage and transfer is DICOM (Digital Imaging and Communications in Medicine). Non-image data, such as scanned documents, may be incorporated using consumer industry standard formats like PDF (Portable Document Format), once encapsulated in DICOM. A PACS consists of four major components: The imaging modalities such as X-ray plain film (PF), computed tomography (CT) and magnetic resonance imaging (MRI), a secured network for the transmission of patient information, workstations for interpreting and reviewing images, and archives for the storage and retrieval of images and reports. Combined with available and emerging web technology, PACS has the ability to deliver timely and efficient access to images, interpretations, and related data. PACS reduces the physical and time barriers associated with traditional film-based image retrieval, distribution, and display.

Base Year: June 06, 2020 – May 31, 2021 $510,000.00 1st Option Period June 01, 2021 – May 31, 2022 $510,000.00 2nd Option Period June 01, 2022 – May 31, 2023 $510,000.00 3rd Option Period June 01, 2023 – May 31, 2024 $510,000.00 4th Option Period June 01, 2024 – May 31, 2025 $510,000.00

Base and Options Total $2,550,000.00

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) Subpart 16.505 Subpart 16.505(b)(2)(i):

Date: 03/11/2019 Rev 02

( ) FAR Subpart 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.

( ) FAR Subpart 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.

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

( ) FAR Subpart 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).

( ) FAR Subpart 16.505(b)(2)(i)(F) In accordance with section 1331 of Public Law 111-240 (15 U.S.C.

644(r)), contracting officers may, at their discretion, set aside orders for any of the small business concerns identified in 19.000(a)(3). When setting aside orders for small business concerns, the specific small business program eligibility requirements identified in part 19 apply.

5. Rationale Supporting Use of Authority Cited Above:

The Change Healthcare PACS system offers advanced clinical workflows and associated quantitative analysis capabilities directly within the radiologist’s read flow. The Change PACS also provides 16 Advanced Visualization applications, tools and workflows that are essential for reading CT and MRI exams are included at no cost. In addition, Change offers over 30 applications, tools and workflows for Oncology, Neurology and Cardiology imaging for purchase. The Change Healthcare Integrated Advanced Visualization can eliminate the need for dedicated specialized Advanced Visualization workstations and associated costs for customers, while reducing the cost of healthcare delivery.

The Change Healthcare PACS also allows radiologists to control consult availability, connect quickly and easily in real-time, screen-share with members of the care team, and log collaboration session information. This system addresses the common issues most disruptive to the radiologist's workflow, including the management of referring physician consultations. It initiates a collaboration session by sending a request through the collaboration contact list; users can send, accept, decline, queue up the invitation, and immediately discuss the case from within the imaging cockpit.

The Change Healthcare system offers deployment and usability options that address specific business challenges and user requirements. It is easy to implement, but sufficiently flexible and http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfars/far/19.htm#P3_64

Date: 03/11/2019 Rev 02 intelligent to follow end users as they move within, or even outside, a healthcare enterprise, retaining user preferences for each login, regardless of where they access the system. Various deployment alternatives that meet the requirements of different end users, including robust and feature rich toolsets for power users and hospital staff.

An award to Change Healthcare was made for the initial purchase of this equipment and the software on which it operates. The software used in this equipment is proprietary to the manufacturer, Change Healthcare, and this requirement represents a follow-on to the initial award. To utilize different equipment from another vendor would require duplication of costs and would not be cost advantageous to the government. The vendor has also provided confirmation that there are no authorized distributors for the PACS system, its operating software and the monitoring and maintenance of those components.

6. Efforts to Obtain Competition: A source sought notice was posted to seek competition for this requirement. Detailed market research was conducted through queries of Vendor Information Pages(VIP), Federal Procurement Data System (FPDS), BetaSam and internet searches for providers of PACS systems.

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 competed.

8. Market Research: Detailed market research was conducted through queries of VIP, FPDS, BetaSam and internet searches for providers of PACS systems. A query of FPDS-NG located multiple awards to Change Healthcare for similar requirement. Emails were sent to the Contract Specialists administering these requirements for their supporting documents to further enhance the basis for the sole source award in this requirement. Email communication with the vendor to ascertain the names of any authorized distributors or providers resulted in confirmation that only Change Healthcare is authorized to maintain the equipment and the software which operates on the equipment is proprietary and no other vendor is authorized to distribute it.

