Medical Gas ECAT Program - Vendor Questions.pdf

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DLA TROOP SUPPORT MEDICAL GAS ECAT PROGRAM

SOLICITATION SPE2DH-23-R-0002

RESPONSES TO VENDOR QUESTIONS

(A.) MEDICAL GAS CYLINDER RELATED QUESTIONS

1. It's not possible to contemplate costs and pricing without estimated consumption quantities of each cylinder gas and cylinder rental for each individual location.

DLA TROOP SUPPORT RESPONSE: As stated in the solicitation (Page 39, Section IV.

STATEMENT OF WORK, sub-section F. CONTRACT MINIMUM REQUIREMENTS, paragraph (2.), sub-paragraph (I.), individual gas demands of each facility are not able to be specified in this solicitation. However, based on the information available in the solicitation, vendors shall provide their most favorable/competitive “base offered pricing”, which refers to pricing that would be expected for a quantity of one (1) without any commitment to purchase more quantities in the future. See question 2 below for more information in relation changes that should mitigate this cost/pricing concern.

2. For cylinder gases: raw materials, labor, distribution, distance from plant to delivery point, access to delivery points, energy costs, fuel, and regulatory compliance costs vary by location so there cannot be one single price for each product and service for an entire region.

DLA TROOP SUPPORT RESPONSE: Amendment 0003 updated the pricing requirements of the solicitation and corresponding Attachment B to allow vendors to more effectively establish pricing. Vendors can now offer fixed pricing for each individual state within a particular region, rather than at a single regional price. Reference Amendment 0003, paragraph VII and XII, for more information in relation to these specific changes.

3. The DHA Procedures Manual for Medical Gases requires color coding of cylinders (i.e., painting, striping, and stenciling), however, this is cost prohibitive and limits vendor's flexibility and use of cylinders across its entire national customer base. Propose the following language: “Cylinders shall be color coded in accordance with CGA Publication C-9 – Standard Color Marking of Compressed Gas Containers Intended for Medical Use, dated September 2013”. This is the industry standard.

DLA TROOP SUPPORT RESPONSE: Reference Amendment 0003, paragraph XIV, for more information in relation to the solicitation revisions resulting from this question.

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4. Vendors cannot track cylinder rental periods and manage government funding (DOs).

Vendors must charge cylinder rental until the cylinder is returned or the cylinder is deemed lost. The customer is solely responsible for managing sufficient funding for the requirements, supplies, and services they receive and incur.

DLA TROOP SUPPORT RESPONSE: Amendment 0003 updated this section of the solicitation. Reference Amendment 0003, paragraph VI, for more information in relation to these specific changes.

5. Companies have a responsibility to ensure we have sufficient package/assets deployed, across your regions, to meet any “indefinite” need that develops. Without having an estimated range of the number of cylinder packages required on-site at each facility, along with a minimum annual projection for each site, it will be difficult to provide a responsible bid or ensure reliable and timely supply. We are requesting consideration for including cylinder balances requirements by facility along with estimated product volume projections by locations.

paragraph (2.), sub-paragraph (I.), individual gas demands of each facility are not able to be specified in this solicitation.

Additionally, many of the individual facilities specified in the solicitation currently have agreements in place with suppliers who support their medical gas related needs. Therefore, at time of contract awards, some of the facilities will be utilizing this program immediately to support their medical gas related needs, but many will not, as those agreements with the current suppliers would remain effective until expiration. As such, it is expected that reliable and timely support can be achieved under this program regardless, as this program will be a phased implementation where facilities without agreements in place can begin to utilize the program to purchase their medical gas requirements, and those other facilities that are still being supported by their current agreements can begin to utilize the program as the agreements expire over time. In short, although vendors are required to provide pricing as if they will be supporting each facilities’ medical gas needs immediately after contract award, that will not necessarily be the case for all individual facility locations.

