P03_J and A_HCA SIGNED.pdf

VHAPM Part 806.3 Other Than Full and Open Competition (OFOC) SOP Attachment 5: Request for Sole Source Justification Format >SAT

OFOC SOP Revision 11 Page 1 of 6 Original Date: 03/22/11 Revision 11 Date: 02/11/2021

DEPARTMENT OF VETERANS AFFAIRS

Justification and Approval (J&A) For

Other Than Full and Open Competition (>SAT)

Acquisition Plan Action ID:____36C77021AP0652_____

1. Contracting Activity:

Department of Veterans Affairs Network 15 Contracting Office (NCO15) Dallas Consolidated Mailout Pharmacy 3450 S. 4th Street Lancaster, Tx. Leavenworth, Ks. 66048

Funding Documentation # TBD Estimated Cost: $16,000,000.00

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

The Dallas Consolidated Mail Outpatient Pharmacy (CMOP), located in Lancaster Texas, requires an upgrade to their current Tablet Capsule Automation (TCA) hardware and its supporting software along with the Unit of Use Automation (UUA) software to meet existing workload demands. The acquisition will be a one time contract with no option periods. The upgrade is expected eliverables include;

Proof of Concept Final Design Implementation Testing Training

Acceptance Criteria will be spaced throughout the life of the contract to ensure the design, throughput, quality, and safety meets Government requirements, standards and timelines. To avoid downtime, the upgrade will need to be accomplished during normal operations. These two subsystems (TCA and UUA) are incorporated into a larger system which includes the Packing area, the Picking area and Cold Chain Processing area. When combined they make a complete system that must continue to communicate through the proprietary software from one subsystem to the next. The CMOP requires a complete system upgrade; however, due to lack of funding, a complete system replacement is not feasible and only the TCA and UUA can be updated at this time.

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

The Tablet Capsule Automation (TCA) and Unit of Use Automation (UUA) subsystems make up the automated components within the overall system that is used to meet the processing demands;

however, both are no longer being supported as the system was purchased in 2002. The following enhancements to the system need to be made to allow for operations to continue uninterrupted:

The upgrade of 260 older worn out and unsupported TCA dispensers with newer units that incorporate the latest technology and design being offered by vendor KNAPP. This change will increase capacity to meet existing demands being increased across CMOP.

OFOC SOP Revision 11 Page 2 of 6 Original Date: 03/22/11 Revision 11 Date: 02/11/2021

VHAPM Part 806.3 Other Than Full and Open Competition (OFOC) SOP Attachment 5: Request for Sole Source Justification Format >SAT

The Re purposing of 200 current dispensers from high volume to mid and low volume dispensers

Upgrade TCA and UUA software from end of Lifecyle/unsupported version Klass X WCS to Ki Soft One and KiSoft SCADA that will provide one operating system for all the KNAPP sub systems.

4. Statutory Authority Permitting Other than Full and Open Competition: 41 USC §3304(a)(1), as implemented by FAR 6.302 2.

( ) (1) Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements per 41 USC §3304(a)(1) as implemented by FAR 6.302 1;

( ) (2) Unusual and Compelling Urgency per 41 USC §3304(a)(2) as implemented by FAR 6.302 2;

( ) (3) Industrial Mobilization, Engineering, Developmental or Research Capability or Expert Services per 41 USC §3304(a)(3) as implemented by FAR 6.302 3;

( ) (4) International Agreement per 41 USC §3304(a)(4) as implemented by FAR 6.302 4 ( ) (5) Authorized or Required by Statute per 41 USC §3304(a)(5) as implemented by FAR 6.302 5;

( ) (6) National Security per 41 USC §3304(a)(6) as implemented by FAR 6.302 6;

( ) (7) Public Interest per 41 USC §3304(a)(7) as implemented by FAR 6.302 7;

5. Demonstration that the Contractor’s Unique Qualifications or Nature of the Acquisition Requires the Use of the Authority Cited Above (applicability of authority): The vendor, KNAPP Inc. is the only Responsible Source (FAR 6.302 )being the developer and manufacturer of the current overall CMOP production system. Their system is proprietary and there are no other authorized or certified technicians from other vendors that possess the expertise to upgrade these two subsystems and maintain the integrity of the software to allow for the necessary communication across the entire system platform. Furthermore, KNAPP is the only vendor with the expertise and familiarity with the system(s) to avoid downtime during the upgrade. By upgrading the Automated Table Dispensers(ATDs) within the TCA to the latest version of software/firmware:

KNAPP will be able to provide greater reliability, accuracy, and expanded throughput with minimum risk or downtime

A portion of the existing ATDs, can continue to be used for mid movers and their usable life can be extended by using the ATDs that are removed as spares

It will also provide for future expansion in the pharmacy which can extend the life of the other existing KNAPP systems that are on site with minimal risk or downtime; and

The pharmacy will have a common support and spares program for the whole system to include both the existing and areas being upgraded.

