S02 - ATTACHMENT 5 - Brand Name JA - Honolulu Pkg 58 - REDACTED.pdf

Effective Date: 02/01/2022 Page 1 of 6

DEPARTMENT OF VETERANS AFFAIRS

BRAND NAME JUSTIFICATION UNDER SIMPLIFIED PROCEDURES FOR CERTAIN COMMERCIAL

ITEMS IN ACCORDANCE WITH FAR 13.5

Acquisition Plan Action ID: 36C261-23-AP-0503

1. Contracting Activity: Department of Veterans Affairs, Program Contracting Activity Central (PCAC) in support of a new VISN 21, VA Pacific Islands Health Care System (VA PIHCS) Akaka VA Clinic Community Based Outpatient Clinic (CBOC). This new facility will be located at 91-1051 Franklin D. Roosevelt Avenue, Kapolei, Hawaii 96707. The 2237 for this procurement is: 459-23-2-093-0005.

2. Nature and/or Description of the Action Being Processed: This procurement is for a brand name justification 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.

The VA PIHCS provides high quality health care with advanced technologies and a commitment to friendly, compassionate service to more than 87,000 Veterans in the Leeward side of O’ahu. Construction is currently underway for a new 113,696 square foot, single-story building at 91-1051 Franklin D.

Roosevelt Avenue, Kapolei, Hawaii 96707. The new building will provide Primary Care, Mental Health, Specialty Care, Pharmacy, Women’s Health, Physical and Occupational Therapy, Dental, Prosthetics and additional clinical and Veteran Benefits Services on the Leeward side of O’ahu.

The proposed Firm Fixed Price (FFP) purchase order is a new requirement for the VA PIHCS for the Pyxis brand automatic medication distribution system in support of the activation of the new Akaka (ALOHA) Multi-Specialty CBOC. This individual Justification and Approval (J&A) is to support a brand name procurement competed unrestricted on the open market.

3. Description of Supplies/Services Required to Meet the Agency’s Needs: The VA PIHCS has a requirement for BD/Carefusion Pyxis MedStation ES, accessories, and installation in support of the new Akaka (ALOHA) Multi-Specialty CBOC in Kapolei, HI. The Contractor shall deliver and install six (6) BD/Carefusion Pyxis MedStation ES and two (2) BD/Carefusion Flex Locks in the Akaka CBOC. The Contractor shall also provide installation and training in order to support a timely opening of the facility.

Independent Government Cost Estimate (IGCE):

CLIN Description QTY Price EA Total Price 0001 MedStation, ES, Main 6-drawer, Part Number 323, JSN

M3150

0002 Med, SRM, Roundoffset, 12ft, LT, Part No. 345, JSN M3150L 2 0003 Yearly Support Fee (MedStation, ES, Main 6-drawer) 1 0004 Yearly Support Fee (Med, SRM, Roundoffset, 12ft, LT) 1 0005 CIO-CS Fee 1

TOTAL

The Pyxis Medstations will provide an automated medication dispensing system that supports decentralized medication management with various features for safety and efficiency and assist with the accurate dispensing of medication while support pharmacy workflows.

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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 as there is only one responsible source and no other supplies or services will satisfy agency requirements.

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

Use of the Authority Cited Above (applicability of authority): The new Akaka VA Clinic requires the use of the same Carefusion Pyxis ES system which is currently in operation within the VA PIHCS. Uniformity of systems and the components of those systems are essential for patient safety, specifically the safety of veterans seeking treatment. This is a brand name justification in support of FAR 11.105, “Items Peculiar to One Manufacturer.” The purchase of BD/Carefusion Pyxis ES system will standardize staff training requirements for all facilities and reduce clinical risks associated with pharmacy staff having to switch between different manufacturer systems in each facility.

The VA National Patient Safety Center (NPSC) recognized that uniformity of systems significantly increases patient safety and specifically the compatibility of Drug Error Reduction Software (DERS) between the different components of the system. Additionally, one system would also improve patient safety by limiting the training required for pharmacists, pharmacy technicians, nurses, physicians, and other users of the system. One system at a medical facility greatly increases the understanding users of the system will have as opposed to having to maintain proficiency on multiple systems that logically increases the risks to patients.

