P03 - JOFOC - Westlake CNH_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: 36C259-23-AP-0020

RPOW JOFOC Tracker: # 2023-07-28T08:35:21

1. Contracting Activity: Department of Veterans Affairs, Network Contracting Office (NCO) 19, 6162

S. Willow Drive, Suite 300, Greenwood Village, Colorado 80111, in support of the Eastern Colorado Health Care System in Aurora, Colorado located at 1700 N Wheeling St, Aurora, CO 80045.

2. Nature and/or Description of the Action Being Processed: This procurement is for Community Nursing Home (CNH) services for the Eastern Colorado Health Care System (ECHCS) in Lakewood, CO with W III INC, doing business as (dba) Westlake Care Community. This procurement will be processed 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. The award action will result in a new 5-year (60-month) sole source firm-fixed-price Indefinite-Delivery Indefinite-Quantity (IDIQ) contract. This action is funded by a 1358 so there is no associated 2237.

3. Description of Supplies/Services Required to Meet the Agency’s Needs: The CNH will provide all facilities and services to support short and long-term care for eligible Veterans. These services include but are not limited to rehabilitation, nursing, and clinical care in accordance with the Performance Work Statement (PWS). The current contract, 36C25918D0217, expires on September 30, 2023. W III INC, dba Westlake Care Community has met all requirements under the VHA Notice 2022-32, and VHA Notice 2022-04 Community Nursing Home Program (CNHP) and VHA Field Guidebook, Specialty Programs Section 1.2, Geriatric Extended Care (GEC). Additionally, they are certified under The Centers for Medicare and Medicaid Services (CMS) and licensed by the State of Colorado. This will be a 5-year IDIQ (60 months) contract. The total estimated price of this procurement is and this is also the maximum ceiling amount. The contract will include the evaluation of FAR 52.217-8 - Option to Extend Services. If exercised for up 6 months, the 52.217-8 option will be exercised at the same rates as those in effect under the contract at the time the contract is extended. The estimated period of performance will be October 1, 2023, through September 30, 2028.

4. Statutory Authority Permitting Other than Full and Open 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

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

Requires the Use of the Authority Cited Above (applicability of authority): Currently, there are ten (10) Veterans being treated and housed at W III INC, dba Westlake Care Community, under the existing Indefinite Delivery Contract (IDC) 36C25918D0217. W III INC, dba Westlake Care Community center in Lakewood, Colorado has met all requirements VHA Notice 2022-32 and 2022- 04 and Office of Integrated Veteran Care (IVC) Field Guidebook, Specialty program section, 1.2., Geriatric Extended Care (GEC). Additionally, they are certified under the Centers for Medicare and Medicaid Services (CMS) and licensed by the State of Colorado. There are ten (10) Veterans being treated and housed at W III INC, dba Westlake Care Community. The Veterans at this facility cannot be moved without causing a disruption in the continuity of care and undue stress to both the Veterans and family. The relocating of Veterans away from their families is not in accordance with VA policy/directive established by the Office of Geriatrics and Extended Care. In accordance with FAR 6.302-1, this requirement for community nursing home services will be a sole source IDIQ contract to W III INC, dba Westlake Care Community.

6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable: A Sources Sought Notice (36C25923Q0049) was posted on SAM.gov on October 28, 2022 and closed on November 11, 2022. The notice requested basic contractor information from interested parties to gain knowledge of potentially interested parties and their size classification including: HUBzone, 8(a), small, small disadvantage, service-disabled Veteran-owned small business, Veteran-owned small business, or large business. The NAICS selected for this requirement is 623110 Nursing Care Facilities for Skilled Nursing Facilities with a small business size standard of $34 Million. No responses were received from other potential sources to the posting.

A search of the Medicare Compare website https://www.medicare.gov/nursinghomecompare/search.html resulted in twenty-three (23) nursing homes within a 5-mile radius of Lakewood, CO. One (1) of the results is the incumbent W III INC, dba Westlake Care Community. Two (2) of the nursing home facilities are currently under VA contract but due to proximity to family and Veteran choice these other two (2) CNHs are not feasible.

The other twenty (20) facilities have not been vetted through the VA process to establish them as viable options for the contract. A search of Veteran Small Business Certification (VetCert) using the NAICS code 623110 returned 121 results, only two (2) of the results are located in the state of Colorado. While there are two (2) facilities in Colorado, they are unable to provide skilled nursing home care. A search utilizing Vendor Information Page (VetBiz), utilizing zip code 80214 and NAICS 623110, was conducted but yielded no results. A search utilizing Dynamic Small Business with NAICS code 623110, and the zip code 80214 produced one (1) result. The one (1) result from the search was the current facility W III INC, dba Westlake Care Community. A redacted Justification for Other than Full and Open Competition (JOFOC) will be posted on Contract Opportunities. There will be no further actions taken to facilitate competition for this acquisition.

