JASoleSourceQuestInterimFY12Redacted.doc

SOURCE SELECTION SENSITIVE – SEE FAR 3.104

Control No: 12-002

Justification and Approval for Other Than Full and Open Competition

1. Contracting Activity: Health Care Acquisition Activity (HCAA), Center for Health Care Contracting (CHCC), United States (U.S.) Army Medical Command, Fort Sam Houston, Texas.

2. Description of Action: Approval is requested to award a sole source Indefinite-Delivery/Indefinite-Quantity (IDIQ) contract for Clinical Reference Laboratory Testing Services in accordance with (IAW) 10 U.S.C. 2304(c)(1) and FAR Part 6.302-1, “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements” to Quest Diagnostics Clinical Laboratories, Incorporated. The period of performance is 1 April 2012 through 30 September 2012. FAR Clause 52.217-8, Option to Extend Services will be incorporated into the contract. The type of funds to be used is Defense Health Program (DHP).

3. Description of Supplies/Services: This is an interim contract for Clinical Reference Laboratory Testing Services; these services support the laboratory missions of the U.S. Army, U.S. Navy, U.S. Air Force, Veteran’s Administration, U.S. Coast Guard, the Federal Prison System and other Federal Government Agencies. These laboratory services support an estimated 150 Military Treatment Facilities (MTFs) located throughout the continental United States, including Alaska, Hawaii, Puerto Rico, and Europe. Required services consist of providing pre-analytic processing analysis, and result interpretation for clinical and pathology specimens as required by the MTFs. Routine testing measures various bodily health parameters such as the functions of the kidney, heart, thyroid, and other organs. More difficult tests are performed less frequently and require more sophisticated equipment, materials, and trained staff that many MTFs do not have on site. Quest Diagnostics, Inc. will provide non-personal services which include, facilities, labor, and equipment, materials, software, and services necessary to support Clinical Reference Laboratory Testing Services to the above referenced Federal Government Agencies. Use of this contract will be limited to those agencies identified. The total estimated value, including the Option to Extend Services, FAR clause 52.217-8, is $49,911,000.00.

4. Authority Cited: The statutory authority permitting other than full and open competition is 10 United States Code (U.S.C) 2304(c) (1) and Federal Acquisition Regulation (FAR) 6.302-1 Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

5. Reason for Authority Cited:

(1) Contract number W81K04-11-D-0007, was awarded on 22 April 2011, to Quest Diagnostics, The requirement is a follow-on, which was solicited on a competitive basis. On May 5, 2011 Laboratory Corporation of American (LabCorp) Inc, protested (B-405081) to the U.S Government Accountability Office (GAO) the award to Quest arguing that the pricing methodology used in determining the awardee was flawed and requested a stay; GAO sustained the plaintiff’s request. CHCC is currently conducting corrective action.

(2) The services require a six (6) month transition period, during which time the awardee would need to begin the DoD Information Assurance Certification and Accreditation Process (DIACAP), provide training to the Military Treatment Facilities (MTFs), and work with MTFs to build files and tables, all prior to full performance. The six (6) month transition period needed to have begun no later than 1 October 2011, to be completed prior to the end of the current requirement on 31 March 2012. Due to the protest and subsequent corrective action, the milestones have severely compressed, rendering it impossible for the transition period to be successfully performed under a new contract beginning 1 April 2012.

(3) Clinical reference laboratory services are critical to MTFs who do not have the equipment and staff on-site to perform laboratory tests covered by the current contract. Failure to continue contract coverage with Quest Diagnostics, Incorporated will make it impossible for MTFs in MEDCOM and other agencies to fulfill their health care missions. The incumbent is the only logical source that can immediately perform an interim contract of this magnitude and complexity for the period of 1 April 2012 through 30 September 2012, because as stated in paragraph (2) above, the services require a six (6) month transition period, during which time the awardee would need to begin the DoD Information Assurance Certification and Accreditation Process (DIACAP), provide training to the Military Treatment Facilities (MTFs), and work with MTFs to build files and tables, all prior to full performance Quest already has the necessary management, laboratory network, experience, and resources in place to provide continuity of services. The Government cannot forego laboratory testing even for a short period of time considering the criticality of the testing being performed.

