W911QY20P0119_JandA_6.302-2.pdf

Control Number:

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

(March 2019)

Justification Review Document FAR 6.302-2 Other than Full and Open Competition

Urgent and Compelling for COVID-19

W91QY20P0119

Program/Equipment: DoD procurement of Cepheid GeneXpert 4 systems, GeneXpert 16s systems and Emergency Use Only (EUA) assays to detect COVID19 in human clinical samples.

Authority: 10 U.S.C. 2304(c)(2) as implemented by FAR Part 6.302-2 -- Unusual and Compelling Urgency.

Amount: $2,149,606.95

Prepared by:

Typed Name: _ _DSN: _____________________

Title: _Contract Specialist__Date: _____________________

E-mail:

Contracting Officer:

Typed Name: DSN: _____________________

Date Reviewed: __________________E-Mail:

Technical Representative:

Title: Assistant Program Manager NGDS Inc 2, DOD JPEOCBD

Date Reviewed: ________________________

(State specific supply or services being procured and location)

(March 2020)

Requirements Representative:

Title: Assistant Program Manager NGDS Inc 2, DOD JPEOCBD

Date Reviewed: ________________________

Reviews

I have reviewed this justification and find it adequate to support other than full and open competition.

Legal Counsel

Typed Name: DSN: ______________________

Signature: _________________________________ Date: ______________________

Justification and Approval FAR 6.302-2 Other than Full and Open Competition

Urgent and Compelling for COVID-19

1. Contracting Activity: Army Contracting Command, Aberdeen Proving Ground, Natick Division, Ft Detrick Branch

2. Description of Action: JPEO is seeking approval to issue a direct purchase order to Cepheid (CAGE: 07YE7) located at 904 E Caribbean Dr, Sunnyvale, CA 94089 for the purpose of purchasing assay reading systems and COVID-19 assays in order to meet the testing demand in response to the COVID-19 global pandemic.

Funds provided for this requirement are Other Procurement Army and the award will be a firm fixed price purchase order based on available commercial prices.

3. Description of Supplies/Services: The requirement is for the purchase of Cepheid GeneXpert 4 systems, GeneXpert 16s systems and Emergency Use Only (EUA) assays to detect COVID19 in human clinical samples. Test kits will be ordered and delivered in increments and packaged in boxes

Delivery Date: 13 April 2020 for both the GeneXpert 4 and 16s systems. For the Assays, the contractor shall ship assays per week beginning the week of 13 April 2020 with the final delivery date not later than 26 May 2020

Total Value: $ $2,149,606.95

4. Authority Cited: 10 U.S.C. 2304(c)(2), as implemented by FAR 6.302-2, Unusual and compelling urgency.

5. Reason for Authority Cited:

41 U.S.C. 1903 Special Emergency Procurement authority is authorized because the President of the United States made an emergency determination under the authority of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121- 5207 (the "Stafford Act") in response to the COVID-19 pandemic on 13 March 2020.

The JPEO-CBRND has a public responsibility to comply with Centers for Disease Control (CDC) guidance to prevent further spread of COVID19. CDC guidance is consistent with that of the WHO in response to the COVID-19 pandemic. JPEO CBRND is also required to comply with Department of Defense and U.S. Army Europe guidance to implement plans to ensure compliance with directed force health protection measures throughout the area of operations in order to prevent an outbreak of COVID-19 within

U.S. personnel (service members, civilians, contractors, and dependents) or confine it to as small a population as possible. In order to comply and put protective measures in place, JPEO CBRND has an urgent need for Cepheid GeneXpert 4 systems and FDA EUA Approved COVID-19 Assays. These supplies are required in order to protect the public from the spread of (or isolate people infected with) COVID-19. This requirement will provide the DoD with rapid testing and diagnostic systems which will be sent to military hospitals and laboratories nationwide in order to support military’s efforts to test and treat COVID-19 in warfighters and their immediate families.

Every day that passes, confirmed COVID-19 cases spike and the death toll increases. It is imperative that these supplies are obtained as quickly as possible to protect public health. The U.S. Government cannot apply standard procurement times to an acquisition of this urgent nature. Even the short time-lines of 30-60 days to award could result in hundreds of thousands more being infected and thousands more dying.

