P03 - JA HAPA Sonova-final_Redacted.pdf

DEPARTMENT OF VETERANS AFFAIRS

NATIONAL ACQUISITION CENTER

COMMODITIES, SERVICES ACQUISITION SERVICE

555 CORPORATE CIRCLE

GOLDEN, CO 80401

APRIL 24, 2025

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

HEARING AID PARTS AND ACCESSORY SUPPLIES

Title 41 United States Code (U.S.C.) § 3304(a)(1)

1. Identification of the agency, contracting activity, and specific identification of the document as a “Justification for Other Than Full and Open Competition.”

This Justification and Approval (J&A) for Other Than Full and Open Competition is executed by the Office of Procurement, Acquisition and Logistics, National Acquisition Center (NAC), Commodities and Services Acquisition Service (CSAS) on behalf of the U.S. Department of Veterans Affairs (VA), Veterans Health Administration (VHA), Prosthetic and Sensory Aids Service (PSAS) and Denver Logistics Service (DLS).

2. The nature and/or description of the action being approved.

This action will permit the noncompetitive establishment of a new national contract vehicle with Sonova USA Inc. to provide Original Equipment Manufacturer (OEM) customized (prescription) hearing aids parts and accessories. The planned contract type is a single-award firm-fixed price indefinite delivery/indefinite quantity (IDIQ) contract with a five-year ordering period. This action is a follow-on contract to establish the next generation contract vehicles for the VA’s national Hearing Aid Program and directly supports the contracted customized (prescription) hearing aid device contracts in that it supplies sole source Sonova OEM parts and accessories to the Veterans who own Sonova hearing aid devices in addition to parts for older discontinued devices that Veterans may still own. The Sonova parts and accessories supplies will be stocked at DLS warehouse and distributed once orders are placed and shipped out to the Veteran or their clinician.

3. A description of the supplies/services required to meet the agency's needs.

To support VA’s National Hearing Aid Program that is managed by the DLS, a robust supply chain for ordering and delivery of customized (prescription) hearing aids, parts, accessories, and repairs is required to ensure that Veteran needs are being met. This current OEM supply requirement will provide the required hearing aid parts and accessories for Sonova’s contracted hearing aid devices in addition to parts and accessories for discontinued hearing aid models no longer on contract, but still being parts and accessories will guarantee proper functionality of their hearing aids, and thus meet the requirement at FAR 6.302-1 “Only one responsible source and no other supplies or services will satisfy agency requirements.”

6. A description of efforts to ensure that offers were solicited from as many potential sources as is practicable. Include whether or not a notice was or will be publicized as requirement by subpart 5.2 and, if not, which exception under 5.202 applies.

As stated above, the current hearing aid parts and accessories contracts administered by CSAS were previously competed under full and open competition procedures and the most recent contracts were procured as a sole source bridge extension while the program realigns the hearing aid requirements with the changes within industry. The five large business hearing aid manufacturers maintain 100% of the market share in the United States for customized (prescription) hearing aid devices that are Trade Agreement Act (TAA) and Food and Drug Administration (FDA) compliant and meet VA’s technical requirement for the supply of related OEM parts and accessories.

Sonova hearing aid manufacturers products that have the capability of supporting VA’s voluminous requirement. The product listing is a mix of components, end products such as receivers, domes, or tubes, to name a few, which attach to the receivers and market research revealed that the products were manufactured from domestic, designated, and foreign countries. Market research reflected no resellers of Sonova parts and accessories, and only Sonova could support the requirement.

A notice of the proposed actions will be synopsized via the Government Point of Entry (GPE) in accordance with FAR Section 5.201, and the agency will make publicly available the justification required by FAR 6.305(a) within 14 days after contract award.

Additionally, the VA conducts numerous engagements with industry annually. CSAS, PSAS, and DLS hosted an industry day for hearing aid devices in June 2023 that was synopsized via Contract Opportunities. CSAS, PSAS, and DLS IPT members also attend a yearly conference, the Joint DoD VA Audiology Conference to engage with industry partners. Finally, CSAS will consider any new entrants to industry that are capable of meeting the VA’s technical requirements, including the FDA. If capable new entrants are discovered, CSAS will consider pursuing contract actions directly with these manufacturers.

7. The anticipated dollar value of the proposed acquisition, including options if applicable, and a determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

The execution this national contract vehicle for Sonova will utilize the products that are deemed technically acceptable and pricing that is determined fair and reasonable. The Independent Government Cost Estimate (IGCE) was based on the past frequency of orders and a commodity index related to this industry to escalate the rate of each item.

The GNR IGCE value for all 5 ordering periods is $133,402,111.83.

