P03 JA - Purchase of Bldg T-9 - doc signed rev 6-18-24-HCA - Redacted.pdf

VHAPG Part 806.3 OFOC Page 1 of 5 Revision: 03 Effective Date: 04/15/24 Acquisition ID#: __________________

DEPARTMENT OF VETERANS AFFAIRS

Justification and Approval (J&A) For

Other Than Full and Open Competition (>SAT)

Acquisition Plan Action ID: 36C776-24-AP-1158

1. Contracting Activity:

Department of Veterans Affairs, Veterans Health Administration (VHA), Program Contracting Activity Central (PCAC), on behalf of Network Contracting Office (NCO) 10, VA Ann Arbor Healthcare System (VAAAHS), Ann Arbor, MI.

This action is part of the Minor construction project 506-333, Construct Clinics over Emergency Room, to accommodate swing space for the construction of a dialysis suite in Building 28. This acquisition has been budgeted for and is on the FY24 operating plan. A 2237 will be provided at award.

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

The proposed action is to purchase the existing T9 building, an 18,432 square foot modular building, from Modular Management Group, Inc (MMG). The building is currently leased and is being used for administrative space outside of the main hospital to accommodate Primary Care Administration, Office of Information and Technology, Patient Safety, Union, and Electronic Health Record Modernization (EHRM)/Oracle staff. The building is on VA property and has been rented by the VA since Sept. 29, 2015. The building rental contract (36C250-21-C-0203) will expire on July 14, 2026. The current rental period ends September 30, 2024. This will be a firm fixed price contract.

3. :

The VAAAHS has a need to purchase the currently leased T9 building from MMG.

The T9 building is presently under a rental contract and located on the main campus at 2215 Fuller Rd, Ann Arbor, Michigan. The procurement of the modular building will allow for modifications to be made to the T9 building to accommodate the swing space of Building 28 personnel to be relocated for construction of the dialysis suite.

These modifications cannot be made to the leased building without a modification with MMG. The purchase of the T9 building has already been approved by the Minor program via an approved scope change so the additional square footage can be used for the 506-333 Minor construction project. The total estimated value of the contract is

Existing occupants in T9 are multidepartmental and have less adjacency requirements than occupants in Building 28. Electronic Health Record Modernization (EHRM)/Oracle staff are temporary occupants and will not require onsite space post Cerner go-live. Remaining occupants will be absorbed into space on campus or into existing administrative leases where less contiguous space is available.

The contractor will be required to provide all building documentation required by law to sell the building, as-built drawings, third-party inspection and to correct any

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Acquisition ID#: __________________ deficiencies found prior to the final purchase of the building. The VA will also conduct an inspection.

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

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.

5.

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

MMG is the lessor of the T9 building and has authority to sell it to the VA. This building has been on a rental contract since Sept. 29, 2015 which will expire on July 14, 2026. The time involved in a procurement for a new leased space off-site, or construction of a replacement space via the Minor construction program, would have adverse effects to hospital operations, and the construction of the dialysis suite would be delayed as relocation space is limited. The purchase of the building needs to be completed before the rental contract expires to ensure continued use of the space during construction of the dialysis suite.

At lease termination, the VA would have to pay MMG to disassemble and remove the current building. The VA would also have to pay a fee to remove the equipment and furniture, a cost that is already paid with the current building. These costs would not be recovered through competition, thus making purchasing T9 the most economic decision for the government. If an additional lease of comparable size is pursued in the community it is reasonable to expect to pay at least twice the current rate per square foot based on current market prices in Ann Arbor for fully serviced leases. This cost does not include Tenant Improvement buildout costs.

Based on historical data it would be reasonable to pay approximately for buildout costs for a comparable sized lease in the community.

Additionally, T9 is a fully engineered viable solution already residing on our property.

It is vastly different from most typical modular type buildings. This building is comprised of 24 individual cuboids configured into eight columns three rows high.

Foundationally, the building sits on sub grade piers and the cuboids were constructed with steel columns that correspond with pier locations. Beams are laminated veneer lumber and floor joists are constructed with lumber components.

The building has two separate rated stairwells, an elevator, is fully sprinklered, connected to EES, and complies with OIT security standards for communication closets. The exterior of the building is stucco, has an EPDM flat roof and is visually appealing. The building is plumbed with copper piping with soldered fittings, has PVC drains, and is wired with BX type cabling. This building can accommodate continguous space needs for the swing space immediately without buildout costs.

Accordingly, MMG is the only firm capable of providing the supplies and services described in Section 3 above without the VA experiencing substantial duplication of

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Acquisition ID#: __________________ cost that could not be expected to be recovered through competition and unacceptable delays in fulfilling its requirements.

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

Market research was conducted as described below in Section 8.

Determination by the CO that the Anticipated Cost to the Government will be Fair and Reasonable:

The Contracting Officer will ensure through the use of price analysis techniques, such as comparison against the independent Government estimate and other price analysis techniques identified in FAR 15.404-1(b), that the price will be fair and reasonable.

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

Market research was conducted in VetCert utilizing NAICS 321992. The search returned 50 Service-Disabled Veteran-Owned Businesses (SDVOSBs) and VOSBs that may be able to furnish a new modular building to meet our requirements.

MMG, as owner, is able to sell the modular building.

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

This is a logical follow-on to the original rental contract and there is still a need for this administrative building. MMG is a Minority-Owned Small Disadvantaged business that rents\sells modular buildings to government agencies. Over the last 8 + years, the VA has been renting the building. During this

, the building has performed as expected with very few issues.

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Acquisition ID#: __________________

Listing of Sources that Expressed, in Writing, an Interest in the Acquisition:

Modular Management Group, Inc, 6602 Plaza Parkway, Fort Worth, TX 76116.

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:

Future buildings, if needed, will be procured utilizing competition.

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.

Date

Facilities Management, VAAAHCS

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

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

Contracting Officer Procurement Contracting Activity Central

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.

Procurement Contracting Activity Central

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Acquisition ID#: __________________

c. Head of Contracting Activity: I certify the justification meets requirements for other than full and open competition.

Director of Contracting

d. 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.

Head of Contracting Activity