Q201--Remote Patient Monitoring - Home Telehealth (RPM-HT) FY 2022

Determination That Bundling Is Necessary and Justified To Multiple Award Indefinite Delivery Indefinite Quantity Contract Expected to exceed $100M to the successful offeror(s) for Office of Connected Care (OCC) FAR 7.107-3 This determination is issued pursuant to Federal Acquisition Regulation (FAR) FAR 7.107-3(a) measurably substantial benefits that meet the thresholds in FAR 7.107-3(d). Background Contracting Office and Agency: VA-OALC-NAC-CSAS Solicitation number: 36C79121R0002 Requirement: Remote Patient Monitoring - Home Telehealth (RPM-HT) Period of Performance: August 23, 2021 January 31, 2030 Estimated value: $, including options Financial Benefits of Bundling Market research conducted in accordance with FAR 10.001(a)(2)(iv) and (a)(3)(vii) demonstrated that bundling for this requirement will provide the Department of Veterans Affairs (VA), Office of Connected Care (OCC) with the following benefits: Through market research, the VA has found substantial bundling necessary and justified for the Remote Patient Monitoring Home Telehealth which consists of platforms, peripherals, and services. Currently peripherals are acquired by a separate contract that contractors must ensure interfacing with proposed platforms is maintained. The restriction of platforms to ensure interfacing capability of VA peripherals could limit competition or result in additional separate contracts for peripherals to meet new technology advances in peripherals and to meet VA requirements to provide telehealth to veterans. The incorporation of peripherals into the requirement allows contractors to propose the necessary devices instead of the VA setting up separate contracts to acquire the supplies required for this requirement. The cost savings is reflected in the products and in the acquisition cycle. The cost savings in the acquisition cycle would result in a potential savings of $. To solicit and award a service contract over $for acquisitions alone it would equate to $ a day in wages and benefits. Soliciting two separate contracts would result in $ in labor wages and does not take into account the administrative costs associated with administrating two contract awards. Cost savings is also reflected in the peripherals. During market research a review of the current telehealth contracts VA791-17-D-0001 and VA791-17-D0004, that incorporated some peripherals and BPA contract VA119-15-A0131 Iron Bow Technologies, that also provided the peripherals reflected a cost savings. The costs savings of bundling the peripherals is reflected in the table below, and reflects a potential total savings of $, which equates to 4.2% savings and slightly under the 5% threshold ($) prescribed at FAR 7.107-2(d)(1)(ii). Per FAR 7.107-2(d)(2), some benefits of bundling cannot be quantified in dollar amounts due to contractors potentially having patent rights to peripherals that only work with their platforms or the peripherals are sole sourced that is not readily acquired in an open market. Finding comparable costing data for sole source or patented items typically reflect a higher cost, unlike the ones in the table below that reflect peripherals that are easily competed in the marketplace. Costs associated with soliciting a separate contract for a sole source or patented peripheral from the only contractor that could provide it would result in higher costs for those peripherals. To solicit a separate contract for a patented item would not result in a successful award, as purchasing a patented item and re-selling the item could imply patent infringement and the patent company could refuse to sell the item, thus not allowing the secondary company the ability to successful propose. The Subject Matter Experts concluded that if certain peripherals were determined sole sourced and obtained through a third party, the third party would add G&A and possibly profit to the peripheral which would be reflected in the price given to the Government. To calculate the potential cost impacts of obtaining 1 peripheral through a third party, the SME looked at blood pressure cuffs and estimated that to obtain through a third party it would cost an approximate additional $ per item with 50,000 needed a year. These additional costs for patented or sole source can potentially add an additional 1-2% to the contract costs, thus reflecting more than the 5% threshold. The bundling of the peripherals will reflect not only cost savings in the peripherals and acquisition costs, but reflects management efficiencies in soliciting, awarding, administrating, and ensuring device compatibility. Peripheral Current Telehealth IDIQ s BPA s (9 separate BPA s) +/- % Qty 1st yr/each year after Price Difference* - 1st yr/each yr after Pedometer $ - $ $- $ +4.9% 7,000/3,500 +$/ +$ Spirometer $- $ $- $ -84% 400/100 -$/ -$ Weight Scale $- $ $- $ +111% 50,000/25,000 +$/ +$ Digital Blood Pressure $ $ -47% 118,000/59,000 -$/ -$ Electric Thermometer $- $ $- $ -51% 4,000/2,000 -$/ -$ Pulse Oximeter $- $ $- $ +47% 22,000/11,000 +$/ +$ Contract Line Savings 1 year -$ Contract Line Savings 7 years adjusted 5% inflation each year -$ Award 2 BPA s to support peripherals ($ per contract) -$ Net Saving 1 year Bundled -$ Contract Admin Cost Yearly (exercise options) ($ per contract per year 6 contracts) -$ Potential additional costs for Patent or Sole Source ($ w/5% inflation added) -$ Potential savings life of contract Bundled -$ *Price derived from average from Telehealth and/or BPA if more than one pricing schedule, does not take into account 5% inflation cost inflation calculated in line for 7 years of savings. Bundling will result in quality improvements that will save not only time but will enhance performance. Allowing contractors the ability to propose peripherals if their devices are not able to interface with VA provided peripherals shifts the risk from the Government to the contractor to ensure compatibility is maintained and compliant with the Performance Work Statement (PWS). Contractors would be responsible to ensure quality of peripherals remain up to date with any changes in technology and can seamlessly update as necessary. If the peripherals were on a separate contract, the home telehealth contractor would have to inform the Government on industry changes/updates to peripherals which would then have to be addressed with the peripheral contractor to incorporate. These delays could potentially impact Veterans as telehealth devices may not be capable to transmit the necessary information to their doctor due to outdated peripherals, which could potentially result in life threatening conditions. Bundling the necessary peripherals, the telehealth contractor would have in place the quality control measures that would monitor industry changes and take the necessary steps to ensure compliance of peripherals to guarantee Veterans needs are supported. Bundling will result in a reduction in the acquisition cycle time. By bundling the peripherals there is the reduction of soliciting two separate contracts to fulfill one need for the Veteran. This reduction of two separate contracts results in fewer labor hours as one contracting team would solicit and award the bundled contract versus two contracting teams soliciting and awarding two contracts that will be required to be dependent on each other in terms of compatibility, communication, and oversight. Each contract would not be able to function independently from the other. Bundling will also ensure that all devices and platforms will be ready for the Veteran upon award without potential delays from a second contract that may not be on the same milestone schedule. Having one bundled contract will allow contractors to ask questions on either platforms or peripherals that can be answered at once by the Government. Whereas having separate contracts would require coordination between each acquisition team to answer questions or resolve conflicts which would directly impact each contract and the award. A bundled contract would be more efficient and result in a shorter acquisition cycle. Pursuant to FAR 7.107-2(d)(1), the expected financial benefits are 5% or greater as stated above. Determination Based on the above facts, I determine in accordance with FAR 7.107-3(a), bundling for the above referenced requirements provides measurably substantial benefits and is necessary and justified. __________________________________ ___________________________ Connie J. Gordon Date Contracting Officer