P03 - EFO - Siemens signed.pdf

VHAPM Part 816.5—Indefinite‐Delivery Contracts Attachment 1: Request for Exception to Fair Opportunity Memo Format

VHAPM Part 816.5—Indefinite‐Delivery Contracts Page 1 of 6 Original Date: 08/30/2017 Date: 02/19/2021 Rev 06

DEPARTMENT OF VETERANS AFFAIRS

Justification and Approval

For

Exception to Fair Opportunity Memo

Acquisition Plan Action ID: 36C242‐21‐AP‐1065

1. Contracting Activity: Department of Veterans Affairs, VISN 02, Finger Lakes Healthcare System:

Bath Campus: 76 Veterans Ave, Bath, NY 14810 Canandaigua Campus: 400 Fort Hill Ave, Canandaigua, NY 14424 Rochester Outpatient Clinic (ROPC): 260 Calkins Road, Rochester, NY 14623 Purchase Request number: 528‐21‐2‐6803‐0159

2. Description of Action: This is a request for approval of a sole source task order under Joint DoD, VA NAC HTME Contract (DSCP/VA) SPED1‐17‐D‐0023 for full service maintenance coverage on the Siemens Medical Solutions, USA, Inc. (Siemens) X‐Ray CT Scanner equipment currently in use at the Bath, Canandaigua and ROPC Campuses. This procurement will be conducted in accordance with FAR Part 16.505(b)(2)(i)(B). The purpose of the service agreement is to reduce service costs and improve equipment turn‐around time and reliability. This will be a firm‐fixed price task order contract from contract # SPED1‐17‐D‐0023. The anticipated period of performance is from April 1, 2021 to February 28, 2022 with a provision of four (4) option years. The base year cost is $169,113.01, the cost of each option year is $349,137.48, and the total estimated cost is $1,565.662.93.

3. Description of Supplies or Services: The Canandaigua, Bath and ROPC Campuses (addresses listed above) require a service maintenance plan for the Siemens HTME (High Tech Medical Equipment) currently in use at all three facilities to include replacement parts coverage, remote service support, telephone support, operating system software and hardware reliability reports, as well as, continuing education and support service. The contractor will be responsible for full maintenance coverage by providing all replacement parts, labor, travel expenses, tools, test equipment and other incidentals necessary to maintain or restore the listed equipment to operating specifications according to the manufacturer’s recommendations throughout the term of the contract.

Covered equipment includes the following:

Manufacturer Model Location Functional Location

Siemens SOMATOM.go TOP Bath 400‐655113

Siemens STELLANT Flex Bath 400‐673457

Siemens SOMATOM Definition AS64 Open Canandaigua 400‐497513

Siemens STELLANT D+ CERTEGRA+INFORMATICS SW Canandaigua 400‐497514

Siemens SOMATOM PERSPECTIVE 64 ROPC 400‐536837

Siemens STELLANT D+ CERTEGRA+INFORMATICS SW ROPC 400‐536838

The purpose of the service agreement is to reduce the costs and improve equipment turn‐around time and reliability. This will be a firm‐fixed price task order contract from contract # SPED1‐17‐D‐

VHAPM Part 816.5—Indefinite‐Delivery Contracts Page 2 of 6 Original Date: 08/30/2017 Date: 02/19/2021 Rev 06

0023 for the anticipated period of performance of April 1, 2021 to March 31, 2022 with a base year cost of $169,113.01, the provision of four (4) option years at an annual cost of $349,137.48 per year, and a total contract value of $1,565.662.93. Pricing was agreed upon to be an equal annual cost between Siemens and accepted by the DSCP/VA. There will not be any service cost increases for the base plus four (4) years per the DSCP/VA contract SPED1‐17‐D‐0023 as well as the proposals submitted: ROPC (1‐URGGMX), Bath (1‐URZ5JB) and Canandaigua (1‐UT81PL). Pricing will be as follows:

Base year ROPC: 04/01/2021 to 03/31/2022 $83,945.16 Bath: 6/29/2021 to 03/31/2022 $81,043.12 Canandaigua: 02/19/2022 to 03/31/2011 $4,124.73 Total: $169,113.01

Option year #1 ROPC: 04/01/2022 to 03/31/2023 $83,945.16 Bath: 04/01/2022 to 03/31/2023 $116,702.04 Canandaigua: 04/01/2022 to 03/31/2023 $148,490.28 Total: $349,137.48

