65--Denver VAMC contract for Omega Medical Imaging LLC ERCP system - Urgent and Compelling Justification to be posted within 30 days from award.

Page 1 of 6 Department of Veterans Affairs Office of Acquisition and Logistics National Acquisition Center, National Contract Service High Tech Medical Equipment Contract Administration Division Hines, Illinois 60141 Justification for Other than Full and Open Competition 6.302-2 Unusual and compelling urgency This document is written in accordance with the content requirements found at FAR Part 6.303-2 Content Identification of Agency and Contracting Activity and specific identification of the document: Justification for other than full and open competition is provided by The Department of Veterans Affairs, Office of Acquisition and Logistics, National Acquisition Center. This document sets forth the justification and approval for other than full and open competition for the acquisition described herein, under the authority of FAR 6.302-2 Unusual and compelling urgency . Nature and/or description of the action being provided: The Denver Replacement Facility (Denver VAMC) requests a purchase of Omega ERCP system (Endoscopic retrograde cholangiopancreatography) for GI (gastrointestinal) clinic. This system replaces the Philip ERCP system that was cancelled through order VA79H-13-J-1631, placed due to the ECHCS Project Eagle Consolidation, Solicitation Number: VA797H13Q0043. An explanation for the cancellation is provided in paragraph 5 below. Description of the supplies or services required to meet the agency s needs (including the estimated value) This product offers x-ray imaging for GI/ERCP and image guided endoscopic and GI procedures. The total estimated value of this system is $645,059.90. Identification of the statutory authority permitting other than full and open competition: The statutory authority permitting other than full and open competition is 10 U.S.C. 2304(c)(2) or 41 U.S.C. 3304(a)(2), as implemented by FAR 6.302-2, which authorizes the agency s need for the supplies or services is of such an unusual and compelling urgency that the Government would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits bids or proposals, full and open competition need not be provided for. Per FAR 6.302-2(b), this authority applies in those situations where (1) An unusual and compelling urgency precludes full and open competition; and (2) Delay in award of a contract would result in serious injury, financial or other, to the Government. The continued delay in awarding this acquisition is resulting in financial injury to the Government, as described below. Market research was updated to confirm that Omega Medical Imaging, Inc. was the only technically acceptable offeror, see notation below. Demonstration that the proposed contractor s unique qualifications or the nature of the acquisition requires use of the authority cited: During the ECHCS Project Eagle Consolidation, Solicitation Number: VA797H13Q0043, four companies submitted quotes for a product that would meet the requirements of the solicitation. The first two companies, Philips and Siemens, were found to be acceptable. Their offered products met all the requirements of the solicitation. Two other companies submitted offers, GE and Omega Medical Imaging, Inc. GE and Omega Medical Imaging, Inc. were deemed unacceptable, due to GE s inability to meet the solicitation requirements and Omega s lack of a current Government contract under any previously posted solicitation, to include the Joint DLA/VA Imaging program under solicitations M6-Q8-06 or SPE2D1-15-R-0001. Omega Medical Imaging, Inc. is a small business concern. The Siemens product was technically acceptable during initial product evaluations, but due to the additional product requirements and space requirements for their machine. Siemens later indicated that they would need to have additional space provided in order to store their machine which would create unwanted construction in the room and additional noise, which would have been a distraction to proper patient care. As a result, they were deemed to be unacceptable and incapable of meeting the requirements of the solicitation. Since Philips was the only remaining technically acceptable product, whose pricing was deemed fair and reasonable and best value, award was recommended to Philips for their product called the Multi-diagnostic Eleva 6.2 . Deliver Order number VA797H-13-J-1631 was placed on 3/24/2016, see attached. Denver VAMC continued forward with placing a delivery order with the NAC for the Philips product. On March 4, 2016, The Acting Deputy Under Secretary for Health for Operations and Management provided a directive instructing VISN Directors not to acquire new medical equipment that runs on unsupported Windows operating systems such as Windows XP. The operating system for the Philips product was Windows XP and subsequently could not meet the VA requirement to upgrade to a supported Windows Operating System (OS). On July 14, 2016, the Denver VAMC requested the NAC to cancel the awarded order with Philips. This cancellation request included Philips updated response to the Denver VAMC that confirmed their ERCP system is not upgradeable to a supported Windows OS. Philips also informed the VAMC of its decision to discontinue the development of the systems hardware and software, to include updating to supportable Windows OS platforms. During the period from April 2016 to August 2016, Denver VAMC contacted Siemens to request a quote for a product that would fit in the desired location, (see attached email correspondence and architectural drawings provided by Siemens). The Siemens product did meet the technical requirements of the solicitation but required additional equipment and modifications to the architectural designs of the room under construction. Due to these issues, Siemens was once again deemed unacceptable. According to the preliminary drawing from Siemens, the Siemens ERCP took up most of the optimal north and south wall spaces in the room. In order to house the Siemens system, VAMC will not be able to place other critical equipment such anesthesia machine and stent supplies cabinets for ERCP operation. The Siemens system also comes with a cooling cabinet that product 55dB noise level that could distract patient relaxation status during the ERCP case. Upon conversations with a Siemens representative, Siemens recommends locating the cooling cabinet to a house keeping closet (HAC) next to ERCP room. However, that is not a feasible solution because electronic equipment cannot be housed in the HAC per VA design criteria. Omega did not have a contract with the Government at that time, but did provide a quote to Denver VAMC, which met the requirements of the solicitation, with no construction or architectural changes to the structure. The