P03 PM_Part816.505_Atch1_Except_to_Fair_Opp-Redacted-.pdf

DEPARTMENT OF VETERANS AFFAIRS

Justification and Approval

For

Exception to Fair Opportunity Memo

Acquisition Plan Action ID:__ 36C261-21-AP-1833_/ PR# 662-21-3-630-0220

1. Contracting Activity:

Department of Veterans Affairs

Network Contracting Office (NCO) 21

VISN 21, San Francisco Medical Center

2. Description of Action:

The proposed sole source firm fixed price Task Order (TO) against Multiple Award Contract vehicle SPE2D1-17-D-0023 is for preventative maintenance support of the Siemens Magnetom 7 Tesla, 3 Tesla Skyra MRI’s and DTS Chiller located at the VA Medical Center, San Francisco CA. Approval is being sought to issue a sole source TO for a base year with 4 one-year option periods to the original equipment manufacturer (OEM) Siemens Medical Solutions USA Inc. of 40 Liberty Blvd, Malvern, PA 19355.

3. Description of Supplies or Services:

The proposed action is to provide preventative maintenance support to include exclusive parts and labor, systems upgrades, and access to Siemens Customer Care Center for the Siemens manufactured Magnetom 7 Tesla, 3 Tesla Skyra MRI’s and DTS Chiller. The total estimated value of the proposed action is $2,107,184.52.

Period of Performance Amount Base Year: (05/1/2021 – 4/30/2022) $325,175.96 Option Year 1 (05/1/2022 – 4/30/2023) $445,502.14 Option Year 2 (05/1/2023 – 4/30/2024) $445,502.14 Option Year 3 (05/1/2024 – 4/30/2025) $445,502.14

Option Year 4(05/1/2025 – 4/30/2026) $445,502.14 Grand Total: $2,107,184.52

$2,107,184.52.

$325,175.96 $445,502.14 $445,502.14 $445,502.14

$445,502.14 $2,107,184.52

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).

5. Rationale Supporting Use of Authority Cited Above:

The Siemens manufactured Magnetom 7 Tesla, 3 Tesla Skyra MRI’s and DTS Chiller is considered to be a highly technological medical equipment that can only be supported and maintained by the OEM.

The preventative maintenance services provided by the Siemens highly trained technicians is necessary for the equipment to function in accordance with the manufacturer specifications and standards. The preventative maintenance services for the Siemens manufactured Magnetom 7 Tesla, 3 Tesla Skyra

MRI’s and DTS Chiller can only be provided by the OEM, as the equipment and the systems upgrades that support it are proprietary to Siemens. Siemens has also provided a sole source justification stating that they do not authorize any third party personnel to service its equipment due to their proprietary rights to their equipment and software.

6. Efforts to Obtain Competition:

In support of a joint effort by Defense Logistics Agency (DLA) Troop Support Medical and the

VA National Acquisition Center (VA-NAC) a solicitation under solicitation number SPE2D1-17-D-

0023 was issued in April 2019 and awarded to Siemens Medical Solutions, USA, Inc. as an Indefinite

Delivery/Indefinite Quantity (ID/IQ) contract for the supply of radiology and imaging systems, accessories, maintenance services, clinical and biomed training, including: CT, MR, MR-PET, PET-

CT, SPECT/SPECT-CT, cathlab, interventional radiology, ultrasound, fixed and portable x-ray, fluoroscopy, mammography, c-arms and urology imaging system.

This type of equipment is classified as High Technological Medical Equipment, and the systems are proprietary to the OEM. Therefore, the maintenance and support of the equipment can only be provided by the manufacturer for maintaining the equipment in accordance with the OEM’s specifications and standards. The Siemens Magnetom 7 Tesla, 3 Tesla Skyra MRI’s and DTS Chiller is equipment that can only be supported and maintained by the manufacturer. Market research was conducted and there was no competition identified for this acquisition. In accordance with FAR 5.301 and 16.505(b)(2), this justification will be posted to Federal Business Opportunities Page (FBO) and made publicly available.