In relation to those facilities that may begin to utilize this program over time during the phased implementation, there will be ordering guidance available to those ordering facilities that outlines procedures of how to place orders under the program, including guidance suggesting that the ordering facility contact the contracted vendor of their region as far in advance as reasonably possible in order to discuss that particular facilities future medical gas related requirements (i.e., usages, frequency, balances, etc.) so that expectations can be established among the ordering facility and the contracted vendor

Page | 3 prior to delivery. At that stage (i.e., post-award), the vast majority of the ordering facilities needs should already be on contract (as provided in Attachment B), however, if they have additional or unique needs that were not captured/priced as part of the original contract award, those additional supplies/requirements may be added to the vendors contract, as long as those items are able to be determined fair and reasonable and within scope of the program.

Overall, as stated in the solicitation (Page 39, Section IV. STATEMENT OF WORK, sub-section F. CONTRACT MINIMUM REQUIREMENTS, paragraph (2.), sub-paragraph (I.), vendors should do their own assessment in order to determine whether they have adequate resources available to provide full support, which may take into consideration standard estimated gas demands/usages among other commercial/Government facilities similar in size to the applicable DoD facilities (or any other relevant information available) in order to arrive at whether or not a reasonable expectation can be made as to whether full support can be achieved.

6. Carbon Dioxide and Nitrous Oxide are liquified gases. Unlike compressed gasses, they are filled by liquid weight. Using the same “cylinder sizing” as compressed can be confusing.

Ex. A size “K” cylinder can be filled with either 56lb’s or 64lb’s of N2O. This incremental difference can add up quickly.

DLA TROOP SUPPORT RESPONSE: Amendment 0003 updated this section of the solicitation. Reference Amendment 0003, paragraph IV, for more information in relation to these specific changes.

7. Can an estimate be provided by location of the number of Government owned cylinders that are expected to be filled by the awarded vendor?

DLA TROOP SUPPORT RESPONSE: An estimate on the number of Government owned cylinders is not able to be provided, however, the majority of medical gas cylinder support, among each of the individual facilities, is expected to be via cylinder rentals.

(B.) BULK MEDICAL GAS RELATED QUESTIONS

8. It's not possible to contemplate costs and pricing without estimated consumption quantities of each bulk site to include frequency of fill, monthly consumption, tank sizes, for each individual location.

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DLA TROOP SUPPORT RESPONSE: Reference above response to Question 1.

9. Bulk oxygen pricing (and where applicable bulk tank rental pricing) is unique to each site based upon numerous factors including consumption and frequency of fills, tank ownership, tank size, access to the bulk site, distance from fill point to bulk site, raw materials costs, energy costs, distribution costs, fuel costs, and regulatory compliance costs. Each location must have its own pricing. One single price for all locations in the region is impossible.

DLA TROOP SUPPORT RESPONSE: Reference above response to Question 2.

10. All bulk requirements, regardless of whether the tank is government-owned or contractor-owned, will require that vendors conduct an inspection of the site prior to making any commitment. Any findings would have to be resolved as well prior to start of performance.

DLA TROOP SUPPORT RESPONSE: In accordance with the solicitation, bulk tank inspections are required prior to the first fill and routinely after. Reference solicitation pages 45-50, Section IV. STATEMENT OF WORK, sub-section J. DELIVERY REQUIREMENTS, paragraph (1.), sub-paragraph (I.) On-Site Delivery Requirements, for more information.

11. Confirm that all bulk tanks are government-owned, and no contractor-owned bulk tanks are involved at any existing or potential added location. Substantial capital sourcing investments of contractor-owned cylinders or contractor-owned bulk tanks would need to be made upon award and may require lead times of 8-12 weeks. The government's pricing file does not reference a line item for the rental of bulk tanks.

DLA TROOP SUPPORT RESPONSE: There is a mix of government-owned and contractor-owned bulk medical gas tanks currently in use throughout the individual minimum required facilities. However, as indicated in the solicitation (Page 30, Section IV.

