P03 Exception to Fair Opportunity 36C262-26-AP-5020 Hologic Genious AI Detection Signed.pdf

Request for Exception to Fair Opportunity Memo

Effective Date: 12/30/2025 Page 1 of 5 Revision: 03 Acquisition ID#: 36C262-26-AP-5020

DEPARTMENT OF VETERANS AFFAIRS

Justification and Approval

For

Exception to Fair Opportunity Memo

Acquisition Plan Action ID: 36C262-26-AP-5020

1. Contracting Activity: Department of Veterans Affairs, VISN 22, Network Contracting Office 22 (NCO

22) in Long Beach, CA, seeks Justification for Brand Name Award to procure the services listed in purchase request #678-26-3-071-0143 for the Southern Arizona VA Healthcare System (SAVAHS), Tucson, AZ.

2. Description of Action: The Southern Arizona VA Healthcare System is requesting purchase of the latest proprietary hardware and software for the healthcare facility BRAND Name only, Southern Arizona VA Healthcare, Mammography Hologic GENIUS AI DETECTION LICENSE 2.0, which is only offered by Hologic, Inc. Estimated Cost: $34,265.65.

3. Description of Services: Due to the proprietary nature of hardware and software application, only the hardware and software developer, Hologic, Inc. – Original Equipment Manufacturer (OEM) and its authorized distributor can provide the needed hardware and software licenses to their Hologic Genius AI Detection an advanced computer-aided detection (CAD) license, which has been and currently still is in use at SAVAHS. Purchase of the software update allows healthcare facilities to assist radiologists by automatically identifying suspicious regions in screening and diagnostic 2D and 3D (tomosynthesis) mammograms. This is the standard of care in the healthcare industry, and is in use at SAVAHS but requires an upgrade. Lack of hardware and software license update will impact SAVAHS in providing adequate healthcare to patients requiring mammographies.

The use of breast tomosynthesis in breast imaging has demonstrated an improvement in cancer detection and a reduction in false positives compared to digital mammography. Challenges with the routine use of breast tomosynthesis has been the increase in the number of images that need to be reviewed by radiologists which increased the average interpretation time. 2/3 less images to read which yield in saving 1 hour of interpretation time per day. The GENIUS AI Detection software acts as a second reader that analyzes 2D and 3D mammograms using advanced artificial intelligence.

It highlights suspicious regions (such as masses and calcifications), providing a computer-generated “second opinion” that radiologists can consider alongside their own assessment. By flagging subtle or easily-missed findings, AI can help identify cancers that a human reader might overlook. Machine learning helps the system differentiate between benign and suspicious findings, reducing unnecessary callbacks and biopsies. Automated analysis happens rapidly, so radiologists can review exams more efficiently without slowing down patient throughput. This AI algorithms provide consistent analysis, helping standardize the interpretation of mammograms across different radiologists and institution. Hologic Genious AI Detection CAD will also reduce the file size, which reduces required space for PACS storage and reduces high network bandwidth requirements.

The GENIUS AI Detection is used to enhance diagnostic accuracy, improve workflow, and support earlier breast cancer detection—helping radiologists provide better patient care and outcomes. It

Effective Date: 12/30/2025 Page 2 of 5 Revision: 03 Acquisition ID#: 36C262-26-AP-5020 supplements human expertise, helping ensure important findings are not missed, and optimizes the mammography process both clinically and operationally

Hologic, Inc., has confirmed that there are only 2 authorized distributors of Hologic, Inc., (OEM) hardware and software: DGA Medical and Sustainment Technology (both SDVOSBs). Additionally, procuring an “equal to” hardware and software licenses would require purchase and installation of completely new equipment and software platform that is cost prohibitive to the immediate need.

Circumstances of contract action deem only one brand name reasonably available based on urgency, agency need, time constraints, and the exclusive proprietary nature of the hardware and software and providing fair opportunity through competition would result in unacceptable delays.

Estimated Cost: $34,265.65.

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) 6.103-1 :

( ) 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 6.103-1(a)(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.

( ) 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:

Based on extensive market research, as described in paragraph eight of this document, it was determined that limited competition is viable among authorized resellers for this brand name item.

This is a brand name justification in support of FAR 11.204 Items peculiar to one manufacturer. The particular brand-name product, Hologic’s Genius AI Detection hardware and software, is essential to the Government’s requirements due to its proprietary nature and integration with existing imaging systems at SAVAHS. Only Hologic, Inc. – the Original Equipment Manufacturer (OEM) – and its two authorized distributors (DGA Medical and Sustainment Technology, both SDVOSBs) can provide the required hardware and software licenses for operation and upgrade of the Hologic Genius AI Detection CAD, which is already installed and in use at SAVAHS.

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Market research indicates that other companies’ similar products, or those lacking Hologic’s proprietary AI detection and integration features, do not meet—and cannot be modified to meet— the agency’s interoperability, performance, and regulatory requirements in support of clinical care.

Procuring a non-Hologic “equal” system would require full replacement of mammography hardware and software platforms, at significant cost, time, and disruption to critical patient care.

The Hologic Genius AI Detection software provides unique and essential features including:

Advanced artificial intelligence for analyzing 2D/3D mammograms and highlighting suspicious regions.

Seamless integration as a “second reader” within the existing imaging workflow, reducing interpretation time and radiologist cognitive burden.

