TAB 1- FINAL JA Zimmer Procedural Packages REDACTED_Redacted.pdf

Controlled Unclassified Information (CUI)

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

Zimmer Biomet Orthopedic “Procedural Packages” Electronic Catalog Manufacturer Direct Program

Source Selection Information – FAR 2.101 and 3.104

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

2. The action being approved is the ability to solicit for DLA requirements on an other than full and open competition basis in accordance with FAR 6.302-1(a) (2).

3. The goal of the Manufacturer Direct Program (Program) is to establish an alternative to manual open market purchase activity and re-engineer the business process with automated e-commerce business solution that allows Military Treatment Facilities (MTF) to order the required brand-name procedure packs based on a number of relevant factors for the particular need. Contractors under the Program will have their product lines loaded in the DLA Troop Support Electronic Catalog (ECAT). Items will be delivered to various Department of Defense (DoD) research centers, hospitals, clinics, and any other federal customer participating in this Program. Facilities are not restricted to ordering particular types or brands of products and can order from a variety of brand-name products given the circumstances of a particular requirement, including the training and experiences of physicians which may vary from hospital, procedure, and location. This justification will allow for the addition of specialized products to this Program. Although this J&A pertains to a particular family of brand-name products (Zimmer Biomet), it does not rely solely on the authority of FAR 6.302-1(c), application for brand-name descriptions, as it does not preclude consideration of another company’s product. A variety of brand name products responsive to requirements are included in the ECAT as part of the Manufacturer Direct Program.

The supplies to be acquired are Zimmer Biomet’s (Zimmer) orthopedic (hip, knee, spine, extremity and trauma) “procedural packages” that will be delivered Just-in-Time (JIT) for surgery, Direct Vendor Delivery (DVD) or Consignment. Under the JIT delivery method, the MTF calls the Sales Representative when a surgery is scheduled to discuss the case, make a product selection and set the surgery date and time. The Sales Representative will transport the “procedural package” to the designated site at the scheduled time. Under the DVD method, the products are shipped direct to the customer via a transportation carrier. Under the Consignment method, “procedural packages” are pre-positioned at the MTFs which pay only for the products that are used during the surgery. These “procedural packages” include orthopedic implants, which are medical devices manufactured to replace a missing joint or bone or to support a damaged bone, instrumentation sets and ancillary accessories (such as drill bits, saw blades, bone cement, etc.) that are necessary for the orthopedic surgery. The instruments are used during the surgery and then either returned to the vendor or purchased by the hospital, so they are readily available on the shelves. DLA Troop Support will provide for all of the delivery methods (JIT, DVD and Consignment).

Controlled by: DLA Troop Support Controlled by: FSC CUI Category: Source Selection Distribution/Dissemination Control: FED ONLY POC: matthew.peoples@dla.mil

The proposed contract will be a fixed price with economic price adjustment (EPA), Indefinite Delivery/ Indefinite Quantity (IDIQ) five (5)-year contract. The estimated dollar value for DLA’s requirement in support of DoD activities is approximately $103,916,786.69 over the five

(5) year life of the contract, as shown in the table below:

The maximum dollar value of the proposed procurement is $207,833,573.39 and is based on a growth factor of the total estimated sales to cover any unanticipated demand.

4. The statutory authority permitting other than full and open competition is 10 U.S.C.

3204(a)(1), Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements, as implemented by FAR 6.302-1(a)(2).

5. The use of this authority is necessary because the current orthopedic marketplace consists of manufacturers that produce their own unique line of orthopedic products. Unlike many other industries, product selection in the orthopedic industry is not based solely on price and is

CONTRACT PERIODS Ordering Period 1 Ordering Period 2 Ordering Period 3 Ordering Period 4 Ordering Period 5 Est 5 Year

AUXILIARY - BONE

CEMENT $244,233.24 $248,179.07 $252,188.65 $256,263.01 $260,403.20

$1,261,267.18

AUXILIARY - BONE

CEMENT $126,815.42 $128,864.25 $130,946.18 $133,061.75 $135,211.49

$654,899.09

CMFT $2,250,568.88 $2,286,929.07 $2,323,876.70 $2,361,421.25 $2,399,572.37

$11,622,368.27

EMBODY $74,400.00 $75,602.01 $76,823.43 $78,064.59 $79,325.80

$384,215.83

EXTREMITIES -

PRIMARY $1,709,005.15 $1,736,615.84 $1,764,672.60 $1,793,182.65 $1,822,153.31

$8,825,629.56

EXTREMITIES -

REVISIONS $57,241.55 $58,166.34 $59,106.08 $60,061.00 $61,031.34

$295,606.32

HIPS - PRIMARY $2,214,964.87 $2,250,749.84 $2,287,112.96 $2,324,063.55 $2,361,611.12 $11,438,502.35

HIPS - REVISIONS $2,211,450.39 $2,247,178.58 $2,283,484.00 $2,320,375.97 $2,357,863.96 $11,420,352.90

HIPS - REVISIONS

PROPRIETARY $41,993.25 $42,671.69 $43,361.10 $44,061.64 $44,773.50

$216,861.18

KNEES - PRIMARY $6,591,536.36 $6,698,029.22 $6,806,242.58 $6,916,204.24 $7,027,942.43 $34,039,954.83

KNEES - REVISIONS $2,558,977.08 $2,600,319.91 $2,642,330.68 $2,685,020.18 $2,728,399.36 $13,215,047.22

KNEES - REVISIONS

PROPRIETARY $94,141.60 $95,662.55 $97,208.08 $98,778.57 $100,374.44

$486,165.23

KNEES - SALVAGE $505,158.75 $513,320.09 $521,613.29 $530,040.48 $538,603.81

$2,608,736.43

ZIMMER BIOLOGICS $191,558.61 $194,653.43 $197,798.25 $200,993.88 $204,241.14

$989,245.31

ZIMMER KNEE

CREATIONS - $27,666.87 $28,113.86 $28,568.06 $29,029.61 $29,498.61

$142,877.01

ZIMMER TRAUMA $801,649.90 $814,601.36 $827,762.06 $841,135.38 $854,724.76

$4,139,873.45

SURGICAL CAPTIAL $81,045.08 $82,354.44 $83,684.96 $85,036.98 $86,410.83

$418,532.30

SURGICAL

CONSUMABLES $340,160.18 $345,655.81 $351,240.22 $356,914.86 $362,681.18

$1,756,652.25

Total $20,122,567.18 $20,447,667.38 $20,778,019.89 $21,113,709.58 $21,454,822.67 $103,916,786.69 overshadowed by physician experience and highly specialized training on the use of specific surgical items. A physician’s training with a particular manufacturer’s product increases their aptitude and familiarity with the technical characteristics of the implantable products that are expected to produce a higher quality of life for their patients and/or achieve certain therapeutic results.

Zimmer’s products are unique and proprietary, as is the industry standard, and require highly specialized training on the part of the physician. The standard medical practice is that after a physician is trained and comfortable with a particular manufacturer’s products and the surgical procedure, that physician will typically use that manufacturer’s products consistently thereafter.

The Manufacturer Direct Program allows various manufacturers the ability to offer their products under the Electronic Catalog (ECAT) ordering platform. This allows physicians to utilize the appropriate product in accordance with training, experience, and other factors.

In addition, the Zimmer representatives are experts on the vendor’s products and are a vital part of helping to ensure that the patient is getting the necessary treatment. At the request of MTFs, Zimmer will have a qualified representative on site at the MTF within the timeframe specified by the facility necessary to meet their requirements. The representative provides technical advice and guidance to the physician before, during, and after implantation. Furthermore, technical support is available twenty-four (24) hours a day, seven (7) days a week.

As noted above, Zimmer products are provided in procedural packages that include proprietary Zimmer orthopedic products, instrumentation sets, and ancillary accessories that are essential for the surgical procedures involving the implant products. Like the other products in the Manufacturer Direct Program, these products are only offered manufacturer direct from Zimmer and are not available through a third-party distributor. The instruments and ancillary accessories are available individually from sources other than Zimmer, but the overall requirement for a complete surgical package ready for immediate use makes separate competitive buys of these instruments and ancillary accessories impractical and such buys would not satisfy the requirement.

There are no known manufacturers or distributors other than Zimmer that can provide requiring medical facilities with the complete procedural package under all three (3) delivery methods and have the ability to provide the necessary technical support with regard to Zimmer orthopedic products and surgical procedures that are currently being used by the MTFs.

6. The acquisition will be synopsized on or around January 14, 2024 through SAM.gov. In addition, this justification will be published with the solicitation in accordance with FAR 6.305(c).

7. As the Contracting Officer, I hereby determine that the anticipated prices will be fair and reasonable based on a favorable comparison to commercial pricing. Negotiations will be conducted, as necessary, to obtain fair and reasonable prices and favorable discounts.

8. Market Research was conducted on June 4, 2024, with current DLA Troop Support ECAT customers, Zimmer and other orthopedic manufacturers to inquire about the nature of the orthopedic market. Market research revealed that each manufacturer’s orthopedic implants and the related surgical procedures are unique and proprietary to each orthopedic manufacturer. A Sources Sought Notice (SSN) was issued to ensure that offers are solicited from as many sources as is practicable. The SSN was issued on June 12, 2024 on SAM.gov, seeking sources capable of providing Zimmer procedural packages and closed on July 12, 2024. Zimmer was the only company that expressed interest in the proposed acquisition and that could provide all the requested products.

9. There are no other facts supporting the use of other than full and open competition.

10. Zimmer is the only source expressing interest, in writing, in this acquisition and will be solicited for this requirement.

11. The barriers to competition were not imposed by this agency. Unlike many other industries, product selection in the orthopedic industry is not based solely on price and is overshadowed by physician preference/experience and highly specialized training on use of specific surgical items.

There are no other known manufacturers or distributors other than Zimmer who can provide DoD hospitals with the complete “procedural package” under all three (3) delivery methods and has direct control over a sales force that is knowledgeable in Zimmer products.

12. As the Contracting Officer, I hereby certify that this justification is accurate and complete to the best of my knowledge and belief.

Date HECTOR QUINONES

Contracting Officer

I hereby certify that the requirements which form the basis of this justification are accurate, that these supplies meet the Government’s needs in accordance with applicable specifications, and that this justification is accurate and complete to the best of my knowledge and belief.

Date SON TRAN

Technical/Quality Specialist

I have reviewed and hereby approve this justification.

Date MATTHEW R. BEEBE Senior Procurement Executive

BEEBE.MATTHE

W.RICHARD.10

12725473

Digitally signed by

BEEBE.MATTHEW.RICHAR

D.1012725473 Date: 2024.11.12 16:43:49 -05'00'