VA119-14-D-0001-P00018001.pdf

Justification for Other than Full and Open Competition under FAR 6.302-1

1. Identification of the agency and the contracting activity, and specific identification of the document as a “Justification for other than full and open competition:

Department of Veterans Affairs (VA) Veterans Health Administration

Strategic Acquisition Center 10300 Spotsylvania Avenue Suite 400

Fredericksburg, VA 22408

2. Nature and/or description of the action being approved:

The proposed modification to contract VA119-14-D-00001 is to exercise an extension in accordance with (“IAW”) FAR 52.217-8 “OPTION TO EXTEND SERVICES”. This extension period commences on July 10, 2019 and ends September 30, 2019 and is awarded to the incumbent Intuitive Surgical, Inc. (“ISI”).

This action is a sole source, firm fixed priced modification to the existing Requirements Contract for the procurement of da Vinci® surgical robots, consumables, warranty, attachments, and other supplies and services related to the da Vinci® surgical system. This proposed contract modification will ensure a continuity of care through the continuation of all supplies and services without any breaks pending the award of a replacement contract. The replacement contract to VA119-14-D-0001 is in the acquisition stage. The effort is proposed to be awarded to the da Vinci® system manufacturer, Intuitive Surgical, Inc. (“ISI”), 1266 Kifer Road, Sunnyvale, California 94086.

3. Description of the supplies or services required to meet the agency’s needs (including the estimated value):

The Department of Veterans Affairs (“VA”) Veterans Health Administration (“VHA”) Medical Centers provide a wide range of surgical services to our Veterans, including traditional surgery, critical care, orthopedics, neurology, oncology, podiatry, urology, and vision care. VA also offers our Veterans advanced surgical techniques comparable to state-of-the-art commercial surgical solutions to include robotic Minimally Invasive Surgery (MIS) procedures within many of the VHA Medical Centers. These techniques as compared against traditional surgical procedures are proven to reduce the risk of infection, minimize blood loss, significantly reduce postoperative pain leading to a faster patient recovery time, reduce patient hospital stay, and contribute to positive psychological outcomes as it pertains to postsurgical scarring.

da Vinci Robotic Surgical Device

Regarding the procurement of new systems, VHA requires FDA-approved robotic surgical devices to perform MIS procedures for the following: urologic, general surgery, gynecological, thoracic, thoracic cardiotomy, and ear, nose and throat (ENT) surgeries. FDA approved devices are mandated law. VHA also requires a system that is capable of accommodating a single or dual surgeon console and that provide(s) the surgeon(s) with intuitive controls, range of motion, fine tissue manipulation capability, and 3-D visualization characteristic of open surgery while simultaneously allowing work through small ports of MIS surgery, with associated accessories such as fluorescent imaging, skills practice platform, and replaceable components used during surgery.

Regarding sustainment of existing systems, as noted throughout this J&A, ISI is the only possible source of ISI products and services. The VA decided to maintain the use of ISI products and services with the subject action as well as the replacement contract. The total estimated price of this action including the accessories and associated services does not exceed $7,000,000.00. Purchase Orders will be placed directly from the VISNs to the manufacturer using this modification during the subject period of performance pending the award of a replacement contract for VA119-14-D-0001. All deliveries will be completed within the subject period being placed unless otherwise agreed.

4. Identification of the statutory authority permitting other than full and open competition: FAR 6.302-1 - Only One Responsible Source

The statutory authority permitting other than full and open competition is 41 USC.3304(a)(1) as implemented by the Federal Acquisition Regulation (FAR) Subpart 6.302-1 entitled, "Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements."

5. Demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited:

VHA currently owns and utilizes 62 da Vinci® systems at 56 separate locations.

The da Vinci® robotic system has a robust global presence within the VHA and this presence has been briefed and documented to senior officials within the VA by Intuitive. The average number of surgeries performed using the existing systems are 65 per quarter per system. The forgoing contract expires in July 2019.

Based on extensive market research, as described in paragraph 8 of this document, the da Vinci® ® system, manufactured by Intuitive Surgical, Inc., is the only robotic surgical system that meets all the requirements of VHA. Regarding sustainment of existing equipment, due to the proprietary nature of the da Vinci® system and the sole ownership of the patents by Intuitive Surgical, Inc., the only accessories that are interoperable with the system are accessories sold by Intuitive Surgical, Inc. No other robotic surgical accessories are compatible.

