SOLICITATION NOTICE
65 -- Med/Surg Fleet Prime Vendor
- Notice Date
- 2/12/2010
- Notice Type
- Justification and Approval (J&A)
- NAICS
- 339112
— Surgical and Medical Instrument Manufacturing
- Contracting Office
- Defense Logistics Agency, DLA Acquisition Locations, Defense Supply Center Philadelphia - Medical, 700 Robbins Avenue, Philadelphia, Pennsylvania, 19111-5096
- ZIP Code
- 19111-5096
- Point of Contact
- Thomas Sidor, Phone: 2157372490
- E-Mail Address
-
Thomas.Sidor@dla.mil
(Thomas.Sidor@dla.mil)
- Small Business Set-Aside
- N/A
- Award Number
- SPM2DS-09D7150
- Award Date
- 1/29/2010
- Description
- JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION MEDICAL/SURGICAL FLEET PRIME VENDOR 1. The Defense Logistics Agency (DLA) Defense Supply Center Philadelphia (DSCP), Medical Supplier Operations Directorate is the contracting activity. 2. The action submitted for approval is for the acquisition of supplies on Other Than Full and Open Competition basis. This justification is for a second bridge contract for a period of 180 days to ensure continuation of the Medical/Surgical Fleet Prime Vendor contract currently held by American Medical Depot (AMD) under contract number SPM200-09D7150. The first bridge contract expires on January 30, 2010. The proposed 180-day bridge contract will provide accessibility to all items currently on Medical/Surgical Distribution and Pricing Agreements (DAPAs) through July 29, 2010. 3. The supplies required to meet the Navy Fleet's needs are a wide array of medical/surgical items, including surgical dressing materials, medical and surgical instruments, utensils, and supplies. The estimated dollar value of the 180-day bridge is $1,604,642.40 based upon our current annual sales of approximately $3,253,860.00. 4. The applicable statutory authority permitting other than full and open competition is 10 U.S.C. 2304(c)(1) as implemented by FAR 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements. 5. The use of this authority is necessary because the second-generation contract for various medical and surgical items in support of Naval Fleet operations has been delayed in paret due (reducated) (redacted) (redacted) At the time of the first generation Medical/Surgical Fleet Prime Vendor contract ten years ago the 3030 version of American National Standards (ANSI) X12 transaction sets was modified to be capable of providing this military-unique data. In recent years, however, a newer 4010 version was adopted by the commercial industry which does not have this capability. Furthermore, the practice of accepting and processing these military-unique identifiers is not performed by the medical/surgical vendor base, as both military and commercial customers comply with and operate using the current commercial standards. Changing the transmission and processing capability is unlikely since the Navy represents a small protion of the overall business for suppliers of medical and surgical materials. Thus, the medical/surgical prime vendor industry lacks sufficient financial incentive to even contemplate reverting back to this older technology. Since AMD is already using the 3030 version of Electronic Data Intrchange (EDI), it is the only medical/surgical Prime Vendor that is currently geared to meet the needs of the Navy. The first generation Med/Surg Fleet Prime Vendor contract was awarded to AMD as a sole-source 8(a) set-aside. AMD graduated from the 8(a) program while the first generation contract was still in effect, and so the bridge contracs were not 8(a) set-asides. (redacted) For continuity pruposes, AMD would be the recipient of this proposed second bridge contract. The first bridge contract, issued in March 2009 for 306 days, was thought to be of sufficient duration to provide enough time to award the second generation contract. The second generation solicitation was issued in August 2009, and closed in September 2009; (redacted) (redacted) (redacted) (redacted) AMD's and DSCP's considerable involvement in processing a large volume of emergency requisitions in response to the recent Haiti earthquake on January 12, 2010 (redacted) (redacted) (redacted) In order to assure uninterrupted medical/surgical Fleet Prime Vendor support after the January 30, 2010 expiration date of the current bridge contract, the effective dates of the new bridge contract will be from January 31, 2010 through July 29, 2010, a period of 180 days. (redacted) (redacted) (redacted) however, the second bridge contract will cease upon actual implementation of the second generation award. The amount of time required to process the various phases of the second generation contract and the multiple levels of approval required for