9. Other Facts: None

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.

Date: 03/11/2019 Rev 02

Date: 03/11/2019 Rev 02

Susan F. Digitally signed by Susan F. Nagel 234493

Date: 2020.04.21 12:33:59 -05'00'

Susan F. Nagel Acting, Director of Contracting NCO 9

HIGHER LEVEL APPROVAL (Required for orders over $700,000):

a. VHA SAO HCA REVIEW AND APPROVAL (over $700,000 to $13.5 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.

Terry L. Spitzmiller Executive Director Regional Procurement Office Central (VHA)

Nagel 234493

626-20-2-2000-0039 IGCE (2)

For Official Use Only/Source Selection Sensitive Acquisition Planning SOP Revision: 09, Effective Date: 03/25/20

VA249-20-AP-0962 TITLE: Picture Archive and Communication System (PACS) BACKGROUND INFORMATION: The VISN 9 Service Area has a Sole Source requirement to purchase Picture Archive and Communication Software (PACS) to assist with patient care and seamless transfer of medical images throughout the service area.

1. DATE PREPARED: March 25, 2020 2. PREPARED BY: Thomas Nicholls, Contract Specialist

3. DESCRIPTION OF REQUIREMENT: The contractor shall provide all-inclusive service support for software and hardware which shall include system operation, backups, updates, upgrades, preventive maintenance and follow-on training for PACS and related equipment and software purchased or licensed for the term of the contract.

4. PRODUCT OR SERVICE? Service 5.NAICS/FSC/PSC: 518210 | D311

6. REQUESTOR: Brandon T. Weiss 7. PHONE NO: 615-225-3646

8. PLANNED/ACTUAL DATE SUBMITTED:

Feb 10, 2020

9. PLANNED AWARD DATE: June 05, 2020

10. ESTIMATED TOTAL COST: $2,550,000.00 11. ESTIMATED BASE PERIOD COST: $510,000.00

12. RISKS: The risks to this requirement are security and contractor performance. This system works on government networks and archives patient information. Additionally, this is a vital system and contractor performance is vital to hospital operations.

13. OTHER CONSIDERATIONS: There are no other areas of consideration for this requirement.

14. COMPETITIVE?

YES NO

15. REASON FOR OTHER THAN FULL AND OPEN

COMPETITION: Sole Source

16. POTENTIAL SOURCES: This requirement is a follow on to an existing contract. The PACS system in place is proprietary to Change Healthcare and there are no authorized distributors.

17. DESCRIPTION OF MARKET RESEARCH EFFORTS CONDUCTED OR TO BE CONDUCTED: Market research through VIP returned 1 result. FPDS query returned multiple results for similar requirements to Change Healthcare. Email communication with the vendor returned no authorized distributors for software or systems in place.

18. *SMALL BUSINESS PROGRAMS

*VA must be cognizant of socioeconomic set-aside considerations, including the Veterans First Contracting Program/ 38 U.S.C. 8127’s “Rule of Two.”

*See “Procurement Request and Bundling Requirements” if applicable

Service-Disabled Veteran-Owned Business Set-aside

Veteran-Owned Business Set-aside

8(a) Set-Aside

HUBZone Set-Aside Small Business Set-Aside

Women- Owned Small Business Set Aside

19. PLANNED CONTRACT TYPE: Firm Fixed Price

20a. COMMERCIAL ITEM OR SERVICE?

YES NO

20b. If NO, could the requirement be changed to provide for commercial item or service?

YES NO

21. IF SERVICES, ARE INHERENTLY GOVERNMENTAL FUNCTIONS INVOLVED?

YES NO N/A

22a. SUITABLE FOR PERFORMANCE-

BASED?

YES NO N/A

22b. If performance-based unacceptable, provide explanation:

23a. OPTIONS:

YES NO

23b. If YES, number and type:

4- 12 month periods

24a. GOVERNMENT PROPERTY TO BE

FURNISHED?

YES NO

24b. If YES, describe (attach additional sheets, if necessary):

25a. GOVERNMENT INFORMATION TO

BE PROVIDED?

