Blood, Blood Products, and Reference Laboratory Testing 36C250-23-AP-4434 Effective Date: 02/01/2022 DEPARTMENT OF VETERANS AFFAIRS SOLE SOURCE JUSTIFICATION UNDER SIMPLIFIED PROCEDURES FOR CERTAIN COMMERCIAL ITEMS IN ACCORDANCE WITH FAR 13.5 Acquisition Plan Action ID: 36C250-23-AP-4434 Contracting Activity: Department of Veterans Affairs, Network Contracting Office 10, in support of VISN 10, LTC Charles S. Kettles VA Medical Center located at 2215 Fuller Road, Ann Arbor, MI 48105 2237: 506-24-1-031-0002 Nature and/or Description of the Action Being Processed: This procurement is for various blood, blood products and specialized reference laboratory testing services for the veteran patients at the LTC Charles S. Kettles VA Medical Center 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. A sole source procurement is being conducted for these products and services. The action will be awarded as a new open market, firm-fixed price, 5-year IDIQ contract. Description of Supplies/Services Required to Meet the Agency s Needs: The products and services provided will vary based upon orders specified by the clinicians. The contractor shall provide blood, blood products and specialized reference laboratory testing services on an as-needed and on-demand basis, 24 hours a day, 7 days a week, 365 days a year. The total estimated contract value for all five years is $4,274,547.57 in accordance with the Independent Government Estimate as developed from historical ordering quantities and market research pricing quote from The American National Red Cross. The contract period of performance is anticipated to be October 1, 2023 through September 30, 2028. Statutory Authority Permitting Restricted Competition: FAR 13.5 Simplified Procedures for Certain Commercial Items. The statutory authority for applying the Simplified Procedures for Commercial Items of FAR 13.5 is 41 U.S.C. 1901 and is implemented by FAR 13.106-1(b)(2) for restricting competition on this procurement. Competition is restricted on this procurement for the reason below: (X) Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements ( ) Unusual and Compelling Urgency ( ) Industrial Mobilization, Engineering, Developmental or Research Capability or Expert Services ( ) International Agreement ( ) Authorized or Required by Statute ( ) National Security ( ) Public Interest Demonstration that the Contractor s Unique Qualifications or Nature of the Acquisition Requires the Use of the Authority Cited Above (applicability of authority): Previous procurement history and current market research show there are two potential providers of blood, blood products, and reference laboratory testing services in the service area of the LTC Charles S. Kettles VA Medical Center The American National Red Cross and Versiti Michigan, Inc. During a Zoom meeting held on February 27, 2023 between the Ann Arbor VA COR and Regional Vice-President of Versiti, Versiti stated they are not able to take on any new customers due to demand and lack of supply, and they want to be able to supply their existing customers. In addition, Versiti s closest distribution center is Livonia, MI, which can add up to 90-100 minutes of travel time to the Ann Arbor VA. The current requirement is the contractor must be able to provide blood requirements within one hour of notification of need except for blood and blood products requiring specialized typing or testing. Versiti also will not allow for blood and blood products to be re-distributed between local hospitals for credit, which would ultimately increase costs to the VA at approximately $10K - $12K per year based on current re-distribution volumes and pricing. Therefore, the fact that Versiti is not currently accepting new customers and is unlikely to meet required delivery times disqualifies them from further consideration. However, even if Versiti were accepting new customers, their unwillingness to accept returns would keep them from being competitive with The American National Red Cross. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable: Market research was conducted, details of which are in the market research section of this document. This effort did not yield any additional sources that can meet the Government s requirements. There is no competition anticipated for this acquisition. Determination by the CO that the Anticipated Cost to the Government will be Fair and Reasonable: The Contracting Officer will ensure that the anticipated cost to the Government will be fair and reasonable. The Contracting Officer will make a fair and reasonable price determination based on a comparison of proposed pricing to historical contract prices for blood, blood products, and reference laboratory testing services. Description of the Market Research Conducted and the Results, or a Statement of the Reasons Market Research Was Not Conducted: Search of SBA VetCert and DSBS using NAICS 621991 and search criteria for blood banks in Michigan resulted in zero SDVOSB/VOSB/Small Business concerns. The current contract was awarded to The American National Red Cross on a sole source basis. The previous contract solicitation VA250-17-Q-1219 was issued as unrestricted, and only one quote was received from The American National Red Cross. There are no existing VA or other Government agency contracts from which to source the required blood products. The Ann Arbor VA COR stated she held a Zoom meeting with the Regional Vice-President of Versiti, on February 27, 2023, and due to the shortage of blood and blood products, Versiti is not able to take on any new customers as they want to supply their existing customers. Versiti stated that during normal circumstances they would be able to dispatch the blood and blood products within one hour of notification of need but due to the travel time to reach the VA from their closest distribution center (Livonia, MI), can add up to 90 100 minutes. Versiti also does not allow for blood and blood products to be transferred between the local hospitals for credit and re-distribution. Due to these reasons, The American National Red Cross is the only vendor capable of meeting the requirements. The Buy American statute applies to this acquisition. Blood and blood products are sourced from local donations, and prepared/processed by The American National Red Cross for distribution to local area hospitals, medical centers, etc. As described in Section 6 above, market research, in accordance with FAR Part 10, was conducted by synopsis of the proposed acquisition, advising industry of the pending acquisition, and soliciting inquiries from interested parties. Any Other Facts Supporting the Use of Other than Full and Open Competition: There are no other supporting facts. Listing of Sources that Expressed, in Writing, an Interest in the Acquisition: The American National Red Cross 431 18th St Washington, DC 20006 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: The proposed contract action is for a period of five years. After the five years, the market will be surveyed to determine if there are other sources that could lead to a competitive procurement.