A complete upgrade with a whole new processing system is estimated at $50M $70M. Accordingly, KNAPP, Inc. is the only firm capable of providing the supplies and services described in Section 3 above without the Veteran’s Health Administration experiencing substantial duplication of cost that could not be expected to be recovered through competition.

6. Description of Efforts made to ensure that offers are solicited from as many potential sources as deemed practicable: A meeting was set up with Knapp, the manufacturer of the current system, to

OFOC SOP Revision 11 Page 3 of 6 Original Date: 03/22/11 Revision 11 Date: 02/11/2021 determine the viability of other sources that could be used to provide the proposed upgrade being requested. The following concerns were addressed during the meeting;

Proprietary software/firmware on current system and requested upgrade

Integration between the upgrade and remaining part of the system

Operatoinal downtime of system while upgrades are being completed

Continued support after system has been upgraded.

In addition, a Sources Sought was posted to Beta.Sam, (36C77021Q0396) from April 22nd 2021 – May 13th 2021. One response was received from Wolf Solutions, a small Disabled Veteran owned small business. Even though they have the expertise, they do not possess license or certifications to service KNAPP Equipment. Based on the potential for operational risk(i.e.downtime) and the information provided by Knapp, the determination is that KNAPP is the only vendor that can provide the upgrade with mininimal risk to the overall operation of the system when completed. Using KNAPP to upgrade the ATDs and the software/firmware will provide greater;

Overall reliability, accuracy, and expandsion of the throughput with minimum risk or downtime

Allow a portion of the existing ATDs to continue to be used for mid movers which will extend their usable life by using the ATDs that are removed as spares

Provide for future expansion in the pharmacy which can extend the life of the other existing KNAPP systems that are on site

Reduction in risk in system integration using hardware, software/firmware that was meant to be integrated with older units still in use.

The Government looked into options however, KNAPP has confirmed that non KNAPP technology would not physically or mechanically work with the existing system.

Recent attempts towards the operation of a fully operational Automated Pharmacy Fulfillment System(APFS) to replace aging systems at several CMOP processing locations to include, Charlestion, Murfreesboro, Hines, and Leavenworth to minimize intensive manual labor systems into a more streamlined automated system, has proven to be difficult at best and as of this date, no system has been fully accepted as a viable option going forward for the CMOPs. These systems can take 4 + years to implement once an award has been made. With pending obsolescence of the current production system no longer being supported and limited availability of replacement parts, waiting for a viable system to be developed greatly increases the risk of a unrecoverable system failure that would impact the Dallas CMOP’s obligation to fill over 70,000 prescriptions a day. Those prescriptions would have to be transferred to other CMOPs that are already at maximum throughput capacity. A transfer of workload would incur considerable overtime costs and jeopradize the prescription turnaround time throughout the entire CMOP system. Upgrading the current KNAPP hardware and software will keep the CMOP operational for another 10 years until a proven system can be found to meet the expanding demands of CMOP and funding can be appropriated to purchase a complete new system in the future.

OFOC SOP Revision 11 Page 4 of 6 Original Date: 03/22/11 Revision 11 Date: 02/11/2021

7. Determination by the CO that the Anticipated Cost to the Government will be Fair and Reasonable: The anticipated cost to the Government will be fair and reasonable. The Government(i.e. CMOP) has a history of purchasing automated pharmacy equipment to include Tablet Capsule Automation (TCA), Unit of Use Automation (UUA), Automated Prescription Fulfillment Systems (APFS) and updating production software. The previous purchases were used to anticipate costs (IGCE) of the work to be performed. KNAPP’s proposal will be compared with those contracts that are similar in size and scope and adjusted for any changes in market conditions or economic price factors.

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

The following market research was conducted:

A ources Sought was posted and one response was received. The vendor could not provide the services needed due to the proprietary nature of the upgrade.

A meeting with KNAPP Inc., the manufacturer, confirmed that they do not currently partner with other vendors to provide this type of hardware and/or software upgrade to an existing system, which is considered proprietary.

The current system has been in operation since 2002 and has been supported during that time through maintenance, part replacements, and upgrades all provided by KNAPP Inc. Due to funding limitations, other parts of the existing system will remain intact; therefore, any parts of the existing system that remains must be able to communicate with the upgraded system.

As described in Section 6 above, market research, in accordance with FAR Part 10, was conducted by posting a synopsis of the proposed acquisition advising industry of the pending acquisition and soliciting inquiries from interested parties.

