SPE2D1-17-D-0023-P00003001.pdf

VA261-17-F-3212 P00003 Siemens Request for Exception to Fair Opportunity Memo

VHAPM Part 816.5—Indefinite-Delivery Contracts Page 1 of 5 Original Date: 08/30/2017 Date: 03/11/2019 Rev 02

DEPARTMENT OF VETERANS AFFAIRS

Justification and Approval

For Exception to Fair Opportunity Memo

Acquisition Plan Action ID: 36C261-19-AP-2151 / SPED1-17-D-0023 VA261-17-F-3212 P00003

1. Contracting Activity: VISN 21, Department of Veterans Affairs

Network Contracting Office (NCO)21 VA Northern California HealthCare System 150 Muir Road, Bldg: AB7; Rm: AB701 Martinez CA 94553-4668

2. Description of Action:

This exception to fair opportunity justification is for a new task order modification to procure additional annual maintenance agreements with Siemens Medical Systems, Inc under the current VA Contract # SPED1-17-D-0023 VA261-17-F-3212. The Imaging High Tech Medical Equipment (HTME) is listed below in para. (a.) and will require the same terms and conditions under the existing contract. The contracting office cannot follow the fair opportunity process for solicitation and award due to the equipment involved and the nature of the maintenance required which would involve intellectual property and other proprietary rights owned exclusively by Siemens.

Siemens is the only known vendor that can supply service support that includes preventive maintenance, corrective maintenance during hours of coverage, and software support system that includes required updates/upgrades. The task order will also be issued against Defense Logistics Agency Contract # SPED1-17-D-0023 for which the Delegation of Authority Memo requirement has been rescinded by the VA NAC, effective 3/01/2017 The Defense Logistics Agency Troop Support Medical Supply Chain (DLA) and the Department of Veterans Affairs National Acquisition Center (VA NAC) are the only activities authorized to place delivery orders under this IDIQ contract except as otherwise delegated in writing by the DLA or VA NAC. Both the VA NAC and DLA will issue orders directly against any IDIQ contract under the program, regardless of which agency is the designated administrating agency. The agency which issues a delivery order will be responsible for all administration functions for the given delivery order. Lastly, Defense Logistics Agency Contract # SPED1-17-D-0023, FAR 52.212-5 Contract Terms and Conditions has been verified to include the following language:

In accordance with Statement of Work, section IV. Authority to Issue Orders (a.), individual procuring activities of the Department of Veterans Affairs are hereby delegated authority to place delivery orders for their respective facility, for equipment valued at $50,000 or less under this contract. Also, individual procuring activities of the Department of Veterans Affairs are hereby delegated authority to place task orders for their respective facility, for required

VHAPM Part 816.5—Indefinite-Delivery Contracts Page 2 of 5 Original Date: 08/30/2017 Date: 03/11/2019 Rev 02 maintenance services at any value under this contract. Individual VA procuring activities will obtain pricing and maintenance information for a specific contract holder from the VA NAC at ammhindscp@va.gov.

a. Equipment / Software / Systems

1. Siemens Artis zee Ceiling (400-487253)

2. Siemens Artis Q.zen Ceiling (400-488961)

3. Siemens AX Application Software SYS - HW/SW, (400-596291)

4. Siemens AX Application Software SYS - HW/SW (400-608668)

3. Description of Supplies or Services:

The proposed action is to provide preventive maintenance services on (4) items of Siemens Medical Equipment located at San Francisco Veteran Affairs Medical Center, located in San Francisco, California. Siemens has proprietary diagnostic equipment and service software that is required to service VA equipment. The total estimated value of this proposed modification action is $568,499.08 which brings the contract total $4,399,817.06.

4. Statutory Authority: The statutory authority permitting an exception to fair opportunity is Section 41 U.S.C. 4106(c) as implemented by the Federal Acquisition Regulation (FAR) Subpart 16.505 Subpart 16.505(b)(2)(i):

( )FAR Subpart 16.505(b)(2)(i)(A): The agency need for the supplies or services is so urgent that providing a fair opportunity would result in unacceptable delays.

( X ) FAR Subpart 16.505(b)(2)(i)(B): Only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized.

( ) FAR Subpart 16.505(b)(2)(i)(C): The order must be issued on a sole-source basis in the interest of economy and efficiency because it is a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order.

( ) FAR Subpart 16.505(b)(2)(i)(D): It is necessary to place an order to satisfy a minimum guarantee.

( ) FAR Subpart 16.505(b)(2)(i)(E): For orders exceeding the simplified acquisition threshold, a statute expressly authorizes or requires that the purchase be made from a specified source”. The statutory authority permitting an exception to fair opportunity for this action is 38 U.S.C. 8127(c), known as the Veterans First Contracting Program which provides the authority to directly contract with a Service-Disabled Veteran-Owned Small Business (SDVOSB) or a Veteran-Owned Small Business (VOSB).

VHAPM Part 816.5—Indefinite-Delivery Contracts Page 3 of 5 Original Date: 08/30/2017 Date: 03/11/2019 Rev 02

( ) FAR Subpart 16.505(b)(2)(i)(F) In accordance with section 1331 of Public Law 111-240 (15 U.S.C.