YES NO

25b. If YES, describe:

26. ENVIRONMENTAL AND ENERGY CONSERVATION OBJECTIVES: There are no environmental or energy conservation objectives applicable to this requirement.

27. SECURITY CONSIDERATIONS: This PACS system will operate on the government network and archive patient information. Security vulnerabilities have been addressed in the prior awards and will be considered again.

28. EVALUATION FACTORS: This price will be the evaluation factor as this contract follow on to an already in place award for a sole source requirement.

29. MILESTONES: PLANNED DATE

a. Completion of acquisition package:

- Purchase Request (VA Form 2237)

- Statement of Need/ Statement of Work/Statement of Objectives

- Specifications

- Data requirements

- Evaluation factors

- Quality Assurance Plan

03/20/2020

b. Acquisition plan approvals 04/27/2020

c. Solicitation reviews completed 05/10/2020

d. Issuance of combined synopsis/solicitation 05/13/2020

e. Quotes Due 05/25/2020

f. Evaluation of Quotes 06/01/2020

g. Contract preparation, reviews, and clearances obtained: 06/03/2020

h. Contract Award 06/05/2020

i. Acquisition plan approvals

SIGNATURES OF APPROVAL IAW - VHAPM Part 807.1 Acquisition Planning SOP Program Manager Name: Brandon Weiss

Brandon T. Digitally signed by Brandon T. Weiss 448860

Signature: Weiss 448860 Date: 2020.04.15 10:58:36 -05'00'

Date:

Contracting Officer Name: Lori Ellis Lori L. Ellis Digitally signed by Lori L.

Ellis 447747

Signature: 447747 Date: 2020.04.15 11:01:12 -05'00'

Date:

Reviewer Name: Thomas Allman Thomas N. Digitally signed by Thomas

Title: BranchChief Services N. Allman 709696

Signature: Allman 709696 Date: 2020.04.15 12:33:59 -05'00'

Date:

Reviewer Name:Monica Thompson Digitally signed by MONICA Title: Division Chief MONICA E E THOMPSON 110287

Signature: THOMPSON 110287 Date: 2020.04.15 14:03:36 -05'00'

Date:

Attachment 2: Simplified Market Research Template

VHAPM Part 810 Market Research SOP Page 1 of 3 Revision: 03, Effective Date: 02/04/19

Requirement Title: PACS Maintenance | 626-20-2-2000-0039

In accordance with FAR 7.102, contracting officers and acquisition planners are required to perform acquisition planning and conduct market research. The following information is a summary of the acquisition planning: In submitting this request for procurement, the customer considered available sources within the agency, any government furnished information/property, and security considerations IAW VA Directive/Handbook 6500. The contract type for this procurement is FFP and the milestone schedule will be accomplished and documented in the Electronic Contract Management System (eCMS). The information below summarizes the market research results for this requirement.

1. Objective: Per FAR 10.001(a)(2) and VAAR 810.001-70, this report is in support of (check as many as apply):

A new requirement

An acquisition with an estimated value in excess of the simplified acquisition threshold (see FAR subpart 2.1 for current threshold)

An acquisition with an estimated value less than the simplified acquisition threshold where adequate information is not available to develop the requirements package and the circumstances justify the cost of performing the market research;

An acquisition that could lead to a bundled contract (15 U.S.C.

644(e)(2)(A)) (see FAR subpart 2.1 for bundled contract definition);

Other: This is a follow-on contract for High Tech Medical Equipment under DOD contract SPE2D1-18-D-0006.

2. Background:

a. Title: PACS Maintenance

b. Product or Service Code: D311 | Automatic Data Processing Data Conversion Services

c. NAICS Code: 518210 | Data Processing, Hosting, and Related Services

d. Size Standard for NAICS: $35.0 Million

e. Estimated contract value: $2,550,000.00 https://www.acquisition.gov/content/part-7-acquisition-planning https://www.acquisition.gov/content/part-10-market-research https://www.va.gov/oal/library/vaar/vaar810.asp https://www.acquisition.gov/content/part-2-definitions-words-and-terms http://www.ecfr.gov/cgi-bin/text-idx?SID=d7c65babb9a0160ded49f025f5ea9435&mc=true&node=pt48.1.2&rgn=div5#sp48.1.2.2_11 http://support.outreachsystems.com/resources/tables/pscs/ http://www.census.gov/eos/www/naics/ https://www.sba.gov/document/support--table-size-standards

