J&A Notice - Bridge Extension

Justification and Approval (J&A) for Federal Acquisition Regulation (FAR) Subpart 6.3 Other Than Full and Open Competition Title: CAD/CAM Device Maintenance & Services - Dental (N6264518C4006) 1. Identification of the agency and contracting activity: Defense Health Agency - Tidewater Contracting Division 2. Nature and/or Description of Action being Approved: Modification to an existing contract / Individual 3. Description of Supplies/ Services: Non-personal services for preventive maintenance and inspections, corrective maintenance tasks, and unlimited emergency responses to maintain designated, Government-owned dental computer-aided design and manufacturing (CAD/CAM) equipment, manufactured by Sirona Dental Systems LLC, located at various Naval Medical Treatment Facilities (MTFs) and Dental Clinics within the Continental United States (CONUS) and Outside the Continental United States (OCONUS). The contractor shall provide unlimited telephone support, preventive maintenance and inspections, corrective maintenance tasks, and unlimited emergency responses by the Contractor's Field Service Engineers for all medical devices listed in the performance work statement. All maintenance provisions shall apply to hardware, firmware, and software. The Contractor shall provide all parts, labor, materials, travel, personnel, supervision, and freight shipping for the scheduled, preventive, and corrective maintenance of all equipment identified. When product recalls or updates are necessary to maintain the contractual equipment inventory within the OEM's specifications, the Contractor shall obtain and install same. TOTAL CONTRACT VALUE BASE POP: From 12/15/2023 to 12/14/2024 POP: From 12/15/2023 to 6/14/2024 Estimated Value $716,827.56 Estimated Value $358,413.78 Type of Contract (Primary): OPTIONS FAR 16.202 Firm-Fixed Price Number of options: 1 POP (All options): From 6/15/2024 to 12/14/2024 Estimated Value (all options): $358,413.78 Funding Type: Operations & Maintenance (O&M) 4. Statutory and Regulatory Authority Permitting Other Than Full and Open Competition (see FAR 6.302), or the Specification of the Statutory and Regulatory Provision Providing Exception to 8(a) Program Competitive Requirements (see FAR 19.805-1): 10 U.S.C. 2304(c)(1) FAR 6.302-1 - Only One Responsible Source and No Other Supplies or Services will Satisfy Agency Requirements. 5. Rationale Justifying Use of the Statutory Authority Cited: The need for a sole source bridge can be confirmed using the equipment list. Sirona Dental is the manufacturer of all of the equipment that requires maintenance and service. Information therein, coupled with the manufacturer's proprietary intellectual property and technical support personnel with access to proprietary rights, heightens the need for a sole source requirement. The much-needed government service requirement is heavily hinged on software updates (proprietary property of the manufacturer), an essential factor that makes the deliverables as outlined in the PWS possible. All proprietary intellectual property, technical support, and proprietary software rights remain solely with Sirona Dental, Inc. As the Original Equipment Manufacturer (OEM), Sirona Dental, Inc. retains all rights to proprietary software and hardware needed to maintain OEM Warranty and extended service maintenance. Sirona has not allowed any outside technicians to be trained on Sirona equipment and has not authorized any outside technicians to provide maintenance and/or services on behalf of Sirona. This requirement is a bridge in order to mitigate a lapse in services to support the mission of over two hundred (+200) dental clinics located CONUS and OCONUS. The current contract, N6264518C4006, will expire 14 December 2023. The recompete action for this requirement is being worked as a sole source, has received legal sufficiency, and the DD2579 and J&A have been approved (JA-23-0330). The Request for Quote was sent to Sirona Dental on 8 November 2023. Sirona Dental responded, the same day, saying they were not prepared to provide a quote because discussions were required to change/update aspects of the current PWS. Sirona anticipates these discussions will take 4 - 6 months to complete. Sirona is working on a list of discussion points and an initial meeting is expected to take place before the end of December 2023. Given the short time before the incumbent contract expires (less than 4 weeks) and the expected possible 4 months or more for discussions with Sirona; it is in the government's best interest to award a bridge extension on a sole source basis to the incumbent, Sirona Dental, to maintain continuity of care for maintenance and service of critical dental equipment until such time as the recompete PWS is resolved and a new contract can be awarded. If this bridge action is not allowed, the MTFs/dental clinics will lose critical services for at least 4 months (the estimated discussion schedule suggested by the incumbent vendor). The affected dental clinics may lose functionality of dental care equipment resulting in a lapse of dental healthcare services to the affected patient population. 6. Efforts to Obtain Competition: The two companies listed as potential sources for the recompete (Henry Shien Dental Distributor and Patterson Dental) are Sirona designated distributors authorized only to sell the equipment. The service portion as it relates to the PWS requirements is reserved exclusively to Sirona. Historically, no other business has been able to meet the MTF's dental clinic requirement and current Market Research does not indicate any new businesses in the area capable of providing these services. A Notice of Intent to Sole Source to Sirona (for the current recompete effort) was posted to SAM.gov on 24 October 2023. No challenge letters were received in response to this posting providing further confirmation that no other source is available to provide the required services. Any attempt to obtain competition at this juncture would require replacing more than 350 pieces of dental equipment at over 200 dental clinics across the world in order to obtain services and maintenace that does not require OEM technicians to perform critical services. The cost of a lapse in services, due to the time it would take to acquire new equipment and maintenance services, and the cost of replacing hundreds of pieces of equipment would not be realized by the increased competition. All future requirements will be handled on a case-by-case basis with an emphasis on competition-based solicitations. 7. Determination that Anticipated Cost to the Government will be Fair and Reasonable: The bridge action will be funded at the same rate as the current option year. The current rates were considered fair and reasonable at the time of the initial award. The DHA contracting officer will use an IGCE and comparison to historical rates to make a determination that the anticipated cost to the government will be fair and reasonable for this short-term bridge action. 8. Market Research Conducted? Yes When was it conducted: July 2023 to November 2023 Description: In-depth Market Research was conducted for this enterprise-wide requirement covering over 200 dental clinics located both CONUS & OCONUS in anticipation of the recompete. The research included meetings with other Government offices, review of past contracts, searching business search engines, and reviewing generally available product literature. Included in the Market Research (conducted for the recompete) is a sole-source letter received from the vendor Sirona Dental confirming the requirement for OEM maintenance and software upgrades services. A Notice of Intent to Sole Source was posted to SAM.gov on 24 October with no responses further confirming no other source is available. 9. Other Facts: Services provided by the incumbent are already established at the MTFs and performance under the current contract is considered satisfactory. 10. Interested Sources: None 11. Actions to overcome barriers: All future requirements will be handled on a case-by-case basis with an emphasis on competition-based solicitations.