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

The Dallas CMOP must be able to operate without disruption to production while the upgrades are being installed and tested. Any downtime due to the upgrade will jeopardize production at the Dallas CMOP which processes over 70,000 prescriptions a day.

The overall risk of system failure, disruptions, and shutdowns during implementation of the upgraded system will be minimized through KNAPP’s extensive knowledge, understanding, and experience with KNAPP equipment and software and the integration with the overall CMOP Production system.

10. Listing of Sources that Expressed, in Writing, an Interest in the Acquisition: As stated above the government met with representatives of KNAPP Inc. and concluded that KNAPP is the only vendor that can meet the Government’s needs due to the proprietary nature of the upgrade. In addition:

The funding limitations that would allow the government to persue a complete upgrade with a whole new processing system, would cost between $50M and $70M.

OFOC SOP Revision 11 Page 5 of 6 Original Date: 03/22/11 Revision 11 Date: 02/11/2021

Based on recent attempts to replace an entire system at several of the CMOPs cited in section 6 above, it is estimated that it will take another five ten years to find a viable system that has been tested and proven to meet the needs going forward.

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: As stated in section 6 above, several attempts from FY2013 FY2018 have been made to upgrade existing equipment with a complete and viable automation system at four other CMOP locations. Of the four, only one is near completion with an acceptance date of Octomber 29th 2021. That system was awarded in February of 2017. This upgrade will extend the life span of the current equipment for another ten years. This added time will allow the market to mature and produce more viable alternatives for future use based on the need and continued growth in automation.

12. Requirements Certification: I certify that the requirement outlined in this justification is a Bona Fide Need of the Department of Veterans Affairs and that the supporting data under my cognizance, which are included in the justification, are accurate and complete to the best of my knowledge and belief.

David Racette Date Direcor Dallas Consolidated Mail Outpatient Pharmacy(CMOP)

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

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

J. Braden Smith Date Contracting Officer

NCO 15, CMOP

David E.

Racette 253109

Digitally signed by David E. Racette 253109 Date: 2021.06.24 14:05:21 -05'00'

JUSTIN B.

SMITH 493654

Digitally signed by

JUSTIN B. SMITH 493654

Date: 2021.06.25 06:08:37 -05'00'

OFOC SOP Revision 11 Page 6 of 6 Original Date: 03/22/11 Revision 11 Date: 02/11/2021

b. 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.

Loyd D. Jackson Date Acting Director of Contracting Network Contracting Office (NCO) 15

c. VHA RPO HCA Review and Approval: I have reviewed the foregoing justification and find it to be complete and accurate to the best of my knowledge and belief and recommend approval (if over $75 million) or approve ($750K to $75 million) for other than full and open competition.

Terry L. Spitzmiller Date Executive Director Head of Contracting Activity (HCA) Regional Procurement Office Central

LOYD JACKSON

Digitally signed by LOYD

JACKSON

Date: 2021.06.25 13:56:30 -05'00'

07/14/2021

TERRY

SPITZMILLER

Digitally signed by TERRY

SPITZMILLER

Date: 2021.07.14 12:12:09 -05'00'

Attachment 2: Market Research Report Template

VHAPM Part 810 Market Research SOP Page 1 of 9 Revision: 08, Effective Date: 04/27/21

Title of Program/Project/Requirement:

Upgrade of Dallas Consolidated Mail Out Pharmacy (CMOP) Table Counter Automation (TCA) and Unit of Use Automation (UUA) systems

PART I:

I. Authority.

Market research is required in accordance with:

FAR 7.102, Acquisition Planning Policy FAR 7.103(u)(1) and (2), Agency-Head Responsibilities FAR 10.001, Market Research Policy and VAAR 810.001-70 (Class Deviation) VAAR 813.003-70(c), Policy (Class Deviation) FAR 19.202-2, Locating Small Business Sources and VAAR 819.202 (Class Deviation) FAR 25, Foreign Acquisition

Procurement Information.

Procurement History.

The equipment being upgraded is near its end of life but due to recent failed attempts to replace aging equipment at 4 other CMOP locations, upgrading the current TCA and UUA of the existing system, will extend the life of the equipment for an additional 10 years. The cost benefit to upgrade the existing system is 80% less than the current estimated cost to replace an entire system that has not been successful

Was the requirement previously procured?

o Yes, this system was procured almost 20 years ago.

Is this a bundled (FAR 2.101) requirement? If so, consult FAR 10.001(c). \ o No It will be sole sourced to the original manufacturer based on proprietary information.

Are there any applicable Organizational Conflicts of Interest?

o No

Procurement Background. The Consolidated Mail Out Pharmacy (CMOP) operates out of 7 different locations throughout the US providing pharmacy prescriptions to eterans across the country. The current system at the Dallas CMOP is 20 years old and needs to be replaced or upgraded. Based on increased volumes and as stated above, recent attempts to provide an efficient automated system to replace aging systems at 4 other locations to meet increased “Throughput” levels has not succeeded. These systems cost between $70M-$80M and require 3-4 years on average to be installed and tested for final acceptance. The proposed upgrade

VHAPM Part 810 Market Research SOP Page 2 of 9 Revision: 08, Effective Date: 04/27/21 should be completed within a year while extending the end of life out another 10 years at a fraction of the cost for a proposed newer unit. The upgraded equipment will need to operate and communicate with the other parts of the system once upgraded. This would also allow time for current automation trends to continue to progress providing additional opportunities for CMOP to obtain a viable solution to replace other aging systems to meet future needs.

Name Title Office Telephone E-mail Address

James Hinspeter

Contracting Officer Representative

CMOP James.hinspeter@va.gov

III. Initial Requirements

Type of acquisition (service or supply) - Supply Expected dollar value of requirement - $16Million Suggested NAICS code(s): 332999 Time frame in which the market research was conducted o This has been an on-going effort to replace or upgrade aging systems throughout CMOP. 4 attempts have been made.

2013 - Two contracts were awarded to replace systems in Hines IL.

and Murfreesboro Tn. Neither has been successful to date.

2017 - One contract awarded to replace system in Charleston S.C.

The complete system has not been completed or accepted yet.

Estimated completion / acceptance is October 29th, 2021.

2019 - One contract awarded to replace system in Leavenworth Ks., currently at a work stoppage. No date established for final acceptance.

o For the Dallas CMOP Upgrade, a ources ought was posted April 22nd, 2021, response SDVOSB. The SDVOSB, stated they do not possess the licenses or certifications needed to be able to upgrade the current system due to proprietary information.

o A conference call with the manufacturer, KNAPP confirmed that they are the only ones that can upgrade the system using their components.

Describe the Government’s requirement in terms of:

o Functions to be performed

Vendor is to upgrade current equipment with newer models/parts o Services or Performance required and/or

Vendor will provide testing once upgrade has been completed and provide training to all personnel o Essential physical characteristics

VHAPM Part 810 Market Research SOP Page 3 of 9 Revision: 08, Effective Date: 04/27/21

Upgraded unit must communicate and function with the other components within the system.

Describe schedule requirements, e.g., performance periods and/or delivery due dates.

o Requirement must be awarded by September 1st of 2021 o Must be completed within one year of award

Discuss any cost effectiveness issues associated with the requirements o Upgrading the current unit will cost 80% less than obtaining a complete new system while providing increased productivity to meet current demands.

o Based on recent attempts to replace other aging systems, this is the most cost-effective alternative to meeting increased demands while minimizing the risk of success.

IV. Participants in Market Research

Describe the involvement of the individual Acquisition Team members and any other participants in the market research effort.

NAME TITLE OFFICE TELEPHONE E-MAIL ADDRESS MARKET

RESEARCH ROLE

James Hinspeter

Contracting Officer Representative

(COR)

CMOP James.hinspeter@va.gov Initial Market Research

Larry Zaritz Contracting

Specialist

NCO 15,

CMOP

Team 1

913 684 0156 Larry.zaritz@va.gov Posted Sources Sought/Communicated with Manufacturer.

David Mugan

Small Business Liaison

NCO 15

Contacting

David.mugan@va.gov SBA Guidance

OSDBU Other Oversight.

V. Market Research Techniques and Sources

A. Market Research Techniques Describe techniques and sources used during market research. The following table may help structure and summarize the techniques used in the market research effort.

Check X

IF USED

SOURCES USED IN MARKET RESEARCH DETAILS OF

RESEARCH/COMMENTS

(INCLUDE REFERENCES TO

ATTACHMENTS TO REPORT)

(e.g., List of Journals and

VHAPM Part 810 Market Research SOP Page 4 of 9 Revision: 08, Effective Date: 04/27/21

RESEARCH SOURCES Literature Reviewed included as Attachment 4 to this report)

X Acquisition history reviewed CMOP Systems Procurements for other units.

Other recent market research reviewed

X VA Vendor Information Pages (VIP) https://www.vip.vetbiz.va.gov/ (including any information supporting price reasonableness)

N/A Sole Source

X Interviewed knowledgeable individuals in industry/Government

Conference Call with MFG

Participated/Attended Tradeshows and Industry Conferences

Professional Journals, Catalog and/or Product Literature reviewed

Participated in Small Business Vendor Outreach Sessions

B. Market Research Sources. In accordance with FAR part 10 and VAAR part 810, market research has been conducted for this acquisition. The following additional collaborative Contracting Officer-led techniques were used:

SOURCES REVIEWED

(IAW FAR 8.002, VAAR 808.002, FAR 8.003, FAR 8.004, and VAAR 808.004-70)

MARKET RESEARCH FOR SUPPLIES

Insert X if Check ed

Details of Research/Comm ents (Include N/A if not applicable)

MANDATORY GOVERNMENT SOURCES

IN PRIORITY ORDER

See VAAR 808.002 for further guidance on other mandatory

Government sources

(Include References to Report

Attachments)

N/A 1. VA Inventories including the VA supply stock program (41 CFR 101-26.704) and VA excess.

