P03- OFOC 36C242-20-AP-2605_signed HCA.pdf

VHAPM Part 816.5—Indefinite-Delivery Contracts Attachment 1: Request for Exception to Fair Opportunity Memo Format

VHAPM Part 816.5—Indefinite-Delivery Contracts Page 1 of 6 Original Date: 08/30/2017 Date: 03/11/2019 Rev 02

DEPARTMENT OF VETERANS AFFAIRS

Justification and Approval

For

Exception to Fair Opportunity Memo

Acquisition Plan Action ID: 36C242-20-AP-2605

1. Contracting Activity: Department of Veterans Affairs, VISN 02, Buffalo VA Medical Center, 3495 Bailey Ave, Buffalo, NY 14215.

Purchase Request number: 528-21-1-4803-0021

2. Description of Action: This is a request for approval of a sole source task order against VA NAC contract VA797H-17-D-0024 for full-service maintenance coverage on the General Electric Medical System (GE) imaging equipment currently in use at the Buffalo VA Medical Center. This procurement will be conducted in accordance with FAR Part 16.505(b)(2)(i)(B). The purpose of the service agreement is to reduce service costs and improve equipment turn-around time and reliability. This will be a firm-fixed price task order against contract # VA797H-17-D-0024. The anticipated period of performance is from November 1, 2020 to October 31, 2021 with a provision of four (4) option years. The base year cost is $154,766.52, followed by (4) option years totaling $188,166.40 each, the total estimated cost is $907,432.12.

3. Description of Supplies or Services: The Buffalo VA Medical Center located at 3495 Bailey Ave, Buffalo, NY 14215 requires a service maintenance plan for the GE HTME (High Tech Medical

Equipment) currently in use at the Buffalo VA Medical Center to include replacement parts coverage, remote service support, telephone support, operating system software and hardware reliability reports, as well as, continuing education and support service. The contractor will be responsible for full maintenance coverage by providing all replacement parts, labor, travel expenses, tools, test equipment and other incidentals necessary to maintain or restore the listed equipment to operating specifications according to the manufacturer’s recommendations throughout the term of the contract.

Covered equipment includes the following:

Manufacturer Equipment Name/Model Serial Number(s)

General Electric (GE) MR 1.5 SIGNA ARTIST 716862MR1

General Electric (GE) MR MAGNET MAINTENANCE

AND CRYOGEN(MSC28Z)

716862MR1C

General Electric (GE) DIMPLEX MV PR DIMPLEX

WO2-2-5000 CHILLER 20T

(SDI020)

71686MR1CH

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36C242-20-AP-2605

VHAPM Part 816.5—Indefinite-Delivery Contracts Page 2 of 6 Original Date: 08/30/2017 Date: 03/11/2019 Rev 02

General Electric (GE) NM OPTIMA NM/CT 640 716862NM

General Electric (GE) WORKSTATION XELERIS

WORKSTATION 3.X (NX31PR)

716862XEL2,

716862XELERIS,

716862XELR

General Electric (GE) XR OPTIMA XR240AMX -

DIGITAL MOBILE X-RAY

SYSTEM (XMB216)

716834PORT1,

716834PORT2,

16834PORT3,

585297PORT1

The purpose of the service agreement is to reduce the costs and improve equipment turn-around time and reliability. This will be a firm-fixed price task order against contract # VA797H-17-D-0024 for the anticipated period of performance of November 1, 2020 to October 31, 2021 with a base year totaling: 154,766.52 and the provision of four (4) option years each at a cost of $188,166.40 per year for a total contract value of $907,432.12. Pricing was agreed upon to be an equal annual cost between GE and accepted by the VA NAC. There will not be any service cost increases for the base plus four (4) years per the VA NAC contract VA797H-17-D-0024 as well as the quote 465472B submitted. Additionally, there was discussion with the NAC Contracting Officer, Michelle Williams, for the HTME contract VA797H-17-D-0024. Ms. Williams has confirmed that any task order for preventative maintenance can last for up to one year past the expiration date of the parent contract. The current contract ends 2/17/2022; however, Ms. Williams advised that should a 5-year option be exercised it would push the contract expiration date out to 2/17/2027. Therefore, a base year plus (4) option years could be awarded, provided the 5-year option is awarded by the NAC, and can be included in this procurement for award. Pricing will be as follows:

Base year 11/01/2020 to 10/31/2021 $154,766.52

Option year #1 11/01/2021 to 10/31/2022 $188,166.40

Option year #2 11/01/2022 to 10/31/2023 $188,166.40

Option year #3 11/01/2023 to 10/31/2024 $188,166.40

Option year #4 11/01/2024 to 10/31/2025 $188,166.40

Grand Total $907,432.12

Option year pricing is greater than the base year due each piece of equipment coming off manufacturer’s warranty on differing dates and is pro-rated to reflect undisrupted coverage. The (4) option years are consistent throughout the remaining term of the contract, with no increase in cost during the option periods.