Omega system is deemed the best fit system as minimal construct change is necessary and the offered product met the technical specifications of the solicitation. As time progressed with this delay, the contracting officer for the construction contract at the Denver VAMC decided to issue a Stop Work Order. The Stop Work Order was issued on November 4, 2016 against Contract No. W9128F-16-C-0003, see attached. The reasoning behind this Order was an effort to stop the financial harm to the Government which was caused by the delay in acquiring the ERCP system. A modification to terminate DO number VA797H-13-J-1631 was sent to Philips on January 12, 2017. This cancellation is still in progress as of February 2017. On December 15, 2016, Philips was awarded a new contract, VA797H-17-D-0022, resulting from the Joint Defense Logistics Agency (DLA) Troop Support and the Department of Veterans Affairs National Acquisition Center (VA NAC) Radiology and Imaging Systems Program Solicitation number SPE2D1-15-R-0001. Their current awarded pricelist and product offering showed the Eleva system to have Windows XP OS. Furthermore, on February 7, 2017, the CS contacted Patricia McKay Director, Federal Government Contracts, who is the current point of contact for the new Philips contract, to confirm the OS for Eleva and if any OS upgrades were planned. Ms. McKay responded and confirmed that Philips has no intention on upgrading the OS of the Eleva system to a Windows supported OS, see attached email. Thus, Philips will not be capable of meeting the Windows OS requirement. On February 7, 2017, Omega confirmed the OS platform for their product is Windows 7, which is a supported OS by Microsoft, see attached email correspondence. The Omega ERCP system requires less foot print in the desired room, when compared to the Siemens product, which allows VAMC to install other equipment and supply cabinets that are essential to the ERCP procedure. The Denver VAMC has estimated that due to this postponement, the Government is losing approximately $624,375.00 per month in direct labor wages assigned to this contract. An estimated $2 million dollars in overhead costs for the entire facility once the campus is turned over and contractor has to continue work in this room. The delay in acquiring the ERCP system is unacceptable if a contract is not promptly awarded, as the agency has identified a product that will meet their requirement and has shown a substantial financial harm to the Government. Based on the monthly overhead estimate amount for the ERCP room, since the November 2016 Stop Work Order was issued, the Government potentially has lost an estimated $2,624,375.00 in four months. Description of the efforts made to ensure that offers are solicited from as many potential sources as is practicable, including whether a notice was or will be publicized as required by Subpart 5.2 and, if not, which exception under 5.202 applies: The exception for the above contact and posting requirements will be followed in accordance with FAR 5.202(a)(2). However, background information of this acquisition is as follows: On June 12, 2013, ECHCS Project Eagle Consolidation, Solicitation Number: VA797H13Q0043 was posted to www.fbo.gov (see https://www.fbo.gov/spg/VA/VANAC/VANAC/VA797H13Q0043/listing.html ), where this requirement was originally synopsized. For the reasons stated above Omega Medical Imaging is the only potential source for an ERCP system that can be installed in the desired location with no architectural or constructional changes required by the VAMC. Justification & Approval will be synopsized within with the solicitation, per applicable FAR requirements. A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable: A determination of fair and reasonable price has been made based on the analysis of a current quote dated 1-9-2017 and compared to historical commercial market prices and available sources. A description of the market research conducted, the results or a statement of the reason market research was not conducted. Any other facts supporting the use of other than full and open competition, such as: (iii) When 6.302-2 is cited, data, estimated cost, or other rationale as to the extent and nature of the harm to the Government. The Denver Replacement Facility construction firm has received a construction Stop Work Order in the ERCP room pending the new ERCP equipment replacement. Since it has been determined that the Omega Medical Imaging System is the only system that will meet the Denver VAMC s requirement, it is determined that we award the new contract as soon as possible to avoid further delay in construction of the Denver Replacement Facility. Continued delay is causing financial harm to the Government. The Denver VAMC has estimated that due to this postponement, the Government is losing approximately $624,375.00 per month in direct labor wages assigned to this contract. An estimated $2 million dollars in overhead costs for the entire facility once the campus is turned over and contractor has to continue work in this room. The delay in acquiring the ERCP system is unacceptable if a contract is not promptly awarded, as the agency has identified a product that will meet their requirement and has shown a substantial financial harm to the Government. Based on the monthly overhead estimate amount for the ERCP room, since the November 2016 Stop Work Order was issued, the Government potentially has lost an estimated $2,624,375.00 in four months. List of sources, if any, that expressed, in writing, an interest in the acquisition: In accordance with FAR 6.305(b), this justification shall be posted within 30 days after contract award. However, previous market research showed no other company that can meet the technical requirements of this acquisition. Statement of actions the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required: If applicable, market research will be completed for future offers. Contracting officer certification that the justification is accurate and complete to the best of the contracting officer s knowledge and belief. See below. APPROVALS AND CERTIFICATIONS CONTRACTING OFFICER CERTIFICATION I certify that this justification is accurate and complete to the best of my knowledge and belief. FAR Part 6.304(a)(1) - Approval of the justification. For a proposed contract not exceeding $700,000, the contracting officer s certification required by 6.303-2(b)(12) will serve as approval unless a higher approving level is established in agency procedures. _______________________________________ 3-9-17 Lani Nishimura, Contracting Officer Date High Tech Medical Equipment Contracts Division VA National Acquisition Center, Hines, Illinois 3-9-17 Frank Zacchigna, Chief Date High Tech Medical Equipment Contracts Division VA National Acquisition Center, Hines, Illinois