SOLICITATION NOTICE
65 -- Nerve Agent Antidotes in Auto-injectors
- Notice Date
- 1/31/2011
- Notice Type
- Justification and Approval (J&A)
- NAICS
- 325414
— Biological Product (except Diagnostic) Manufacturing
- Contracting Office
- Defense Logistics Agency, DLA Acquisition Locations, DLA Troop Support - Medical, 700 Robbins Avenue, Philadelphia, Pennsylvania, 19111-5096, United States
- ZIP Code
- 19111-5096
- Solicitation Number
- SPM2DP08R0010
- Archive Date
- 2/14/2011
- Point of Contact
- Neil Mcavinue, Phone: 215-737-3123
- E-Mail Address
-
Neil.Mcavinue@dla.mil
(Neil.Mcavinue@dla.mil)
- Small Business Set-Aside
- N/A
- Award Number
- SPM2DP11D0002
- Award Date
- 12/1/2010
- Description
- 1. Summary/Introduction a) The Defense Logistics Agency, Defense Supply Center Philadelphia (DSCP), Medical Supplier Operations, is the contracting activity. b) The acquisition is for various Nerve Agent Antidotes and Morphine in autoinjectors and related services. Items included in this acquisition are as follows: Routine items/bought Add'l Quantity/Surge Items: on an ongoing basis: 0001 Base Maintenance/Service 0006 Surge 0002 Logistics Maintenance 0007 Additional Quantity 0003 Nerve Agents/Morphine 0008 990K Stockpile Management 0004 Autoinjector Trainers 0009 Off Shift Personnel 0005 Readiness Enhancement Program c) The total duration of this acquisition is five years, 1 annual base period and 4 annual option periods. (The contract base period may be less than one year to coincide with the contractor's fiscal year, which also runs concurrent with the calendar year.) The estimated dollar value of this acquisition is $182,696,809 for line items 0001 through 0005, that is those supplies and services that are ordered on a routine and ongoing basis and excludes the value of line items 0006 through 0009, additional quantity and three contingent surge lines. The maximum dollar value is $327,422,158, which, in addition to routine supplies and services, includes line item 0007, Additional Quantity, which will only be ordered if demand exceeds the estimated annual quantity. The Surge line values are over and above the estimated value and maximum value above. d) The statutory authority for Other than Full and Open Competition is 10 U.S.C. 2304(c)(3), as implemented by FAR 6.302-3, Industrial Mobilization. 2. Description of Agency's Need (10 U.S.C. 2304(f)(3)(a)): a) The proposed action is the sixth in a series of Industrial Base Maintenance Contracts (IBMCs) for Nerve Agent Antidotes and Morphine in autoinjectors and related services. The antidotes are used to counteract the effects of nerve agent poisoning and the morphine is a powerful painkiller. Because of their critical application, these items have been designated as mobilization essential by the Services. The current IBMC with Meridian Medical Technologies, Inc. (Meridian) expires on March 31, 2009. This contract was recently extended by placing a bridge contract. The bridge contract is for a period of 8 months and was required primarily because the planning phase of this acquisition took much longer than expected, due to a need to devise new scenarios for satisfying the surge requirements. The new contract must be in place before the expiration date in order to avoid a lapse in coverage. b) The type of contract contemplated is an Indefinite Quantity Contract. The quantity estimates for this new acquisition are based on the current contract's annual estimated demands to maintain a warm industrial base. The estimated dollar value is obtained by using the unit prices of the final option year of contract SPM200-05-D-0010 as a base and increasing that by 8 percent. We then escalated each succeeding year of the proposed contract by 5%. Historically, the approximate amount of increase between contract years has been between 4 and 5 percent. c) The specific supplies under this proposed acquisition are: Item Est. Ann. Qty Add'l Ann. Qty Surge Reqmt. (Line 0003) (Line 0007) (Line 0006) Antidote Kit, Nerve 99,700 ea 99,700 ea 100,000ea Agent, Mark I Atropine Injection 351,680 ea 351,680 ea 298,000ea Pralidoxime Injection 80,120 ea 80,120 ea 359,000ea Diazepam Injection 302,178 ea 302,178 ea 834,000ea Morphine Injection 28,442 ea 28,442 ea 130,000ea Antidote Treatment Nerve 1,438,180 ea 1,438,180 ea 1,596,000ea Agent Auto. (ATNAA) Total 2,400,000 ea 2,400,000 ea 3,417,000ea Note: Each Mark I counts as 2 autoinjectors, so that the 99,700 amount is counted twice (= 199,400) in the 2.4M total. i) Line 0001 Base Maintenance/Service. This requirement includes services that are industrial, qualitative, managerial, and administrative in nature, in order to maintain the technical expertise, facility, and equipment, to insure production and mobilization capacity. This line permits the company to retain the necessary production capacity to keep a warm industrial base since the Government cannot guarantee the quantities necessary (2.4 million autoinjectors) to keep the company in continuous production. The requirement covers the salaries and benefits for managerial personnel (indirect labor) who are responsible for this program. This investment partially prepays unit prices for each autoinjector purchased. The amount of this line will be