Furthermore, the da Vinci® system is the only FDA approved robotic surgical system that is capable of performing all of the VHA required surgeries. This was verified as recently as December 2018 by the subject Program Manager for the da Vinci® Robotic device. FDA classified the da Vinci® system as a Class II device, which received a Premarket Notification 510(k) clearance approval pursuant to 21 CFR 807 Subpart E. A 510(k) submission is a premarketing submission provided to FDA to demonstrate that the device to be marketed is as safe and effective (i.e., substantially equivalent (SE)) to a legally marketed device that is not subject to premarket approval. While market research shows that there are other robotic surgical systems, they are limited to specific types of surgeries, and/or are not FDA approved. With regard to installation, training and the manufacturer's warranty, only Intuitive Surgical, Inc, the sole patent owner, can perform these services due to the proprietary nature of the robotic surgical system.

6. Description of efforts made to ensure that offers are solicited from as many potential sources as is practicable, including whether a notice was or will be publicized as required by subpart 5.2 and, if not, which exception under 5.202 applies.:

Market research was conducted as set forth in paragraph 8 of this document and those efforts did not yield any additional sources that can meet the Government's requirements. There is no known competition for this acquisition. The FDA website was extensively searched and only the da Vinci® can perform the different types of surgeries as required by VHA.

7. Determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable.

The anticipated pricing from Intuitive Surgical, Inc., is based on current contract pricing which has already been determined to be fair and reasonable. This pricing is commercial catalog pricing, which is the same pricing offered to all government buyers. This type of pricing analysis is identified as “fair and reasonable” IAW FAR 15.404-1 (b)(2)(iii).

Actions to Increase Competition:

8. Description of the market research conducted (see part 10) and the results or a statement of the reason market research was not conducted.

For the purposes of this action, all market research results acquired for the replacement contract will be used for the subject modification. Extensive market research was conducted from August 7, 2018 to August 15, 2018 and again on December 10 to December 12 to determine if other potential vendors could meet the robotic surgical system requirement. An RFI was posted on FBO numbered

36C10G-19-0029 on December 17, 2018 which closed on January 8, 2019. The RFI sought the names of vendors who manufactured robotic devices that were FDA approved and capable of performing all the surgical procedures as required by the VA. The RFI received four (4) responses. Out of those four responses, only Intuitive Surgical, the incumbent, is capable of meeting the VA’s needs. The latter statement is based upon a review of the material as provided by each vendor in response to the RFI. The four vendors who responded to the RFI were: Alliant Healthcare Products, Fidelis Sustainability Distribution, Stryker d/b/a Mako Surgical Corp., and the incumbent Intuitive Surgical.

A search of the General Services Administration (GSA) Federal Supply Schedule (FSS) was conducted. While there are vendors under FSS Special Item Number (SIN) 65 II A (Medical Equipment and Supplies), a review of that section indicated that there were no vendors listed that could supply robotic surgical systems. It was verified that Intuitive Surgical da Vinci® Si System is not available on the GSA

FSS.

An internet search was conducted from August 7, 2018 to August 15, 2018 and again on December 10 to December 12, 2018 to confirm whether or not there were other robotic surgical system manufacturers. The search yielded no other immediate, available competitors to Intuitive Surgical, Inc., that would meet the unique, specialized requirements of VHA.

Furthermore, research articles on the Internet were reviewed. In these articles, there were references to other manufacturers of robotic surgical systems.

However, the review indicated that manufacturers had either not made robotic surgical systems or were manufacturing robotic surgical systems that were limited in scope and focused on one type of surgery/medical treatment (e.g., orthopedic, joint replacement, radiation therapy, etc.) and not the array of unique, specialized requirements needed by the VHA in conducting critical patient care of Veterans.

For example, the article 'Open-source' robotic surgery platform going to top medical research labs, Raven II system developed at UC Santa Cruz and University of Washington, dated January 12, 2012, indicates that the University of Washington and University of California - Santa Cruz have begun work on a Raven II Surgical System that uses an open source model. No meaningful gains have been achieved since 2015 as the system is ‘open source’ and is susceptible to computer hacking. This system is not available to non-university entities at present, is not FDA approved, and would not be available to meet VHA needs.

