Y1DA--EHRM Infrastructure Upgrades West Campus – North Chicago - Construction

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Department of MEMORANDUM

Veterans Affairs

Date: 2 October 2026

From: Contracting Officers Representative Subj: Contract: 36C77621C0096

EHRM Infrastructure Upgrades Construction - Captain James A. Lovell FHCC West Campus Justification and Approval Out-of-Scope Modification Other Than Full and Open Competition (FAR 6.302)

Thru: Contracting Officer To: Contract File

Contracting Activity:

U.S. Department of Veterans Affairs, Veterans Health Administration (VHA), Program Contracting Activity Central (PCAC), 6100 Oak Tree Boulevard, Suite 490, Independence, OH 44131.

Nature and/or Description of the Action Being Processed:

The contracting activity plans to award an out-of-scope bi-lateral modification to existing firm-fixed price contract number 36C77623C0089 for the subject contract in accordance with VAAR 819.7004, 819.7005 and 819.7008 as interpreted by GAO Decision RCG of North Carolina, B-419691 which states:

There is nothing in section 8127 of the Veterans Benefits Act that requires a contracting officer to make award to an SDVOSB on a competitive basis, rather than on a sole-source basis, where the same objective (i.e., award to an SDVOSB) will be met in either instance

The original contract award was competed among VHA Program Contracting Activity Central (PCAC) SDVOSBs and awarded in the original amount of $42,597,900.00 to Povolny Group.

Description of Supplies/Services Required to Meet the Agency s Needs:

The requirement is to extend the VA.gov network from the in-campus Captain James A. Lovell FHCC West Campus to the on-site Fisher House. This effort will:

Eliminate the current recurring $500 monthly fee associated with the GSU circuit network;

Improve network performance by providing scalable connectivity of up to 10 Gbps or greater; and

Extend the existing guest wireless network from the National Campus Hub (NCH) to the Fisher House facility.

No DOT permits are required for this work. Estimated initial costs for directional boring and fiber-optic penetration to the nearest existing fiber connection point are approximately

$203,160.74. This one-time investment is expected to eliminate recurring circuit costs and improve service reliability, resulting in a positive return on investment and net savings to the Government over the life of the contract.

Statutory Authority Permitting Other than Full and Open Competition:

41 USC § 3304(a)(5), 38 U.S. Code § 8127 and VAAR 806.302-570 provides the express authority to use other than competitive procedures for sole source awards to verified veteran-owned small businesses. COs may use the non-competitive (sole source) procedures authorized by VAAR 819.7008 or 819.7009 for actions not to exceed

$5,000,000. As prescribed in VAAR 806.302-570(a), full and open competition need not be provided for when awarding a sole source contract to a verified SDVOSB in accordance with 819.7008, as authorized. Further, a determination that only one SDVOSB can meet the requirement is not required.

Demonstration that the Contractor s Unique Qualifications or Nature of the Acquisition Requires the Use of the Authority Cited Above (applicability of authority):

The incumbent contractor holds the existing contract for EHRM infrastructure upgrades at the Captain James A. Lovell FHCC West Campus and possesses current, site-specific knowledge of the campus's existing fiber routes, telecommunications closets, and network architecture.

This familiarity was gained through performance of the underlying contract and cannot be readily replicated by a new contractor without incurring duplicative site assessment, design, and mobilization costs.

Because the Fisher House network extension is directly connected to, and dependent upon, the same backbone infrastructure the incumbent is already upgrading under the base contract, performing this work under a separate, competitively awarded contract would require a new contractor to remobilize to the site, independently verify as-built conditions already documented by the incumbent, and coordinate cutover activities with the incumbent's ongoing work. This would introduce schedule conflicts, increase the risk of service disruption to existing operational systems, and duplicate design and mobilization costs already sunk into the current effort.

The incumbent is a verified SDVOSB with demonstrated technical capability to perform this work as an extension of its current scope, without disrupting infrastructure upgrades already underway or in place.

Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable:

Because this action is proposed as a sole-source modification to an existing SDVOSB contract under the authority of VAAR 819.7008(b), a separate competitive solicitation for additional sources was not conducted for this specific increment of work. The Contracting Officer's determination to pursue a sole-source award rests on the following considerations:

The base contract was itself competed among SDVOSB concerns in accordance with the rule of two, satisfying the statutory objective of directing the requirement to the SDVOSB community;

Awarding the additional work as a separate, competed contract would require a new contractor to remobilize to an active construction site, duplicating site investigation and coordination work already performed by the incumbent; and

The added cost and schedule risk associated with re-competing a comparatively small increment of work, and remobilizing a new contractor would outweigh any benefit gained from further competition, consistent with the GAO's recognition in B-419691 that a sole-source SDVOSB award meets the same statutory objective as a competitive one.