STATEMENT OF WORK, sub-section B. CONTRACT SCOPE), bulk tank replacements are not in the scope of this program. Although vendors are required to provide pricing as if they will be providing bulk medical gas tank support to all the individual facilities within a particular region, that may not necessarily be the case for all those locations. For example, there may be instances where the awarded Primary Vendor cannot support a particular facilities bulk tank due to it being owned by another contractor other than the awarded Primary Vendor. In these situations, the awarded Primary Vendor would simply not be required to provide support to the bulk medical gas tank at that facility, unless at some point during the contract term that facility was to undergo bulk tank replacement (outside of this program), which could potentially create the opportunity for the Primary Vendor to be able to provide bulk medical gas support to that facility.

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12. Concerning bulk gas pricing, explain the requirement for three lines of pricing per year and the designators, D1, D2, D3, D4, D5, etc...

DLA TROOP SUPPORT RESPONSE: Similar to the rest of the line-item numbers identified throughout the Attachment B pricing spreadsheet, D1, D2, D3, etc., are line-item numbers and serve the sole purpose of differentiating between the various medical gas requirements, in addition to the pricing of those requirements. For example, D1, D2, D3, etc., are used to differentiate between the various bulk gas types and each year under which the pricing for those various gas types is provided.

(C.) GENERAL PROGRAM QUESTIONS

13. We could only accept locations at the beginning of the five-year term. The possibility that the government would add additional locations later in the agreement without adding more time to the agreement, would result in financial harm to the vendor. The alternative would be either to extend the performance period to five years for the added location or allow specific pricing to the shortened performance period.

DLA TROOP SUPPORT RESPONSE: Resultant contracts under this program will be one, five-year base period with one, two-year option period, which arrives at a total potential contract term of seven (7) years. In accordance with the solicitation (page 44, Section IV. STATEMENT OF WORK, sub-section H. AUTHORITY TO ISSUE ORDERS), during the term of resultant contracts, the Government reserves the right to add other customer groups located within the established regions but not specifically identified in the solicitation minimum requirements, if the contracted vendor has the additional support capability/capacity. Furthermore, any new facilities added to a specific state/territory within a particular region shall be supported in accordance with the terms and conditions set forth in this solicitation and at the same established contract pricing as the other locations under that state/territory. In situations where a new location does not already have established state pricing, state pricing must be established and ultimately determined fair and reasonable prior to any work being performed at that new location.

14. Request a clearer explanation of what is required by the vendor in Attachment F - Medical Gas Program ECAT Loader.

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DLA TROOP SUPPORT RESPONSE: Attachment F is the spreadsheet that gets uploaded into MediPrice, which is the system that interfaces with ECAT, to upload vendor item offerings, including descriptions, pricing, etc., into a particular ECAT catalog. The information provided in Attachment F is the information that will be visible to the customer once the items are uploaded into the MediPrice system. At time of proposal submission, vendors are only required to complete and submit one copy of this loader, however, at time of award the selected vendors will need to submit multiple copies of Attachment F, as each loader submitted would need to reflect the state established pricing for the cylinder and bulk offerings, which each become their own separate catalog in the system. At time of proposal submission, the completed loader should mirror the offerings, including descriptions, pricing, etc., provided within the vendors Attachment B submission, but in the Attachment F format. This submission is necessary in order for the Government to ensure all mandatory fields are able to be updated.

15. Concerning the decision to set aside the BACKUP VENDOR. Our company is concerned that DLA is placing PRIMARY VENDOR offerors in a position of antitrust conflict with potential BACKUP VENDOR offerors. Only large business concerns possess the materials, supply chain, capital infrastructure, equipment and assets, labor, and logistics to supply these requirements. Yet, DLA encourages small businesses to compete against the large business concerns in both PRIMARY and BACKUP categories. This methodology forces large businesses to share their proprietary cost /price models and approach with small businesses who are both competitor and potential customer.

DLA TROOP SUPPORT RESPONSE: The program was structured, in part, based on information that was received from companies (of all sizes) in the medical gas industry.

Additionally, the Government understands the concern, however, large businesses are not being forced to share anything. What a business decides to do with their information, resources, etc., is ultimately a decision made by the business.