determined by plant overhead costs computed as a percentage of Cost of Goods Sold and profit associated with the production of the annual quantity of autoinjectors indicated. This is the only line that includes plant overhead. Costs are not duplicated between the various lines. The dollar value of this line is estimated at $11,415,187 for the base year and $63,076,116 for the 5-year period. ii) Line 0002 Logistics Maintenance, which includes miscellaneous warehouse expenses and services for the storage and stock rotation of DLA-owned pre-positioned components. A large part of this amount pays the salaries of personnel who handle this inventory. Corporate G&A and profit are also applied. The dollar value of this line is estimated at $1,367,249 for the base year and $7,554,912 for the 5-year period. iii) Line 0003 Estimated Annual Quantity includes the estimated annual quantities, which will be ordered on a routine and ongoing basis. They are based on a total purchase quantity of 2.4M autoinjectors per year. According to Meridian, the 2.4M quantity total is the quantity required for maintaining a warm industrial base. In the past year, the demand level from the Military Services has decreased to about 1.6M. Since this level determines the amount paid on Line 0001, Base Maintenance, we intend to negotiate a lower demand level, more in line with actual demands. However, Meridian typically maintains that 2.4M is the amount necessary to maintain a warm base. Thus, we use the 2.4M as a "going in" quantity level that represents the highest annual level that the Government may be obligated to support. Because of Meridian's increase in commercial business, we will also conduct discussions on their need now or in the future for an IBMC or a reduced IBMC. The dollar value of this line is estimated at $19,841,850 for the base year and $109,638,744 for the 5-year period. iv) Line 0004 Autoinjector Trainers: These items contain no drugs and are designed to simulate the autoinjectors with nerve agent antidote for training purposes. They are the same size, work in the same manner, and can be reset after activation and reused. These items are being added to the IBMC for the first time. The prices for the base year are based on Meridian's 2008 price list. The dollar value of this line is estimated at $324,908 for the base year and $1,795,322 for the 5-year period. Item Est. Ann. Qty (Line 0004) Antidote Kit, Nerve 550 pg Agent, Mark I Atropine Injection 60 pg Pralidoxime Injection 130 pg Diazepam Injection 30 pg Morphine Injection 30 pg Antidote Treatment Nerve 150 pg Agent Auto. (ATNAA) Total 950 pg (Note: The unit of issue for each item is a package of 25 autoinjectors.) v) Line 0005 Readiness Enhancement Program, which involves maintaining a trained contingency of twenty-five (25) second and third shift workers to assure adequate production of the nerve agent antidote. Meridian secures a business arrangement with a subcontractor to set up, train and maintain this contingency worker pool. Three-shift production shall ensure that production capacity is adequate to meet the requirements of a 2-Major Theatre War (2MTW). The dollar value of this line is estimated at $114,324 for the base year and $631,715 for the 5-year period. vi) Line 0006 Due to the critical nature of the items involved, a Surge Option will be included, which will enable DLA to maintain the supply requirements of a 2 Major Theatre War (2MTW). The Surge quantity is required, when invoked, to be delivered in 142 days. The dollar value of this line is estimated at $23,618,234 for the base year and $130,505,651 for the 5-year period. vii) Line 0007 Additional Quantity provision, which is not an option, but a provision to address un-programmed demands in excess of the annual estimated quantity, will be included as a separate line on the solicitation because the price of the autoinjectors here will not contain any prepayments already contained under the line for Base Maintenance (Line Item 0001) and will fully reflect all the costs to manufacture the additional specified quantity estimates. Ordering the full additional quantity would constitute the maximum annual quantity amount. The dollar value of this line is estimated at $26,191,641 for the base year and $144,725,349 for the 5-year period. viii) Line 0008 990K Stockpile Management and Line 0009 Off-Shift Personnel. These requirements are new and serve the purpose of facilitating a Surge in the event inventory levels that the Services are holding get low. These lines are contingent, thus the estimated amounts were not included in "routine" lines. If exercised, Meridian will place in its inventory (at contractor expense) a quantity of 990,000 autoinjectors. This is the quantity of autoinjectors deemed necessary to implement a Surge without impairing Meridian's non-government production. Meridian will manage and rotate finished goods and components by filling new routine orders from this stock. Meridian will also staff an "off shift" crew of approximately 15 people. The purpose of the off shift personnel will be to reduce ramp-up time from 4-6 months to 2 months and increase run rate capability to 16 million in 30-60 days from 12 million annually. These lines were also devised to facilitate capacity in view of the fact that Meridian will no longer agree to halt non-DoD production to comply with DLA demand levels in excess of the estimated annual amount. The initial price estimates for these lines were provided by Meridian. The dollar value of these lines is estimated at $3,022,250 for the base year and $16,699,840 for the 5-year period. The cost of these lines will be funded with war-stopper funds. 