7. Actions to Increase Competition:

The Government will continue to conduct market research to ascertain if there are changes in the marketplace that would enable future actions to be competed.

8. Market Research:

The market research conducted is briefly summarized as follows:

VIP: searched using keyword: Magnetom, no results

GSA: searched using keyword: Magnetom , no results

SBA: searched using keyword: Magnetom, no results

DLA/VA NAC: IDIQ Multiple Award Contract SPE2D10-17-0023 was awarded to Siemens Medical

Solutions U.S.A in order to streamline the ordering process for acquisition of High Tech Medical

Equipment and support services. In some cases, there may be third party sources that are authorized by the OEM to provide maintenance support services for their equipment. However, for the High Tech

Medical Equipment (HTME) that Siemens manufacturers, support can only be provided by the OEM, as the systems are proprietary and require upgrades only the OEM can provide. Parts manufactured by the OEM can only be used for replacement parts, as the VA has a policy against supplying grey market replacement parts for VA owned equipment.

9. Other Facts:

The joint DLA/VA NAC Radiology and Imaging Systems Program was established to support the requirements of both agencies for the strategic sourcing streamlined acquisition and management of radiology and imaging systems, subsystems, and components along with maintenance services, training, and incidental services related to the support of its customers located in the United States and worldwide. Having an unauthorized third-party source provide these services of the Siemens manufactured Siemens Magnetom 7 Tesla, 3 Tesla Skyra MRI’s and DTS Chiller would risk degradation of the equipment, nullify the OEM equipment warranty, and the possible introduction of grey market replacement parts with the VA incurring significant costs to correct.

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.

Mark A Montgomery / An (Joseph) Vu Date

SFVAMC Program Manager/ COR | Director of Advanced Imaging Technology

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: Siemens Medical Solutions U.S.A.’s price schedule under the Multiple Award IDIQ contract SPE2D1-17-D-0023 was pre-negotiated by the Defense Logistics Agency and the VA National

Acquisition Center and was determined to be fair and reasonable to the government at the time of the award. The price quote of $325,175.96 for the base year and the 4 one-year option periods equally priced at $445,502.10 are deemed fair and reasonable as there is no price change throughout the life of this contract. Differences in the cost of the base year and option periods are due to the later start dates of the DTS Chillers and Skyra 3T MRI machine within the base year.

4/26/2021___ __

Mark A Montgomery / An (Joseph) Vu

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 Hill Date

NCO21 Contracting Officer

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 $750K): I certify the justification meets requirements for other than full and open competition.

Brooke C. Robison Date

Director of Contracting

Network Contracting Office (NCO) 21

HIGHER LEVEL APPROVAL (Required for orders over $750,000):

b. VHA Advocate for Competition/Head of Contracting Activity (HCA) REVIEW AND

APPROVAL (over $750,000 to $15 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.

Curtis M. Jordan Date

Executive Director, Regional Procurement Office West

Head of Contracting Activity (HCA)

Jason T. Hill 534284

Digitally signed by Jason T.

Hill 534284 Date: 2021.04.26 14:06:07 -07'00'

26 APR 21

Digitally signed by Jason T.y Hill 534284

534284 Date: 2021.04.26 14:06:07 Date:

Jason T. Hill

__________-07'00'

Jason Hill

Brooke C. Robison

Curtis M. Jordan

Brooke C. Robison 1615983

Digitally signed by Brooke C.

Robison 1615983 Date: 2021.04.26 16:33:31 -07'00'

CURTIS M. JORDAN 597130 Digitally signed by CURTIS M. JORDAN 597130 Date: 2021.04.28 12:45:56 -06'00'

Brooke C. Robison Digitally signed by

1615983 Robison 1615983 R Date: 2021.04.26 16:33:31 -07'00'ate

C. y Brooke C

Digitally signed by CURTIS M. JORDAN 597130 CURTIS M. JORDAN 5971300 Date: 2021.04.28 12:45:56 -06'00'Da