P03 Sole Source Justification PM Olympus Scopes 9 Oct 2025_REDACTED.pdf

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

Effective Date: 11/15/24 Page 1 of 6

REVISION: 01

Acquisition ID#:

DEPARTMENT OF VETERANS AFFAIRS

SOLE SOURCE JUSTIFICATION UNDER SIMPLIFIED PROCEDURES FOR

CERTAIN COMMERCIAL ITEMS IN ACCORDANCE WITH FAR 13.5

Acquisition Plan Action ID:

1. Contracting Activity: Department of Veterans Affairs, VISN 8, Network Contracting

Office (NCO) 08, located in San Juan, Puerto Rico, in support of station 672, VA Caribbean Healthcare System (VACHS) located at 10 Casia St., San Juan, Puerto Rico 00921. The applicable purchase request is .

2. Nature and/or Description of the Action Being Processed: This procurement is for procuring Preventive and Corrective Maintenance Services to Olympus Scopes in accordance with FAR 13.303, Blanket Purchase Agreements (BPAs), 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 estimated value of this acquisition is . The government intends to award a new Blanket Purchase Agreement (BPA) with an ordering period of five (5) years, upon the BPA award date. The anticipated award date is November 1, 2025.

FITARA approval is not required since Product/Service Code J065, Maintenance, Repair, and Rebuilding of Equipment – Medical, Dental, and Veterinary Equipment and Supplies is not listed as IT Product Service Codes (PSC) Requiring FITARA Approval (see VA OIT PSC Codes).

The proposed BPA holder is: Olympus Latin America, Inc.

27 Gonzalez Giusti St. Ste 602 Guaynabo, PR 00968-3040

A Situation, Background, Assessment, and Recommendation (SBAR) was approved for this requirement and uploaded to the applicable briefcase.

3. Description of Supplies/Services Required to Meet the Agency’s Needs: The BPA holder shall provide all personnel, equipment, supplies, facilities, transportation, tools, materials, supervision, and other items and non-personal services necessary to perform preventive and corrective maintenance services of the Olympus Scopes, including Urology, Gastroenterology, Surgical, Ear, Nose and Throat, and Pulmonary sections at VACHS as defined in this Performance Work Statement (PWS).

The resulting solicitation/BPA will include the following line items:

Effective Date: 11/15/24 Page 2 of 6

Acquisition ID#:

Line Item

Description Ordering Period

Qty Unit of Issue

0002AA Preventive and Corrective Maintenance Services for eight (8) Specialty Equipment as per the PWS.

11/1/2025

10/31/2030

60 Month

0002AB Preventive and Corrective Maintenance Services for five (5) Video Bronchoscopes Equipment as per the PWS.

11/1/2025

10/31/2030

60 Month

0002AC Preventive and Corrective Maintenance Services for four (4) EUS Scopes Equipment as per the PWS.

11/1/2025

10/31/2030

60 Month

0002AD Preventive and Corrective Maintenance Services for sixty-one (61) GI Video Equipment as per the PWS.

11/1/2025

10/31/2030

60 Month

0002AE Preventive and Corrective Maintenance Services for thirty-five (35) Fiberscopes Equipment as per the PWS.

11/1/2025

10/31/2030

60 Month

0002AF Preventive and Corrective Maintenance Services for five (5) Reprocessors as per the PWS.

11/1/2025

10/31/2030

60 Month

0003AA Preventive and Corrective Maintenance Services for twelve (12) Fiberscopes Equipment as per the PWS.

5/1/2026

10/31/2030

54 Month

0003AB Preventive and Corrective Maintenance Services for nine (9) Specialty Equipment as per the PWS.

5/1/2026

10/31/2030

54 Month

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

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

Acquisition Requires the Use of the Authority Cited Above (applicability of

Effective Date: 11/15/24 Page 3 of 6

Acquisition ID#:

authority): The highly specialized scopes are manufactured by Olympus America and serviced by Olympus Latin America, Inc., a subsidiary of Olympus America. Olympus is the only company that can provide all necessary OEM parts and perform the necessary repairs due to patents and other intellectual property rights. The company does not have any authorized service provider. Since the scopes are in constant use at VACHS, patient care would be negatively impacted if there were a delay in obtaining and performing any necessary maintenance services. Any repairs or services on these systems must be compatible in all aspects with the existing system, and any improper repairs can cause critical impairment to the entire system, thus risking patient care at

VACHS.