In accordance with VAAR 819.7008(b), the decision to make a sole-source award to a verified SDVOSB is a business decision within the discretion of the Contracting Officer. The Contracting Officer has determined that the incumbent is a qualified, responsible SDVOSB capable of performing this requirement.

Determination by the Contracting Officer (CO) that the Anticipated Cost to the Government will be Fair and Reasonable:

The government will issue an RFP to the existing contractor for the change after developing the SOW and the IGE. The contractor will be required to submit cost or pricing data with their proposal.

The Government estimate was prepared by the Contracting Officer s Representative (COR). The anticipated price for the Government is $203,160.74

When received the proposal will be evaluated by the COR and the proposal and its data will be the subject of rigorous cost analysis. The government s prenegotiation position will be based on costs proposed by the contractor, technical analysis of the proposal itself and other historical data. The contractor will be required to certify its cost or pricing data prior to modification award.

Also, in accordance with FAR 15.406, FAR 15.403-5, and FAR 52.243-4; a price reasonableness determination will be made before modification award based on historical data, cost and/or price analysis, and negotiation.

Description of the Market Research Conducted and the Results, or a Statement of the Reasons Market Research Was Not Conducted:

Market research was conducted prior to award of the base contract. The final market research documentation was signed on 27 February 2023 and confirmed that an adequate number of SDVOSB concerns had been identified to satisfy the rule of two. Because this market research and the resulting competitive SDVOSB set-aside determination remain current and directly applicable to this requirement, additional market research specific to this modification is not necessary.

Any Other Facts Supporting the Use of Other than Full and Open Competition:

GAO Decision RCG of North Carolina, B-419691 states:

There is nothing in section 8127 of the Veterans Benefits Act that requires a contracting officer to make award to an SDVOSB on a competitive basis, rather than on a sole-source basis, where the same objective (i.e., award to an SDVOSB) will be met in either instance

The decision references VAAR 819.7004, 819.7005 and 819.7007 which provide the VA with independent authority to award contracts using other than full and open competition (including set-aside procurements and sole-source awards) in certain circumstances.

Specifically:

A contracting officer may award contracts to SDVOSB concerns on a sole source basis provided:

The anticipated award price of the contract (including options) will not exceed $5 million;

The requirement is synopsized in accordance with FAR part 5;

The SDVOSB concern has been determined to be a responsible contractor with respect to performance; and

Award can be made at a fair and reasonable price.

Assuming that the Contracting Officer can make a determination that the price ultimately negotiated with the contractor is fair and reasonable, there is no barrier to awarding this work to the incumbent on a sole source basis since the incumbent is a responsible SDVOSB, and the change will be synopsized in accordance with FAR part 5, and the requirement is less than

$5M.

Listing of Sources that Expressed, in Writing, an Interest in the Acquisition:

N/A

A Statement of the Actions, if any, the Agency May Take to Remove or Overcome any Barriers to Competition before Making subsequent acquisitions for the supplies or services required:

This J&A represents an effort by the VA to mitigate project timing and coordination issues which had previously resulted in issuing a statement of work that, while actionable, resulted in greater costs and increased schedule risk to the government. The base award was competitively awarded to a SDVOSB, and the work that is the subject of this modification will also be awarded to an SDVOSB.

Requirements Certification:

I certify that the requirement outlined in this justification is a Bona Fide Need of the Department of Veterans Affairs and 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.

Approvals in accordance with FAR 6.304

Contracting Officer's or Designee s Certification (required): I certify that the foregoing justification is accurate and complete to the best of my knowledge and belief.

NAME AND TITLE (Type or print)

Richard Webb -Contracting Officer

SIGNATURE

DATE SIGNED

RICHARD WEBB Digitally signed by RICHARD WEBB

Date: 2026.10.02 16:53:46 -04'00'

One Level Above the Contracting Officer: I certify the justification meets requirements for other than full and open competition.

NAME AND TITLE (Type or print)

Nicholas Sparks Supervisory Contract Specialist

SIGNATURE

DATE SIGNED

NICHOLAS SPARKS Digitally signed by NICHOLAS SPARKS

Date: 2026.10.05 08:52:41 -04'00' Awarded contract 36C77623C0089 to POVOLNY GROUP, INC, THE for 200681.00000000 on 2026-09-29.