Sole Source Justification.pdf

VHAPG Part 806.3 OFOC Page 1 of 5 Revision: 03 Effective Date: 04/15/24 Acquisition ID#: 36C260-25-AP-0608

DEPARTMENT OF VETERANS AFFAIRS

Justification and Approval (J&A) For

Other Than Full and Open Competition (>SAT)

Acquisition Plan Action ID: 36C260-25-AP-0608

1. Contracting Activity: Department of Veterans Affairs (VA), Veterans Health Administration (VHA), Regional Procurement Office West (RPOW), Network Contracting Office 20 (NCO20) on behalf of Veterans Integrated Service Network (VISN) 20, Puget Sound Health Care System – American Lake Campus, Tacoma, WA 98493. Funding ID (2237): 663-25-1-581-0189.

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

This request is for a new, firm-fixed price, sole source contract action to upgrade the current HVAC Building Management System (BMS) software used for critical temperature controls for buildings 6, 8, 17, 81, 85, 143 & 199 at the American Lake Campus.

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

An upgrade to the facilities BMS system is required to the new Andover EcoStruxure Building Operation (EBO) software platform made by Schneider Electric. Without this upgrade, all the current HVAC controls and the entire BMS at the American Lake Campus will no longer be functional.

The government estimate of this requirement is:

4. Statutory Authority Permitting Other than Full and Open Competition:

; (2) Unusual and Compelling Urgency per 41 USC §3304(a)(2) as implemented by FAR

6.302-2;

5. Demonstration that the Contractor’s Unique Qualifications or Nature of the Acquisition Requires the Use of the Authority Cited Above (applicability of authority):

Since April 2025, the BMS system and HVAC controls have experienced a multitude of issues due to the age of the current system and are continuing to worsen. The departments have created contingency plans to move equipment to other adequately temperaturecontrolled areas in case of complete failure. Furthermore, VA employees have been working overtime and, on the weekends, to continually monitor the system in the event of a full failure and monitor temperature thresholds that have been close to the outside parameters of safe temperature ranges which, if reached, will result in the loss of pharmaceutical drugs. The head pharmacist of the American Lake VA has also asked the FMS supervisor to prepare air conditioning units to the pharmacy as contingency plan in the event the HVAC system goes down and, in an attempt, to prevent patient medications from being destroyed. The estimated costs of pharmaceutical drug loss alone is $700,000.00, which would significantly and directly impact patient care if critical medications are not available for hospital patients.

Additional costs include re-ordering pharmaceutical supplies, sending patients to third-party

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Acquisition ID#: 36C260-25-AP-0608 providers to source drug prescriptions, and other administrative costs to the government and impact to patient care.

The American Lake Campus- Buildings 6, 8, 17, 81, 85, 143 & 199 are committed to Schneider Electric until there is an entire replacement of the system to be installed which would cost $1M or higher based on historical costs. This is a complex and critical system responsible for monitoring temperatures for critical storage areas such as the sterile processing department, eye clinic, operating room, and pharmacy; all of which hold hundreds of thousands of dollars of government-owned supplies that require strict temperature controls.

In addition, Schneider Electric does not allow unauthorized third-party vendors to perform system upgrades and any unauthorized work or implementation of system equipment will void all warranties. If warranties are voided, the government will need to pay for any equipment replacement and repairs to correct issues. Furthermore, utilizing unauthorized vendors can result in damage to critical systems that will take time to repair through authorized channels, thereby requiring departments to move equipment and patients to other hospital areas that have adequate temperature controlled environments. Consequently, utilizing any third-party vendors that are not authorized, represents significant costs and safety risks to the VA.

Although there are alternative manufacturers and developers of BMS software, this is an urgent requirement due to the issues described above. The large business, Schneider Electric, can begin to work on these critical areas in a timeline to prevent further impacts. Utilizing an alternative vendor would require removing all equipment, possibly conducting a field survey of all buildings for accurate estimating, decommissioning the existing system in coordination with the current OEM, and other project management planning functions that would cost more and take more time to accomplish.

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

Request for Information (RFI) 36C26025Q0131 conducted from 01/07/2025 - 01/17/2025 on SAM.gov to identify an authorized distributors of Schneider Electric’s new Andover & EcoStruxure Buildings (EBO). Searching for authorized distributors of the OEM Schneider Electric was conducted in accordance with the station’s request to upgrade the system versus increasing/changing the entire scope to replace the entire BMS system, this RFI was conducted to identify if there were any other distributors of Schneider Electric to limit competition but not restrict it entirely.