8. A description of the market research conducted and the results.

In accordance with FAR Part 10 and VAAR Part 810, VA has conducted vigorous market research to arrive at the most suitable approach for acquiring Customized (prescription) Hearing Aid Devices and its associated parts and accessories to maintain the necessary supply chain. The market research for this requirement was a collaborated effort with CSAS, PSAS and DLS. The market research report documents all research conducted to include various avenues researched such as literature published by the manufacturers, a review of databases such as the Small Business Administration’s (SBA) Dynamic Small Business Search and VetCert, the issuance of RFI’s, and a review of similar items for comparison. Also included in the market research was the information obtained for the recently awarded sole-source Customized (Prescription) Hearing Aid Devices and Repair Services contract to Sonova that emphasized TAA compliance. As demonstrated in the market research report, these supplies are not readily available on any existing government agency contract vehicle and the current contract is utilized by other agencies such as Department of Defense (DoD) and Indian Health Services (IHS) to meet Veteran’s needs.

Market research reflected that supplies are not readily available on any existing GSA GWAC, or FSS. As stated in paragraph 5, based on the unique requirements of the hearing aid device and associated OEM parts and accessories, only Sonova can provide the necessary parts and accessories that will ensure the hearing aid device maintains its integrity. Many of the circuits, components, and chargers are proprietary to Sonova and not available to other resellers. As a result of the market research, the Contracting Officer has determined that Sonova is the only contractor capable of meeting the VA’s requirements for these proprietary Sonova OEM parts and accessories.

9. Any other facts supporting the use of other than full and open competition.

VA has a continuing need for the Sonova proprietary parts and accessories to support its hearing aid devices that VA prescribes to Veterans. Sonova USA Inc. is the OEM manufacturer and owns all rights to the technical data and specifications of the hearing aid devices, parts, and accessories. These OEM parts and accessories are procurable only from the OEM manufacturer and considered proprietary to Sonova USA Inc as no other manufacturer is in legal possession of the necessary parts and accessories.

10. A listing of any sources that expressed a written interest in the acquisition.

1. GN Hearing Care Corporation / Resound

2. Oticon, Inc.

3. Sonova USA, Inc.

4. Starkey Laboratories, Inc.

5. WS Audiology USA, Inc.

11. A statement of any actions the agency may take to remove or overcome any barriers to competition, if subsequent acquisitions are anticipated.

All future requirements will be handled on a case-by-case basis. Towards the expiration of these contracts, consideration will be given to whether the future acquisition should be competed. The current national hearing aid contract vehicles are a compelling part of VA prosthetics to obtain customized hearing devices and contribute directly to patient care. The national hearing aid parts and accessories contract vehicles are vital to ensuring access to the required parts and accessories and at the best available pricing.

As part of executing the new national hearing aid devices contracts, it was required that an IPT, comprised of clinicians and other subject matter experts from various roles across the agency, was established to work together to define the hearing requirements to present to industry. The clinicians support the IPT by helping to define the various categories of hearing aid devices and therefore, this vehicle providing related parts and accessories necessary to meet VA’s goals and Veteran care. If new and capable vendors are found to be able to provide OEM customized hearing aid parts and accessories, CSAS will consider pursuing similar sole source contract actions for the related hearing aid parts and accessories with those manufacturers.

12. Requirements Certification. I certify that the supporting data under my cognizance, which are included in this J&A, are accurate and complete to the best of my knowledge and belief.

Deputy Executive Director Office of Rehabilitation and Prosthetic Services

13. Approvals in accordance with FAR 6.304 and VAAR 806.304-1.

Pursuant to FAR Part 6.303-2(b)(12), I certify that this justification is accurate and complete to the best of my knowledge and belief.

Contracting Officer Commodities and Services Acquisition Service

Concurrence

In my role as the Competition Advocate, based on the foregoing justification, I hereby concur with these acquisitions on an “other than full and open competition” basis pursuant to the statutory authority cited in paragraph four above, subject to availability of funds, and provided that the property and services herein described have otherwise been authorized for acquisition.

Supervisory Contract Specialist and Competition Advocate National Acquisition Center

Approval

In my role as Senior Procurement Executive, based on the foregoing justification, I hereby approve these acquisitions on an “other than full and open competition” basis pursuant to the statutory authority cited in paragraph four above, subject to availability of funds, and provided that the property and services herein described have otherwise been authorized for acquisition. As this action is over , the certification below required by FAR 6.304(a)(4) serves as approval by the senior procurement executive of the agency.

Acting Executive Director Office of Acquisitions and Logistics and Senior Procurement Executive