N/A 2. Excess from other agencies (See FAR subpart 8.1)

VHAPM Part 810 Market Research SOP Page 5 of 9 Revision: 08, Effective Date: 04/27/21

N/A 3. Federal Prison Industries* (FPI) (See VAAR 808.603 Purchase Priorities)

N/A 4. Supplies from Ability One - (VA AbilityOne Procurement List for Supplies/Services) (FAR 8.002)

N/A 5. Wholesale Supply Sources (GSA website:

https://www.gsaglobalsupply.gsa.gov/advantage/main/start_page.d o?store=FSS)

N/A See VAAR 808.002 for further guidance on other mandatory Government sources

Insert X if Checked

VETERANS FIRST CONTRACTING PROGRAM (VAAR

subpart 819.70)

REFERENCES/SOURCES CHECKED

(IDENTIFYING VIP VERIFIED SDVOSBs/VOSBs)

Details of Research/Comments (Include References to Report Attachments)

X VA Office of Small and Disadvantaged Business Utilization (OSDBU), Center for Verification and Evaluation (CVE) Vendor Information Pages (VIP) Database found at https://www.vip.vetbiz.va.gov/

VA Policy based on associated NAICS Code

System for Award Management (SAM) search for entity records at:

https://www.sam.gov/SAM/pages/public/index.jsf

Check X if Part of Research

PRIORITY CONSIDERATION OF

VA EXISTING CONTRACTS

N/A 1. See VA PPM (2016-05)(Revised AUG 2019) - Implementation of the Veterans First Contracting Program (VIEWS 01368239) concerning consideration of existing VA contracts and VA strategic sourcing regarding supplies in FSC Groups 65 and 66.

N/A

Check X if Part of Research

CONSIDERATION OF NON-VA EXISTING

CONTRACTS

Federal Strategic Sourcing Initiatives or OMB Category Management contracts/sources

(Non-Mandatory except where OMB or Agency policy states otherwise)

VHAPM Part 810 Market Research SOP Page 6 of 9 Revision: 08, Effective Date: 04/27/21

N/A 1. Non-VA Contracts:

(Includes NASA-SEWP and BPAs under FSS Strategic Sourcing Initiative (FSSI) non-mandatory Federal Supply Schedules (other than for FSC Group 65 and 66) (FAR 8.004(a)(1) and VAAR 808.004-70).

N/A 2. Non-mandatory Federal Supply Schedules (non VA) (See FAR 8.004(a)(1) and VAAR 808.004-70, Use of non-mandatory sources by VA (Class Deviation).

Use of Other Sources N/A Commercial sources (includes educational and non-profit institutions) in the open market. This is permissible IAW FAR 8.004 and VAAR 808.004-70.

VETERANS FIRST CONTRACTING PROGRAM (VAAR

subpart 819.70)—REFERENCES/SOURCES CHECKED

N/A Sources Sought Notices: Requests for Information (RFI) https://beta.sam.gov/

N/A System for Award Management (SAM) search for entity records at: https://www.sam.gov

OTHER REFERENCES/SOURCES CHECKED

(Other ways to conduct or confirm market research)

X Sources Sought Notices: Requests for Information (RFI) https://beta.sam.gov/

Posted from 04/22/21 – 05/13/21

X Pre-solicitation and/or Pre-Proposal Conferences Meeting with Manufacturer – Sole Source

N/A Existing intra-/inter-agency contract vehicles, e.g.

Interagency Contract Directory (ICD) at:

https://www.contractdirectory.gov/contractdirectory

X System for Award Management (SAM) search for entity records at:

https://www.sam.gov/SAM/pages/public/index.jsf

Vendor is listed in SAM

N/A SBA Dynamic Small Business Database at:

http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm

VHAPM Part 810 Market Research SOP Page 7 of 9 Revision: 08, Effective Date: 04/27/21

Identify Product/Services and Sources Able to Meet the Requirement Identify or describe:

If sole source, describe efforts to locate additional sources o A sources sought was posted to Beta.Sam under eCMS control # 36C77021Q0396 from April 22nd, 2021 through May 13th, 2021 seeking certified sources that had the certification to perform the upgrades to the current system. Only one vendor responded. However, in their response, they noted that they are not licensed or certified to service KNAPP hardware and software. No other responses were received.

o In additional a conference call with the manufacturer confirmed that no other sources could perform these upgrades due to the proprietary nature of the software. Based on the market research and the proprietary nature of this requirement, competition will be limited IAW FAR Part 6.302-1 only one responsible source currently processes the requirements to fulfill this requirement.