Enhanced breast cancer detection rates and reduction in false positives, as proven in current SAVAHS use and supported by clinical data.

Automated, consistent analysis which standardizes mammogram interpretation and improves quality of patient care.

Reduction in image file size, effectively decreasing storage and network requirements within the VA’s PACS infrastructure.

Only the Hologic brand can satisfy all technical and operational requirements. Failure to update and maintain the current Hologic solution would significantly impair mammography services, directly affecting quality and timeliness of patient care for SAVAHS veterans. Additionally, competitive procurement would cause unacceptable delays and could result in the loss of continuity of care, a standard of care reduction, and increased costs associated with system re-implementation.

In summary, due to the exclusive proprietary design, required system interoperability, and unique clinical and technical features, only the brand name Hologic Genius AI Detection hardware and software meets the Government’s requirements. This justification supports the use of brand name in accordance with FAR 11.204 and as permitted under FAR 6.103-1(a)(b) due to the one-of-a-kind capabilities of the Hologic solution and the absence of viable, modifiable alternatives.

6. Efforts to Obtain Competition: Significant efforts were made to obtain competition for this requirement. A market research query was conducted using the SBA VetCert database with the applicable NAICS code 541511, which identified 39 SDVOSB/VOSB vendors who could potentially fulfill the requirement. Additional market research was carried out across AbilityOne, Unicor, FPDS, National Acquisition Center, National Strategic Source Listing, and NASA Solutions for Enterprise-Wide Procurement. Despite these efforts, none of the identified vendors or sources were able to meet the specific and proprietary requirements for the Hologic Genius AI Detection workstation.

To further explore available competitive options, the Contract Specialist contacted the Original Equipment Manufacturer (OEM), Hologic, Inc., to obtain additional information regarding the product and eligible distributors. The OEM responded with a sole source manufacturer and distributor letter, confirming the proprietary limitations of the hardware and software. Hologic also provided a list of two SDVOSB vendors—DGA Medical and Sustainment Technology—who are the only authorized distributors for the required items.

As a result of this thorough market research and outreach, it was concluded that only these two SDVOSB vendors have the capability and authorization to supply the required brand name items. This meets the

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VA and SBA “Rule of Two,” allowing the requirement to be competed as a SDVOSB set-aside. All reasonable steps have been taken to foster competition to the maximum extent practicable under the circumstances.

7. Actions to Increase Competition: The VA contracting office NCO 22 is committed to promoting competition and will continue to regularly review requirements, engage with industry, and monitor available vendors to identify additional sources capable of meeting future service needs. For subsequent acquisitions, the agency will further refine market research efforts, issue advance notices, and encourage broader vendor participation in order to remove barriers to competition and maximize opportunities for competitive procurements wherever practicable.

8. Market Research: Comprehensive market research was conducted to ensure consideration of all viable sources and to validate that only the specified brand-name products satisfy agency needs. Efforts included reviewing government-wide acquisition databases, consulting directly with manufacturers, and verifying small business participation.

Initial market research focused on identifying vendors through SBA VetCert under NAICS code 541511, as well as searching additional channels including AbilityOne, Unicor, FPDS, the National Acquisition Center, National Strategic Source Listing, and NASA SEWP. While these resources identified several vendors categorized as SDVOSB/VOSB, detailed evaluation determined that none could meet the precise proprietary requirements essential for compatibility with the VA’s existing Hologic mammography infrastructure.

In parallel, VA personnel contacted Hologic, Inc., to confirm the availability of their proprietary Genius AI Detection system. Hologic verified that due to intellectual property limitations and specialized technology requirements, both distribution and servicing rights are restricted. The OEM provided documentation supporting their status as the only source of the required solution, as well as written confirmation of two authorized SDVOSB distributors eligible to supply and support the products in question.

This systematic and layered market research process confirmed the necessity of acquiring brand-specific items through the only authorized SDVOSB sources, allowing VA to proceed with a set-aside competition while ensuring maintenance of clinical capabilities and compliance with applicable acquisition policies.

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.

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Name Date Title Facility

11. Determination that Anticipated Cost is Fair and Reasonable: The Contracting Officer will determine that the anticipated cost to the Government is fair and reasonable through multiple methods. Price reasonableness will be established by evaluating offers received in response to the solicitation using the Lowest Price Technically Acceptable (LPTA) evaluation method. Offered prices will be compared against the Independent Government Cost Estimate (IGCE) and the quote provided by the Original Equipment Manufacturer (OEM) to confirm alignment with market expectations and current manufacturer pricing.

In addition, the Federal Procurement Data System (FPDS) was queried to identify similar contracts previously awarded for comparable requirements. Price analysis will be further supported by reviewing pricing from these prior awards as a benchmark for current offers. A final determination of price reasonableness will be made upon closure and evaluation of the solicitation, incorporating information from competitive SDVOSB quotes, IGCE, OEM pricing, and historical data from FPDS to ensure the Government obtains the required supplies at a fair and reasonable cost.

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

Daniel Ruiz Date

CONTRACTING OFFICER

NCO 22

DANIEL RUIZ Digitally signed by DANIEL RUIZ Date: 2026.05.20 10:57:59 -07'00'

Name: Maio Nava Acquistition & Utilization Spec.

SAVAHCS

Date2_af_date: 5/21/26