Description
VHAPM Part 806.3 Other Than Full and Open Competition (OFOC) SOP Attachment 2: Request for Sole Source Justification Format >SAT OFOC SOP Revision 10 Original Date: 03/22/11 Revision 10 Date: 09/10/2020 Page of 4 DEPARTMENT OF VETERANS AFFAIRS Justification and Approval (J&A) For Other Than Full and Open Competition (>SAT) Acquisition Plan Action ID: 36C260-20-AP-1845 Contracting Activity: Department of Veterans Affairs, Veterans Health Administration, Network Contracting Office 20. Nature and/or Description of the Action Being Processed: This will be a new single source award for a Firm Fixed Price IDIQ Contract with an ordering period not to exceed 24 months. The proposed vendor is Cardinal Health in Spokane, Washington to provide oral or injectable radioactive isotopes for Nuclear Medicine. This procurement is in accordance with FAR 13.5 Simplified Procedures for Certain Commercial Items and specifically FAR 13.501 Special documentation Requirements, where acquisitions conducted under Simplified Acquisition Procedures are exempt from the requirements of FAR Part 6, but still require a justification using the format of FAR 6.303-2. Description of Supplies/Services Required to Meet the Agency s Needs: This procurement is for oral or injectable radioactive isotopes for Nuclear Medicine. The contractor must be able todeliver the isotopes to the Spokane VA Medical Center Nuclear Medicine Department within 30 minutes when orders are placed between the hours of 07:00 am and 16:30 p.m. and within 2 ½ hourswhen orders are placed between the hours of 16:31 p.m. and 06:59 am (for emergencies). Normally orders shall be placed during the workday and delivery shall be required by 0700 am the following workday. It is necessary for cancer treatment that a ready supply of nuclear isotopes be available to the Spokane VA Medical Center. The estimated value of the contract is $251,454.55 for the base year with an estimated contract total with the base and one ordering year of $515,186.85. Five Year Price Schedule Totals Ordering Base Year - 12/01/2020 through 11/30/2021 total $251,454.55 Ordering Year 1 12/01/2021 through 11/30/2022 total $263,732.30 Base plus 1 option year total contract obligations - $515,186.85 Statutory Authority Permitting Other than Full and Open Competition: FAR 13.5 Simplified Procedures for Certain Commercial Items: The authority for applying the Simplified Procedures for commercial Items of FAR 13.5 is 41 U.S.C. 1901 and is implemented by for restricting competitionon this procurement via FAR 13.106-1(b)(2). Demonstration that the Contractor s Unique Qualifications or Nature of the Acquisition Requires the Use of the Authority Cited Above (applicability of authority): Only One Responsible Soource- Cardinal Health is a large business and is the only vendor in the Spokane, Washington area that is capable of manufacturing and delivering radioactive isotopes in the area. There are only 4 reactors/cyclotrons in the world. None are based in the U.S.A. Cardinal Health in Spokane uses a generator with a small source from Canada s reactor. Cardinal Health then delivers to Spokane the Mci in prescribed dosage requested for scheduled examinations. The isotopes are created in a specialized nuclear reactor and are sealed in containers designed to hold radioactive material while they are being delivered. The isotopes cannot be shipped via common carrier because they have a short half-life and need to be injected or taken orally by the Veteran receiving treatment within four hours of being manufactured. To mitigate the risk of the treatment arriving late or not at all, using a local provider is preferred. The isotopes have a half-life of four hours and to provide the strongest dose the treatment needs to be provided within the four hour window. Although air transportation is used to deliver isotopes to some communities, it is not advantageous to use air transportation when a reactor is located nearby. The associated risk of weather or mechanical delay grounding the aircraft and the accompanying high costs of air charter make ground delivery a preferable option. If there are traffic issues that delay the arrival of the isotope to the Spokane VA Medical Center, a local vendor can manufacture a new isotope and deliver the isotope the same day. Due to the nature of radioactive material, and the licensing and permitting involved there is a limited market place available for this procurement. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable: RFI 36C26020Q0762 was posted to Contract Opportunities on 08/12/2020 and closed on 08/17/2020. To ensure vendors would understand the request, the information provided in the request was the notice and the statement of work. There were no responses to the RFI. Additional market research has shown that Cardinal Health operates the only reactor in the area capable of manufacturing the needed isotopes. This will be procured in pursuant to 10 USC2304 C and FAR 6.302-1(2) available from only one responsible source. In accordance with FARparts 5.201 Synopses of Proposed Contract Actions 5.203 Publicizing and Response Times a Notice of Intent to Sole Source will be posted on Contract Opportunities for 7 days (it was posted on 09/24/2020). Once the J&A is signed the document will be posted to Contract Opportunities within 14 days of the contract award for a minimum of 30 days in accordance of FAR 6.305. Determination by the CO that the Anticipated Cost to the Government will be Fair and Reasonable: Fair and Reasonable price will be determined through an Independent Government Cost Estimate and Historical Pricing that has been paid by the Spokane VA Medical Center and other VA Medical Centers for these classes of drugs. RFI 36C26020Q0762 was posted to FBO Opportunities from 12-17 August 2020 and resulted in zero competitive sources. An award was made to Cardinal Health for Radioactive Isotopes for the Spokane VA Medical Center on award 36C26020P0145 on 11-27-2019 in the amount of $252,000.00 for the base year. The base price for that award is $545.45 higher than the base price for the 2020 request. Option year one on award 36C26020P0145 had a cost of $263,732.30 and the option year one of the current request has a cost of $263,732.30. Because the option years are the same price and the current request base year is $545.45 lower than the previous award I feel this is a reasonable price. Therefore, the price of $515,186.85 for two years plus the price of an additional 6 months (at the same rate of the last exercised period) if the option at 52.217-8 were exercised, is determined fair and reasonable and in the best interest of the Government. Description of the Market Research Conducted and the Results, or a Statement of the Reasons Market Research Was Not Conducted: Market research was conducted using the Federal Supply Schedule and returned no results. A search of the National Acquisition Center for Nuclear Medicine and searching for Cardinal Health failed to produce a result. A search of the Vendor Information Page using NAICS Code 325412 and the keyword radiopharmaceuticals produced 1 SDVOSB and when adding the state of Washington zero results came up. The one vendor that is the SDVOSB is located in Georgia and does not have the capabilities to produce the isotopes locally. An RFI was posted for vendors in the Spokane, Washington area that could produce and deliver the needed isotopes to the Spokane VA Medical Center and there were no responses. The current contract for this item had a procurement value of $252,000.00 for a period of one year. This request is valued at $251,455.55 also for a period of one year. It is determined that the current price is fair and reasonable because it is less than the price on the last procurement. Any Other Facts Supporting the Use of Other than Full and Open Competition: Producing and delivering radioactive isotopes needed for nuclear medicine care is a unique and specialized activity that is costly and requires years of permitting and licensing from the Department of Energy and the Food and Drug Administration to be able to place a nuclear reactor in a given area and manufacture a radioactive pharmaceutical. Due to the startup costs and the length of time it takes for the permitting and licensing process this is a venture that typically only involves large businesses. The contractor must be licensed by the Nuclear Regulatory Commission and be regularly established in the business of providing radiopharmaceuticals. Listing of Sources that Expressed, in Writing, an Interest in the Acquisition: There were no vendors that expressed interest through the RFI posting. 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: Market research has revealed that Cardinal Health is the only vendor in the area that can produce and deliver the radioactive isotopes needed by the Spokane VA Medical Center. Cardinal Health has provided these pharmaceuticals previously and has a proven, satisfactory past performance delivering radioactive isotopes to the Spokane VA Medical Center. 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. Digitally signed by Darin K. Morgan Darin K. Morgan 648695 648695 Date: 2020.11.16 10:20:18 -08'00' Physician, SPO VA Med Ctr Date Approvals in accordance with the VHAPM Part 806.3 OFOC SOP: Contracting Officer or Designee s Certification (required): I certify that the foregoing justification is accurate and complete to the best of my knowledge andbelief. WEEKS 414521 KRYSTAL K. WEEKS Digitally signed by KRYSTAL K. 414521 Date: 2020.11.20 11:4_0:38 -08'00' Krystal Weeks Date Contracting Officer NCO 20 Contracting Office JOFOC TRACKER: 2020-11-24T07:54:00 One Level Above the Contracting Officer (Required over SAT but not exceeding $700K): I certify the justification meets requirements for other than full and open competition. Peggy L. Bowen 1568934 Digitally signed by Peggy L. Bowen 1568934 Date: 2020.12.01 09:55:48 -08'00' Peggy Bowen Date Division 1 Branch Chief Network Contracting Office 20 (NCO 20)