The NIH Information Technology Acquisition and Assessment Center (NITAAC) was contacted by email and on the phone to identify any Government Wide Area Contracts (GWAC), but none were identified for the Andover & EcoStruxure Buildings (EBO) software made by Schneider Electric.

RFI 36C26025Q0131 was also posted during the same period to maximize market research results but on the government marketplace NASA Solutions for Enterprise-Wide

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Acquisition ID#: 36C260-25-AP-0608

Procurement (SEWP) to identify any established GWAC or authorized distributors. No GWACs or IDVs were identified for this software made by Schneider Electric.

A second RFI 36C26025Q0480 was posted on SAM and NASA SEWP from 04/22/2025 to 05/08/2025 to identify any alternative developers and providers of BMS software after considering alternative BMS providers to replace the entire system. One large business did respond that is the developer and distributor of an alternative BMS software. The other small business that responded did not provide any BMS software information or proof as authorized distributors.

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

Reasonable:

Schneider Electric has offered a firm-fixed priced quote for this requirement, to include identifying existing VHA owned system controls that can integrate with the new BMS upgrade. The station has reviewed a quote from Schneider Electric, and the level of effort to include equipment replacement costs, and labor hours have been deemed appropriate.

Therefore, the Contracting Officer anticipates it is fair and reasonable.

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

Reasons Market Research Was Not Conducted:

Market research conducted, including both RFI’s did not yield any results of Government wide Acquisition Contracts (GWAC), Federal Supply Schedules, or other Indefinite Delivery Vehicles (IDVs) that can fulfill this requirement. Both RFI’s resulted in responses from several small businesses; however, none had proof of being authorized distributors for BMS systems. Furthermore, although one large business did respond with an alternative BMS, this is an urgent requirement, and replacing the existing systems and all HVAC controls would take significant time to achieve.

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

VA Office of Information and Technology (OIT) approval and the Federal Information Technology Acquisition Reform Act (FITARA) review is required for all requirements with IT and IT-related requirements. Schneider Electric’s new Andover & EcoStruxure Buildings (EBO) building management software has been reviewed in accordance with these regulations and policies and is approved. Consequently, sourcing an alternative OEM and software developer that is not approved would take further review by VA OIT, and given the urgency of this requirement, any additional delay may cause significant financial loss of government supplies, and significant impact to direct patient care as described above.

The current BMS software installed is made by Schneider Electric and will become a legacy system that is obsolete around October 2025. Although there are alternative providers of building management systems (BMS), this requirement is urgent given a continued failure of the current BMS related to required upgrades of the controls and software.

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

Business Name Business Socio-economic Category Avalon Contracting, Inc. Service-Disabled Veteran Owned Small Business (SDVOSB)

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Acquisition ID#: 36C260-25-AP-0608

Vesequ Service-Disabled Veteran Owned Small Business (SDVOSB) METGreen Solutions, Inc Service-Disabled Veteran Owned Small Business (SDVOSB)

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: This requirement is for a one-time system upgrade only. It is expected that future requirements involving component replacements for the BMS system will be available for competition. Schneider Electric has numerous authorized distributors for certain HVAC controls nationwide.

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.

Bryan Taylor Date Maintenance & Operations Supervisor Puget Sound VA Medical Center - American Lake Campus

13. Approvals in accordance with the VHAPM Part 806.3 OFOC SOP:

a. Contracting Officer Certification (required): I certify that the foregoing justification is accurate and complete to the best of my knowledge and belief.

Susan Howe Date Contracting Officer Network Contracting Office 20

JFOC# FY25-NCO20 -1543

Mountain Veteran Solutions Native-Owned Service-Disabled Veteran Owned Small Business (SDVOSB)

Arayna Technology Solutions Women-Owned Small Business (WOSB) ByteForza SBA Certified 8(a) Small Business (EDWOSB) Kode Labs Large Business

Acquisition ID#: 36C260-25-AP-0608

VHAPG Part 806.3 OFOC

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.

Karen Rhodes Date

NCO20/Contruction-1 Branch Chief Network Contracting Office 20