16. Furthermore, we see no value to the government in placing a small business company as the prime contractor when that small business has not invested in nor possesses the materials, supply chain, capital infrastructure, equipment and assets, labor, and logistics to supply these requirements. The small business would exist only as a pass-through for orders and invoicing at a significant mark up at little value. Additionally, no large business concern's ebusiness capabilities extends to the government when servicing as a subcontractor to a small business prime contractor.

DLA TROOP SUPPORT RESPONSE: In accordance with the solicitation (Page 6, Block 10), this acquisition is a PARTIAL SET ASIDE, which entails the Primary Vendor role of

Page | 7 all twelve (12) regions being solicited as UNRESTRICTED, and the Back-Up Vendor role of all twelve (12) regions solicited as a SMALL BUSINESS SET ASIDE.

17. There is no incentive for a large business concern to pursue the role of BACKUP VENDOR.

Typically, if one contractor is experiencing a shortage, force majeure, or severe weather impact, chances are likely that all others in the industry in that area are also experiencing the same impacts. In that case, BACUP VENDORS are already supplying what may be available to contracted committed customers. BACKUP VENDORS would have to reserve resources for indefinite periods of time without any financial consideration. Asking for that is not reasonable unless the customer would be willing to agree to a take-or-pay term. An analogy would be expecting an insurance company to pay a claim when the claimant has paid no previous premiums.

DLA TROOP SUPPORT RESPONSE: In accordance with the solicitation (Page 6, Block 10), this acquisition is a PARTIAL SET ASIDE, which entails the Primary Vendor role of all twelve (12) regions being solicited as UNRESTRICTED, and the Back-Up Vendor role of all twelve (12) regions solicited as a SMALL BUSINESS SET ASIDE.

Reference solicitation pgs. 41-43, Section IV. STATEMENT OF WORK, sub-section G.

PRIMARY VENDOR AND BACKUP VENDOR ROLES AND RESPONSIBILTIES for more information in relation to the requirements, responsibilities, and expectations of the Primary Vendor and Back-Up Vendor.

18. In relation to an IDIQ without volume or balance information, there is an inherent advantage to the incumbent supplier servicing the individual facilities. That supplier would have unique and protected knowledge of historical cylinder balance and annual consumption. They would also be aware of the individual distribution requirements and frequency. I believe it would serve this solicitation well to level the field by including balance and volume information as a baseline and establish a reasonable and responsible limited range for the same.

paragraph (2.), sub-paragraph (I.), individual gas demands of each facility are not able to be specified in this solicitation.

19. The solicitation states that many facilities have bulk tanks. Similar to the above remarks, the incumbent supplier would have a competitive advantage based on their knowledge of historical volumes and the relationship to the tank size and the number of deliveries required to support a sustainable inventory. Our company would be able to bid and fill into a “complaint” government owned bulk supply system. Our company would not be able to bid and fill into a competitively owned bulk supply system and risk the potential co-mingling of a medical drug. As a result, the inability to replace the existing bulk system with our

Page | 8 company’s own system that we can fill, may prevent our company from meeting the solicitation requirement to supply all facilities within a given region. Please provide clarification.

DLA TROOP SUPPORT RESPONSE: As stated in the solicitation (Page 43, Section IV.

STATEMENT OF WORK, sub-section G. PRIMARY VENDOR AND BACKUP VENDOR ROLES AND RESPONSIBILTIES, paragraph (2.), sub-paragraph (II.)), many of the Government facilities have bulk medical gas tanks currently in use at the facility, however, bulk tank replacements are not in the scope of this program. Therefore, there may be situations where some regional locations are renting a bulk tank that is not owned by the facility or the Primary Vendor. For liability reasons, only the vendor that owns the bulk tank can refill that bulk tank. As such, in situations where the Primary Vendor is not able to refill the facilities bulk medical gas tank, bulk medical gas support for that facility will default to the Back-Up Vendor. If the Back-Up Vendor is also not able to source the bulk gas from the supplier that owns the bulk tank (through their network of suppliers), then that facility would continue to procure the bulk gas outside of this program until the facility requires replacement (e.g. have reached their end of life, no longer pass inspection, etc.) of the existing tank. As stated above, the replacement of those tanks shall be procured outside of this program.

