36C25919C0115-002.pdf

OFOC SOP Revision 08 Original Date: 03/22/11 Revision 08 Date: 04/18/2018

VHAPM Part 806.3 Other Than Full and Open Competition (OFOC) SOP Attachment 2: Request for Sole Source Justification Format >SAT

DEPARTMENT OF VETERANS AFFAIRS

Justification and Approval (J&A) for

Other Than Full and Open Competition (>$250K)

Pharmacy Benefit Manager (PBM) Retail Pharmacy Claim Adjudications One Year Sole Source Bridge Contract

Period of Performance (04-03-2019 to 04-02-2020)

Acquisition Plan Action ID: 36C259-19-AP-2282

1. Contracting Activity:

Agency:

Department of Veterans Affairs Veterans Health Administration Office of Community Care 3773 Cherry Creek North Drive Denver CO 80209

Contracting Activity:

Department of Veterans Affairs Network Contracting Office 19 Rocky Mountain Acquisition Center 6162 South Willow Drive, Suite 300 Greenwood Village, CO 80111

Requisition No: 741-19-2-9025-0018

2. Nature and/or Description of the Action Being Processed: This acquisition is for an unrestricted Firm Fixed Price (FFP) one-year sole source bridge contract with incumbent, OptumRx Administrative Services LLC (OptumRx hereafter); utilizing, simplified acquisition procedures (SAP) allowed by FAR Claim Adjudications for the Office of Community Care (OCC) from 04-03-2019 to 04-02-2020;

preventing a lapse in service from contract 36C25919C0079.

Any loss of claim adjudications shall affect third party recoupments that fund Civilian Heath and Medical Program of the Department of Veterans Affairs (CHAMPVA) Programs who support various programs to include the Caregiver, Spina Bifida Health Care, and Children of Women Vietnam Veterans Healthcare Programs. A one-year sole source bridge contract will ensure claim adjudications will not cease to fund these vital programs.

FAR 13.5 -- Simplified Procedures for Certain Commercial Items: This acquisition is for a Pharmacy Benefit Manager (PBM) Retail Pharmacy Claim Adjudications one-year sole source bridge contract and is IAW FAR Part 13.5 -- Simplified Procedures for Certain Commercial Items and specifically FAR 13.501 -- Special Documentation Acquisitions, where acquisitions conducted under SAP are exempt from the competition requirements of FAR Part 6 but still require a justification using the format of FAR 6.303-2.

VHAPM Part 806.3 Other Than Full and Open Competition (OFOC) SOP Attachment 2: Request for Sole Source Justification Format >SAT

OFOC SOP Revision 08 Original Date: 03/22/11 Revision 08 Date: 04/18/2018

3. Description of Supplies/Services Required to Meet the Agency’s Needs: The acquisition was received by Contracting on 03-15-2019 with a need date of 04-03-2019. On 01-30-2019, and pursuant to the Service Area Office (SAO) West Emergency Procurement Procedures, OptumRx was provided the authority to continue work under contract 36C25919C0079 from 02-01-2019 to 04-02-2019. Additional time is required to compete a five-year (base + four option years) contract. Therefore, the Government proposes to award a one-year sole source bridge contract with the incumbent, OptumRx, for $2,880,000 from 04-03-2019 to 04-02-2020; ensuring there will be no lapse in service from contract 36C25919C0079. The resulting contract will include 52.217-8 option if needed due to protest or other unforeseen circumstances which would bring the total contract value to $4,320,000. Pricing for any option exercised will be at the same rates as those in effect under the contract at the time the option is exercised.

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

(x) 1. Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Acquisitions per FAR 6.302-1;

( ) 2. Unusual and Compelling Urgency per FAR 6.302-2;

( ) 3. Industrial Mobilization, Engineering, Developmental or Research Capability or Expert Services per FAR 6.302-3;

( ) 4. International Agreement per FAR 6.302-4 ( ) 5. Authorized or Required by Statute FAR 6.302-5;

( ) 6. National Security per FAR 6.302-6; or ( ) 7. Public Interest per FAR 6.302-7;

FAR13.5 -- Simplified Procedures for Certain Commercial Items: The statutory authority permitting other than full and open competition is 41 U.S.C. 1901. It has been determined that the use of this authority is appropriate pursuant to FAR Part 13.501(a)(1)(ii); prepare sole source (including brand name) justifications using the format at 6.303-2, modified to reflect that the procedures in FAR subpart 13.5 were used IAW 41 U.S.C. 1901 or the authority of 41 U.S.C. 1903.