Pyxis System communications from this new clinic to the VA PIHCS Pharmacy system will be through the existing Pyxis Server that already in use in the VA PIHCS network and will connect with the new Akaka Clinic. This will eliminate the need for the addition of a different manufacturer communication server and compatibility issues by using the existing server and segregated switches that will not require new Virtual Local Area Network (VLAN) configurations on the hospital network. Using the existing Pyxis system will also reduce life cycle costs by standardizing the operation, supplies, training, and maintenance requirements for systems in both hospitals and clinics.

Based on an analysis of the cost of a brand new medication distribution system versus purchasing only the Carefusion Pyxis equipment, software, and services not currently owned by the facility, the estimated savings are substantial. If the VA PIHCS was required to purchase a brand new system, it would require purchasing an entire automated dispensing cabinet system for each of the 13 facilities in the VA PIHCS.

The approximate cost to re-outfit the entire VA PIHCS with Omnicell would be at least

. This very conservative figure is the basic cost of an Omnicell system and does not include facility specific configurations or custom interfaces, training needs, delivery, installation, operations and maintenance, and consumables. The savings and estimated cost of a new system do not take into account the added cost of purchasing and maintaining spare equipment for two (2) or more medication distribution systems that would be required in order to keep an adequate number of working systems available. In accordance with the authority prescribed in FAR 6.302-1(a)(2)(ii)(A), award to another source would result in substantial duplication of costs to the Government that is not expected to be recovered through competition.

6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable: See section 8 below for detailed efforts to ensure offers will be solicited from as many potential sources as deemed practible. A Request for Quotes (RFQ) will be posted unrestricted on the open market.

7. Determination by the CO that the Anticipated Cost to the Government will be Fair and Reasonable: The anticipated cost to the Government has been determined fair and reasonable by previously conducted market research by facility subject matter experts who have participated in the acquisition of the same

Effective Date: 02/01/2022 Page 3 of 6 equipment. Further, an informal quote was received by the facility from Four Points Technology, one of the SDVOSB authorized dealers for BD Carefusion Pyxis products.

A price reasonableness determination will likely be made based on a comparison of competitive offers in accordance with FAR 13.106-3(a)(1). However, if only one quote is received in response to the solicitation, the Contracting Officer will use the procedures at FAR 13.106-3(a)(2) to determine the price to be fair and reasonable prior to award.

8. Description of the Market Research Conducted and the Results, or a Statement of the Reasons Market Research Was Not Conducted: Preliminary Market Research was conducted by the requiring activity with the assistance of the Initial Outfitting, Transition, and Activation (IOTA) services contractor Strategic Medical Equipment Solutions (SME), LLC. According to the market research conducted, there is no other automated medication distribution system that can integrate with the current Pyxis system.

The original assigned Contract Specialist posted a Request for Information (RFI)/Sources Sought Notice (SSN) to Contract Opportunities using NAICS 339112 on December 6, 2022 with responses due December 18, 2022. Zero (0) responses were received. Additionally, a search in VetBiz* (see note below) of NAICS 339112 yielded 420 results. An email was sent to all 420 vendors with the RFI/SSN notice information asking for a response if they believe they are willing and capable of providing the items detailed in the Statement of Work (SOW) and are an authorized dealer/distributor of the Original Equipment Manufacturer (OEM) for all items. Two (2) responses offering the brand name items were received from:

Four Points Technology (verified SDVOSB) and Veterans Healthcare Supply Solutions (verified SDVOSB).

One (1) response was received (from Geo-Med, LLC.) offering a potential or/Equal product. *NOTE: The search for SDVOSB/VOSB concerns was conducted on Vetbiz as SBA’s VetCert was not announced until December 30, 2022 and became mandatory January 1, 2023. Market research regarding SDVOSB and VOSB concerns after January 1, 2023 was conducted using SBA’s VetCert as required.

Geo-Med is offering the NexsysADC system through a third-party reseller (Medline). Capsa Solutions, LLC’s NexsysADC does not meet minimum salient characteristics. The NexsysADC does not configure with the Pyxis system, does not offer refrigerated product dispensing, and does not offer controlled substance dispensing including wastage and return capabilities. Additionally, while Capsa is considered a small business under NAICS 339112 (over 500 employees but under 1,000 per SAM Reps and Certs), per SBA, a Small Business whose manufacturing is taking place outside the United States would not meet the definition of a Small Business product under SBA rules. To qualify as a small business product under SBA regulations, the Small Business must be the manufacturer and producer of the end item being procured and the end item must be manufactured or produced in the United States (Reference 13 C.F.R. § 121.406).