VHAPM Part 810 Market Research SOP Page 2 of 3 Revision: 03, Effective Date: 02/04/19

3. Market Research Sources: In accordance with FAR Part 10, VAAR 810 and VAAM M810, market research has been conducted for this acquisition. The following techniques were used (check as many as apply):

Used VA’s VIP database to identify verified capable SDVOSBs and VOSBs. A query of VIP was done using NAICS 518210 and keyword” PACS”. There was only 1 vendor in the results.

Applying personal knowledge in procuring supplies/services of this type.

Contacting knowledgeable individuals in Government and industry regarding market capabilities to meet requirements.

Reviewing the results of recent market research undertaken to meet similar or identical requirements. Reviewed contract file of award 36C24920N0371

Publishing formal requests for information in appropriate technical or scientific journals or business publications.

Querying the Government-wide database of contracts and other procurement instruments intended for use by multiple agencies available at www.contractdirectory.gov and other Government and commercial databases that provide information relevant to agency acquisitions.

Participating in interactive, on-line communication among industry, acquisition personnel, and customers.

Obtaining source lists of similar items from other contracting activities or agencies, trade associations or other sources.

Reviewing catalogs and other generally available product literature published by manufacturers, distributors, and dealers or available on-line

Conducting interchange meetings or holding presolicitation conferences to involve potential offerors early in the acquisition process.

Conducting market survey:

Other: A sources sought notice was posted to BetaSam.

https://www.vip.vetbiz.va.gov/

VHAPM Part 810 Market Research SOP Page 3 of 3 Revision: 03, Effective Date: 02/04/19

Communication with the manufacturer to establish proprietary evidence for software and all maintenance

4. Market Research Findings: Market research through VIP returned 1 result. FPDS query returned multiple results for similar requirements to Change Healthcare.

Email communication with the vendor returned no authorized distributors for software or systems in place.

5. Customary Commercial Practices/Standards None

6. Market Price: $2,550,000.00

7. Acquisition History: An emergency acquisition was awarded on March 05,2020 to Mckesson/Change Healthcare.

8. Other pertinent information: This is a follow on contract for High Tech Medical Equipment under DOD contract SPE2D1-18-D-0006.

9. Recommendations: The VISN 9 Service Area requires Picture Archiving and Communication System (PACS). Through detailed market research and vendor confirmation the Change Healthcare PACS system and software are proprietary to Change Healthcare, formerly McKesson. The costs associated with seeking potential alternatives to the Change Healthcare PACS system would be excessive and eliminate any potential cost savings. The time required to implement a new system would potentially result in a lapse in service and a detrimental effect in patient care. As a result of the proprietorship and the above factors, it is recommended the award be made Sole Source to Change Healthcare.

10. Based on the above information, the basic clauses and provisions prescribed in FAR Part 12:

Are sufficient for use in this acquisition and do not require any tailoring to be consistent with industry's commercial practices.

Require tailoring to be consistent with industry's commercial practices as noted below. All such tailoring will be included in the solicitation issued for the required supplies/services.

- Identify affected clause/provision paragraph and your recommended change(s).

PREPARED BY:

NAME: Thomas Nicholls DATE: March 25, 2020

FOR OFFICIAL GOVERNMENT USE ONLY

Item # Qty Price Extended

Amount

1 $190,000 190,000.00$ 1 $105,000 105,000.00$ 1 $50,000 50,000.00$ 1 $40,000 40,000.00$ 1 $65,000 65,000.00$

Description/Part Number*

SUBTOTAL (Products)

CHANGE HEALTHCARE RADIOLOGY SOLUTION - MOU

CHANGE HEALTHCARE RADIOLOGY SOLUTION - MEM

CHANGE HEALTHCARE RADIOLOGY SOLUTION - LOU

CHANGE HEALTHCARE RADIOLOGY SOLUTION - LEX

INDEPENDENT GOVERNMENT COST ESTIMATE (IGCE) (Rev. 7-7-14)

