Sole Source Justification PAR EXCELLENCE.pdf

Request for Sole Source Justification >SAT - $9M

Acquisition ID#: 36C246-26-AP-1351

DEPARTMENT OF VETERANS AFFAIRS

SOLE SOURCE JUSTIFICATION FOR COMMERCIAL ITEMS

IN ACCORDANCE WITH REVOLUTIONARY FAR OVERHAUL (RFO) 12.201-1 SIMPLIFIED

PROCEDURES

Acquisition Plan Action ID: 36C246-26-AP-1351

1. Contracting Activity: The Department of Veterans Affairs, Network Contracting Office (NCO) 6, proposes to enter into a contract on the basis of other than full and open competition for the Salem VA Medical Center (VAMC) located at 1970 Roanoke BLVD, Salem VA 24153. Purchase Request Number 658-26-1-4538-0001.

2. Nature and/or Description of the Action Being Processed: Network Contracting Office (NCO) 6 intends to award a new firm-fixed-price sole-source contract to PAR Excellence Systems, Inc. for the PAR Excellence software licenses, scales, and hardware required to support the Salem VA Medical Center Phase 2 expansion of the existing PAR Excellence Automated Inventory Management System and supply chain operations at the Salem VA Medical Center in accordance with Revolutionary FAR Overhaul (RFO) 12.201-1, Simplified Procedures. Acquisitions valued over the simplified acquisition threshold require a written justification and approval of the justification as described in FAR RFO 6.104.

3. Description of Supplies/Services Required to Meet the Agency’s Needs: The PAR Excellence system is an integrated, weight-based inventory management platform that utilizes specialized PAR scales, proprietary embedded software, and cloud-based analytics to provide real-time supply monitoring and management. Only PAR Excellence Systems, Inc., is authorized and capable of furnishing, configuring, updating, and maintaining these components, which are engineered to operate exclusively within the PAR Excellence ecosystem. The hardware, software, and backend analytics are not compatible or interoperable with third-party systems, and no other vendors can provide authorized replacements, upgrades, or technical support. Authorized VA and contractor personnel will use the PAR Excellence platform to manage, record, and securely transmit supply data across the medical center. The PAR Excellence system has already been successfully implemented across multiple departments within the Salem VA Medical Center, establishing a standardized and unified inventory management platform. For the upcoming Phase 2 expansion, it is necessary to build upon the existing system to maintain consistency and operational integrity. Expanding this same system is essential to ensure interoperability, consistent data management, unified workflow processes, and consolidated reporting across all locations. Adding a different system would cause operational fragmentation, necessitate duplicate training, disrupt existing supply chain automation, and prevent integration with the current PAR Excellence environment. Under the Phase 2 expansion, the procurement will add 75 new PAR Excellence inventory management stations throughout the facility, each comprised of various bins, weight-based scales, racks, and controllers. These new stations will operate as integrated extensions of the existing PAR Excellence system at Salem VA Medical Center, supporting the continuity of operations and the further adoption of an automated, facility-wide supply management environment. The total estimated cost for this expansion is The estimated award date is June 1, 2026, and full installation and implementation will be completed 51 weeks after contract award.

4. Statutory Authority Permitting Restricted Competition: RFO Revolutionary FAR Overhaul (RFO) 12.201-1 Simplified Procedures, statutory authority is 41 U.S.C. 1901. 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 PAR Excellence software licenses and weight-based scale components required for the Phase 2 expansion must directly integrate with the existing PAR Excellence inventory management system operating at the Salem VA Medical Center since August 2021. PAR Excellence Systems, Inc. is the exclusive designer, developer, manufacturer, and maintainer of its proprietary, highly specialized, fully automated, turn-key weight-based inventory management system (WBIMS) platform and its associated software. PAR Excellence Systems, Inc. is also the exclusive provider of all maintenance and support services for this platform.

Market research confirmed that PAR Excellence Systems, Inc. does not authorize any resellers to offer its products or services; only PAR Excellence Systems, Inc. itself can provide system components, proprietary software licenses, hardware, firmware, and technical support. These items rely on proprietary algorithms, interfaces, and calibrated weight-sensing hardware that are protected by intellectual property and trade secret rights and are not available through any other channel. Further, no third-party providers are authorized or able to supply compatible solutions or perform maintenance and support on the PAR Excellence system. While other commercial inventory management systems exist, none are technically compatible with the PAR Excellence configuration at Salem VAMC. Implementing an alternative platform would require the facility to adopt a non-integrated, parallel system—resulting in workflow fragmentation, duplicate training, and significant increases in lifecycle and maintenance costs for the government. Most importantly, the agency’s requirement for seamless system interoperability, data integrity, and unified supply chain management cannot be met by any source other than PAR Excellence.

6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable: To ensure offers were solicited from as many potential sources as practicable, the Government posted a Notice of Intent to award a sole-source contract to PAR Excellence Systems, Inc. on SAM.gov from 02-04-2026 to 02-06-2026. The notice was issued in accordance with the publicizing requirements of FAR Part 5 and invited any interested parties to submit capability statements demonstrating their ability to meet the Government’s requirement or to provide components compatible with the existing PAR Excellence system. The notice remained open for the required response period to allow adequate time for potential vendors to review and respond. No responses or capability statements were received during the posting period. These actions reflect the Government’s efforts to publicize the requirement widely and provide all potential sources an opportunity to express interest or challenge the proposed sole-source award.

7. Determination by the Contracting Officer that the Anticipated Cost to the Government will be Fair and Reasonable: Prior to award of the proposed contract, price analysis will be performed and documented by the Contracting Officer. The proposed price will be compared to what the Government has previously paid for similar PAR Excellence products, checking the independent government cost estimate, and considering relevant market research. Using these sources together will help ensure the price is in line with past purchases and current market expectations, confirming that the cost to the Government 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 was conducted by searching the following sites: SBA Small Business Search, GSA e-Library, VA National Acquisition Center (NAC), VA Supply Chain Master Catalog (SCMC), and System Award Management-Federal Procurement Data System (SAM-FPDS) for PAR Excellence equipment. These searches did not identify any vendors capable of fulfilling the Phase 2 PAR Excellence expansion requirement for the Salem VA Medical Center. Due to the proprietary nature of the PAR Excellence system, the Contracting Officer contacted PAR Excellence Systems, Inc. directly. They provided a letter confirming PAR Excellence Systems, Inc. is the exclusive designer, developer, manufacturer, and maintainer of its proprietary, highly specialized, fully automated, turn-key, weight-based inventory management systems (WBIMS), associated software, and they are the exclusive provider of all maintenance and support services. PAR Excellence Systems, Inc., does not authorize any resellers of their products or services. The VA Rule of Two could not be met, as no verified SDVOSB or VOSB vendors were identified as capable sources for this requirement. Based on this market research and evidence of exclusive manufacturer support, the Contracting Officer has determined that it is in the best interest of the Government to proceed with an open market sole source solicitation directly to PAR Excellence Systems, Inc., the original equipment manufacturer.

9. Any Other Facts Supporting the Use of Other than Full and Open Competition: The PAR Excellence system at the Salem VA Medical Center operates on a proprietary, closed architecture, meaning only PAR Excellence Systems, Inc. can provide components and software that maintain full interoperability.

Because the Salem VA Medical Center must integrate directly with the existing system at Salem, selecting a different inventory management platform would require replacing the current architecture rather than augmenting it. This would create operational inconsistencies between facilities, prevent shared consumption and report data, and introduce risks in supply accuracy due to differing system logic. It would also result in significant additional costs associated with system replacement and staff retraining. To maintain standardized supply chain operations across both locations, components must be fully compatible with the established PAR Excellence configuration.

These interoperability requirements support proceeding with PAR Excellence Systems, Inc., as the sole available source.

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