3. Authority for Other than Full and Open Competition (10 U.S.C. 2304(f)(3)(B): The applicable statutory authority permitting other than full and open competition is 10 U.S.C. 2304(c)(3), FAR 6.302-3, Industrial Mobilization; engineering, developmental, or research capability; or expert services. Use of this contracting authority is necessary to maintain a facility, producer, manufacturer, or other supplier available for furnishing supplies to achieve industrial mobilization. Nerve agent antidotes and morphine in autoinjectors have been designated as mobilization essential by the Services and Meridian is the only known source for these supplies. As the incumbent contractor for the nerve agent antidote and morphine in autoinjectors, Meridian is the only known source that possesses a state-of-the-art, FDA-approved manufacturing facility; a workforce specially trained in the production of these highly specialized items of supply; production molds and equipment; a ready source of components from suppliers; a reliable sub tier vendor base from which to secure immediate additional components during a crisis; and a surge capability for national emergency and contingency situations. Meridian additionally provides unique technical, qualitative, and managerial services for the purpose of maintaining mobilization capability (i.e., Base Maintenance/Service, CLIN 0001). This covers the level of production needed to maintain a warm industrial base. Consistent with previous contracts, plant overhead with applicable profit was allocated to this CLIN. The amount of overhead used was the amount applied to an annual production quantity of 2.4 million autoinjectors, which is the amount considered necessary for maintaining a warm industrial base. This investment partially prepays unit prices for each autoinjector purchased. When orders are placed for new injectors under CLIN 0003, DLA only pays for the direct labor, direct materials, and profit associated with the ordered production. Meridian also provides special services such as storage and stock rotation of DLA-owned pre-positioned components. In accordance with 10 U.S.C. 2534 and defense industrial mobilization requirements, the Government is restricted from acquiring chemical weapons antidote contained in automatic injectors, or the components for such injectors, unless the chemical weapons antidote or component is manufactured in the United States or Canada by a company that is a producer under the industrial preparedness program at the time of contract award; has received all required regulatory approvals; and has the plant, equipment, and personnel to perform the contract in the United States or Canada at the time of contract award (ref: DFARS 225.7005). Meridian is the only known source that meets all criteria of this DFARS requirement. 4. Price/Cost Considerations (10 U.S.C. 2304(f)(3)(c)): As the Contracting Officer, I hereby determine that the anticipated cost to the Government will be fair and reasonable based on an analysis of certified cost or pricing data. Additionally, this data will be audited by the Defense Contract Audit Agency (DCAA) for verification and supportability. 5. Market Research/Efforts to Obtain Competition (10 U.S.C. 2304(f)(3)(D) & (E)): Market Research for additional sources is an ongoing task of DSCP's Medical SMSG Readiness Division (FSG). Currently, no other domestic or Canadian firm has the capability to produce nerve agent antidotes and morphine in autoinjectors. The autoinjectors are military-unique items for which a very limited commercial market exists. (Most non-DoD purchases of the autoinjectors are by other state and local governments and non-government organizations, such as hospital groups, that purchase on behalf of first-responders.) This acquisition will not be synopsized in accordance with FAR 5.202(a)(10). 6. Actions Being Taken to Overcome Barriers to Competition (10 U.S.C. 2304 (f)(3)(F): As discussed in paragraph 5 above, the search for potential alternate sources for these items is a continuing function of DSCP's Medical Readiness Unit. To date, no other domestic or Canadian firm has been found to possess the capability to produce these highly specialized items. Additionally, such firms must have obtained approval of their New Drug Applications (NDA) from the FDA at time of award, which is required by federal law. There are no known firms currently going through this process. I hereby certify that the information contained in this justification is accurate and complete to the best of my knowledge and belief. _______________________________ NEIL McAVINUE Date Contracting Officer Approval: Claudia S. Knott _______________________________ Director, Acquisition Management Signature and Date
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