P03 - SSJ.pdf

Effective Date: 02/01/2022 Page 1 of 5

DEPARTMENT OF VETERANS AFFAIRS

SOLE SOURCE JUSTIFICATION UNDER SIMPLIFIED PROCEDURES FOR CERTAIN

COMMERCIAL ITEMS IN ACCORDANCE WITH FAR 13.5

Acquisition Plan Action ID: 36C252-24-AP-1337

1. Contracting Activity:

Contracting:

Great Lakes Acquisition Center 115 S. 84th Street, Suite 101 Milwaukee, Wisconsin 53214-1476

Facility:

William S. Middleton Memorial Veterans Hospital 2500 Overlook Terrace Madison, WI 53705-2286 695-24-4-133-1500

2. Nature and/or Description of the Action Being Processed:

Sole Source procurement of GE Healthcare/Datex-Ohmeda full-service maintenance, including preventive and corrective maintenance as well as vaporizer efficacy and trace gas testing, provided by GE Healthcare for the William S. Middleton Memorial Veterans Hospital located in Madison, WI.

This procurement is for the maintenance anesthesia equipment for the William S. Middleton Memorial Veterans Hospital in accordance with 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. This new purchase order will be awarded as a Firm-Fixed-Price base year with four (4) one-year options.

3. Description of Supplies/Services Required to Meet the Agency’s Needs:

The proposed new purchase order is for the full-service maintenance, including preventive and corrective maintenance as well as vaporizer efficacy and trace gas testing, of twenty-three (23) GE Healthcare/Datex-Ohmeda Aestiva, Avance, and Respiratory Module anesthesia devices for the William S. Middleton Memorial Veterans Hospital located in Madison, WI. These anesthesia devices are critical for intraoperative ventilation and anesthesia delivery. All equipment was acquired between 2014 and 2023, the majority being acquired in 2021. As equipment is not end of life, service is required to maintain the devices in optimal working order. Due to the critical nature of the equipment, devices must be maintained and operating in accordance with OEM specifications. Service will consist of all on-site labor, transportation, parts, and technology necessary to maintain equipment in accordance with OEM specifications. The purchase order shall be a Firm-Fixed-Price base year with four (4) one-year options with a start date of 7/1/2024 and an ultimate completion date of 6/30/2029 once all options are exercised. The anticipated cost for the base year and all option years are as follows:

Base (7/1/2024-6/30/2025): $59,406.00

OY1 (7/1/2025-6/30/2026): $59,406.00

OY2 (7/1/2026-6/30/2027): $59,406.00

OY3 (7/1/2027-6/30/2028): $59,406.00

OY4 (7/1/2028-6/30/2029): $59,406.00

Aggregate Total: $297,030.00

Effective Date: 02/01/2022 Page 2 of 5

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 authority):

GE Healthcare maintains certain proprietary service technologies relating to the Aestiva, Avance, and Respiratory Module devices. The service to be procured includes preventive and corrective maintenance, as well as vaporizer efficacy and trace gas testing, which require access to software passwords and other proprietary service technologies in order to maintain the equipment in accordance with OEM specifications. GE does not authorize any other party access to and use of their proprietary service technologies.

A sole source letter was provided by GE stating the following:

GE Healthcare (“GEHC”) is the Original Equipment Manufacturer of the Aestiva, Aespire, Aisys, Avance, Carestation anesthesia machines and/or CARESCAPE Respiratory Gas Modules included in the service Quotation, which are GEHC proprietary products, covered by GEHC patents and other intellectual property rights. GE Healthcare maintains certain proprietary service technologies relating to these products. Please note, however, that other parties are not prevented from servicing our products, and other parties may sell similar types of services.

In addition to proprietary service technologies required for preventive maintenance and vaporizer efficacy/trace gas testing, due to the critical nature of the anesthesia equipment and the facility’s high volume, the William S. Middleton Memorial Veterans Hospital requires corrective (emergency) on-site repair response times to commence within 8 operating hours. Access to the proprietary service technologies is required to ensure this response time can be met, thus emergency service by the OEM is required. Service by other parties would introduce the risk of failing to maintain the equipment within OEM specifications, result in unacceptable delays in meeting facility needs and patient care, as well as result in potential incurrence of service costs in addition to the firm-fixed-price purchase order.

6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable:

An Intent to Sole Source to the OEM, GE Healthcare, was posted to Contract Opportunities on 4/18/2024 with a close date of 4/24/2024. One (1) response was received from Heartland Medical Sales & Services, LLC. IAW VAAR 852.212-71 and the SOW, the Intent to Sole Source required respondents to submit a letter of authorization from the OEM, proof vendor can obtain OEM parts, proof all technical personnel are OEM certified, proof vendor may access software, proof vendor may use OEM’s billable services (if applicable), and proof vendor can commence emergency on-site repair within 8 operating hours. Heartland was unable to provide all required documentation. Upon discussion with the OEM and COR to further assess Heartland’s capabilities, it was confirmed that while other parties may perform some services on GE Healthcare’s anesthesia equipment, the services

Effective Date: 02/01/2022 Page 3 of 5 for this specific purchase order require GE Healthcare’s proprietary service technologies, and per the sole source letter, no other vendor is authorized use of those technologies.