Option year #2 ROPC: 04/01/2023 to 03/31/2024 $83,945.16 Bath: 04/01/2023 to 03/31/2024 $116,702.04 Canandaigua: 04/01/2023 to 03/31/2024 $148,490.28 Total: $349,137.48

Option year #3 ROPC: 04/01/2024 to 03/31/2025 $83,945.16 Bath: 04/01/2024 to 03/31/2025 $116,702.04 Canandaigua: 04/01/2024 to 03/31/2025 $148,490.28 Total: $349,137.48

Option year #4 ROPC: 04/01/2025 to 03/31/2026 $83,945.16 Bath: 04/01/2025 to 03/31/2026 $116,702.04 Canandaigua: 04/01/2025 to 03/31/2026 $148,490.28 Total: $349,137.48

Grand Total: $1,565.662.93

The base year pricing is different than option year costs, as sites are being phased in throughout the base period as equipment comes off the original warranty period. However, Option year pricing is consistent for each year through the life of the contract with no increase in costs.

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):

( ) 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.

(X) 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.

VHAPM Part 816.5—Indefinite‐Delivery Contracts Page 3 of 6 Original Date: 08/30/2017 Date: 02/19/2021 Rev 06

( ) 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).

5. Rationale Supporting Use of Authority Cited Above: Siemens is the only company that can provide all the necessary OEM parts and perform all the necessary repairs for the Siemens HTME described above due to patents and copyrights on the equipment. This prevents other possible contractors from accessing the diagnostic software, possessing necessary tooling and providing OEM parts to the Government. To ensure that services performed on the equipment meets OEM requirements as per Title 21 Part 820, Subpart N, Section 820.200, “Servicing in order to mitigate any liability as a result of equipment failure due to improper servicing of modification of equipment.”

These maintenance services are considered “highly specialized” and thus there is only one responsible source.

6. Efforts to Obtain Competition: A description of efforts made to ensure that offers are solicited from as many potential sources as is practicable.

Past procurement history indicates that this procurement was sole sourced to the joint DSCP/VA contract SPED1‐17‐D‐0023 due to patents and copyrights, precluding other contractors from being able to meet all of the service requirements. A search in the VA MedSurg Catalog for a Siemens Imaging provided one (1) vendor, Siemens. A search under the SBA website under NAICS code 811219 with keywords “Siemens imaging” produced zero matches. A search in VetBiz under NAICS code 811219 with keywords “Siemens” revealed two (2) SDVOSB’s. Bocler LLC provides Audiology equipment. HurtVet Subcontracting LLC provides fire alarm and access control services. Therefore, neither vendor can provide services required.

Notice of Intent to Sole Source, 36C24221Q0526 was posted to beta.SAM.gov from February 19, 2021 through February 26, 2021 seeking information from contractors who could potentially provide the required maintenance service. No response was received from Siemens due to their submittal of quotes showing their interest. Capability statements were not required as they are the OEM and already performing services at each site either under contract or warranty period.

7. Actions to Increase Competition: Describe actions taken, or that will be taken, to remove or overcome any barriers to competition before initiating any subsequent acquisitions for the supplies, or services required, including challenges to restrictive data markings, data rights, preparation of a performance based work statement, and etc.

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

VHAPM Part 816.5—Indefinite-Delivery Contracts

VHAPM Part 816.5—Indefinite-Delivery Contracts Page 4 of 6 Original Date: 08/30/2017 Date: 02/19/2021 Rev 06

OEM specifications. Unless the manufacturer chooses to license its software and authorize local service providers to maintain the Siemens equipment, the only alternative would be to replace the existing Siemens equipment with a more generic brand. At this time, the Canandaigua VAMC is satisfied with the quality and operation of the installed equipment, its maintenance and repair.

Canandaigua VAMC currently does not have the sufficient budget to replace the Siemens equipment thus the reason to have equipment properly maintained through the life of the contract.

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

8. Market Research: Provide a description of the market research conducted among the contract holders and the results. If market research was not conducted, the reasons it was not conducted should be stated. When citing 16.505(b)(2(i)(b) or 16.505(b)(2)(i)(e), the only possible way to state in paragraph 5 of the J&A that there is only one contractor who can fulfill the agency’s needs is to conduct market research, and it should be summarized here.