Although there are circumstances that may initially prevent a facilities bulk tank from being supported by the contracted vendor (either the Primary Vendor or the Back-Up Vendor), that may not always be the case throughout the life of the contract, as during the life of the contract the facilities bulk tank may be replaced (outside of this program), which would create the possibility for the contracted vendor (either the Primary Vendor or Back- Up Vendor) to be able to support that facilities bulk tank requirements, which is why vendors must provide pricing for the bulk tank requirements regardless.

20. Historical annual spend was estimated at $10M. if spend remained static at $10M*7 years the total would be $70M. The forecasted projected value was stated at potentially $450M over the same seven (7) years. Can you share what would contribute to the significant growth rate of $380M over the same period outside of annual escalations. If this represents volume growth, the need for additional supporting cylinder assets would be significant and may jeopardize future planning if the asset requirements aren’t understood well in advance of the need. Will the growth come from these existing facilities?

DLA TROOP SUPPORT RESPONSE: The summation of all Back-Up Vendor regional contract maximums is $150M. This figure takes into consideration situations where the Back-Up Vendor may be needed, such as contingency situations and bulk tank refills. The rest of the contract maximum value accounts for unforeseen situations where the Back-Up is needed more than originally anticipated and to ensure that the Back-Up Vendor contract maximums are not reached prematurely as result of that unexpected need arising.

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The summation of all Primary Vendor regional contract maximums is $300M, which accounts for the $70M estimate of sales over the next seven (7) years, while also accounting for sales growth and inflation. However, the sales growth is estimated higher when establishing these maximum contract values to ensure that an increase in sales growth does not result in the Primary Vendor contract maximum being reached, which if reached would prematurely end the contracts prior to actual expiration.

In relation to sales growth via medical gas support for new ordering facilities (those not originally included in the solicitation), the Government reserves the right to add other customer groups located within the established regions but not specifically identified in the solicitation minimum requirements, if the contracted vendor has the additional support capability/capacity. Furthermore, for new ordering facilities (i.e., those not originally included in the solicitation), coordination between the customer and the vendor would need to occur prior to any work being performed by the vendor. With the ECAT system, the catalogs will be setup as private catalogs, meaning that no customer other than the ones provided ordering access can even see the vendors medical gas offerings. Therefore, not just any customer can place an order, as they would need to be provided access by DLA to do so, which would only be granted if the vendor provided confirmation of the additional support capability to that location.

21. Based on the stated historical spend of $10M and based on the significance of that spend level, it becomes increasing important to understand and commit to the details behind the spend. The alternative may prevent your Primary Vendors from understanding the potential need and falling flat on the deliverable. Something no one wants in a healthcare environment.

DLA TROOP SUPPORT RESPONSE: Reference above response to Question 20.

22. Can you please provide clarification around the CLINs that have bolded language (FOR RENT ONLY) + (FOR PURCHASE ONLY). This appears to be redundant with similar descriptions surrounding them.

DLA TROOP SUPPORT RESPONSE: The CLINs that are identified as “(FOR PURCHASE ONLY)” are the lines that must be priced for the purchase the physical cylinder with the corresponding gas inside, where the result would be that the Government now owns that cylinder.

The CLINs that are identified as “(FOR RENTAL ONLY)” are the lines that must be priced for the rental of those cylinders with the corresponding gas inside, where the result remains with the supplier still owning that cylinder and the ordering facility is only purchasing the actual gas inside.

It is expected that the vast majority of cylinder usage will be via rentals, however, there may be situations where a particular facility opts to purchase the cylinders.

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23. Our company would like to provide a bid for dry ice as well. For similar reasons as described above the volume information would be helpful. Delivery costs are often based on a minimum deliverable. Without the know if the minimum can be met it will be more difficult to price effectively.

paragraph (2.), sub-paragraph (I.), individual gas demands of each facility are not able to be specified in this solicitation.

