McKesson_Navy_maintenenace_LSJ_revised_per_legal_comments_Redacted.pdf

LIMITED SOURCE JUSTIFICATION

1. Defense Logistics Agency (DLA) Troop Support, Medical Supply Chain, Capital Equipment Division, is the contracting activity.

2. This justification is for the purchase of the annual DIN-PACS Maintenance Service and Support on a sole source basis, for the Naval Hospital Camp Pendleton, CA with a period of performance from June 1, 2016 through May 31, 2017.

3. The Naval Hospital Camp Pendleton, CA has ongoing requirements for maintenance services for the radiology and cardiology DIN-PACS installed by McKesson Technologies, Inc. (McKesson). The estimated total maximum dollar value of this acquisition is $456,015.69.

4. The authority waiving competition requirements is FAR 8.405-6(a)(1)(i)(B), only one source is capable of providing the supplies or services required at the level of quality required because the supplies or services are unique or highly specialized. McKesson is the only vendor able to perform maintenance services on its DIN-PACS and maintain the installed systems’ performance. DIN-PACS is a commercial network of high technology digital medical devices regulated by the FDA. They are designed to acquire, transmit, display and store diagnostic imaging studies and related information. DIN-PACS provides for teleradiology or the electronic communication of medical radiology images and results.

DIN-PACS systems include proprietary hardware and software. Proprietary clinical software used in DIN-PACS requires licenses and only the manufacturer providing that software can provide licenses for the software. Upgrades to system software can only be provided by the manufacturer as these are FDA approved medical devices. Also, DIN- PACS vendors have developed sophisticated remote diagnosis and repair capabilities for their individual systems.

The manufacturer of the DIN-PACS is responsible for all system information security certifications, testing and on-going Information Assurance (IA) and security updates and patches or fixes. Accordingly, only the manufacturer of the system can maintain the critical security status of the DIN-PACS on an on-going basis under yearly maintenance programs. Since DIN-PACS are FDA approved medical devices, updates and patches must be thoroughly tested by the manufacturer prior to being installed to a medical system.

5. The McKesson DIN-PACS III contract includes fixed prices for yearly maintenance service programs. These prices were determined fair and reasonable by the Contracting Officer at time of contract award based on the discount from their commercial pricing and sales to similarly situated commercial customers. Based on the above facts, the pricing of the maintenance service order to be issued under this contract represents the best value to the Government and will result in the lowest overall cost alternative to best meet the Government’s needs.

6. Market research has been conducted during the DIN-PACS III acquisition from January 2010 through the present. It has revealed that no other DIN-PACS vendor is