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VHAPM Part 816.5—Indefinite-Delivery Contracts Page 3 of 6 Original Date: 08/30/2017 Date: 03/11/2019 Rev 02

4. Statutory Authority: The statutory authority permitting an exception to fair opportunity is Section 41 U.S.C. 4106(c) as implemented by the Federal Acquisition Regulation (FAR) Subpart 16.505 Subpart 16.505(b)(2)(i):

( ) FAR Subpart 16.505(b)(2)(i)(A): The agency need for the supplies or services is so urgent that providing a fair opportunity would result in unacceptable delays.

( X) FAR Subpart 16.505(b)(2)(i)(B): Only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized.

( ) FAR Subpart 16.505(b)(2)(i)(C): The order must be issued on a sole-source basis in the interest of economy and efficiency because it is a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order.

( ) FAR Subpart 16.505(b)(2)(i)(D): It is necessary to place an order to satisfy a minimum guarantee.

( ) FAR Subpart 16.505(b)(2)(i)(E): For orders exceeding the simplified acquisition threshold, a statute expressly authorizes or requires that the purchase be made from a specified source”. The statutory authority permitting an exception to fair opportunity for this action is 38 U.S.C. 8127(c), known as the Veterans First Contracting Program which provides the authority to directly contract with a Service-Disabled Veteran-Owned Small Business (SDVOSB) or a Veteran-Owned Small

Business (VOSB).

( ) FAR Subpart 16.505(b)(2)(i)(F) In accordance with section 1331 of Public Law 111-240 (15 U.S.C.

644(r)), contracting officers may, at their discretion, set aside orders for any of the small business concerns identified in 19.000(a)(3). When setting aside orders for small business concerns, the specific small business program eligibility requirements identified in part 19 apply.

5. Rationale Supporting Use of Authority Cited Above: GE is the only company that can provide all the necessary OEM parts and perform all the necessary repairs for the GE HTME described above due to patents and copyrights on the equipment. This prevents other possible contractors from accessing the diagnostic software, possessing necessary tooling and providing OEM parts to the

Government. To ensure that services performed on the equipment meets OEM requirements as per

Title 21 Part 820, Subpart N, Section 820.200, “Servicing in order to mitigate any liability as a result of equipment failure due to improper servicing of modification of equipment.”

These maintenance services are considered “highly specialized” and thus there is only one responsible source.

http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfars/far/19.htm#P3_64 vhasyrrundlj

VHAPM Part 816.5—Indefinite-Delivery Contracts Page 4 of 6

6. Efforts to Obtain Competition: A description of efforts made to ensure that offers are solicited from as many potential sources as is practicable.

A VIP search utilizing NAICS 811219 and PSC J065 with Keywords “Medical Equipment Maintenance” was performed and resulted in (21) potential VOSB/SDVOSB vendors.

A DSBS search was completed utilizing NAICS 811219 and Keywords “Medical Equipment

Maintenance” and resulted in (4) potential contractors, however after closer examination of their capabilities narrative the companies provided sales or unrelated services. In addition, no companies listed responded to the government’s intent to sole source.

Market research identified an available NAC awarded contract for this type of equipment exists and is available for use. Contract# VA797H-17-D-0024, awarded: 2/13/2017 to General Electric

Company (GE) for service and maintenance of radiology imaging equipment.

Notice of Intent to Sole Source # 36C24221Q0033 was posted to Contract Opportunities from

September 23, 2020 through September 30, 2020 seeking information from contractors who could potentially provide the required maintenance service. One (1) response was received from The

Remi Group; however, the vendor does not have GE technicians on staff nor does GE authorize the company to work on their equipment.

7. Actions to Increase Competition: Describe actions taken, or that will be taken, to remove or overcome any barriers to competition before initiating any subsequent acquisitions for the supplies, or services required, including challenges to restrictive data markings, data rights, preparation of a performance based work statement, and etc.