Cepheid developed a COVID19 test that was recently approved by the FDA to be employed under Emergency Use Authorization (EUA). Efforts to contain the current outbreak are exacerbated by limited availability of tests and current test throughput (number of simultaneous tests run and time-to-result). Cepheid’s GeneXpert 4 systems are designed to run anywhere between four (4) and eighty (80) tests at a single time, depending on the GeneXpert configuration. The COVID19 test also can be run in approximately 45 minutes. Because of the wide distribution of Cepheid’s GeneXpert system within the DoD healthcare nexus, purchasing a large number of Cepheid’s COVID19 EUA tests would provide the DoD with an immediate and impactful capability to diagnose and treat patients and to implement appropriate force protection measures due to the increase in biosurveillance enabled by more frequent and available testing and a shorter time-to-result. The purchase of the GeneXpert 4 systems will allow expanded testing capabilities for military locations that do not already have diagnostic and testing capabilities in-house.

Cepheid is the sole manufacturer of GeneXpert family of instruments and the sole manufacturer of assay kits compatible with GeneXpert systems and no other company has developed a COVID19 diagnostic capability to run between four (4) and eighty (80) tests at a single time, depending on the GeneXpert configuration, or COVID19 tests within approximately 45 minutes.

Furthermore, no other contractors can produce assays that are readable on Cepheid’s GeneXpert systems. Though other diagnostic systems exist on the commercial market with the capability of developing assays, replacing the entire DoD network of diagnostic systems to accommodate competition during this pandemic would not only require a significant re-investment in systems, training, and supplying consumables, it would necessitate multiple logistical requirements for multiple diagnostic systems, and extend the date the testing capabilities and assays would be available to military health professionals beyond what is needed for the rapid response to get diagnostic capabilities into field.

The Cepheid GeneXpert Systems are available in the quantities required and must be manufactured and sent for delivery as soon as the purchase order is issued for immediate distribution Additionally, the COVID-19 Assays will be available for staggered deliveries which allows the first assays to be fielded to the Government sites within 14 days from the date of award. Cepheid shall deliver assays per week with the first shipment due for delivery by 13 April 2020. The latest delivery date for the last allotment of assays shall be no later than 26 May 2020.

Approval of this J&A and award of the proposed contract must be executed immediately to protect the public from the spread of (or isolate people infected with) COVID-19 and comply with the President’s emergency determination under the authority of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121-5207 (the "Stafford Act") in response to the COVID-19 pandemic.

There are no alternatives available to satisfy the immediate need for assay reading systems and COVID-19 assays in order to meet the testing demand in response to the COVID-19 global pandemic to protect the public from the spread of (or isolate people infected with) COVID-19.

Efforts to contain the current COVID19 outbreak are exacerbated by limited availability of tests and current test throughput. Failure to approve this J&A will result in continued spread of COVID19 and placing the health of civilian and military personnel at risk of COVID19 infection.

6. Efforts to Obtain Competition: As Cepheid holds all intellectual property on the design and manufacturing of the GeneXpert diagnostic systems and the compatible assay designs, the Government did not solicit offers from any other sources.

The required notices prior to issuing the award were not published under exception FAR 5.202(a)(2).

7. Actions to Increase Competition: There will be no opportunities to increase competition if the Government requires additional GeneXpert systems and system compatible COVID-19 assays. Cepheid remains the only manufacturer capable of providing the GeneXpert and system assays.

The required quantities of systems and assays stated above have been verified by the program office and no optional quantities or extended periods of performance are anticipated to meet the immediate needs. If additional assays and systems are required, the contracting office will issue subsequent awards based on the most reasonable contracting process based on the future conditions.

8. Market Research: Market Research in accordance to FAR Part 10 was conducted from 23 March 2020 to 30 March 2020 by the JPEO CBRND group and the Contracting office and found that Cepheid is sole manufacturer of the GeneXpert family of systems.

There are no other companies that sell the GeneXpert systems and there are no resellers of new equipment. Additionally, there are no companies which claim to have assays compatible with Cepheid’s systems. With this information it can be assumed that Cepheid holds all Intellectual property in the design and production of their systems and assays. Market research was minimal due to the urgent nature of this emergency procurement and the lack of requirements package and historical data for this requirement.”

In December of 2019 an outbreak of COVID-19 was reported in Wuhan City, Hubei Province, China. The World Health Organization (WHO) states COVID-19 is the infectious disease caused by the most recently discovered coronavirus. They also state in humans, several coronaviruses are known to cause respiratory infections, ranging from the common cold to more severe diseases, such as COVID-19. The WHO states:

“Around 1 out of every 6 people who gets COVID-19 becomes seriously ill and develops difficulty breathing. Older people, and those with underlying medical problems like high blood pressure, heart problems or diabetes, are more likely to develop serious illness.