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

Reasonable: The anticipated pricing is expected to be considered fair and reasonable. This determination is based on the Medicaid rates that are established by each state based on the national average. The VA Geriatrics and Extended Care Office through the VHA Procurement Guide (VHA PG) and VA pulse publishes an annual maximum allowable percentage that are applied to each Resource Utilization Group, Version IV (RUGS IV) category. The RUGS IV category identifies the different levels of treatment/care. The Medicaid rate is added to the add-on percentages to determine the basic per diem rate, then the basic per diem rate is applied to each RUGS IV category. The basic per diem rate and the additional VA add-on percentage make up the per diem rate price paid for each Veteran. The line-item structure will illustrate the basic rate and the per diem rate for each RUGS IV category which is made up of the basic rate and the VA add-on percentage for each level of care.

After researching the current Medicaid and RUGS IV rates, the CO will determine if the rates are fair and reasonable when the add-on percentage agreed upon by both parties is at or under the maximum allowable percentage established by VA. The add-on percentages do not change throughout the life of the contract.

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

Market Research Was Not Conducted: As described in Section 6 above, a search of the Medicare Nursing Home Compare website https://www.medicare.gov/nursinghomecompare/search.html resulted in twenty-three (23) nursing homes with a range of 5 miles radius with zip code 80214. One of the results is the incumbent, W III INC, dba Westlake Care Community. There are ten (10) Veterans being treated and housed at W III INC, dba Westlake Care Community. The Veterans at this facility cannot be moved without causing a disruption in the continuity of care and undue stress to both the Veterans and family. The relocating of Veterans away from their families is not in accordance with VA policy/directive established by the Office of Geriatrics and Extended Care. Two

(2) of the nursing home facilities are currently under VA contract but due to proximity to family and Veteran choice these other two CNHs are not feasible. The other twenty (20) facilities have not been vetted through the VA process to establish them as viable options for the contract. A Sources Sought Notice, (36C25923Q0049), was posted on October 28, 2022 and closed on November 11, 2022. No responses were received from other potential sources to the posting. A search of SBA Veteran Small Business Certification (VetCert) and Vendor Information Page (VetBiz) was conducted to determine if any potential Service-Disabled Veteran-Owned Small Business (SDVOSB) or Veteran-Owned Small Business (VOSB) offerors exists for this requirement. A search utilizing Dynamic Small Business produced one (1) result. The one (1) result from the search was the current facility W III INC, dba Westlake Care Community. The results of the market research showed there are no SDVOSB/VOSB CNHs or other CNH facilities that can satisfy the requirement in the surrounding area. Based on the CNH program requirements, the Veteran’s preference is taken into consideration when selecting a CNH. The CNH selection is based on the Veterans’ needs, proximity to home/residence, and family. The CNH Program Coordinator at the Medical Center reviews the Medicare compare score of various CNHs in each area to determine the feasibility to meet the Veteran’s needs. The CNH coordinator determines the number of CNHs that may be required in an area based on future needs.

9. Any Other Facts Supporting the Use of Other than Full and Open Competition: There is no other supporting information not previously stated to support the use of other than full and open competition.

10. Listing of Sources that Expressed, in Writing, an Interest in the Acquisition: No other community nursing homes have expressed interest in providing services in this area. The current Contractor, W III INC, dba Westlake Care Community expressed interest in continuing to provide services to the VA and continue providing care to the Veterans housed there.

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:

Actions that are being taken to foster competition for future acquisitions of these services being acquired are being done by the CNH Coordinators. In accordance with the VHA Office of Integrated Veteran Care (IVC) Field Guidebook, the CNH Program Office will review the Medicare Nursing Home Compare scores for a sample of CNHs. The selection of the CNH is determined by whether the CNH has the resources, and program requirements available to meet the Veterans' needs. The CNH Coordinator will review the Medicare Nursing Home Compare scores to determine if they are eligible for a contract. The Contracting Office and CNH Program Office will continue to canvas the market for new CNH entrants capable of meeting program requirements.

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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.

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.

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.

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 approve ($750K to $7.5 million (or $15.0 million for acquisitions described in FAR 13.500(c)) for other than full and open competition.