In addition, the government has received a letter from Olympus stating that Olympus Latin America, Inc. is the exclusive representative in Puerto Rico for the Olympus line of equipment. Olympus has made it clear that they will not honor warranties or guarantee the quality and safety of the equipment if serviced by other vendors. This exclusivity and the lack of warranty and safety guarantees for non-OEM service providers must be taken into consideration.

6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable: An intent to sole source notice was published on September 4, 2025. On the same date, an interested vendor, Total Scope Inc., responded to the intent to sole-source notice, clarifying that Olympus does not certify or authorize any independent service companies to perform endoscope repair services. Total Scope Inc. highlighted its ISO 13485:2016 certification and over 30 years of experience, emphasizing its alignment with FDA Quality System Regulations and extensive support of VA facilities. They also noted their multiple contracts with the Defense Health Agency and their compliance with safety and quality standards, suggesting significant cost savings over OEM services. Total Scope Inc.

expressed its desire to compete for the contract and offered to provide additional documentation for evaluation.

Other Actions: A sources sought notice was not posted since Olympus Medical offers its own service and maintenance programs for its medical equipment, including scopes. Olympus has a network of factory-trained technicians who handle the maintenance, repair, and servicing of their devices to ensure they meet rigorous standards and comply with relevant regulatory requirements.

7. Determination by the CO that the Anticipated Cost to the Government will be Fair and Reasonable: This acquisition will be conducted under FAR 13.303 and 13.501(a). Since there will be no competition, the contracting officer has several alternatives to ensure that the awarded prices are fair and reasonable, including a comparison of proposed prices with prices found reasonable on previous purchases, market research, and a comparison to the Independent Government Cost Estimate, among others.

Effective Date: 11/15/24 Page 4 of 6

Acquisition ID#:

8. Description of the Market Research Conducted and the Results, or a Statement of the Reasons Market Research Was Not Conducted: Extensive market research was conducted to identify potential suppliers capable of fulfilling the requirement for preventive maintenance of Olympus Scopes. An intent to sole source notice was publicly posted on September 4, 2025, outlining the government's requirement and inviting expressions of interest from capable suppliers. This notice aimed to identify any potential vendors, including those from small business categories such as Service-Disabled Veteran-Owned Small Businesses (SDVOSB), Veteran-Owned Small Businesses (VOSB), and other small businesses. In addition, a query in the SBA Small Business Search was conducted using NAICS Code 811210, which yielded no results for SDVOSB, VOSB, or other small businesses with the capability to provide the required preventive maintenance services.

Given that Olympus Latin America, Inc. is the exclusive representative for Olympus equipment in Puerto Rico and the associated risks of using non-authorized service providers, it is in the best interest of the government to procure these services on a sole-source basis with Olympus Latin America. This ensures that the warranties are honored and that the quality and safety of the equipment are maintained, which is critical for the effective and safe operation of medical devices in our facilities.

The Buy American Act is not applicable since the government is procuring services.

As described in Section 6 above, market research, in accordance with FAR Part 10, was conducted by synopsis of the proposed acquisition, advising industry of the pending acquisition, and soliciting inquiries from interested parties.

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

Full and open competition is not feasible since the Original Equipment Manufacturer (OEM), Olympus, advertise in their website that if a device is repaired and modified by an organization outside of Olympus, Olympus can no longer validate that it can be reprocessed as designed, and the instructions in the official product manual are no longer valid (see https://medical.olympusamerica.com/service-repair). The manufacturer will not honor warranties or guarantee the quality and safety of the equipment if serviced by other vendors, potentially posing safety issues when using the scopes with patients.

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

a. Olympus Latin America, Inc.

b. Total Scope, Inc.

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: To promote competition, the government would be required to replace all scopes specified in this requirement. Additionally,