5. Demonstration that the Contractor’s Unique Qualifications or Nature of the Acquisition Requires the Use of the Authority Cited Above (applicability of authority): These services are highly specialized in nature where few businesses have the ability to do the work outlined in the Performance Work Statement (PWS). Any contract transition would require time and access to CHAMPVA patient and provider data, compatible extract software, submission of a definitive CHAMPVA pricing extraction plan, the ability to receive and electronically process claims, utilization of appropriate CHAMPVA payment system methodology, configuration of inbound electronic document interchange (EDI) claim submission files, and processing/adjudication logic including pending claims, adjustments and denial codes. The time it would take to solicit, award, and transition to a new Contractor would cause unacceptable delays in fulfilling the agency’s mission needs, and any loss of services would severely impact the VHA’s ability to process claim adjudications that fund vital CHAMPVA Programs.

Therefore, it has been determined that a one-year sole source bridge contract is adequate and appropriate.

The incumbent, OptumRx, is the only responsible source available to satisfy the Government’s needs while preventing a lapse in service. OptumRx, already has the specialized software, necessary staff, equipment, security clearances, HIPPA safe-guards and procedures to continue services. OptumRx, is the only known Contractor capable of providing these services by the need date. It is not feasible to award a

OFOC SOP Revision 08 Original Date: 03/22/11 Revision 08 Date: 04/18/2018 five-year (base + four option years) contract given the constraints of time, magnitude, and complexity of services. Therefore, a one-year sole source bridge contract is contemplated that would prevent a lapse in service, and would provide adequate time to re-compete this requirement.

6. Description of Efforts Made to Ensure that Offers are Solicited from as Many Potential Sources as Deemed Practicable: This acquisition will not be synopsized IAW FAR 5.202(a)(2) due to the magnitude and complexity of services required by the need date. The proposed contract action is made under the conditions described in FAR 6.302-2 and time periods specified in FAR 5.203. A follow-on contract five-year (base + four option years) contract is contemplated. A one-year sole source bridge contract will provide adequate time to properly synopsize and award a five-year (base + four option years) contract and will avoid any lapse in service that would impede the VHA’s ability to adjudicate claims that fund vital CHAMPVA programs.

OptumRx was awarded a five-year (base + 4-year option) contract from 08-01-2013 to 07-31-2018 in excess of $12,000,000 under contract VA741-13-C-0033. The prior re-compete yielded four large business (LB) businesses proposals that were rated lower than the incumbent by the Source Selection Board (SSB). No small business businesses submitted proposals and there were no protests during any phase of the re-compete.

A six-month extension was cut from 08-01-2018 to 01-31-2019 for $1,300,000; utilizing 52.217-8.

OptumRx was the only source that expressed interest in this acquisition and was the only Contractor that has the necessary staff, software program, equipment, and procedures in place to receive and process claim adjudications to ensure no lapse in service.

On 02-01-2019, and pursuant to the Service Area Office (SAO) West Emergency Procurement Procedures, the Contractor was provided the authority to continue work under contract 36C25919C0079 from 02-01-2019 to 04-02-2019. OptumRx was the only source that expressed interest in this acquisition and was the only Contractor that had the necessary staff, software program, equipment, and procedures in place to receive and process claim adjudications to ensure no lapse in service.

A one-year sole source bridge contract is contemplated from 04-03-2019 to 04-02-2020 that will provide necessary time to properly re-compete a five-year (base + four option years) contract. OptumRx was the only source that expressed interest in this acquisition and was the only Contractor that had the necessary staff, software program, equipment, and procedures in place to receive and process claim adjudications to prevent a lapse in service.