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

The CO has determined the anticipated cost to the Government will be fair and reasonable by comparison to the price for the prior purchase order for the William S. Middleton Memorial Veterans Hospital. Prices were adjusted for inflation using the CPI Inflation Calculator found on www.bls.gov.

The prices were compared on a line-item basis to the quote from GE Healthcare, the quoted prices are as follows:

Aestiva MRI: $2,943.00/unit per year (extended price for one (1) unit per year: $2,943.00) Avance CS2: $3,196.00/unit per year (extended price for eleven (11) units per year: $35,156.00) Gas Module: $1,311.00/unit per year (extended price for eleven (11) units per year: $14,421.00) Vaporizer Efficacy Testing: $242.00/unit per year (extended price for twelve (12) units per year:

$2,904.00) Trace Gas Testing: $362.00/unit per year (extended price for eleven (11) units per year: $3,982.00)

Total/year: $59,406.00 Aggregate Total (base plus all option years): $297,030.00

1. 36C25219C0135 (prior purchase order)

a. Facility: Madison, WI

b. POP: 7/1/2019-6/30/2024

c. Historical price comparison by item:

i. Aestiva MRI: $2,291.00/unit per year (inflation adjusted: $2,830.78).

1. When adjusting for inflation, historical price is $112.22 (3.81%) lower than the anticipated price.

ii. Avance CS2: $2,675.00/unit per year (inflation adjusted: $3,305.25).

1. When adjusting for inflation, historical price is $109.25 (3.42%) higher than the anticipated price.

iii. Gas Module: $1,020.00/unit per year (inflation adjusted: $1,260.32).

1. When adjusting for inflation, historical price is $50.68 (3.87%) lower than the anticipated price.

iv. Vaporizer Efficacy Testing: $192.00/unit per year (inflation adjusted: $237.24).

1. When adjusting for inflation, historical price is $4.76 (1.97%) lower than the anticipated price.

v. Trace Gas Testing: $344.00/unit per year (inflation adjusted: $425.05).

1. When adjusting for inflation, historical price is $63.05 (17.42%) higher than the anticipated price.

b. OVERALL COMPARISON: When extending the inflation adjusted prices based on the quantities required for the new purchase order, the historical price (inflation adjusted:

$60,574.48/year) is $1,168.48 (1.97%) higher than the anticipated price/year, indicating a fair and reasonable cost to the Government.

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

Market Research Was Not Conducted:

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.

VetCert, the NAC CCST, SBA, VIP, and FPDS were all used to identify potential offerors. GE Healthcare/Datex-Ohmeda (OEM, OTSB), Heartland Medical Sales & Services LLC (SB), CE Tech of Jacksonville Incorporated (SB), and Doctors Oxygen Service (SB) were all identified. Upon further http://www.bls.gov/

Effective Date: 02/01/2022 Page 4 of 5 clarification from the OEM and COR, requirements in the SOW, and the submission of a sole source letter, none of the SBs were deemed capable of performing the work.

The sole source letter submitted limits the use of the OEM’s required proprietary service technologies to the OEM itself, GE Healthcare.

An Intent to Sole Source resulted in one (1) response from Heartland Medical, who by failure to submit supporting documentation and the earlier stated requirement for GE Healthcare’s proprietary service technologies, was not found to be capable of performing the work.

Two or more SD/VOSBs capable of performing the work and likely to submit a quote were not identified, the VA Rule of Two has not been met.

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

Failure to maintain the equipment in accordance with OEM specifications could create a liability for the facility.

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

GE Healthcare (OEM) Heartland Medical Sales & Services LLC

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:

At this time, only GE Healthcare is authorized to provide services on this particular purchase order as services require proprietary service technologies and strict response times. The Contract Specialist and Contracting Officer will continue to monitor for changes in authorization requirements regarding the proprietary service technologies that may deem other parties capable of providing service.

For future purchase orders, once equipment has reached end of life and may be considered for replacement, the facility may have less stringent service requirements that do not include proprietary service technologies, thus removing barriers to other parties. Additionally, the William S. Middleton Memorial Veterans Hospital is a high-volume hospital with higher uptime needs, however, other VISN 12 facilities are lower volume and may have lower uptime needs, thus removing response time barriers to other parties.

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.

Karl Ashbrenner Date Biomedical Equipment Support Specialist Madison VA

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.

Ashley Johnson Date https://dvagov.sharepoint.com/sites/VHAProcurement/VHAPM/VHAPM_Part_806.3.aspx

Effective Date: 02/01/2022 Page 5 of 5

Contracting Officer

NCO 12

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.

Matthew Zawada Date Services Team 2 Branch Chief

NCO 12