Due to the proprietary nature, Siemens is the only authorized company able to perform maintenance on its imaging equipment. They have the technical expertise to provide maintenance and service, as well as being the only company with access to manuals and design specifications of its imaging equipment. Siemens is the only company that can access its systems remotely and offer certified parts that meet the original manufacturer’s specifications. Siemens technicians are the only OEM trained and certified personnel authorized to perform service on this HTME (High Tech Medical Equipment). However, VetBiz, SBA, and the VA MedSurg websites were used to determine if there were any other vendors capable of providing service and/or maintenance on the Siemens equipment. Additionally, a Notice of Intent to Sole Source was posted to beta.SAM.gov from February 19, 2021 to February 26, 2021 seeking information from contractors who may be capable of providing the required maintenance service. No vendors responded that are capable of performing services. Therefore, it has been determined that Siemens is the only company capable of providing these services on this highly specialized equipment to the agency.

9. Other Facts: This contract is in support of the VA-DoD Direct Sharing Agreement with the DSCP in consolidation with four of the DOD’s HTME contracts, namely SPED1-17-D-0023. The use of these consolidated HTME contracts after first considering mandatory sources is strongly encouraged by the

NAC.

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.

Michael Price Date Chief, Biomedical Engineer Canandaigua Campus michael Price 3330793

Digitally signed by michael Price 3330793 Date: 2021.03.05 11:40:34 -05'00'

VHAPM Part 816.5—Indefinite-Delivery Contracts Page 5 of 6 Original Date: 08/30/2017 Date: 02/19/2021 Rev 06

11. 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:

A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable:

The anticipated cost to the government is considered fair and reasonable based upon adequate competition on the DSCP/VA contract requirements and negotiation of prices prior to contract award. The pricing for this annual service requirement comes directly from the manufacturer, Siemens, is identical to the pricing available under their DSCP/VA contract. The Contracting Officer will request additional discounts from Siemens during solicitation to the vendor.

The proposed pricing for this task order has been compared to the current prices at the Canandaigua Campus as follows:

a. SPED1-17-D-0023/36C24218F1102, Siemens, February 19, 2018 – February 18, 2022, PO numbers 528C82104, 528C92044, 528C92099, 528C02041. 528C02107, 528C15055 and 528C15126, where the cost for each option year of service is $122,864.66. The proposed cost for the equipment in Canandaigua is 20% higher than what was quoted and awarded in February 2018. However, there have been no increases over the past three years. Additionally, the new cost represents a 6% increase in cost had prices increased each year. Therefore, the cost has been determined fair and reasonable.

Manufacturer Model Functional

Location

Current

Age

Replacement

Date

Life

Cycle

Estimated

Replacement

Cost

Location

Siemens SOMATOM

AS64

400-497513 5 yrs 2025 10 years

$645,659 CNDGA

Siemens STELLANT D+ 400-497514 5 yrs 2022 7 years $4,636.41 CNDGA

Siemens SOMATOM.go

TOP

400-655113 10 mos 2030 10 years

$732,382.00 Bath

Siemens STELLANT Flex 400-673457 10 mos 2028 7 years $34,000.00 Bath

Siemens SOMATOM

PERSPECTIVE 64

400-536837 1 yr 2029 10 years

$466,829.00 ROPC

Siemens STELLANT D+ 400-536838 1 yr 2028 7 years $7,500.00 ROPC

Please note that there is no guarantee that this equipment will be replaced in the recommended year. This is due to the VA not having a consistent equipment budget. However, much of the equipment has been replaced within the past five years and must be maintained by the OEM to prevent any warranties.

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

Janine Childs Date Contracting Officer RPO – East, NCO2, Buffalo, NY

13. Approvals in accordance with VHAPM 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.

Cheryl Brimmer Date

Branch Chief, Services Team I RPO – East, NCO2, Bath, NY

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.

Joseph Maletta Date Executive Director Regional Procurement Office - East

Janine C.

Childs 183575

Digitally signed by Janine C. Childs 183575 Date: 2021.03.05 11:53:12 -05'00'

Cheryl M Brimmer 113171

Digitally signed by Cheryl M Brimmer 113171 Date: 2021.03.05 13:20:46 -05'00'