7. Determination by the CO that the Anticipated Cost to the Government will be Fair and Reasonable: Pursuant to FAR 6.303-2(b)(7), the anticipated award is $2,880,000 for a one-year sole source bridge contract and is in line with current contract pricing. Historical acquisition data and a survey of the market place has deemed the price fair and reasonable. OptumRx, is the only Contractor that has necessary staff, software program, equipment, and procedures in place to receive and process pharmacy claim adjudications to ensure there is no lapse in services at this price. Therefore, no other company can perform these services or provide a fair or reasonable price by the need date and the pricing has been deemed 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 IAW FAR Part 10. Market research conducted on Vendor Information Page (VIP), General Services Administration’s (GSA) e-Buy, OFOC SOP Revision 08 Original Date: 03/22/11 Revision 08 Date: 04/18/2018

Small Business Administration (SBA), and Federal Business Opportunities (FBO) did not find two or more service-disabled veteran-owned small businesses (SDVOSB), veteran-owned small businesses (VOSB), or any small business businesses able to meet the urgency and complexity of this requirement or the time required for a new Contractor of any concern to provide claim adjudications that would comply with CHAMPVA’s regulations and negotiated fee schedules is limited and precludes any other Contractor concern meeting the Rule of Two.

Various Contractors are registered under NAICS 518210 - Data Processing, Hosting, and Related Services. However, the complexity and magnitude increased the procurement acquisition lead time (PALT) to a point where it would take upwards of 18 months to solicit, award, and transition a follow-on contract to any concern. A tiered evaluation scheme would not provide a different outcome due to the time it would take to solicit, award, and transition a contract or Contractor in place by the need date.

OptumRx is the only Contractor that has necessary staff, software program, equipment, and procedures in place to receive and process claim adjudications to prevent a lapse in service. The time it would take to procure this type of service would cause unacceptable delays in fulfilling the agency’s mission needs. A loss of claim adjudications will impair the VHA’s ability to fund vital CHAMPVA programs. A one-year sole source bridge contract with an option to extend for 6-months would ensure continuity of services until a new contract is in place.

9. Any Other Facts Supporting the Use of Other than Full and Open Competition: A lapse of claim adjudications would be detrimental to the VHA, since these services comply with CHAMPVA claim processing and negotiated fee schedules. If services lapse, the VHA would have to process these claims manually. Currently the VHA does not have the resources or expertise to properly adjudicate these claims which would cause a loss of third party recoupments.

10. Listing of Sources that Expressed, in Writing, an Interest in the Acquisition: OptumRx Administrative Services, LLC, 1600 McConnor Parkway, Schaumburg, IL 60173 is the only source that expressed interest in this acquisition.

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 VHA is committed to the process of competitive acquisitions. It is the VHA’s policy to seek full and open competition to meet mission acquisitions whenever practicable. A five-year (base + four option years) contract award is contemplated prior to 04-02-2020.

12. Acquisitions Certification: I certify that the acquisition outlined in this justification is a Bona Fide Need of the Department of Veterans Affairs, and the supporting data under my cognizance, which are included in the justification, are accurate and complete to the best of my knowledge and belief.

Melissa Friese Date Program Officer

Melissa Friese

03/25/2019

OFOC SOP Revision 08 Original Date: 03/22/11 Revision 08 Date: 04/18/2018

13. Approvals IAW the VHAPM Part 806.3 OFOC SOP:

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

Erica A Blake Date Contracting Officer, NCO 19

b. Director of Contracting’s Certification (required): I certify the foregoing justification is accurate and complete to the best of my knowledge and belief:

Danny Freeman Date Director of Contracting, NCO 19

c. VHA SAO 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 recommend approval (if over $68 million) or approve ($700K to $68 million) for other than full and open competition.

Date

Curtis M Jordan Executive Director, Service Area Office West Head of Contracting Activity (HCA)

03-25-2019 Erica A. Blake 676989

Digitally signed by Erica A. Blake 676989 Date: 2019.03.25 10:19:07 -06'00'

VHAV19FreemD Typewritten Text 03/27/2019