Brief Description of Service*

CHANGE HEALTHCARE RADIOLOGY SOLUTION - TVH

Products (including software, licenses)

Services

$s per Period Estimated Amount

626-20-2-2000-0039 IGCE

1 $60,000 60,000.00$

1 $190,000 190,000.00$

1 $105,000 105,000.00$

1 $50,000 50,000.00$

1 $40,000 40,000.00$

1 $65,000 65,000.00$

1 $60,000 60,000.00$

1 $190,000 190,000.00$

1 $105,000 105,000.00$

1 $50,000 50,000.00$

1 $40,000 40,000.00$

1 $65,000 65,000.00$

1 $60,000 60,000.00$

1 $190,000 190,000.00$

1 $105,000 105,000.00$

1 $50,000 50,000.00$

1 $40,000 40,000.00$

1 $65,000 65,000.00$ CHANGE HEALTHCARE RADIOLOGY SOLUTION - LEX

(Option Year 3)

ENTERPRISE ORTHOVIEW/SHARED SERVICES

CHANGE HEALTHCARE RADIOLOGY SOLUTION - LOU

(Option Year 3)

CHANGE HEALTHCARE RADIOLOGY SOLUTION - TVH

(Option Year 1)

CHANGE HEALTHCARE RADIOLOGY SOLUTION - MOU

(Option Year 1)

CHANGE HEALTHCARE RADIOLOGY SOLUTION - MEM

(Option Year 1)

CHANGE HEALTHCARE RADIOLOGY SOLUTION - LOU

(Option Year 1)

CHANGE HEALTHCARE RADIOLOGY SOLUTION - LEX

(Option Year 1)

ENTERPRISE ORTHOVIEW/SHARED SERVICES (Option Year 1)

CHANGE HEALTHCARE RADIOLOGY SOLUTION - TVH

(Option Year 2)

CHANGE HEALTHCARE RADIOLOGY SOLUTION - MOU

(Option Year 2)

CHANGE HEALTHCARE RADIOLOGY SOLUTION - MEM

(Option Year 2)

CHANGE HEALTHCARE RADIOLOGY SOLUTION - LOU

(Option Year 2)

CHANGE HEALTHCARE RADIOLOGY SOLUTION - LEX

(Option Year 2)

ENTERPRISE ORTHOVIEW/SHARED SERVICES (Option Year 2)

CHANGE HEALTHCARE RADIOLOGY SOLUTION - TVH

(Option Year 3)

CHANGE HEALTHCARE RADIOLOGY SOLUTION - MOU

(Option Year 3)

CHANGE HEALTHCARE RADIOLOGY SOLUTION - MEM

(Option Year 3)

1 $60,000 60,000.00$

1 $190,000 190,000.00$

1 $105,000 105,000.00$

1 $50,000 50,000.00$

1 $40,000 40,000.00$

1 $65,000 65,000.00$

1 $60,000 60,000.00$

SUBTOTAL (Services) 2,550,000.00$

2,550,000.00$

Engineering Estimates

ENTERPRISE ORTHOVIEW/SHARED SERVICES (Option Year 4)

Past Contract Pricing GSA Federal Supply Schedule Published Prices Government Wide Acquisition Contract (GWAC) Published

TOTAL IGCE

*Check block(s) below that describe the basis for the IGCE:

Phone: 615.225.3646 Date: 2/10/2020

POC NAME: Brandon Weiss Email: Brandon.Weiss@va.gov

Informal Vendor Quotes Prior Bills of Material Prior Monthly Vouchers Catalog Pricing Other (Please Explain ):

CHANGE HEALTHCARE RADIOLOGY SOLUTION - MOU

(Option Year 4)

CHANGE HEALTHCARE RADIOLOGY SOLUTION - MEM

(Option Year 4)

CHANGE HEALTHCARE RADIOLOGY SOLUTION - LOU

(Option Year 4)

CHANGE HEALTHCARE RADIOLOGY SOLUTION - LEX

(Option Year 4)

ENTERPRISE ORTHOVIEW/SHARED SERVICES (Option Year 3)

CHANGE HEALTHCARE RADIOLOGY SOLUTION - TVH

(Option Year 4)

Month Year