The last solution found during an internet search, Cerner RxStation, does not meet minimum salient characteristics as the RxStation does not configure with the Pyxis system or integrate with the VistA Electronic Health Record (EHR) platform used by the VA. Additionally, Oracle/Cerner Corporation is an other than small business with an unknown location of manufacture fo the RxStation. While Cerner has locations in the United States and is headquartered in Kansas City, MO, from extensive internet research, it appears all U.S. locations are office locations. Cerner has a total of 26 facilities around the world in North America (United States, Canada), South America (Brazil), Australia, Europe (Austria, Germany, United Kingdom, France), Egypt, India, Malaysia, and Singapore. We contacted Cerner to inquire where the RxStation is manufactured but we received no response. Finally, we attempted to determine the price of the RxStation and associated software; however, we could not find any pricing information available online. Due to time, cost, and safety, it is not in the best interest of the Government to pursue a complete system overall and re-outfitting of the VA PIHCS to Cerner’s RxStation. The cost of re-outfitting the entire VA PIHCS would result in a substantial duplication of costs the Government could not expect to be recovered through competition [Ref: FAR 6.302-1(a)(2)(ii)(A)].

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A notice of intent to sole source (brand name) was posted to Contract Opportunities on February 27, 2023 asking any vendor that believes they are capable of meeting the requirements while compling with the Non-Manufacturing Rule to respond by March 6, 2023. Zero (0) responses were received challenging the notice of intent.

The OEM, BD/Carefusion, was contacted on February 23, 2023 to receive a list of authorized dealers. The OEM contact, Jacqueline Hoffmaster, stated that the following vendors are authorized distributors: Four Points Technology, MicroTech, and Veterans Healthcare Supply Solutions (VHSS). The representative also verified that the equipment is now manufactured in Tijuana, Mexico.

There are two primary medication distribution systems on the market that are used in VA facilities – Pyxis and Omnicell. Pyxis was the first to market the automated medication distribution system and has been in use by the VA since June 1993. The Omnicell system is manufactured in the United States. Up until very recently, the Pyxis was manufactured in the United States at the Pyxis Manufacturing Corporation’s Utah manufacturing facility but has since transferred its manufacturing to Mexico.

The two medication distribution systems do not use the same platform and software. In a healthcare system where patients are moving within the system for treatment regularly, to reduce provider medication errors, it is in the best interest of the VA Pacific Islands Health Care System to maintain the current standardized medication distribution system. The VA National Patient Safety Center (NPSC) recognized that uniformity of systems significantly increases patient safety and specifically the compatibility of Drug Error Reduction Software (DERS) between the different components of the system.

Additionally, one system would also improve patient safety by limiting the training required for nurses, physicians, other medical practitioners, and users of the system. One system at a medical facility greatly increases the understanding users of the system will have as opposed to having to maintain proficiency on multiple systems that logically increases the risks to patients.

In addition to the significant risk to patient safety, the approximate cost to re-outfit the entire VA Pacific Islands Health Care System with Omnicell would be at least . This very conservative figure is the basic cost of an Omnicell system and does not include facility specific configurations or custom interfaces, training needs, delivery, installation, operations and maintenance, and consumables. The cost of re-outfitting the entire VA Pacific Islands Health Care System would result in a substantial duplication of costs the Government could not expect to be recovered through competition [Ref: FAR 6.302- 1(a)(2)(ii)(A)].

The last solution found during an internet search, Cerner RxStation, does not meet minimum salient characteristics as the RxStation does not configure with the Pyxis system or integrate with the VistA Electronic Health Record (EHR) platform used by the VA. Additionally, Oracle/Cerner Corporation is an other than small business with an unknown location of manufacture fo the RxStation. While Cerner has locations in the United States and is headquartered in Kansas City, MO, from extensive internet research, it appears all U.S. locations are office locations. Cerner has a total of 26 facilities around the world in North America (United States, Canada), South America (Brazil), Australia, Europe (Austria, Germany, United Kingdom, France), Egypt, India, Malaysia, and Singapore. We contacted Cerner to inquire where the RxStation is manufactured but we received no response. Finally, we attempted to determine the price of the RxStation and associated software; however, we could not find any pricing information available online. Due to time, cost, and safety, it is not in the best interest of the Government to pursue a complete system overall and re-outfitting of the VA PIHCS to Cerner’s RxStation. As stated above, the cost of re-outfitting the entire VA PIHCS would result in a substantial duplication of costs the Government could not expect to be recovered through competition [Ref: FAR 6.302-1(a)(2)(ii)(A)].