24. Our company will be taking exception to the following FAR clauses within the solicitation.

52.203-13: CONTRACTOR CODE OF BUSINESS ETHICS AND CONDUCT

52.204-14: Service Contract Reporting Requirements

52.204-15: Service Contract Reporting Requirements for Indefinite-Delivery Contracts

52.215-2: AUDIT AND RECORDS—NEGOTIATION

52.219-13 - Notice of Set-Aside of Orders

52.219-27- Notice of Set-Aside for, or Sole-Source Award to, Service-Disabled Veteran-

Owned Small Business (SDVOSB) Concerns Eligible Under the SDVOSB Program

(FEB 2024)

52.222-41- Service Contract Labor Standards (AUG 2018)

52.222-42- Statement of Equivalent Rates for Federal Hires (MAY 2014)

52.222-43 Fair Labor Standards Act and Service Contract Labor Standards-Price Adjustment (Multiple Year and Option Contracts) (AUG 2018)

52.222-44 Fair Labor Standards Act and Service Contract Labor Standards-Price Adjustment (May 2014)

52.222-55 Minimum Wages for Contractor Workers Under Executive Order 14026

52.222-62 Paid Sick Leave Under Executive Order 13706 (JAN 2022)

52.222-9 Apprentices and Trainees

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52.224-3 Privacy Training (JAN 2017) (5 U.S.C. 552 a)

52.225-26 Contractors Performing Private Security Functions Outside the United States

52.239-1 Privacy or Security Safeguards (AUG 1996)

52.242-15 Stop-Work Order (AUG 1989) FAR

52.245-1 Government Property (SEP 2021) FAR

52.245-9 Use and Charges (APR 2012) FAR

52.247-34 F.O.B. Destination (NOV 1991) FAR

DLA TROOP SUPPORT RESPONSE: In accordance with the solicitation (Page 58, Section V. SOLICITATION PROVISIONS, sub-section B. GENERAL SUBMISSION INSTRUCTIONS, paragraph (1.), a proposal must satisfactorily meet all solicitation requirements, and the vendor must not take exception to any terms or conditions. Taking exception to any terms or conditions, including clauses/provisions, may result in the vendor being ineligible for award. If taking exception, vendors should specify (within their proposal submission) which part of the clause/provision they are taking exception to, for the Government to reassess the applicability the clause(s)/provision(s) the vendor is taking exception to.

Additionally, the following clauses were never included in the solicitation, and therefore do not apply to the solicitation:

52.215-2: AUDIT AND RECORDS—NEGOTIATION

52.219-13 - Notice of Set-Aside of Orders

52.222-9 Apprentices and Trainees

Additionally, the following clauses are not checked with an “X” in the corresponding line, and therefore do not apply to the solicitation:

52.204-14: Service Contract Reporting Requirements

52.204-15: Service Contract Reporting Requirements for Indefinite-Delivery Contracts

52.219-27- Notice of Set-Aside for, or Sole-Source Award to, Service-Disabled Veteran-Owned Small Business (SDVOSB) Concerns Eligible Under the SDVOSB Program (FEB 2024)

52.222-41- Service Contract Labor Standards (AUG 2018)

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52.222-42- Statement of Equivalent Rates for Federal Hires (MAY 2014)

52.222-43 Fair Labor Standards Act and Service Contract Labor Standards-Price

Adjustment (Multiple Year and Option Contracts) (AUG 2018)

52.222-44 Fair Labor Standards Act and Service Contract Labor Standards-Price Adjustment (May 2014)

52.222-55 Minimum Wages for Contractor Workers Under Executive Order 14026

52.222-62 Paid Sick Leave Under Executive Order 13706 (JAN 2022)

52.224-3 Privacy Training (JAN 2017) (5 U.S.C. 552 a)

52.225-26 Contractors Performing Private Security Functions Outside the United States

52.239-1 Privacy or Security Safeguards (AUG 1996)