Business Category Name of Potential Source(s)/Other POC Information

Large Business KNAPP Inc. Manufacturer

VII. Description of the Commercial Marketplace and Prevalent Business Practices

Describe the marketplace:

o This requirement will be sole sourced based on proprietary information

Identify availability of commercial or non-developmental items that satisfy requirements (value or shortcomings of each) and sub-components:

o Items are available as commercial items

State Nonmanufacturer Rule (NMR) Findings (if the acquisition is for manufactured products or other supplies) (See the Nonmanufacturer Rule Decision Tree to assist with this determination):

o Only the manufacturer has the licenses and certifications to upgrade the system as required

Identify standard/customary terms and conditions and industry business practices that differ from the standard Government practices (include information on payment, freight delivery, acceptance, and warranties)

VHAPM Part 810 Market Research SOP Page 8 of 9 Revision: 08, Effective Date: 04/27/21 o N/A

Discuss if contract financing is applicable. If so, ensure compliance with FAR 32.202-3, Conducting Market Research About Financing Terms:

o No contract financing will be provided.

Discuss any regulations unique to the requirement, if known:

o N/A

VIII. Pricing and Market Issues

Identify price sources (e.g., market price, catalog, GSA, etc.), price ranges, and price variations:

o Historical data exists from previous procurements as noted above.

Describe market trends for product or service, e.g., technical, business, and pricing:

o CMOP continues to look to improve automation of their systems with recent attempts to replace aging systems showing signs of success. But no viable system currently exists.

o Recent material shortages across all sectors of the commercial sector raises concerns of under-estimated IGCEs and continued price fluctuations for the coming months ahead.

IX. Other Considerations

Identify other considerations gathered from market research, e.g., opportunities for small business participation:

o No Small Businesses available for this requirement

Discuss qualifying factors, including such issues as past performance, references, product testing or evaluation, customer satisfaction, warranties, and quality problems:

o Manufacturer is the only vendor that can upgrade the system due to proprietary software, licenses and required certifications.

Describe consideration of green (sustainable products and services https://sftool.gov/greenprocurement and

VHAPM Part 810 Market Research SOP Page 9 of 9 Revision: 08, Effective Date: 04/27/21 http://www.gsa.gov/portal/content/105365. Include discussion of energy efficiency standards of market products, if applicable o Not Applicable

Discuss consideration to Buy American Statute. Does Buy American, Trade Agreement or an Exception to Buy American apply (FAR Part 25). Are there domestic end products available for this acquisition?

o Not Applicable, this will be Sole Sourced, only the Manufacturer can update the system

X. Market Analysis Summary

This requirement will be sole sourced as there are no small or large businesses that can upgrade the current system to;

o Meet the increased demands for throughput o Is licensed and certified to update the system as requested o Can provide the components for the upgrade of the system.

o Extend the life of the system

XI. DETERMINATION:

Market Research shows that only the manufacturer, KNAPP Inc. has the resources, licenses, and certifications to upgrade the system at the Dallas CMOP.

PART II –

I. Contracting Officer Responsibilities: Part 1 Completed by CO. See above for all referenced in Part II

IV. PROPOSED PROCUREMENT METHOD: Based on market research and IAW FAR Part 6.302-1 as there is only one responsible source that is licensed, certified, and has the components necessary to upgrade the system to meet increased demands and extend the life of the system. An RFP developed IAW FAR Part 15.002(a) will be tailored to remove unnecessary information and requirements with the award based on a sole source, “Firm Fixed Price” type of contract.

Name: _______________________________ Date: __________________ J. Braden Smith

JUSTIN B.

SMITH 493654

Digitally signed by JUSTIN B.

SMITH 493654

Date: 2021.05.27 12:49:35 -05'00'

Zaritz, Larry M.

From: Brian SULLIVAN <Brian.Sullivan@knapp.com> Sent: Wednesday, April 7, 2021 4:21 PM To: Justus, James D.

Cc: Fase, Brian R.; Racette, David; Hinspeter, James (CMOP); Crysler, Jeffrey S.; Crum, Ralph R.; Zaritz, Larry M.

