P03_ Sole Source Justification Over SAT (HCA - Signed).pdf

VHAPG Part 813.5 Simplified Acquisition Procedures for Certain Commercial Items Attachment 1: Request for Sole Source Justification Template >SAT-$7.5M under FAR13.5

Two (2) Karl Storz On-Site Endoscopic Support Specialist for the DC Medical Center Acquisition Plan Action ID: 36C245-23-AP-1319

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

1. Contracting Activity: Department of Veterans Affairs, VISN 05, Washington DC VA Medical Center, Purchase Transaction 688-23-3-078-0050.

2. Nature and/or Description of the Action Being Processed: The purpose of this requirement is to provide support for the Karl Storz instrumentation and endoscopes (rigid and flexible) at the Washington DC VA Medical Center. The requirement is for a new, firm fixed-price contract. The requirement is for a base year of 5/1/2023-4/30/2024 and four option years for 5/1/2024- 4/30/2028. The estimated total dollar amount for the contract including options is $965,000.

3. Description of Supplies/Services Required to Meet the Agency’s Needs: The requirement is for on-site endoscopic support from two (2) trained professionals. The on-site endoscopic specialists (OESs) are to facilitate repairs, exchange of the instrumentation, and to provide expertise regarding the operating room (OR) integration system. The services shall include all tools, personal protective equipment (PPE), labor/personnel, and travel to complete scheduled/unscheduled maintenance, troubleshooting, and in-service training for VA staff. The contract includes tasks such as: facilitate the repair and exchange of the instrumentation (utilizing the appropriate service contracts), provide onsite expertise regarding the OR Integration system, inspect/maintain/make repairs to the Storz endoscopes/instrumentation/electromechanical devices, perform daily management/operation/troubleshooting of the OR equipment, provide training and in-services to Washington DC VAMC staff about the equipment operation/handling/care, and provide service activity reports and damage frequency reports. The required period of performance is 5/1/2023 - 4/30/2024 with four option year periods from 5/1/2024 - 4/30/2028. The monthly amount is $16,200 for a grand total of $972,000 over five years.

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

Effective Date: 02/01/2022 Page 2 of 4

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 Karl Storz can provide support for all of the Karl Storz equipment at the Washington DC VA Medical Center. This requirement is to directly set up, repair, troubleshoot, perform maintenance, and train staff on the Karl Storz highly specialized video integration and endoscopy equipment. This equipment is very complex, highly specialized, and is considered high risk due to its use in the Operating Room (OR). No other contractor can provide the on-site support required, as they do not have the personnel trained by Karl Storz and they do not have the proprietary knowledge on the highly specialized systems. If the support were provided by another company, they would not have the training to successfully support the highly specialized systems, and there would be unacceptable delays in operating room cases; ultimately affecting patient access to health care. Also, if support were provided by another company there would be a substantial duplication of cost as we would have to go through Karl Storz for the parts required to repair the equipment. Finally, support from someone not trained by Karl Storz could result in damage to the highly specialized equipment and negative patient care outcomes. Karl Storz Endoscopy-America does not train third-party personnel on servicing Karl Storz equipment.

6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable: No other actions can be taken to allow for more offerors or competition for this requirement.

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

Reasonable: The prescription at FAR 13.106-3(2)(ii) states that, “If only one response is received;

the CO may base fair and reasonable on a comparison of the proposed price with prices found reasonable on previous purchases.” This acquisition is a follow-on request to a previously awarded contract (Contract No. 36C24518C0107). The current contract is in its final option year 4 and awarded for $182,400.00 for the same services as the new request. The vendors quote is as follows;

Current Contract opt. 4 $ 182,400.00 Current

New Quote

YR1 $ 187,200.00 3%increase

YR2 $ 187,200.00 0%

YR3 $ 194,400.00 4%increase

YR4 $ 201,600.00 4%increase

YR5 $ 201,600.00 0%

According to the U.S. Bureau of Labor Statistics and Consumer Price Index the U.S. inflation rate in 2023 is: 6.41% CPI Home : U.S. Bureau of Labor Statistics (bls.gov). The normal average rate of inflation (pre-covid) per year averaged 3.5 – 4%. The vendors quote is less than a 5% increase over a period of 3/5 years. This is comparable to the current purchase awarded in 2018 (due to expire).

Therefore determined to be in the best interest in the Government at fair and reasonable pricing.

https://www.bls.gov/cpi/

Effective Date: 02/01/2022 Page 3 of 4

8. Description of the Market Research Conducted and the Results, or a Statement of the Reasons Market Research Was Not Conducted: A meeting was held with the Original Equipment Manufacturer (OEM of the equipment requiring support. The VA met with Karl Storz employees on Friday, February 10, 2023, to discuss the requirement for supporting the Storz video integration and endoscopy equipment at the Washington DC VA Medical Center. Karl Storz indicated that only their trained staff can provide the necessary support and ensure the equipment is safe for use for surgical cases. Karl Storz Endoscopy-America provided a proprietary letter specific to this requirement that states, “No Third-Party company is authorized to provide repairs and exchanges, service, or parts for KARL STORZ products”.

9. Any Other Facts Supporting the Use of Other than Full and Open Competition: No other companies, to include VIP verified SDVOSB companies, are capable of fulfilling the requirements outlined in the statement of work, to include facilitating the repair and exchange of the instrumentation (utilizing the appropriate service contracts), providing onsite expertise regarding the Karl Storz OR Integration system, and inspecting/maintaining/making repairs to the Storz endoscopes/instrumentation/electromechanical devices.

On Thursday, March 9, 2023, contract specialist, Robert O’Keefe Jr., conducted a call with Karl Storz management to discuss subcontracting opportunities based on the proposed total contract dollars that will exceed the subcontracting plan threshold outline in FAR 19.702(a). Karl Storz explained that they have an exclusive SDVOSB partner, L1 Enterprises for some of their service offerings.

Unfortunately for this specific requirement, and the applicable service NAICS code, it would preclude any subcontractors from performing the required work. A memo has been provided by Karl Storz director and uploaded to the contract file 3/13/2023.

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

KARL STORZ ENDOSCOPY-AMERICA, 2151 EAST GRAND AVENUE, EL SEGUNDO, CA 90245.

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:

Support is required for the current equipment installed at the facility. When the installed equipment is replaced at the end of its useful lifecycle, the equipment requirement will be competed and the support required thereafter will be dependent upon the equipment selected.

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.

Diana Molano Date Assistant Chief Biomedical Engineer Washington DC VA Medical Center

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

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.

Jameel Gordon Date Contracting Officer, Services Team 3 Network Contracting Office 05

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.

Amy Ritchey Date Brach Chief, Services Team 3 Network Contracting Office 05

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.

Joseph P. Maletta Date VHA Head of Contracting Activity (HCA) Regional Procurement Office East https://dvagov.sharepoint.com/sites/VHAProcurement/VHAPM/VHAPM_Part_806.3.aspx