644(r)), contracting officers may, at their discretion, set aside orders for any of the small business concerns identified in 19.000(a)(3). When setting aside orders for small business concerns, the specific small business program eligibility requirements identified in part 19 apply.

5. Rationale Supporting Use of Authority Cited Above:

The Siemens equipment requiring a maintenance agreement is vital to the Patient Care operations at the San Francisco VA Medical Center (SFVAMC), this equipment can only be serviced by Siemens due to the proprietary nature of the equipment itself as well as the maintenance equipment and software utilized to service it. The intellectual property and proprietary data involved is only authorized for use by Siemens, unauthorized usage by another party would constitute a breach of Siemens intellectual property rights and may involve adverse legal ramifications. Additionally, all limited warranties that are held by the VA on the equipment are only valid in so far as the equipment is maintained annually by Siemens, this ensures the proper maintenance is conducted and reduces the likely hood of costly repairs being needed and or extensive down-time incurred.

If this is a Brand Name Justification: Not Applicable

6. Efforts to Obtain Competition:

Market research was conducted for this requirement and the results are detailed in market research section of this document. Due to the Original Equipment Manufacturer (OEM) proprietary nature of the Siemens equipment as well as the maintenance equipment and software required in conducting services on Siemens equipment, only Siemens can provide the required maintenance services. The only opportunity for competition exists if the VA decides to re-procure the imaging equipment which would not be a cost-effective or prudent decisions given the recent purchase of the Siemens Equipment. Therefore, there is no competition anticipated for this acquisition and in accordance with FAR 5.301 and 16.505(b)(2), this action will be synopsized at award on the Federal Business Opportunities Page (FBO) and the justification will be made publicly available.

7. Actions to Increase Competition:

Currently Siemens is the only vendor authorized to provide this service. If Siemens authorizes other vendor to provide these services other vendors will be considered on future preventive maintenance services on this equipment. The contracting office will continue to survey the

VHAPM Part 816.5—Indefinite-Delivery Contracts Page 4 of 5 Original Date: 08/30/2017 Date: 03/11/2019 Rev 02 market periodically and continue to seek guidance from the VA NAC on the procurement of Radiology and Imaging High Tech Medical Equipment (HTME).

8. Market Research:

Based on market research, it was determined that only Siemens can meet the VA’s requirement.

Siemens is the original equipment manufacturer and the only authorized contractor who is capable of providing the services due to the proprietary nature of the equipment itself as well as the maintenance equipment and software required to service it. Additionally, unauthorized usage of Siemen’s proprietary property and or software by another party for maintenance purposes could constitute a breach of Siemens intellectual property rights and may involve adverse legal ramifications. Additionally, all limited warranties that are held by the VA on the equipment are only valid in so far as the equipment is maintained annually by Siemens. Further research was conducted on VETBIZ at the time of award, which was searched with keyword “Siemens” and NAICS 811219, California, this search yielded (0) results. OSDBU has exempted this procurement from small business set-aside requirements IAW FY 2016 Small Business Procurement Review Program Policy dated June 22, 2016, exemption: iv. Orders against High Tech Medical Equipment National Contracts for Imaging & Radiation Therapy.

The anticipated task order will be issued against DLA Contract # SPED1-17-D-0023 which is Multiple Award Contract that has been authorized for use by the VA. FAR 52.212-5 CONTRACT TERMS AND CONDITIONS of contract # SPED1-17-D-0023 has been verified to include the following language:

In accordance with Statement of Work, section IV. Authority to Issue Orders (a.), individual procuring activities of the Department of Veterans Affairs are hereby delegated authority to place delivery orders for their respective facility, for equipment valued at $50,000 or less under this contract. Also, individual procuring activities of the Department of Veterans Affairs are hereby delegated authority to place task orders for their respective facility, for required maintenance services at any value under this contract. Individual VA procuring activities will obtain pricing and maintenance information for a specific contract holder from the VA NAC at ammhindscp@va.gov.

The DLA Contract # SPED1-17-D-0023 has been negotiated and awarded at what is assumed as is fair and reasonable prices, however the VA will still seek additional discounts prior to award. The estimated increased amount of the award by year are listed below.

Option year 1 increase:

Option year 2 increase:

Option year 3 increase:

Option year 4 increase:

Total Increase: $ 568,500.05

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9. Other Facts: None

10. Technical and Requirements Certification: I certify that the supporting data under my cognizance, which are included in this justification, are accurate and complete to the best of my knowledge and belief.

Hannah Behm Date Chief Biomedical Engineer San Francisco VAMC

11. Determination that Anticipated Cost is Fair and Reasonable: A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable: (insert the methods that will be used to determine a fair and reasonable price).

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

Jason T. Hill Date Services Team II, Network Contracting Office 21, Contracting Officer

13. Approvals in accordance with VHAPM Part 806.3 Other Than Full and Open Competition SOP.

a. One Level Above the Contracting Officer (Required over $250K but not exceeding $700K): I certify the justification meets requirements for other than full and open competition.

Date Mark A. Bultman Network Contracting Office 21,