Subject: [EXTERNAL] RE: Knapp Market Research Call

Hello James, Thanks for your email. I can confirm the statements below and provide this additional information:

By upgrading the ATDs and the software/firmware to run these, KNAPP is able to provide greater reliability and accuracy and expanded throughput with minimum risk or downtime. Others cannot do this.

o With the most recent update of the ATD, the pharmacy will have the newest components and controls that are designed to be an integral part of the KNAPP pharmacy system.

o The upgraded system will be able to provide a greater throughput with an optimized staffing model, such as those we see in our newer pharmacies, to address the expected growth of the prescription volume.

o Trying to mix another non KNAPP technology into this system would not physically or mechanically work with the existing system. To attempt to mix these into the current infrastructure would require significant planned downtime of months and more significantly could risk shutting down the pharmacy accidentally as they try to modify a system that was built over 15 years ago. KNAPP could not support this level of risk.

By upgrading the ATDs to the latest version, a portion of the existing ATDs, can continue to be used for mid movers and their usable life can be extended by using the ATDs that are removed as spares. Others cannot do this.

o As part of our life cycle planning, KNAPP regularly makes incremental upgrades such as this ( for example, this is often how we upgrade the ejectors on our A Frames).

o The current ATDs at the CMOP are going into limited support in Q2 of this calendar year (now).

o The current ATDs at the CMOP are going completely out of support in Q2 of 2024 o By removing some of the current ATDs and retaining them as spares, the KNAPP support of the existing

ATD 3000 units can remain available for a longer period of time.

By upgrading the ATD software/firmware to the latest version, we provide for future expansion in the pharmacy which can extend the life of the other existing KNAPP systems that are on site with minimal risk or downtime.

Others cannot do this.

o KNAPP’s KiSoft One software is the most recent version of controls which runs our complete pharmacies and subsystems o Our firmware in the newest ATDs is designed to allow the same replenishment and calibration process that the pharmacy team has been trained on.

o The upgraded ATD software is the same system that will be required for any future expansions or upgrades such as that expected in the future for the A Frame). This will make future upgrades and expansions easier.

By upgrading the ATDs to the latest version, the pharmacy will have a common support and spares program for the whole system, existing and upgraded, provided out of our Atlanta headquarters. Others cannot provide this.

o This allows for more efficient diagnostics, less downtime and lower support costs.

Please let us know if you have any other questions or if we can provide further information for the CMOP team.

Others cannot do this.

Others cannot do this.

Others cannot do this.

Others cannot provide this.

Best regards, Brian

Brian Sullivan Senior Systems Sales Manager Healthcare Solutions USA and Canada

KNAPP

2124 Barrett Park Dr. Ste. 100 Kennesaw, GA 30144 Phone: +1 678-388-2880 ext. 5581 Mobile: +1 404-550-9629 brian.sullivan@knapp.com knapp.com

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From: Justus, James D. <James.Justus2@va.gov> Sent: Friday, April 2, 2021 8:44 AM To: Brian SULLIVAN <Brian.Sullivan@knapp.com> Cc: Fase, Brian R. <Brian.Fase@va.gov>; Racette, David <David.Racette@va.gov>; Hinspeter, James (CMOP) <James.Hinspeter@va.gov>; Crysler, Jeffrey S. <Jeffrey.Crysler@va.gov>; Crum, Ralph R. <Ralph.Crum@va.gov>; Zaritz, Larry M. <Larry.Zaritz@va.gov> Subject: RE: Knapp Market Research Call Importance: High

Morning Brian, During our call with Knapp you identified the work Dallas wants to do would not be able to be done by another company due to the proprietary software/firmware currently used on the Knapp system. We also discuss that attempts from outside sources to replace hardware would not work due to the pieces not being interchangeable with Knapp components. For another vendor to upgrade the required components that Dallas is seeking to do, it would require a system and software/firmware replacement, which would cripple the CMOP via weeks to months of downtime. Further, outside components and software/firmware would not be able to work in tandem with Knapp’s installed system.

Please confirm the information above and provide any further justification that would prohibit outside sources from attempting to retrofit hardware, software and firmware onto the current Dallas system.

James D. Justus Director, CMOP Acquisition, NCO15 CMOP Division 3450 S 4th Street Leavenworth, KS 66048 Office: 913-684-0153 Cell: 816-605-3482 James.justus2@va.gov

From: dustin To: Zaritz, Larry M.

Subject: [EXTERNAL] 36C77021Q0396 Date: Friday, May 14, 2021 11:21:23 AM

Our Duns Number is :

080210994

Below is our response to your RFI:

1. Is your company currently licensed or certified to service KNAPP hardware and software?

We were but are no longer licensed or certified to service KNAPP hardware and software.

2. Does your company have past performance that would show your company’s experience upgrading KNAPP hardware and software to include the installation and maintenance of ATD 3100 Dispensers, KV5 Dispensers, Klass X WCS, Ki-Soft One and Ki-Soft SCADA?

