36C26019D0004-005.pdf

Page 1 of 5OFOC 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 Request for Sole Source Justification Format >SAT

DEPARTMENT OF VETERANS AFFAIRS

Justification and Approval (J&A) For

Other Than Full and Open Competition (>SAT)

Acquisition Plan Action ID: VA260 18 AP 0454

1. Contracting Activity:

Department of Veterans Affairs, Network Contracting Office 20 (NCO20), 5115 NE 82nd Avenue, Suite 102 Vancouver, WA 98662; on behalf of VISN 20 Northwest Network, Logistics. 2237s will be utilized to award the TOs against the IDIQ, as soon as funding is available.

2. Nature and/or Description of the Action Being Processed:

The Department of Veteran Affairs, NCO 20, proposes to enter into a new fixed price, single award IDIQ (indefinite delivery, indefinite quantity) contract with the following vendor on the basis of other than full and open competition:

PAR EXCELLENCE SYSTEMS INC, DUNS: 824657944

11500 NORTHLAKE DR STE 135

CINCINNATI, OH, 45249 1655 ,

UNITED STATES

3. Description of Supplies/Services Required to Meet the Agency’s Needs:

Under this contract, the Contractor shall provide for Point of Use (POU) weight based supply systems to automate inventory management processes in open shelf distribution points (or “supply closets”). The systems are to be installed and used to support single server integration to Veterans Affairs (VA) inventory management system and shall be able to integrate with existing POU systems where they are in use in medical centers, and Community Based Outreach Clinics (CBOC) throughout the Veterans Integrated Services Network 20 (VISN20).

The contractor shall perform when requested by the POC, appropriate site surveys at the identified facilities in VISN 20 to establish detailed quotes for delivery orders of supplies and services to be placed against the IDIQ.

Each product code is itemized, quantified, and estimated at cost in the spreadsheet which accomapanies this sole source document. Cost and needs may fluctuate as we evaluate each room/warehouse for its unique layout.

Estimated Contract Value, and ordering periods (OPs) Base: 07/01/2018 06/30/2019 $5,000,000.00

OP1: 07/01/2019 06/30/2020 $5,000,000.00

OP2: 07/01/2020 06/30/2021 $5,000,000.00

OP3: 07/01/2021 06/30/2022 $5,000,000.00

OP4: 07/01/2022 06/30/2023 $5,000,000.00

Total $25,000,000.00

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

Page 2 of 5OFOC SOP Revision 08 Original Date: 03/22/11 Revision 08 Date: 04/18/2018

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

The Authority permitting Other than Full and Open Competition is 41 USC §3304(a), as implemented by FAR 6.302.

( X ) (1) Only One Responsible Source and No Other Supplies or Services Will Satisfy

Agency Requirements 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;

( ) (7) Public Interest per FAR 6.302 7;

5. Demonstration that the Contractor’s Unique Qualifications or Nature of the Acquisition Requires the Use of the Authority Cited Above (applicability of authority):

Par Excellence is the only authorized distributor of Par Excellence controllers, which communicate to proprietary software/technology. Each inventory item is placed on a scale and each scale is wired together through inputs and outputs that eventually tie into a Par Excellence controller that communicates with proprietary applications on a VA virtual server over the VA network. This allows for proper accounting, coordination and management of the healthcare facility’s procurement process. (FAR 6.302 1)

All Par Excellence software is copyrighted and subject to the protection of applicable copyright laws.

Par Excellence has also obtained registration of their logo and trademarks through the United States Patent and Trademark Office (as of 11/02/1992). Par Excellence seeks to protect and enforce their rights in their patents, copyrights, service marks, trademarks, trade dress, and trade secrets through a combination of laws and contractual restrictions, such as confidentiality and licensing agreements.

(FAR 6.302 1)

Supply areas within the VISN that have a Par Excellence system installed would lose visibility into their inventories at the distribution points, which in turn would affect timeliness and accuracy of product delivered throughout the hospital.

To date, the expended amount of money on Par Excellence equipment is $715,000, with another $79,000 in turn key installation and training expended towards a total amount obligated of $9,263,506. If VISN 20 were to deviate from the current vendor, the money expended would be a sunk cost and the remaining amout obligated retired into prior year funds. The reason being is that Par Excellence’s software is proprietary, meaning the HL7 interface that was developed, the instances built on to the Region 1 server, and the databases from each exisiting inventory point would all have to be rebuilt and re engineered to fit a new application or set of applications which might not necessarily have the functionality intended for healthcare supplies or be designed specifically with the VA facility’s logistical set up like Par Excellence’s has been.

PAR Excellence equipment is considered a major system. As part of Supply Chain's transformation, VISN 20 is pushing to have visibility in all of its inventory areas. As VISN 20 moves forward with

Page 3 of 5OFOC SOP Revision 08 Original Date: 03/22/11 Revision 08 Date: 04/18/2018 automating its supply closets and gaining visibility into them, there would be a substantial duplicate cost to shift gears and use a different vendor to make what exists work with their infrastructure. Par Excellence has established a job routine that can update VISN 20 QOH in the Primary and an HL7 interface to GIP that was developed and tested over the last two years. Moving forward they have been committed to continue customizing the programming as it fits our individual work flow at each facility. To re assemble a Regional OIT team and work with a new vendor to develop these apps and communications would also cause a delay in fulfilling the National Supply Chain transformation's vision.

6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable:

There is no other potential source qualified, nor certified to perform maintenance on the existing VISN 20 equipment and systems. Par Excellence has proprietary rights to maintain the equipment and systems already installed. A notice of intent to award a sole source action will be published on the Federal Business Opportunities (FBO) webpage.

VISN 20 has explored other existing POU technology on the market today, including one of Par Excellence’s direct competitors; Omnicell Inc. Omnicell technology, much of which is also deployed throughout VISN 20 facilities, did not have weight based capability. Their business model is shifting much in the way of a Pharmacy centered technology rather than Medical Supply inventory management.

There were other Inventory Management models looked at as well; however, none of them could fully integrate with our existing Par Excellence proprietary systems. The system has been piloted successfully through an OIT approved Project Intake (Project ID 5235) in Portland, Seattle, and Spokane (with plans for expanding to other facilities moving forward on previously competed contracts C03 VA260 17 C 0066 and V260 15 P 4895). The new procurement going forward will cover all VISN 20 sited.

7. Determination by the CO that the Anticipated Cost to the Government will be Fair and Reasonable: This contractor will provide information (i.e. other than cost or pricing data), which could include commercial price lists and prices for similar or the same services provided to other customers, to assist the Contracting Officer in determining if the contractor’s proposed price is fair and reasonable for the services to be provided. The Contracting Officer anticipates the cost of this procurement to be fair and reasonable. In addition to the above information, Par Excellence provides lower long term costs; provides the latest software upgrades consistent with regulatory standards, and strictly adheres to established privacy principles, use of customer information guidelines, and federal and state statutes and regulations, regarding privacy and confidentiality;

including those measures and practices required under the Health Insurance Portability and Accountability Act of 1996. It is best value to the government to award a contract with Par Excellence, where the installation and service infrastructure is already in place.

8. Description of the Market Research Conducted and the Results, or a Statement of the Reasons Market Research Was Not Conducted:

As described in Section 6 above, VISN 20 has explored other existing POU technology on the market today, including one of Par Excellence’s direct competitors; Omnicell Inc. Omnicell technology, much of which is also deployed throughout VISN 20 facilities, did not have weight based capability. Their

Page 4 of 5OFOC SOP Revision 08 Original Date: 03/22/11 Revision 08 Date: 04/18/2018 business model is shifting much in the way of a Pharmacy centered technology rather than Medical Supply inventory management.

The material/service must be compatible in all aspects (form, fit and function) with existing systems presently installed/performing:

Equipment servers: Windows Server 2012 – A Region 1 virtual server with dedicated space for the Par Excellence system PAR Client (scale registration, calibration application) PAR Vision (data reporting application) PAR Bins (order replenishment, inventory data application)

The material/service must be compatible with the systems described above in order for day to day operations to carry on in Logistics. The current system interfaces with GIP (sub set of IFCAP) via an approved and Region 1 / VISN 20 developed HL7 interface. Essential communications include quantity on hand updates, product cost information, and frequency of usage data for Logistics.

9. Any Other Facts Supporting the Use of Other than Full and Open Competition:

VISN 20 is currently invested into automating all supply locations with its area of responsibility.

Once automation allows the visibility into our inventory locations remotely, our vision is to interface directly with the MSPV Vendor from the POU technology; further leaning out and streamlining the supply chain.

10. Listing of Sources that Expressed, in Writing, an Interest in the Acquisition: N/A

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 VISN has looked at the cost savings of buying the third party equipment from other vendors. I.E.

louvers, compatible bins, etc. And upon realization of those cost savings, we can exercise those project by project as we deploy throughout the VISN. However, controllers, custom scales, maintenance, training, and software licenses are things we need to procure from Par Excellence directly.

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

Name: Bart Coleman, COR Date Title: VISN 20 Program Specialist Facility: 496 VISN 20 Logistics

Name: Bart Coleman C

BARTHOLOMEW

R. COLEMAN

244502

Digitally signed by

BARTHOLOMEW R. COLEMAN

244502 Date: 2018.06.19 16:17:55 -07'00'

Page 5 of 5OFOC SOP Revision 08 Original Date: 03/22/11 Revision 08 Date: 04/18/2018

13. Approvals in accordance with the VHAPM Part 806.3 OFOC SOP:

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

Thomas Ebenhoh Date Branch Manager, Specialized/WSNC/Region One IT Network Contracting Office 20 (NCO 20)

b. Director of Contracting/Designee: (Required Above $700K) I certify that the foregoing justification is accurate and complete to the best of my knowledge and belief and recommend approval.

Stephen Dale Allen Date Director of Contracting Network Contracting Office 20 (NCO 20)

c. VHA SAO HCA Review and Approval: (Required Above $700K Approval to $68M): 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 (Above $68M) for other than full and open competition.

Curtis M. Jordan Date Acting Executive Director, SAO West Head of Contracting Activity (HCA)

Contracting Officer

20 June 2018Thomas M. Ebenhoh 996911

Digitally signed by Thomas M.

Ebenhoh 996911 Date: 2018.06.20 07:59:32 -07'00'