P03 - J-A B Pathway -SAM Post.pdf

Department of MEMORANDUM Veterans Affairs

Date: 1 July 2024

From: Contracting Officers Representative

Subj: Contract: 36C77623C0081 “Dallas VAMC EHRM Design Project” at the VA North Texas Healthcare System, Dallas Justification and Approval – Out-of-Scope Modification – Other Than Full and Open Competition (FAR 6.302)

Thru: Contracting Officer

To: Contract File

1. Contracting Activity:

U.S. Department of Veterans Affairs, Veterans Health Administration (VHA), Program Contracting Activity Central (PCAC), 6100 Oak Tree Boulevard, Suite 490, Independence, OH 44131.

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

The contracting activity plans to award an out-of-scope bi-lateral modification to existing firm-fixed price contract number 36C776-21-C-0096 for the subject contract in accordance with VAAR 819.7004, 819.7005 and 819.7008 as interpreted by GAO Decision RCG of North Carolina, B-419691 which states:

“There is nothing in section 8127 of the Veterans Benefits Act that requires a contracting officer to make award to an SDVOSB on a competitive basis, rather than on a sole-source basis, where the same objective (i.e., award to an SDVOSB) will be met in either instance…”

The original contract award was competed among VHA Program Contracting Activity Central (PCAC) SDVOSBs and awarded in the original amount of $3,908,120.24 to Spur Design, LLC.

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

The change is to add a B Pathway of single mode fiber optical backbone cabling. This request increases the scope by requiring identification, verification, and designing a redundant single mode B Fiber pathway per ISTS guidelines. We anticipate the changes will provide a cost to the Dallas facility. A cost of was estimated for the B Pathway of fiber optical backbone cabling.

4. Statutory Authority Permitting Other than Full and Open Competition:

41 USC § 3304(a)(5), 38 U.S. Code § 8127 and VAAR 806.302-570 provides the express authority to use other than competitive procedures for sole source awards to verified veteran-owned small businesses. COs may use the non-competitive (sole source) procedures authorized by VAAR 819.7008 or 819.7009 for actions not to exceed $5,000,000. As prescribed in VAAR 806.302-570(a), full and open competition need not be provided for when awarding a sole source contract to a verified SDVOSB in accordance with 819.7008, as authorized. Further, a determination that only one SDVOSB can meet the requirement is not required.

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

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

In the original Statement of work for the Dallas facility, A/E Part One Services (also known as Design Phase) for this design project includes site visits, field investigation, studies and user interviews to prepare drawings, specifications and cost estimates for all facets of work and disciplines/trades to facilitate a construction project to upgrade the facility infrastructure to support the new Electronic Health Record Modernization (EHRM) system in accordance with VA OEHRM Site Infrastructure Requirements (provided by VHA). The project shall include, but is not limited to, upgrading facility fiber throughout the buildings to each IT closet, provide a redundant fiber run throughout the facility to each IT closet, provide redundant fiber mains to the demarcation room from the provider point, design or remodel one hundred twenty six IT closets throughout the facility, at specified locations adhering to the EHRM guidelines outlined in attachments, upgrade facility HVAC and electrical distribution as required, physical security assessment and upgrades and hazardous material abatement. The X-Matrix for the original contract included TR Notes stating the site needs a secondary diverse path to TRs but this task was awarded to a different contractor.

The contractor of this project, Spur Design LLC, is a SDVOSB which possess the technical knowledge and resources to incorporate this change to this project without affecting the A/E services already done. Since the progress of this project will reach the 65% of completion soon, it is in the best interest of the Government to incorporate the design of the Redundant B Fiber Pathway now, to avoid duplication of effort that will increase the total cost of the project.

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

The incumbent contractor is positioned to mitigate significant risk to the VISN 17 EHRM budget.

The overall project would face increased costs in terms of a duplicate baseline acquisition for another contract, and ultimately the rework required to add the B Pathway to an existing location.

Under the current design contract, the B Pathway was contracted to a different contractor. The B Pathway is designed to run opposite to the A Pathway. Completing the B Pathway outside of the infrastructure design of this contract would significantly increase the overall cost of this effort to the government and would increase the overall amount of time the facility is under construction due to re-work. Modifying the existing A&E contract at this time mitigates significant cost risk that would come with procuring the B Pathway work under a second, separate contract down the line.

Additionally, and in accordance with VAAR 819.7008(b), Sole Source Awards to a Verified Service-Disabled Veteran-Owned Small Business, the Contracting Officer’s determination whether to make a sole source award is a business decision wholly within the discretion of the Contracting Officer. For the reasons stated herein, and specifically in reference to Paragraph 9, the undersigned Contracting Officer, has determined that Spur Design, LLC is a qualified SDVOSB. The Justification and Approval (J&A) document will be posted within 14 days after award in accordance with FAR Subpart 6.305 and the award synopsis will be posted to Contract Opportunities in accordance with FAR Subpart 5.301(a)(2).

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

The government will issue an RFP to the existing design contractor for the change after developing the SOW and the IGE. The contractor will be required to submit cost or pricing data with their proposal.

When received the proposal will be evaluated by the COR and the proposal and its data will be the subject of rigorous cost analysis. The governments pre-negotiation position will be based on costs proposed by the A&E at the time of the competitive project award, technical analysis of the proposal itself and other historical data. The contractor will be required to certify its cost or pricing data prior to modification award. The overall contract will also, of course, comply with the 6% A&E Fee limitation.

Also, in accordance with FAR 15.406, FAR 15.403-5, and FAR 52.243-1;(Alt III) a price reasonableness determination will be made before modification award based on historical data, cost and/or price analysis, and negotiation.

8. Description of the Market Research Conducted and the Results, or a Statement of the Reasons Market Research Was Not Conducted:

Market research was conducted prior to award of the contract. The final market research documents were signed on 14 March 2022, indicating that an adequate number of SDVOSB concerns had been obtained to comply with the rule of two. Market research has been conducted and additional market research at this time would not be beneficial.

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

GAO Decision RCG of North Carolina, B-419691 states:

“There is nothing in section 8127 of the Veterans Benefits Act that requires a contracting officer to make award to an SDVOSB on a competitive basis, rather than on a sole-source basis, where the same objective (i.e., award to an SDVOSB) will be met in either instance…” The decision references VAAR 819.7004, 819.7005 and 819.7007 which provide the VA with independent authority to award contracts using other than full and open competition (including set-aside procurements and sole-source awards) in certain circumstances.

Specifically:

(a) A contracting officer may award contracts to SDVOSB concerns on a sole source basis provided:

(1) The anticipated award price of the contract (including options) will not exceed $5 million;

(2) The requirement is synopsized in accordance with FAR part 5;

(3) The SDVOSB concern has been determined to be a responsible contractor with respect to performance; and

(4) Award can be made at a fair and reasonable price.

Assuming that the Contracting Officer can make a determination that the price ultimately negotiated with the contractor is fair and reasonable, there is no barrier to awarding this work to the incumbent on a sole source basis since the incumbent is a responsible SDVOSB, and the