Examples of work shall include, but are not limited to, Scope of Work, Dollar Value, timeline and a detailed explanation to show how for your company coordinated the upgrades with

KNAPP.

Our CTO, Wolfgang Skledar worked for KNAPP as the installation manager when this system was initially installed and has been assisting in support of the system for years.

While we do not have experience upgrading the specific KNAPP products, we have been working on various other upgrades and replacements to KNAPP hardware and software and have extensive experience with this particular system.

• Contract No: 36C77018C0006 – Installation of 4 new bottle orientation feeders and label applicators (printers) utilizing existing bottle hopper and operational software control system. $1,057,926.61

• Contract No: 36C77018C0020 – Installation of Universal Product and Vertical Double Row Dispensers for A-Frame upgrade. $341,244.66

• Contract No: 36C10A19P0044 – Pharmacy Control Software to replace the controls on the Tote Conveyor, replace the SCADA for the Tote Conveyor, replace the obsolete and unsupported hardware for the Puck Conveyor for the IPDs (TCA).

$2,571,895.91

3. List any other KNAPP equipment and software that your company is currently authorized to install and service.

We currently support the Descramblers referenced in Contract No: 36C77018C0006

4. Does your company have experience upgrading TCA and UUA systems in a live environment without disruption to production?

Contract No: 36C77018C0006 – The installation of 4 new bottle orientation feeders and label applicators (printers) utilizing existing bottle hopper and operational software control system was performed on the live environment without disruption to production.

We were but are no longer licensed or certified to service KNAPP hardware and software.

Contract No: 36C77018C0020 – The installation of Universal Product and Vertical Double Row Dispensers for A-Frame upgrade is being performed on the live environment without disruption to production.

We have also designed direct replacement parts including the dispensers for the KNAPP A- Frame since it is no longer supported and parts can no longer be obtained. We have integrated the UPDs with the KNAPP A-Frame as additional horizontal dispensers that are directly compatible with the KNAPP controls.

Contract No: 36C10A19P0044 – The Pharmacy Control Software to replace the controls on the Tote Conveyor, replace the SCADA for the Tote Conveyor, replace the obsolete and unsupported hardware for the Puck Conveyor for the IPDs (TCA) is being performed on the live environment without disruption to production.

5. Can your company provide a one-year service agreement and warranty to cover the upgrades?

We certainly offer a one-year service agreement and warranty to cover all upgrades that we perform and would do so if installing our products to address these concerns.

However, the old ATD 3100 dispensers cannot be warranted or supported. We have a business relationship with the manufacturer of these KNAPP pill dispensers (SPARC SYSTEMS), and we know that these dispensers cannot be supported because the PCB boards and pill counters are no longer produced or supported by the manufacturer.

Also, we would not recommend any solution that continues to use the old dispensers because they are controlled by Think and Do, a soft PLC that is the subject of existing projects aimed at its retirement. This would create an architecture that is even more complicated and difficult to support and maintain.

6. If intending to subcontract or enter into any sort of partnering agreement, is your partnering company currently authorized by KNAPP to service hardware and software? What percentage of work will your partnering company be doing?

We would not subcontract.

Thank you, Dustin Greene CEO, Wolf-Solutions

866.552.6405

817.454.4214

4243 FM 1173 Krum, TX. 76249

Dustin@Wolf-Solutions.us www.Wolf-Solutions.us

“For Official Government Use Only”

Item # Description/Part Number* Qty Price

To upgrade the KNAPP Tablet Capsule Automation (TCA) to meet the increased workload demands of a second shift. This upgrade will include replacing older KNAPP Tablet Capsule Automation (TCA) dispensers with newer more advanced versions.

This effort will include, providing legacy hardware support for existing KNAPP TCA dispensers and

KNAPP Unit of Use Automation (UUA) , upgrading all TCA and UUA subsystem software from end of

Lifecyle/unsupported versions to current supported standards and ensure all KNAPP TCA and UUA subsystems are warrantied and supported under a single vendor contract. The CMOP will be in full operation while the upgrades are being made to the TCA subsystem therefore the Contractor must ensure the production throughput, product quality, operator and patient safety are not at risk due to the work that is to be performed.

1 16,000,000.00$

SUBTOTAL (Products)

Services

INDEPENDENT GOVERNMENT COST ESTIMATE (IGCE) Hardware an upgrades for the TCA and UUA subsystems at the Dallas CM

Brief Description of Service* Period of Performance

Products (including software, licenses)

SUBTOTAL (Services) vawww.pclo.infoshare.va.gov

Engineering Estimates

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

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

TOTAL IGCE

Phone: 708-786-7541 Date: 3/10/2021

POC NAME: James Hinspeter Email: james.hinspeter@vs.gov

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