Part 816 JA - Siemens(2).pdf

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

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DEPARTMENT OF VETERANS AFFAIRS

Justification and Approval

For

Exception to Fair Opportunity Memo

Acquisition Plan Action ID: 36C261-20-AP-6093

1. Contracting Activity: Department of Veterans Affairs, VISN 21, Network Contracting Office 21, Fresno Office located at 855 M St. Suite 1020, Fresno, CA 93721 Requisition Number: 654-21-1-225-0010

2. Description of Action:

This exception to fair opportunity justification is for a new task order to procure annual maintenance agreements with Siemens Medical Solutions USA Inc. for the servicing of Imaging High Tech Medical Equipment (HTME). The contracting office cannot follow the fair opportunity process for solicitation and award due to the equipment involved and the nature of the maintenance required which would involve intellectual property and other proprietary rights owned exclusively by Siemens Medical Solutions USA Inc. Siemens Medical Solutions USA Inc. is the only known vendor that can supply service support that includes preventive maintenance, corrective maintenance during hours of coverage, and software support system that includes required updates/upgrades.

The task order will also be issued against a mandatory NAC high tech medical equipment. The agency which issues a delivery order will be responsible for all administration functions for the given delivery order.

3. Description of Supplies or Services: The proposed action is to provide Preventive Maintenance

Service on Siemens high tech diagnostic imaging systems of Siemens Imaging Equipment located in

VA Sierra Nevada Health Care System in Reno, NV. Siemens will provide software upgrades, repairs, new or certified parts to maintain that the equipment is operating according to factory specification.

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.

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( ) 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:

The Siemens equipment requiring a maintenance agreement is vital to the patient care operations at the VA Sierra Nevada Health Care System, this equipment can only be serviced by Siemens Medical due to the proprietary nature of the equipment itself as well as the maintenance equipment and software utilized to service it. The intellectual property and proprietary data involved is only authorized for use by Siemens Medical, unauthorized usage by another party would constitute a breach of Siemens Medical intellectual property rights and may involve adverse legal ramifications. Additionally, all limited warranties that are held by the VA on the equipment are only valid in so far as the equipment is maintained annually by Siemens Medical, this ensures the proper maintenance is conducted and reduces the likely hood of costly repairs being needed and or extensive down-time incurred. Siemens Medical is the OEM manufacturer or replacement parts and they are the only vendor that is authorized to work on their equipment.

6. Efforts to Obtain Competition:

Market research was conducted for this requirement and the results are detailed in market research section of this document. Due to the Original Equipment Manufacturer (OEM) proprietary nature of the Siemens Medical equipment as well as the maintenance equipment and software required in conducting services on Siemens Medical equipment, only Siemens Medical can provide the required maintenance services. The only opportunity for competition exists if the VA decides to re-procure the imaging equipment which would not be a cost-effective or prudent decision given the recent purchase of the Siemens Medical Equipment. Therefore, there is no competition anticipated for this acquisition and in accordance with FAR 5.301 and 16.505(b)(2), this action will be synopsized at award on the Contract Opportunities page and the justification will be made publicly available.

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

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6. Actions to Increase Competition:

Currently Siemens Medical is the only vendor authorized to provide this service. If Siemens Medical authorizes other vendor to provide these services other vendors will be considered on future preventive maintenance services on this equipment. The contracting office will continue to survey the market periodically and continue to seek guidance from the VA NAC on the procurement of Radiology and Imaging High Tech Medical Equipment (HTME).

7. Market Research:

Based on market research, it was determined that only Siemens Medical can meet the VA’s requirement. Siemens Medical is the original equipment manufacturer and the only authorized contractor who is capable of providing the services due to the proprietary nature of the equipment itself as well as the maintenance equipment and software required to service it. Additionally, unauthorized usage of Siemens Medical proprietary property and or software by another party for maintenance purposes could constitute a breach of Siemens Medical intellectual property rights and may involve adverse legal ramifications. Additionally, all limited warranties that are held by the VA on the equipment are only valid in so far as the equipment is maintained annually by Siemens Medical. Further research was conducted on VETBIZ, which was searched with keyword “Siemens Imaging” and NAICS 334517, this search yielded (0) results there are no two SDVOSB, but due to proprietary rights Siemens Medical is the only authorized vendor. OSDBU has exempted this procurement from small business set-aside requirements IAW FY 2016 Small Business Procurement Review Program Policy dated June 22, 2016, exemption: iv. Orders against High Tech Medical Equipment National Contract for Imaging & Radiation Therapy.

The DLA Contract # SPED1-17-D-0023 has been negotiated and awarded at what is assumed as is fair and reasonable prices, however the VA will still seek additional discounts prior to award.

8. Other Facts:

This service was provided under 36C26119N0081 – 640-C99043 for the POP: 10/01/18-

09/30/23.

9. 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.

David L Rodriguez Date Chief, Biomedical Engineering VA Sierra Nevada Health Care System

10. Determination that Anticipated Cost is Fair and Reasonable:

VHARENRODRID

Typewritten Text 11/18/2020

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A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable: Siemens Medical prices are in accordance with the NAC contract and the

NAC contract provides discounts over commercial market rates. This service is being placed against a mandatory NAC high tech medical equipment contract.

11. Contracting Officer's Certification (required):

I certify that the foregoing justification is accurate and complete to the best of my knowledge and belief.

Rico Johnson Date Contract Officer

NCO 21

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.

Mark J. Mikus Date Branch Chief

NCO 21

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.

Name Date VHA Head of Contracting Activity (HCA) https://vaww.pclo.infoshare.va.gov/PCLO/PMWeb/VHAPM_Part_816.505.aspx

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c. VHA Deputy Senior Procurement Executive Approval (over $13.5 million but not exceeding $68 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.

D. Edward Keller, Jr. Date Deputy Senior Procurement Executive (DSPE) Department of Veterans Affairs

d. VHA Senior Procurement Executive Approval (over $68 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.

Angela Billups, Ph.D. Date Senior Procurement Executive (SPE) Department of Veterans Affairs