VAMC JESSE BROWN 537B08009 Philips Upgrade OVER SAT. R1 - CO signed.pdf

DEPARTMENT OF VETERANS AFFAIRS

Office of Acquisition, Logistics, and Construction

National Acquisition Center P.O. Box 76

Hines, IL 60141

Justification for an Exception to Fair Opportunity

FAR 16.505(b)(2)(i)(C) – Logical Follow-on

(1) Identification of the agency and the contracting activity.

This Justification for an Exception to Fair Opportunity is on behalf of VISN 12, Chicago, IL Jesse Brown VAMC, and will be executed by the Department of Veterans Affairs National Acquisition Center (NAC) located in Hines, Illinois.

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

This activity intends to issue a sole-source delivery order against Indefinite Quantity contract VA797H-17-D-0022 awarded to Philips Healthcare (“Philips”). This Delivery Order will include upgrades for Philips Ultrasound hardware, user licenses, and initial product support.

(3) A description of the supplies or services required to meet the agency’s needs, including the estimated value.

The customer requires an upgrade to multiple Philips EPIQ 7 Ultrasound systems. This upgrade will include both hardware and software, to improve imaging processing and enhance the functionality of the system within the Radiology and Imaging Department.

The estimated value of the Ultrasound upgrade is $322,808.00.

(4) An identification of the exception to fair opportunity (see 16.505(b) (2)) and the supporting rationale, including a demonstration that the proposed contractor’s unique qualification or the nature of the acquisition requires use of the exception cited. If the contracting officer uses the logical follow-on exception, the rationale shall describe why the relationship between the initial order and the follow-on is logical (e.g. in terms of scope, period of performance, or value).

The order will be issued on a sole-source basis as a logical follow-on in accordance with

FAR 16.505(b)(2)(i)(C) in the interest of economy and efficiency to an order already issued under the contract. The technology necessary to manufacture and configure these Ultrasounds are trade secret, only available to the OEM. The hardware build must meet the manufacturer’s Bill of Materials exactly due to FDA certification. Additionally, the upgrade will also include a software upgrade for the systems and no other manufacturer can provide this. As such, only one awardee can provide the supplies. The original equipment manufacturer (OEM), Philips Healthcare, is the only contractor who can provide the upgrade and is a logical follow-on to the original contract, due to the proprietary nature of the hardware/software.

The OEM is the only organization capable of owning trade information about the system and is the only one qualified to provide parts and services, with the expectation that the systems continues operating as expected in a safe, clinically effective manner. These systems were previously competed and awarded under Delivery Orders VA797H-14-J- 0573, VA797H-14-J-0585, and VA797H-14-J-0743 and were installed in March of 2015.

Since this time, no upgrades or improvements have been made to the systems.

The primary Ultrasound systems being upgraded are Serial #s: USD14B0346, USD215B1025, and US215B0857 with the most current software and hardware on Philips marketplace that will allow Jesse Brown VAMC to utilize the latest versions of Ultrasound equipment and software to better and more effectively support patient care.

This upgrade will also ensure no lost to the compatibility and functionality of the equipment and system. The only alternative to purchasing these upgrades directly from the OEM would be to purchase entirely new ultrasound systems at an estimated total cost in excess of $650,000. The planning, solicitation, award, and delivery of the new systems will also take several months, and this will delay improvements to patient care at the receiving facility.

(5) A determination by the Contracting Officer that the anticipated cost to the

Government will be fair and reasonable.

The contracting officer for the subsequent order has determined the prices offered to be fair and reasonable for this justification for an exception to fair opportunity. All items are priced at or below the contract price, which have already been determined fair and reasonable at time of contract award, and there have been no significant changes to the industry or market conditions that would result in changes to the reasonableness of the underlying contract prices. All items are currently on Philips IDIQ contract VA797H-17- D-0022. The quoted price for each item is at or below the IDIQ not-to-exceed contract price.

(6) Any other facts supporting the justification.

The Philips upgraded hardware and software will shorten the imaging exams for veterans utilizing the Ultrasound for examinations. This will allow Radiology to increase their throughput and allow for scheduling flexibility. It will also assist with the Veteran experience as it will shorten length of time waiting for Ultrasound appointments. This will decrease discomfort for most Veterans without impacting the image obtained. This is a medical device which received FDA 510K medical device certification in the specific configuration which the OEM manufactured it.

(7) A statement of the actions, if any, the agency may take to remove or overcome any barriers that led to the exception to fair opportunity before any subsequent acquisition for the supplies or services is made.

All prospective delivery orders are competed among all contract holders. Once an order is placed for proprietary equipment, it is generally not possible to compete follow-on acquisitions for upgrades because the system to be upgraded is proprietary in nature.

Future requirements will be handled on a case by case basis and all attempts will be made to provide fair opportunity to all schedule holders when appropriate.

(8) The contracting officer’s certification that the justification is accurate and complete to the best of the contracting officer’s knowledge and belief.

By signing this justification, the Contracting Officer hereby certifies that the justification is accurate and complete to the best of their knowledge.

(9) Evidence that any supporting data that is the responsibility of the technical or requirements personnel (e.g., verifying the Government’s minimum needs or requirements or other rationale for an exception to fair opportunity) and which form a basis for the justification have been certified as complete and accurate by the technical or requirements personnel.

By signing this justification, the requiring activity hereby certifies that the justification is accurate and complete to the best of their knowledge

(10) A written determination by the approving official that one of the circumstances in

(b)(2)(i)(A) through (F) of this section applies to the order.

Based on the information contained herein, a determination has been made that this requirement meets the exception at FAR 16.505(b)(2)(i)(C).

CERTIFICATION AND APPROVAL

TECHNICAL/REQUIREMENTS CERTIFICATION:

Pursuant to FAR 16.505(b)(2)(ii)(B)(9), I certify that any supporting data that is my responsibility and which forms a basis for the justification is complete and accurate to the best of my knowledge and belief.

Victoria Lancey

VISN 12

Jesse Brown VAMC Biomedical Engineer

CONTRACTING OFFICER CERTIFICATION:

Pursuant to FAR 16.505(b)(2)(ii)(B)(8), I certify that the justification is complete and accurate to the best of my knowledge and belief.

Christopher L. Cook

Contracting Officer

VA National Acquisition Center-Hines High-Tech Medical Equipment Admin Division

Reagan P. Criddle

VA National Acquisition Center-Hines Chief, High-Tech Medical Equipment Ordering Division