USAHCA_Sole_Source_Justification_Philips_13.501_(Posted_to_FBO).pdf

Control Number: 19-RHCO-A-604

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

(12 September 2019)

Sole Source Justification and Approval

Under FAR 13.501

1. Contracting Activity: U.S. Army Medical Command, Regional Health Contracting Office - Atlantic, 6011 5th Street, Bldg. 1469, Fort Belvoir, VA 22060

2. Description of Action: Approval is requested for Maintenance Services for Philips Digital Diagnostic Equipment. The previous award W91YTZ-18-P-0325 was awarded to Philips Medical Systems North America Inc. as they are the proprietary vendor for the maintenance of their system. This follow-on contract will be firm fixed price (FFP) with a base and four 12 month option periods. The funding type is Operational and Maintenance (O&M).

3. Description of Supplies/Services: Primary Right Fit Service Agreement, service includes all parts and labor to perform scheduled preventive maintenance in accordance with current Preventive Maintenance Check List. The service includes unscheduled repair visits regarding the item listed in the Service Agreement. The item is a Digital Diagnostic Release 4 High Performance. Only the Manufacturer of the equipment can provide the Calibration, Repair and Preventive Maintenance Checks on stated Philips Equipment. Philips is the only manufacture of the repair parts specific to the units listed.

Original Equipment Manufacturer (OEM). Specification is the only source of specifications needed to properly maintain these items. This follow-on contract will be a firm fixed price with a base and 4 option years. The total estimated value of this requirement for a 12 month base period and four 12 month option periods is $271,600.00. FAR 52.217-8, “Option to Extend Services” will be included in this requirement.

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. Philips Healthcare is the original equipment manufacturer and the proprietary vendor for maintenance of the equipment.

5. Reason for Authority Cited: Philips Healthcare is the original equipment manufacturer and the proprietary vendor for maintenance of the equipment. The equipment was acquired in 2015 with a life expectancy of eight years. Only the Manufacturer of the equipment can provide the Calibration, Repair and Preventive Maintenance Checks on Philips Equipment. Philips is the only manufacturer of the repair parts specific to the units listed. Original Equipment Manufacturer (OEM) specification are the only source of specifications need to properly maintain these items.

Manufacturer has sole right to their proprietary designs, equipment diagnostics serves software. Failures to utilize proprietary operating system software may result in the inability to identify equipment operation parameters, failures of device and the inability to accurately calibrate the equipment. KACH requires the OEM to maintain this high

Maintenance Services for the Philips Digital Diagnostic Release 4 High Performance in support of Keller Army Community Hospital, West Point, NY 10996-1197

(See FAR 2.101 and 3.104-4)

(12 September 2019) end, lifesaving equipment. Diagnostic imaging devices are subject to American College of Radiology (ACR) accreditation, if providing services under Medicare of Medicaid reimbursement. Meeting OEM operating specifications is a minimum requirement in order to certify by ACR and other regulating agencies.

6. Efforts to Obtain Competition: Market research was conducted to determine if there were any vendors that could perform the required services. The market research was conducted by researching GSA Schedules e-Library, Small Business Dynamic Search, previous contract and Internet searches. This J&A will be posted on Federal Business Opportunities (FBO) with the solicitation which will inform companies of the requirement.

a. Effective competition. Philips Healthcare is the only company that can perform the required maintenance on the Philips Digital Diagnostic Release 4 High Performance.

Based on the results of the market research and the proprietary nature of the equipment there is no effective competition anticipated for this acquisition.

b. Subcontracting competition. There are no subcontracting possibilities for this requirement. A subcontracting plan is required.

7. Actions to Increase Competition: It is not possible to increase competition at this time because the sole manufacture of the equipment to be maintained is Philips Healthcare and they have proprietary knowledge of the equipment making them the only company capable of performing the required services. A copy of the solicitation will be posted on the Federal Business Opportunities (FedBizOpps) website. Any proposals received will be considered for future requirements.

8. Market Research: Market Research was conducted in accordance with FAR Part 10 by the Contracting Officers Representative and the Contract Specialist. A search of the Dynamic Small Business website was conducted for NAICS Code 811219 “Other Electronic and Precision Equipment Repair and Maintenance,” revealed large numbers of vendors. However, the large number of small businesses listed below is misleading because the NAICS used 811219 “Other Electronic and Precision Equipment Repair and Maintenance,” is a broad category which means that many of the small businesses listed below may be able to maintain certain Electronic and Precision Equipment but not the Philips Digital Diagnostic Release 4 High Performance because it is proprietary.

(1) The SBA Quick Market Search was completed on September 11, 2019 using the NAICS 811219. The search for each socio-economic group are as follows:

(See FAR 2.101 and 3.104-4)

(12 September 2019)

Table 1 –DSBS Quick Search Results

8(a) and 8(a) Joint Venture 187

Any Women Owned Business 897

HUBZone Certification 138

Service Disabled Veteran Owned 659

Veteran Owned including Service Disabled Veteran 1136

(2) A search of the GSA Library under source 65IIA “Medical Equipment and

Supplies” revealed that while Philips Healthcare has a presence on GSA, the schedule only contains supplies and not the required services.

9. Interested Sources: To date, no other sources have written to express an interest.

The notices required by FAR 5.201 shall be published, and any bids or proposals received shall be considered.

10. Other Facts:

a. Procurement history.

(1) The current contract W91YTZ-18- P-0325 expires on 30 September 2019. Philips Healthcare is the only vendor that can fulfill the requirement. Philips is the sole manufacturer of the proprietary equipment to be maintained.

(2) The competitive status of the action: This action was competed as Unrestricted.

(3) Authority previously cited if less than full and open competition was used. N/A, previous requirement was competed Unrestricted.

(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. N/A.

(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. There are no changes in circumstances that caused the contracting office to limit sources. The follow on requirement cannot be completed timely due the timelines that the complete Acquisition Requirement Package was received coupled with staff shortages.

(See FAR 2.101 and 3.104-4)

(12 September 2019)

(6) An explanation of any unusual patterns that may be revealed by the history, e.g., several consecutive, urgent buys. None.

(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. N/A.

b. 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. I certify these products are not available using mandatory sources and delivery cannot be made by the required delivery date.

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.

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 based on a market research and the Independent Government Estimate. A price analysis will be conducted comparing the offeror’s proposal with current or recent prices for the same or similar items, adjusted to reflect changes in the market conditions, economic conditions, and quantities. Commercial Items are being acquired therefore cost or pricing data is not required per FAR 15.403- 1(b) (3).

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