a contract of this size and complexity preclude any possibility of a timely award and the necessary smooth transition period from the current bridge contract to the next generation contract. There are approximately (redacted) current active items contained on the Fleet's (redacted) for which it relies (redacted) on the DLA Prime Vendor contract. As (redacted) are currentlydepot-stocked, failure to keep the current Prime Vendor contract in place would result in massive delivery delays for (redacted) currently being supplied by AMD on a routine basis. Additionally, a lapse in coverage would result in having to dedicate more (redacted) to handle a significant increase in (redacted) requisitions to keep the Fleet supplied. Without a second bridge contract, a severe gap in coverage would result. AMD is the only medical/surgical Prime Vendor that can perform the bridge contract. The current Medical/Surgical Fleet Prime Vendor contract SOW reflects several military-unique aspects of processing transactions that are not found among standard industry practices of large suppliers. AMD is the only known Prime Vendor with business practices which accepts the previous generation EDI-3030 version of 850s (purchase orders) which allows for receipt and processing of extra key data elements (redated). In concert with these requirements, AMD prints NSNs and part numbers, along with (redacted) on each packing slip, and provides important manual backorder status for accurate fill rate calculations. Standard business operating procedures among Prime Vendor suppiers do not lend themselves to accommodating these types of military-unique requirements, particularly for the relatively short period of time and limited financial return that would result from (redacted) in monthly sales for the proposed second bridge contract. Extensive programming changes in their EDI structure and associated internal hardware (redacted) would not be economically feasible. Accordingly, AMD is the only known sources to fulfill these requirements. 6. The propsed bridge contract will be synopsized in FedBizOpps in accordance with FAR 5.2. In addition, this justification will be made available for public inspection, after award, in accordance with FAR 6.305. 7. As the Contracting Officer, I hereby determine that the anticipated cost to the Government will be fair and reasonable because the items that comprise the current contract have already been determined to be fair and reasonable based upon a pre-priced Distribution and Pricing Agreements (DAPA) catalog. Prices for items within the DAPA catalog are individually determined to be fair and raasonable before time of award based upon comparison with Federal Supply Schedule prices, discounts from commercial catalog prices, and comparison with historical pricing to other customers under an uncommitted volume basis. Additions to the DAPA catalog and price changes made after award are also determined to be fair and reasonable in advance using the same methodologies. AMD has agreed to a distribution fee of 9.9%, which is.6% less than the current 10.5% fee. The current distribution fee, which remained constant throughout the first generation ten-year contract and during the first bridge contract, was determined to be fair an dreasonable at the time of award, based upon a comparison of historical Prime Vendor distribution fees to the unique aspects of the Statement of Work and associated risks that an 8(a) firm assumed on the first-generation Government Prime Vendor contract. 8. Market research was not performed because, as described in more detail in paragraph 5 above, AMD is the only medical/surgical Prime Vendor that can perform the bridge contract. AMD is the only known vendor which accepts the previous generation EDI 3030 version of 850 (purchase orders) allowing for receipt and processing of extra key, Government-unique, data elements. 9. There are no additiional facts supporting Other Than Full and Open Competition. 10. AMD is the only source expected to express an interest in the proposed bridge contract. 11. The second generation acquisition, which incorporates up-to-date EDI technology and does away with the above-described military-unique aspects, has been solicited as a sole-source 8(a) set-aside (redacted) Should the decision be made to request that the Small Business Administration (SBA) grant a release from the 8(a) program, all future acquisitions for these requirements will be competed on a full and open competition basis. (redacted) 12. As the Contracting Officer, I hereby certify that this justification is accurate and complete to the best of my knowledge and belief.
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