In situations involving complex medical equipment, it is difficult to remove barriers to competition because the OEM is the only qualified company capable to provide the repair and maintenance of its own specialized medical equipment. This is especially true where proprietary software, specific diagnostics tools, and specialized electronics are used to maintain the HTME in accordance with

OEM specifications. Unless the manufacturer chooses to license its software and authorize local service providers to maintain the GE equipment, the only alternative would be to replace the existing GE equipment with a more generic brand. At this time, the Buffalo VAMC is satisfied with the quality and operation of the installed equipment, its maintenance and repair. Buffalo VAMC currently does not have the sufficient budget to replace the GE equipment, thus the reason to have equipment properly maintained through the life of the contract. Considerations for new equipment will be made when the existing equipment reaches the end of its life cycle span.

8. Market Research: Provide a description of the market research conducted among the contract holders and the results. If market research was not conducted, the reasons it was not conducted vhasyrrundlj

VHAPM Part 816.5—Indefinite-Delivery Contracts Page 5 of 6 Original Date: 08/30/2017 Date: 03/11/2019 Rev 02 should be stated. When citing 16.505(b)(2(i)(b) or 16.505(b)(2)(i)(e), the only possible way to state in paragraph 5 of the J&A that there is only one contractor who can fulfill the agency’s needs is to conduct market research, and it should be summarized here.

Due to the proprietary nature, GE is the only authorized company able to perform maintenance on its imaging equipment. They have the technical expertise to provide maintenance and service, as well as being the only company with access to manuals and design specifications of its imaging equipment. GE is the only company that can access its systems remotely and offer certified parts that meet the original manufacturer’s specifications. GE technicians are the only OEM trained and certified personnel authorized to perform service on this HTME (High Tech Medical Equipment). However, VIP, SBA, and an intent to sole source was published to determine if there were any other vendors capable of providing service and/or maintenance on the GE equipment. Additionally, a Notice of Intent to Sole Source was posted to Beta.Sam.Gov from September 23, 2020 through September 30, 2020 seeking information from contractors who may be capable of providing the required maintenance service. No responses were received from any source that could provide the required service and maintenance work as required by the Statement of Work or as authorized by the manufacturer. It has been determined that

GE is the only company capable of providing these services on this highly specialized equipment to the agency.

9. Other Facts: This contract is in support of the VA-DoD Direct Sharing Agreement with the DSCP in consolidation with four of the DOD’s HTME contracts, namely VA797H-17-D-0024. The use of these consolidated HTME contracts after first considering mandatory sources is strongly encouraged by the

NAC.

10. Technical and Requirements Certification: I certify that the supporting data under my cognizance, which are included in this justification, are accurate and complete to the best of my knowledge and belief.

LISA RUMMINGS Date

COR/PROGRAM SUPPORT ASSISTANT

NCO2, BUFFALO, NY

11. Determination that Anticipated Cost is Fair and Reasonable: A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable:

The anticipated cost to the government is considered fair and reasonable based upon adequate competition on the VA NAC contract requirements and negotiation of prices prior to contract award.

The pricing for this annual service requirement comes directly from the manufacturer, GE, is identical to the pricing available under their VA NAC contract. The Contracting Officer sought additional discounts from GE on October 08, 2020. The Service Sales Specialist, Eric Rauls, indicated that no further discounts were available.

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VHAPM Part 816.5—Indefinite-Delivery Contracts Page 6 of 6

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

JASON M. RUNDLE DATE

CONTRACTING OFFICER, SERVICES TEAM I

RPO – EAST, NCO2, SYRACSUE, NY

13. Approvals in accordance with VHAPM Part 816.505 Indefinite Delivery Contracts: Ordering.

a. One Level Above the Contracting Officer (Required over SAT but not exceeding $700K): I certify the justification meets requirements for other than full and open competition.

CHERYL BRIMMER DATE

BRANCH CHIEF, SERVICES TEAM I

RPO – EAST, NCO2, BATH, NY

HIGHER LEVEL APPROVAL (Required for orders over $700,000):

b. VHA SAO HCA REVIEW AND APPROVAL (over $700,000 to $13.5 million): I have reviewed the foregoing justification and find it to be complete and accurate to the best of my knowledge and belief and approve for other than full and open competition.

JOSEPH MALETTA DATE

EXECUTIVE DIRECTOR

REGIONAL PROCUREMENT OFFICE - EAST

https://vaww.pclo.infoshare.va.gov/PCLO/PMWeb/VHAPM_Part_816.505.aspx vhasyrrundlj