P03 Justification and Approval VISN 15 FINAL DC Signed.pdf

DEPARTMENT OF VETERANS AFFAIRS

Justification and Approval (J&A) For

Sole Source Justification

Acquisition Plan Action ID: 36C776-21-AP-1762

1. Contracting Activity: The Department of Veterans Affairs, Procurement Contracting Activity

Central (PCAC), 212 3rd Avenue South, Minneapolis, MN 55401, on behalf of Veterans Integrated System Network (VISN) 15. It is the intent of the contracting activity to award a short-term contract on a sole source basis. This document sets forth the justification and approval in accordance with FAR Part 13.501, VAAR 813.106-70 and VAAR 819.7007.

2. Nature and/or Description of the Action Being Processed: VISN 15 has an urgent and ongoing requirement for medical grade bulk liquid oxygen and associated services for an estimated thirteen

(13) VA Medical Centers. The Government intends to award a short-term sole-source contract pursuant to 38 USC § 8127(c) and VAAR 819.7007 to RAS Enterprise, LLC (RAS), located at 2512 25th Avenue, Suite 3, Gulfport, MS 39501, for the period of March 15, 2021 through June 14, 2021 with two (2) three-month option periods, to be exercised at the discretion of the government.

3. Description of Supplies/Services Required to Meet the Agency’s Needs: VISN 15’s current contract VA240C-16-D-0006 awarded to RAS on March 3, 2016 will expire on March 14, 2021.

VISN 15 does not have the capabilities to produce/manufacture medical grade bulk liquid oxygen on its own, therefore upon expiration of the current contract there will be an immediate need to continue receiving medical grade bulk liquid oxygen on a continual basis to prevent disruption of these critical healthcare supply and services for clinics, wards, surgery and pharmacy services. The resulting contract shall be awarded as an Indefinite Delivery Indefinite Quantity (IDIQ) with an Independent Government Estimate (IGE) of $459,076.42 for this requirement.

4. Statutory Authority Permitting Other than Full and Open Competition: 41 USC §3304(a)(5), 38 U.S. Code § 8127(c), as implemented by VAAR 819.7007. Check the specific VAAR clause used below:

(X) 38 USC § 8127 and 819.7007 Sole source awards to a verified service-disabled veteran-owned small business. The contracting officer confirms that:

i. The anticipated award price of the contract (to include options) will not exceed the $5 million dollar threshold.

ii. RAS has the capability to provide medical grade bulk liquid oxygen and associated services for VISN 15 in its entirety. RAS has relevant experience providing medical grade bulk liquid oxygen and is currently doing so in VISN 15 since 2016. Furthermore, RAS can provide the requirement in its entirety immediately upon award.

iii. The contracting officer has determined that award will be made to RAS at a fair and reasonable price. The contracting officer utilized the pricing under the current contract VA240C-16- D-0006 as well as other procurements of medical grade bulk liquid oxygen where prices were previously determined to be fair and reasonable to assist in the determination that the pricing for this short-term sole source contract isfair and reasonable.

5. Demonstration that the Contractor’s Unique Qualifications or Nature of the Acquisition Requires the Use of the Authority Cited Above (applicability of authority):

A GAO protest was filed on February 4, 2021 challenging the agency’s award of contract 36C77621D0010 on a sole source basis to RAS for the provision of medical grade bulk liquid oxygen and associated services for VISN 15 for a period of seven years. As a result of the GAO protest, the agency determined that corrective action is required. The corrective action includes 1) terminating contract number 36C776321D0010, 2) re-assesssing the agency’s needs and 3) performing additional market research for medical grade bulk liquid oxygen to determine the acquisition approach that will best support the agency’s requirements for VISN 15. Current contract number VA240C-16-D- 0006,which includes VISN 15 as well as VISNs 9 and 16, expires on March 14, 2021 with no further options to exercise leaving VISN 15 without this mission critical and life sustaining supply of medical grade bulk liquid oxygen. The immediate cessation of medical grade bulk liquid oxygen would put Veterans’ lives at risk. The use of medical grade bulk liquid oxygen is critical to the care of Veterans. Any delay or disruption to this supply would result in a significant, dangerous interruption that will adversely affect all aspects of patient care and the agency’s mission.

The pending corrective action will require a short-term contract to bridge the gap in supply and associated services until a long term contract can be awarded. Medical grade bulk liquid oxygen is dispersed in the pipes to surgical suites, patient beds and used for surgical and laboratory equipment.