(4) Due to the factors stated above, the proposed contract for six months, which includes FAR Clause 52.217-8, Extension of Services Option, represents the only procurement vehicle available to ensure continuation of clinical reference laboratory services required to execute the health care mission for the U.S. Army, U.S. Navy, U.S. Air Force, Veteran’s Administration, U.S. Coast Guard, the Federal Prison System and other Federal Government Agencies. The interim contract will use the current performance work statement.

6. Efforts to Obtain Competition: As a result of the GAO’s issuance of the contract stay, no other efforts were made to obtain competition. No other contractor is capable of providing these services and therefore only one responsible source; Quest, is capable of meeting agency’s needs. In accordance with FAR 6.302-1(d) (2) the proposed action will be posted on FedBizOpps. A notice will be included that any offers received other than the proposed contractor will be considered.

7. Actions to Increase Competition: See paragraph 6, for an explanation of efforts the government has taken to ensure that maximum competitive is sought to fulfill this requirement.

8. Market Research: Market research was performed on the current requirement and as a result of that research, the requirement was solicited and awarded on a competitive basis; due to the pending protest, which is detailed above, no further market research is needed, as the results would not change the competitive circumstances of the resulting contract.

9. Interested Sources: This acquisition will be posted on FedBizOpps to notify the general public of the government’s pending contract with Quest Diagnostics, Incorporated. Notice required by FAR 5.201 will be published and any proposal received will be considered.

10. Other Facts: None.

11. Technical Certification:

I certify 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.

DANNY R. DEUTER, COL,

MS

Date: 27 December 2011

MEDCOM Deputy Lab Program Manager

Signature: _______________________

12. Requirements Certification: I certify 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.

DANNY R. DEUTER, COL, MS

MEDCOM Deputy Lab Program Manager

Signature: ______________________

13. Fair and Reasonable Cost Determination: I hereby determine that the anticipated cost to the Government for this contract action will be fair and reasonable. Price reasonableness will be based on price analysis by comparing the proposed prices with the existing interim contract prices (W81K04-10-D-0011) and comparison of the proposed prices with Quest Diagnostic’s commercial published price list. Certified cost or price data will not be required. Exception for Cost or Pricing data applies under FAR Part 15.403-1 (b) (3). This requirement is a commercial item.

JOHNIE F. JOHNSON

Contracting Officer:

Signature: _______________

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

JOHNIE F. JOHNSON

Title: Contracting Officer

Signature: _______________

15. Legal Review: I have reviewed this justification and approval and it is deemed to be legally sufficient.

Typed Name: ___________________

Date: 4 January 2012 Legal Counsel

Signature: ___________________________ Recommend Approval Based on the foregoing justification, I hereby recommend approval of the procurement of Clinical Reference Laboratory Testing Services on an other than full and open competition basis pursuant to the authority of 10 U.S.C.2304(c)(1),, subject to availability of funds, and provided that the services herein described have otherwise been authorized for acquisition.

JOYCE B. NADEAU

Date: 9 January 2012 Special Competition Advocate

Signature: ___________________________ Approval

Based on the foregoing justification, I hereby approve the $49,911,000.00 procurement of Clinical Reference Laboratory Testing Services to support the U.S. Army, U.S. Navy, U.S. Air Force, Veteran’s Administration, U.S. Coast Guard, the Federal Prison System and other Federal Government Agencies on an other than full and open competition basis pursuant to the authority of 10 U.S.C.2304(c)(1) and FAR 6.302-1, subject to availability of funds, and provided that the equipment and services herein described have otherwise been authorized for acquisition.

HERBERT A. COLEY

Date: 13 January 2012

Head of the Contracting Activity

Signature: ___________________________