P03 - JOFOC_Cepheid_Redacted.pdf

Effective Date: 02/01/2022 Page 1 of 4

DEPARTMENT OF VETERANS AFFAIRS

SOLE SOURCE JUSTIFICATION UNDER SIMPLIFIED PROCEDURES FOR CERTAIN COMMERCIAL

ITEMS IN ACCORDANCE WITH FAR 13.5

Acquisition Plan Action ID: 36C261-24-AP-1551 JOFOC Tracker FY24: FY24 – NCO 21 - 1583

1. Contracting Activity: Department of Veterans Affairs (VA), Regional Procurement Office West

(RPOW), Network Contracting Office (NCO) 21, on behalf of the Veterans Integrated Service Networks (VISN) 21, VA Pacific Islands Health Care System (VAPIHCS) located at 459 Patterson Road Honolulu, HI 96819-1522.

2. Nature and/or Description of the Action Being Processed: Approval is requested for a new, sole source Indefinite Delivery, Indefinite Quantity (IDIQ) contract with Cepheid to provide cost-per-test contract for specialized reagents, test kits, and supplies with lease of three analyzers and maintenance. The anticipated contract will be a firm-fixed-price contract for five years.

In accordance with FAR 13.5 Simplified Procedures for Certain Commercial Items and specifically FAR 13.501 Special Documentation Requirements, where acquisitions conducted under Simplified Acquisition Procedures are exempt from the requirements of FAR Part 6, but still require a justification using the format of FAR 6.303-2.

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

Indefinite Delivery Indefinite Quantity (IDIQ) ceiling is $700,000.00 to account for any fluctuations but the IGCE for 5 years is $497,778.40.

Ordering Period 1: October 01, 2024 – September 30, 2025, Ordering Period 2 October 01, 2025 – September 30, 2026, Ordering Period 3 October 01, 2026 – September 30, 2027, Ordering Period 4 October 01, 2027 – September 30, 2028, Ordering Period 5 October 01, 2028 – September 30, 2029, The supplies and services required consists of the following:

Supply / Service Estimated Yearly Cost Rental and Service for 3 - GeneXpert analyzer Kit, CDIFF/EPI, GX, IVD Kit, 10-EST, MRSA, NXG, IVD, GX Kit, XPRESS, COV-2/FLU/RSV PLUS Kit, XPRESS, SARS-COV-2 Kit, XPRESS, STREPA, US-IVD Kit, CT/NG, GX, IVD Kit, XPRESS, MVP, US-IVD Kit, XPRESS, COV-2/FLU/RSV PLUS Kit, XPERT TV_US

The procurement will provide specialized Cepheid infectious disease reagents, test kits and supplies in support of the Spark M. Matsunaga Ambulatory Care Center (ACC) Lab and the American Samoa Community Based Outpatient Clinic (CBOC) Lab on a cost-per-test basis. The reagents, test kits and

Effective Date: 02/01/2022 Page 2 of 4 supplies to be covered under this award will support the previous acquired Cepheid GeneXpert analyzers. VAPIHCS currently has purchase order 36C26123P0816 in place that fulfills the above requirement. The contract is set to expire on September 30, 2024.

4. Statutory Authority Permitting Restricted Competition:

FAR 13.5 Simplified Procedures for Certain Commercial Items. The statutory authority for applying the Simplified Procedures for Commercial Items of FAR 13.5 is 41 U.S.C. § 1901 and is implemented by FAR 13.106-1(b)(2) for restricting competition on this procurement. Competition is restricted on this procurement for the reason below:

(X) Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements

( ) Unusual and Compelling Urgency ( ) Industrial Mobilization, Engineering, Developmental or Research Capability or Expert

Services ( ) International Agreement ( ) Authorized or Required by Statute ( ) National Security ( ) Public Interest

5. Demonstration that the Contractor’s Unique Qualifications or Nature of the Acquisition Requires the Use of the Authority Cited Above (applicability of authority): Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

The VAPIHCS, Infectious Disease Team has conducted validation studies and identified Cepheid GeneXpert analyzers and kits be both accurate and reliable. The validation study identified that GeneXpert analyzers produces results in under sixty (60) minutes whereas other analyzers take upwards of 2-3 hours to produce results. The VAPIHCS has been using the reagents, supplies, and analyzers for the past three years. Continued use of the Cepheid GeneXpert analyzers and kits prevents required extensive validation studies to be performed on the new platform which takes upwards of 3-6 months. This would cause a delay in care due to the length of time to procure and approve another analyzer. Thus, patient care would be negatively impacted by these delays.

Accordingly, Cepheid is the only firm capable of providing the highly specialized supplies and services described in Section III above due to proprietary rights they are the sole distributor and the incompatibility with other analyzers. Cepheid provided a letter on April 24, 2024, stating that their firm is the only authorized provider (sole distributor) of Xpert reagents, and the sole service provider for the GeneXpert systems, in the United States. In addition, Cepheid GeneXpert are incompatible with other analyzers and kits; therefore, due to proprietary rights, Cepheid is the only firm capable of providing the highly specialized supplies and services, as described in Section III (above).

6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable: Reviewed previous acquisitions made by NCO 21 for the requirement. The Contracting Officer reviewed previous NCO 21 acquisitions ( purchase orders 36C26123P0056 and 36C26123P0816 as well as two (2) IDIQ contracts 36C26124D0003 and 36C26121D0047) for cost-per-test specialized reagents, test kits, and supplies and NCO 21 acquisitions for leasing of, and maintenance for, the analyzers. Each was awarded on a sole source basis to Cepheid.

Due to the brand name only requirement, an email was sent on April 25, 2024, to the Cepheid to determine whether they had any Service-Disabled Veteran Owned Small Business (SDVOSB), Veteran Owned Small Business (VOSB) or any small businesses as authorized distributors. A Cepheid

Effective Date: 02/01/2022 Page 3 of 4 representative responded with a sole source letter stating they were the sole manufacturer and distributor of the requirement. Consequently, no additional efforts were not made to identify potential sources.

7. Determination by the CO that the Anticipated Cost to the Government will be Fair and

Reasonable: In accordance with (IAW) FAR 13.106-3(a)(2)(ii), fair and reasonable pricing will be determined by comparison of the proposed price with prices found reasonable on previous purchases.

8. Description of the Market Research Conducted and the Results, or a Statement of the Reasons

Market Research Was Not Conducted: A search of the Small Business Administration (SBA), Veteran Small Business Certification (VetCert) database, utilizing the North American Industry Classification System (NAICS) code 325413, yielded eighty-seven (87) SD/VOSB firms. However, due to the aforementioned proprietary nature for the requirement, no further market research was conducted.

The market research reports for four (4) previous NCO 21 procurements were reviewed to assess trends in the market, identify competitors and to evaluate procurement strategies. All four were sole source awards due to Cepheid being the sole manufacturer of the system and reagents. The Contracting Officer reached out to Cepheid to see if this was still the case. Cepheid responded by providing a proprietary/sole distributor letter. Upon receipt of the letter, there is no reasonable expectations for any small or large businesses to be able to meet this requirement.

The Buy American Act (BAA) applies. A review of the vendor Buy American Certificate under FAR 52.212-3(f), will be used to determine BAA compliance.

9. Any Other Facts Supporting the Use of Other than Full and Open Competition: Cepheid has been performing exceptional on the current purchase order and satisfactorily on previous delivery orders.

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

Cepheid 904 Caribbean Drive Sunnyvale, CA 94089-1189

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: The Government will track the life expectancy of the analyzer. When it is time to procure a new analyzer, the procurement for the analyzer and reagents will be competed to the maximum extent practicable. In the future, if another vendor supplies a suitable alternative, their qualifications will be evaluated. The market will be continually assessed to determine if other vendors can provide the required supplies.

Effective Date: 02/01/2022 Page 4 of 4

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.

Date

Administrative Officer VA Pacific Islands Health Care System

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.

Date Contracting Officer, Supply 1 Network Contracting Office 21 (NCO 21)

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.

Branch Chief, Supply 1 Network Contracting Office 21 (NCO 21)