People with fever, cough and difficulty breathing should seek medical attention.”

The WHO declared the global COVID-19 outbreak a pandemic on 11 March 2020, stating it is a “public health crisis”. The following is information from the WHO website.

The WHO is recommending all countries activate and scale up their emergency response mechanisms utilizing a four-pronged approach. First, prepare and be ready. In other words, prepare your people and your health facilities. Second, detect, prevent, and treat. Utilize surveillance to find, isolate, test and treat every case in order to break the chain of transmission. Third, reduce and suppress. Reduce transmission by finding and isolating as many cases as possible and quarantining their closes contacts. Protect health facilities, old age homes, and other vital areas. They recommend testing all suspected cases. Fourth, innovate and improve. Find new ways to prevent infection, save lives, and minimize impact. Utilize personal protective equipment. Utilize the WHO training programs, technical guidance, studies, protocols, and preparedness and response plans.

Purchasing the GeneXpert systems and COVID-19 assays directly support the first, second, and third prongs of the WHO’s approach. Having a substantial quantity of assays and available systems allow the US military to prepare for the anticipated increasing diagnostic requirements. These systems and assays will be used to support diagnosing infected patients and will help military health professionals assess patients’ symptoms and set out appropriate courses of treatment. By having increased ability to diagnose infected patients early, additional spread of the virus can be curtailed thereby suppressing transmission to other populations.

On January 31, 2020, the United States Department of Health and Human Services Secretary Alex M. Azar II declared a public health emergency (PHE) for the United States to aid the nation’s health care community in responding to COVID-19. On 13 March 2020, the President of the United States of America declared COVID-19 an emergency IAW 42 U.S.C. 5122 (the Robert T. Stafford Disaster Relief and Emergency Assistance Act) which allows for Special Emergency Procurement Authority IAW 41 U.S.C.1903. On 18 March 2020, the President invoked his authority IAW the Defense Production Act. The Act allows the President, where necessary to promote the national defense, may require acceptance and performance of contracts orders by any person he finds to be capable of performing them.

Based on the guidance issued by the WHO, CDC, U.S. Government organizations, and other State Departments throughout the world, there is a shortage of diagnostic tests due to the rapid spread of the virus. The FDA has just recently been able to approve EUA authorizations for Coronavirus Assays from multiple manufacturers. This has allowed production at scale to begin. However, with the ability to begin production, it is anticipated that there will be a high demand for these systems and assays and it is imperative that the DoD receives part of the initial lot of production to ensure the safety of the warfighter and their families.

9. Interested Sources: As shown in the market research, no other Offerors can provide the required quantities of the systems and assays.

10. Other Facts:

a. Procurement history. This is a new requirement and as such there is no procurement history.

b. Other facts. The contracting office was tasked with this requirement beginning on Friday 20 Mar 2020 with the intent of awarding no later than 23 Mar 2020 due to the urgency of getting the systems and assays delivered at the earliest date possible for fielding. As it was anticipated that the contract would be awarded over the weekend, it was unrealistic to gather sole source approvals through the normal acquisitions process. Instead, the Contracting Officer extracted the most important details from this J&A and submitted them to both legal counsel and the Competition Advocate via email for approval. On 23 March, 2020 and prior to issuing the award, the Competition Advocate, Dennis Longo, provided approval for this sole source requirement in advance of the formal J&A document with the caveat that this J&A be properly staffed in a reasonable amount of time after award. The approval email has been included in the contract file for reference. This requirement has been awarded under Purchase Order W911QY20P0119 for the price stated above.

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.

Signature: ________________________________Date: __________

Typed Name: Title:_ Assistant Program Manager

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.

Signature: ________________________________Date: __________

Typed Name: ___ Title:_ Assistant Program Manager

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 by comparing the quoted price against existing GSA schedules for assays and diagnostic systems.

Signature: ________________________________Date: __________

Typed Name: Title: Contracting Officer

14. Contracting Officer Certification:

I certify that this justification is accurate and complete to the best of my knowledge and belief.

Signature: ________________________________Date: __________

Typed Name: Title: Contracting Officer

Approval

Based on the foregoing justification, I hereby approve the procurement of Cepheid GeneXpert systems and COVID-19 Assays for a total price of $2,149,962.30 on an other than full and open competition basis pursuant to the authority of 10 U.S.C.2304(c)(2) Unusual and Compelling Urgency, subject to availability of funds, and provided that the services and property herein described have otherwise been authorized for acquisition.

Signature: _____________________________ Date: _______________

Typed Name: Title: Advocate for Competition