A.02.04_Justification_and_Approval_Sole_Source_under_13.501_Ver_5_Final_Redacted.pdf

Control Number: 19-RHCO-C-13

For Official Use Only (See FAR 2.101 and 3.104-4)

(25 February 2016)

Sole Source Justification and Approval Under FAR 13.501

1. Contracting Activity: U.S. Army Medical Command, U.S. Army Health Contracting Activity, Regional Health Contracting Office – Central, Fort Carson Health Contracting Cell, 5885 Barkeley Ave, Fort Carson, Colorado 80913.

2. Description of Action: This is a follow-on requirement for Cochlear supply items.

This will be a Firm-Fixed Price (FFP) Indefinite Delivery Indefinite Quantity (IDIQ) contract.

3. Description of Supplies/Services: The Department of Surgery at Evans Army Community Hospital (EACH), Fort Carson, CO has a requirement for Cochlear Americas Corporation Bone-Anchored Hearing Aid (BAHA) Systems. These BAHA systems are for service members with hearing loss. The Cochlear Americas Corporation BAHA devices are the only option that allows for osseo-integrated or magnetic attachment of the sound processing device as well as direct connection into cell phone for communication. The Cochlear Americas Corporation BAHA system integrates with the existing surgical equipment owned by EACH and is a commercially available item.

The total estimated cost for this IDIQ is . The base period of performance is 01 October 2018 – 30 September 2019

FY19 GFEBS PR# 0011175485 (DHP, O&M funds) was submitted in the amount of which will be the first task order issued to Evans Army Community Hospital (EACH), Fort Carson, CO.

4. Authority Cited: 41 United States Code 1901 as implemented in Federal Acquisition Regulation 13.501(a)(1)(ii), sole source (including brand name) under the authority of the simplified procedures for certain commercial items.

5. Reason for Authority Cited: Cochlear Americas Corporation is the only company that provides vibrotactile hearing systems available via magnetic or osseointegrated coupling of the internal device to an external sound processor. The Cochlear device allows the bone to transfer sound and bypass the middle ear. Furthermore, EACH already owns the surgical equipment compatible with Cochlear Americas Corporation implants. The required Cochlear BAHAs need to be compatible with the existing supplies ensuring standardization. IAW DoD Manual 4120.24, Defense Standardization Program (DSP) Procedures, Enclosure 4, paragraph 6, FAR 6.302-1(b)(4) permits the use of standardization as a justification for other than full and open competition for specific makes and models.

6. Efforts to Obtain Competition: A search of the internet; there are four companies in the world that make vibrotactile hearing systems. These companies include Medtronic

(See FAR 2.101 and 3.104-4)

(the Sophono implant), Oticon Medical (the Ponto implant), MedEl (the Bone Bridge implant) and Cochlear Corporation (the BAHA implant). The only company of these four that allows for either magnetic or osseointegrated implantation is Cochlear Americas Corporation. A sources sought notice was posted to FedBizOpps (on 12 July 2018 to 20 July 2018, and no responses were received. Only Cochlear Corporation systems are compatible with the surgical equipment owned by EACH.

a. Effective competition. The requiring activity and Fort Carson Health Contracting Cell conducted extensive, detailed market research for this requirement.

b. Subcontracting competition. IAW FAR 19.705-2 (c), the requirement for Cochlear BAHA systems with an estimated cost of , exceeds the $700,000.00 threshold that requires a successful offeror to have a subcontracting plan. Historically, Cochlear does not provide for subcontracting opportunities due to the proprietary process, quality control guidelines, counterfeiting concerns, FDA approval for the BAHA system and sufficient in-house capabilities. I have determined that a subcontracting plan is not applicable to this requirement for BAHA system.

7. Actions to Increase Competition: Enhancing competition is always a priority when doing purchases; therefore, market research is done extensively on all sole source buys. Future purchases of the BAHA implants will be handled in similar manner;

extensive market research and sources sought actions to FBO will be published. The requiring activity will continue to monitor the market for sources with the same or similar capabilities and if additional sources are found they will be included in future requirement.

8. Market Research: A Dynamic Small Business Search was conducted from the Small Business Administration website under the NAICS code 339113 using the keyword "Hearing Aid." The search results returned several small businesses however, vendor capability statement indicated products totally unrelated to this requirement.

Additional market research and a sources sought notice did not reveal any additional sources. Cochlear Americas confirmed telephonic-ally that they do not authorize distributors or third party suppliers of their BAHA implants. Additionally, Cochlear provided a sole source letter on 26 July 2018. It is recommended that this procurement be completed sole source to Cochlear Americas Corporation.

9. Interested Sources: A sources sought notice was posted on FedBizOpps from 12 July 2018 through 20 July 2018 and no responses were received. To date, no other sources have written to express an interest. Cochlear Corporation is the only contractor that is capable of providing the BAHA implants.

10. Other Facts:

(See FAR 2.101 and 3.104-4)

a. Procurement history.

(1) Contract numbers and dates of the last several contracts for these same requirements.

(2) The competitive status of these actions. Cochlear Corporation is the only contractor that is capable of providing the BAHA implants.

(3) Authority previously cited if less than full and open competition was used. FAR 13.106-1(b) (1) (i): Only one source reasonably available (e.g. urgency, exclusive licensing agreement, brand name or industrial mobilization).

(4) If a justification was prepared to support the procurement made before this one, a summary of the contents of paragraph 7 of the justification for that procurement and an explanation of the results.

The requirement is for the brand named Bone-Anchored Hearing Aid (BAHA) System is manufactured by Cochlear America. The Cochlear BAHA System is unique in that it is the only BAHA that works through direct bone conduction that provides magnetic vibrations to simulate sound. Cochlear Corporation is the only contractor that is capable of providing the BAHA implants. The requiring activity will continue to monitor the market for sources with the same or similar capabilities. The Government will continue to see new resources, which satisfy the requirement through continued market research, request for Statement of Capability and telephone inquiries. When the current system becomes obsolete or when an equivalent service becomes available every effort shall be made to increase competition.

(5) If any prior contract for this requirement was accomplished using full and open competition, include a detailed explanation of the changed circumstances causing this action to now limit the sources. N/A

(6) An explanation of any unusual patterns that may be revealed by the history, e.g., several consecutive, urgent buys. N/A

(7) If a justification was prepared to support the procurement made before this one, briefly describe the circumstances justifying the procurement and whether there have been any significant changes. There are no significant changes.

b. Other facts. None

(See FAR 2.101 and 3.104-4)

Approval

Based on the foregoing justification, I hereby approve the procurement of Cochlear BAHA implants and supplies in the amount of on an other than full and open competition basis pursuant to the authority of 41 U.S.C. 1901 as implemented by FAR 13.501, subject to availability of funds, and provided that the services and property herein described have otherwise been authorized for acquisition.

Advocate for Competition:

Signature: Date: