Sole Source Justification Molecular Testing Supplies Redacted.pdf

Effective Date: 02/01/2022 Page 2 of 4

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):

The supplies required are for a highly specialized analyzer that was previously purchased for the medical center. The reagents need to be compatible with the GeneXpert IV and 4X4 systems -48S instrument that is manufactured by Cepheid and is currently in use at Sacramento VAMC. Cepheid has a patent for their reagents for this instrument and is the only distributor.

Procuring the Cepheid reagents prevents a duplication of cost that would occur if multiple testing platforms were purchased, to include training the Government staff on new equipment.

The estimated cost to replace the system with another contractor’s system, obtain the necessary test items and training on the new system are estimated at It would also cause a delay in care due to the length of time to procure and approve another analyzer. Patient care would be negatively impacted by these delays. The Cepheid reagents are essential to the function and continuance of patient care to our nations Veterans at our facility.

Accordingly, Cepheid is the only firm capable of providing the supplies and services described in Section III above due to proprietary rights and verified by a letter received from Cepheid.

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

Based on the market research conducted pursuant to FAR Part 10, VA Acquisition Regulation (VAAR) 810.001-70 Market Research Policy, and PPM 2016-05, there is no reason to believe that that two or more SDVOSBs/VOSBs have the capability to meet this requirement, and the Supreme Court Kingdomware mandate’s “Rule of Two” will not be met for this requirement. The “Rule of Two” will not be met for small businesses either.

A VetCert search utilizing NAICS code 325413 yielded 80 SDVOSBs/VOSBs matches.

No relevant results were found on the VA NAC, while a GSA e-Library query under SIN 66III Clinical Microbiology Analyzers, Cost-Per Test resulted in 3 large businesses. There is no reason to believe that the “Rule of Two” exists with any existing contracts.

Procurement history found on the VA’s contract management system and Federal Procurement Data System revealed that molecular analyzer reagents, kits, and supplies are proprietary to the

Effective Date: 02/01/2022 Page 3 of 4 systems purchased. Since Cepheid’s GeneXpert IV and 4X4 systems have already been purchased for this facility, this medical center is limited to the reagents, kits, and supplies for the Cepheid analyzer currently in use.

On April 25, 2023 a letter was received from Cepheid stating “Cepheid is currently the sole manufacturer of Xpert® reagents, and GeneXpert® systems are manufactured exclusively for Cepheid. Xpert reagent test cartridges are designed and manufactured to only be used with Cepheid’s instruments. Cepheid is currently the only authorized provider of service for GeneXpert systems to customers within the United States.” Locally this requirement was awarded on 9/28/2022 for a period of performance of 10/1/2022-9/30/2023. At that time the previous 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. A notice of intent to sole source was posted from 02/07/2022 to 02/11/2022 to SAM.gov with no responses.

7. Determination by the CO that the Anticipated Cost to the Government will be Fair and Reasonable: Historical pricing will be utilized to determine the quoted pricing to be fair and reasonable.

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

Market Research Was Not Conducted:

As noted in section 6, market research has shown that there are no small or large businesses that can provide the items needed besides the manufacturer. A letter was received from Cepheid stating “Cepheid is currently the sole manufacturer of Xpert® reagents, and GeneXpert® systems are manufactured exclusively for Cepheid. Xpert reagent test cartridges are designed and manufactured to only be used with Cepheid’s instruments. Cepheid is currently the only authorized provider of service for GeneXpert systems to customers within the United States, excluding territories.”

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

Cepheid has been performing satisfactory on the current contract and the previous GSA delivery order.

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

None

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:

The Government will track the life expectancy of the analyzer. When it is time to procure a new analyzer, the procurement for the analyzer and reagents will be competed to the maximum extent practicable. In the future, if another vendor supplies a suitable alternative, their qualifications will be evaluated. The market will be continually assessed to determine if other vendors can provide the required supplies.

Effective Date: 02/01/2022 Page 4 of 4

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 d complete to the best of my knowledge and belief

Date

Laboratory Manager VA Northern California 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.

David J. Alvarez Date Contracting Officer, Supply I Network Contracting Office 21 (NCO 21)

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.

Brooke C. Robison Date Director of Contracting Network Contracting Office 21 (NCO 21)

c. VHA RPO HCA Review and Approval: I have reviewed the foregoing justification and find it to be complete and accurate to the best of my knowledge and belief and approve ($750K to $7.5 million (or $15.0 million for acquisitions described in FAR 13.500(c)) for other than full and open competition

Curtis M. Jordan Date Executive Director, Regional Procurement Office West Head of Contracting Activity (HCA)

6/1/2023

6/6/2023