The FDA certification of the Intuitive Surgical da Vinci® Si System was verified through the FDA internet site on December 14, 2018. FDA approval is required prior to the use of any medical device (e.g., the Intuitive Surgical da Vinci® Si System).

Confirmation that FDA approval is needed was provided by a VHA Chief Biomedical Engineer, who stated that any medical device being used for clinical use must be FDA-approved. The requirement was verified and states in pertinent part:

Premarket Notification 510(k) - 21 CFR Part 807 Subpart E If your device requires the submission of a Premarket Notification 510(k), you cannot commercially distribute the device until you receive a letter of substantial equivalence from FDA authorizing you to do so. A 510(k) must demonstrate that the device is substantially equivalent to one legally in commercial distribution in the United States: (1) before May 28, 1976; or (2) to a device that has been determined by FDA to be substantially equivalent.

Market research revealed that no other authorized resellers could provide the da Vinci® system. It was confirmed that Intuitive Surgical, Inc. (via a proprietary rights letter) is the sole manufacturer of this item and its related accessories. After an actual, live surgical procedure demonstration followed by an executive Q&A session at the Minneapolis VAMC in November 2018, senior executives from ISI were questioned by the Program Manager and the assigned contract specialist regarding any possible sub-contracting possibilities, any franchise or distribution agreements, and it was confirmed that Intuitive is the sole firm which markets, manufactures, and sells da Vinci products. There are no authorized re-sellers or dealers of the system or other manufacturers able to compete for this requirement.

As part of the above research and confirmation, robot manufacturing company websites were reviewed and searched to include TransEnterix and Titan Medical.

To date, the FDA’s 510k directory indicates that the FDA approved robotic surgical system are limited in scope. Excluding the da Vinci®, no other robotic device can perform the array of unique, specialized requirements needed by VHA as compared to the da Vinci® Surgical Robot.

Manufacturer Device Name

Procedures FDA-Approved For

Intuitive Surgical da Vinci® Si System

Urologic surgical procedures, general laparoscopic surgical procedures: gynecological laparoscopic surgical procedures, general cardiovascular and non-cardiovascular thoracoscopic surgical procedures, thoracoscopically assisted cardiotomy procedures, and ear, nose & throat procedures.

TransEnterix Senhance® Laparoscopic colorectal and laparoscopic gynecological surgeries

Titan Medical SPORT® NOT FDA APPROVED AT THIS TIME

9. Any other facts supporting the use of other than full and open competition:

No other facts are applicable to this justification for other than full and open competition.

10. A listing of the sources, if any, that expressed, in writing, an interest in the acquisition.

The four vendors who responded to the previously posted RFI: Styrker, Allied, Fidelis, and Intuitive Surgical.

11. A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required.

The da Vinci® system is the only FDA approved robotic surgical system currently on the market that can perform multiple medical surgical procedures as required by VHA. The Government will continue to conduct market research to ascertain if there are changes in the market place that would enable future actions to be competed.

12. Technical Representative:

I certify that the supporting data under my cognizance, which is included in this justification, is accurate and complete to the best of my knowledge and belief.

Dan King, Project Manager Date: ______________________

Title Signature: __________________

11. Determination of Best Value: I hereby determine that the proposed contract action will represent the best value to the Government. Intuitive Surgical, Inc., offers catalog pricing to DoD and non-DoD government customers; however, additionally, price discounts will be sought.

Zachary Wilcox Date: ______________________

Procuring Contracting Officer Signature:__________________

12. Procuring Contracting Officer Certification: I certify that this justification is accurate and complete to the best of my knowledge and belief.

Zachary Wilcox Date: ______________________

Procuring Contracting Officer Signature: __________________

Approval

In my role as the Competition Advocate, based on the foregoing justification, I hereby approve the acquisition of da Vinci® surgical systems by Intuitive Surgical, Inc., pursuant to the authority cited in FAR 6.302-1.

Date: ____________ Signature: _____________________________ Donald Jones Competition Advocate vacojonesd12 Typewritten Text Tracking Number DJ005 vacojonesd12 Typewritten Text 7/3/2019