Currently, all of the medical grade bulk liquid oxygen tank systems and back up systems that are operating in each of the medical facilities in VISN 15 are owned by the manufacturers (Linde Gas, and Matheson) with the medical grade bulk liquid oxygen distributed by RAS. As the current distributor, RAS has agreements with the aforementioned manufacturers; therefore, there will be no break in service in the provision of these critical health care supply and services required at the VA facilities. A break in service would be catastrophic and would be life threatening. Due to the nature of medical grade bulk liquid oxygen, it takes substantial time, effort and coordination to transition over to a new contractor. For example, a 9000 gallon tank system requires a concrete slab to support the size and weight of the tank, specialized equipment to move and install the tank. This coordination and installation can take 3-6 months. Historically, if tank systems are required to be removed from facility grounds, it requires the use of high-tech equipment and generally necessitates the facility to contract construction services to install new tanks and back up systems. Furthermore, the distribution of medical grade bulk liquid oxygen requires the contractor to hold pharmaceutical licenses, permits and/or registrations in the state(s) where there will be distribution. This is required by the Pharmacy Board for each state. The licensing, permit and registration process can take up two (2) months or longer depending on state requirements. For this short term contract it is required that all licenses, permits and registrations be issued by start of the contract performance.

To allow reasonable time to fully implement pendng corrective action and to ensure that there is no interruption in the provision of these critical health care supply and services to Veterans, it is the Contracting Officer’s intent to sole source medical grade bulk liquid oxygen supply and associated services in accordance with 38 USC 8127(c) and 819.7007. It has been determined that RAS, the incumbent, can provide the requirement in its entirety immediately upon award, without disruption or interruption to medical facilities. RAS is a verified Service-Disabled Veteran-Owned Small Business and is an authorized distributor of medical grade bulk liquid oxygen. RAS has agreements in place with all manufacturers whose tanks reside at VISN 15 VA facilities. As the primary contractor, RAS possesses the required pharmaceutical licenses, permits and registrations to support this requirement in its entirety. Furthermore, RAS has proven its ability to provide uninterrupted supply of medical grade bulk liquid oxygen, sustaining stability of support and consistency for the Veteran beneficiaries of VISN 15’s facilities.

The Contracting Officer has reviewed the Non-Manufactuerer Rule and has determined there is a non-manufacturer class waiver in place for NAICS Code 325120-Industrial Gases. In accordance with the Non-Manufactuerer Rule as defined in 13 CFR 121.406(b), RAS can provide medical grade bulk liquid oxygen meeting the non-manufacturer rule criteria identified below:

a. Does not exceed 500 employees

b. Is primarily engaged in the retail wholesale trade and normally sells the type of item being supplied

c. Takes ownership or possession of the item(s) with its personnel, equipment or facilities in a manner consistent with industry practice.

The intent to award a short-term sole source contract to RAS is deemed necessary and essential to support agency’s mission and to maintain this critical and life sustaining supply. The short term contract is needed to allow reasonable time to fully implement corrective action taken in response to a GAO protest, solicit, award and transition a new contract and/or new contractor.

6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable: This justification relates solely to the need of providing medical bulk liquid oxygen for the ordering period of March 15, 2021 through June 14, 2021 with two, three (3) month option periods to bridge the gap of service until pending corrective action is fully implemented and a long term contract is awarded.

7. Determination by the CO that the Anticipated Cost to the Government will be Fair and Reasonable: The Contracting Officer utilized the pricing under the current contract VA240C-16-D- 0006 as well as other procurements of medical grade bulk liquid oxygen where prices were previously determined to be fair and reasonable to assist in the determination that the pricing for this short-term sole source contract is fair and reasonable.

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

Market Research Was Not Conducted: It is paramount to award a short term contract while pending corrective action is being fully implemented and a long term solution is being solicited, awarded and transitioned. The Contract Officer will conduct market research while pending corrective action is being implemented.

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

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

Carolina.

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:

Pending corrective action requires the agency to perform additional market research for medical grade bulk liquid oxygen to determine the acquisition approach that will best support the agency’s requirements for VISN 15’s medical facilities. This pending corrective action will assist in removing and/or overcoming barriers for the acquisition of medical grade bulk liquid oxygen.

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.

Tanya Kuza Date Program Manager Midwest Consortium

Supply Chain Management Sub Committee

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.

Nicole Kutsi Date Contracting Officer PCAC Strategic Sourcing

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.

Paris Everson Date Divison Chief

PCAC Strategic Sourcing https://dvagov.sharepoint.com/sites/VHAProcurement/VHAPM/VHAPM_Part_806.3.aspx