Redacted Justification.pdf

J&A No. 20-00039

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity.

This justification is executed by the Naval Medical Logistics Command (NMLC), Fort Detrick, MD, on behalf of the Navy to meet Naval Medical Center Portsmouth, VA (NMCP) requirements.

2. Description of the Action Being Approved.

Award of a contract on a sole source basis to Philips North America LLC for Patient Monitoring System equipment maintenance services for NMCP. The maintenance contract will include all corrective maintenance, preventive maintenance, parts, labor, and travel. The Government intends on awarding a Firm-Fixed-Price (FFP) contract. The proposed awardee is Philips North America LLC (Philips), 22100 Bothell Everett Highway, Bothell, WA, 98021- 8431.

3. Description of Supplies/Services.

NMCP has a requirement for a non-personal services contract to provide maintenance support and original equipment manufacturer (OEM) parts for currently installed Philips equipment at NMCP. The Contractor shall provide OEM maintenance support and coverage for all equipment listed in Technical Exhibits 1 and 2 (see the Performance Work Statement (PWS)). The equipment listed in Technical Exhibits 1 and 2 will change based on equipment becoming End of Service Life (EOSL) and equipment coming off warranty. Support of the devices stated in Technical Exhibit 1 shall include the supply of all parts and over the phone maintenance support. Support for the devices stated in Technical Exhibit 2 shall include telephone support, on-site field support, and system hardware and software updates, as mandated by the OEM, in accordance with the PWS. All parts, labor, and travel shall be included. Support shall be provided for a period of performance from 01 June 2021 through 31 May 2022, with four option periods to extend service through 31 May 2026.

The Contractor shall maintain all equipment listed in the PWS. The Contractor shall maintain the systems within the OEM specifications, in accordance with all U.S., State, and Local laws and regulations, U.S. Navy regulations, instructions, and Joint Commission requirements. The Joint Commission’s requirements are specified in its Comprehensive Accreditation Manual for Hospitals (CAMH), readily found on https://www.jointcommission.org/.

U.S. Navy regulations and instructions will be made available upon request. The Contractor must maintain any networkable systems such that they meet Navy and Defense Health Agency (DHA) Cybersecurity requirements.

When product recalls or updates are necessary to maintain the contractual equipment inventory within the OEM’s specifications, the Contractor shall obtain and install all associated software patches/updates/upgrades.

The aggregate amount of equipment covered under the contract shall fluctuate over time, as hardware and software eclipse useful life and as new equipment comes off warranty. However, the aggregate requirement and level of effort will remain relatively constant over the life of the contract. Any changes to the equipment list will be executed through an official contract modification.

The Contractor shall be an OEM authorized maintenance contractor for the proposed equipment/system, such that OEM warranty and service are provided and maintained by the OEM. All software licensing, warranty and service associated with the equipment/system shall be in accordance with the OEM terms and conditions.

Defense Health Program (DHP) Operations & Maintenance Fiscal Year 2021 (FY21) funds in the amount of will be used to fund the base year of the maintenance contract.

Table 1: COST OF BASE AND FOUR OPTION YEARS

4. Statutory Authority Permitting Other Than Full and Open Competition.

FAR § 13.106-1(b)(1)(i) Soliciting from a single source.

The procedures in FAR Part 13 will be used in accordance with 41 U.S.C. 1901.

5. Rationale Justifying Use of Cited Statutory Authority.

Only Philips can provide a service and parts maintenance contract for the devices stated in Technical Exhibits 1 and 2 in the required timeframe. Philips is the OEM and has proprietary access to technology and software upgrades required to keep the equipment fully functional and meet all applicable standards. Philips does not provide training, OEM parts, or OEM software to any third-party vendors. Significant patient safety risk would be presented without coverage from Philips, as equipment could not be maintained appropriately. No other vendor is capable of servicing the medical equipment to OEM standards and Government requirements or providing OEM parts. Thus, Philips is the only vendor capable of providing parts and servicing the medical equipment stated in Technical Exhibits 1 and 2 to OEM standards and Government requirements.

6. Description of Efforts Made to Solicit Offers from as Many Offerors as Practicable.

Market research was performed from June to July 2020. Philips provided information indicating they are the sole provider of maintenance for their PIC IX, IntelliVue MP5, IntelliVue MX500, SureSign VM 4 Patient Monitor, Vital Signs ViewStation, Monitoring System, Physiologic Acute Care, Monitor, Bedside Physiologic Modular, 19” display, IntelliVue MP30, 19” Touch display, Flexible Module Server, IntelliVue Multi-Measure server x2, IntelliVue-MP50, IntelliVue MX40 1.4 GHz Smart Hopping, Remote Antenna, Animation Synch Unit Assy, and Smart-Hopping 1.4 GHz AP, Smart-Hopping. General Electric (GE) and Dreager can provide Patient Monitoring System maintenance; however, they cannot provide parts or maintenance for the currently installed Philips Patient Monitoring System at NMCP. While some parts may be purchased from Alpha Source, Inc. (alphasource.com), not all required parts are available. Some parts are proprietary to Philips. In addition, Alpha Source, Inc. does not supply software.

Other sources have expressed an interest in this acquisition. Two responses were received in response to the notice of intent (NOI) to award a sole source contract with Philips posted to the Contract Opportunities website (beta.sam.gov) from 20 August 2020 through 04 September 2020. The first response only asked for information on the incumbent and was therefore not considered an affirmative response. Per the NOI, submissions that only ask questions will not be considered as an affirmative response. The second response included a capability statement that was reviewed by one of NMLC’s Clinical Engineers; however, the firm was determined to be not capable of providing the required services.

The NOI was revised and posted to the Contract Opportunities website (beta.sam.gov) for a second time from 22 March 2021 through 06 April 2021. The NOI was revised to clarify that some equipment would require parts only and telephone support coverage. No responses were received.

7. Determination of Fair and Reasonable Cost.

Prior to award, the Contracting Officer will make a determination that the award price is fair and reasonable. It is anticipated that the price analysis conducted will consider the Independent Government Cost Estimate and/or prices for the same or similar items.

8. Actions to Remove Barriers to Future Competition.

Future requirements will be competed in accordance with FAR, DFARS, and local regulations. Market research will be conducted before each acquisition to see if market conditions have changed.

J&A No. 20-00039

CERTIFICATIONS AND APPROVAL

TECHNICAL/REQUIREMENTS CERTIFICATION

I certify that the facts and representations under my cognizance which are included in this Justification and its supporting acquisition planning documents, except as noted herein are complete and accurate to the best of my knowledge and belief.

LEGAL SUFFICIENCY REVIEW

I have determined this Justification is legally sufficient.

n/a Office of Counsel Code 00L Date

CONTRACTING OFFICER CERTIFICATION below $700,000

Contracting Officer Certification.

I certify that this Justification is accurate and complete to the best of my knowledge and belief.

COMPETITION ADVOCATE/APPROVING OFFICIAL $700,000 or above

Upon the basis of the above Justification, I hereby approve, as Competition Advocate, the solicitation of the proposed procurements described herein using other than full and open competition, pursuant to the authority of 41 U.S.C. 1901.

n/a