The CO has determined there is not a reasonable expectation that two (2) or more Small Business concerns will submit a quote that can comply with the NMR. This requirement is over the SAT. As stated above, the sole Small Business manufacturer of a medication dispensing solution discovered during market research, Capsa Solutions, does not meet the definition of a Small Business as their product is

Effective Date: 02/01/2022 Page 5 of 6 manufactured outside the United States. Additionally, their product, the NexsysADC does not meet the minimum Government requirements required.

Based on the market research conducted and because this effort is above the SAT, the CO determined there is not a reasonable expectation that quotes will be received from two (2) or more SDVOSB or VOSB concerns that can comply with the Non-Manufacturing Rule (NMR) as the basis of design brand identified is an other than small business and the small business manufacturer identified does not offer a solution manufactured in the United States that meets required salient characteristics. However, if the requirement is posted unrestricted on the open market, any SDVOSB response received will be in compliance with the NMR.

Vendor SAM UEI Socio-Economic Category

Brand or/Equal

MicroTechnologies LLC.

CL69E7KATK59 SDVOSB BD-Carefusion

Four Points Technology, LLC.

H1KHJPJH9R51 SDVOSB BD-Carefusion

Veterans Healthcare Supply Solutions (VHSS)

TLTXKMLQEYU9 SDVOSB BD-Carefusion

Geo-Med, LLC. QB6KPELRH1C7 SDVOSB Or/Equal: NexsysADC

9. Any Other Facts Supporting the Use of Other than Full and Open Competition: The new Akaka VA Clinic requires the use of the same Carefusion Pyxis ES system which is currently in operation within VA PIHCS.

Uniformity of systems and the components of those systems are essential for patient safety, specifically the safety of veterans seeking treatment.

Not having continuity of systems for training and patient safety reasons was the subject of a GAO Protest VHSS B-411904 dated 11/12/2015. The GAO held that the VA requiring a specific brand product from a training and patient safety related issue is a valid basis for a sole source.

From GAO Protest VHSS B-411904 11/12/2015: “In our view, the VA’s rationale for standardizing medical equipment, to reduce medical errors and enhance patient safety, sets forth a reasonable basis for procuring APCs on a brand name basis under the circumstances here. The determination of the government’s needs and the best method of accommodating them is primarily the responsibility of the procuring agency, since its contracting officials are most familiar with the conditions under which supplies, equipment, and services have been employed in the past and will be utilized in the future.

Columbia Imaging, Inc., supra, at 2. Where, as here, a requirement relates to human safety concerns, the agency has the discretion to set its minimum needs so as to achieve not just reasonable results, but the highest possible reliability and effectiveness. McKesson Automation Sys., Inc., B-290969.2, B-290969.3, Jan. 14, 2003, 2003 CPD ¶ 24 at 8.”

The Buy American Act (BAA) does not apply to this order as the Trade Agreement Act (TAA) applies. The brand name items required are manufactured in Tijuana, Mexico. There is a Free Trade Agreement (FTA) with Mexico and the value of the requirement is above the threshold identified at FAR 25.402. As such, a non-availability exception determination (also referred to as a Buy American Act waiver) would not be required to make award.

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

Micro Technologies, LLC Four Points Technology, LLC Veterans Healthcare Supply Solutions, Inc. (VHSS) Geo-Med, LLC

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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 remove or overcome any barriers to competition before future acquisitions for the same supplies and services are conducted at the system’s end of life, the VA will ensure extensive market research is performed in a timely manner to evaluate vendor capabilities with the intent of opening competition to all brands of medication distribution systems that can potentially meet the Government’s requirements. Further, the Government will continue to conduct market research to ascertain if there are changes in the marketplace that would enable future actions to be competed.

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.

Date

VA Pacific Islands Health Care System

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.

Michelle Rhodes Date Contracting Officer Progarm Contracting Activity Central (PCAC)

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.

Supervisory Contract Specialist Program Contracting Activity Central (PCAC)

5/1/2023