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
- SPM20005D0010
- 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
- SPM20005D0010
- Award Date
- 10/1/2010
- Description
- 1. The Defense Logistics Agency Troop Support, Medical Supplier Operations, is the contracting activity. 2. The action being approved is the ability to solicit and award a contract for DLA requirements on an other than full and open competition basis. 3. The acquisition is for various nerve agent antidotes (NAA) and morphine in auto-injectors and related services. The total duration of this bridge acquisition is two (2) months, covering the period from October 1 through November 30, 2010. The estimated dollar value is $4,900,491.11 for supplies and services that are ordered on a routine and ongoing basis. The contract will also include contingent lines for a Surge and an Additional Quantity. If these lines were also ordered, the total maximum dollar value of this bridge would be $47,091,069.11. The supplies and services for the 2-month period are summarized below: CLIN Description 0001 Base Maintenance Service $ 1,373,878 0002 Logistics Maintenance 399,142 0003 NAA Auto-injectors (2-mo quantity) 3,082,781 0005 Readiness Enhancement Program 44,690 $ 4,900,491 Contingent Lines 0004 Surge (3.2M Auto-injectors in 150 days) 37,745,270 0006 Additional Quantity 4,445,308 NAA Auto-injectors, (CLIN 0003) Estimated Quantities: 400,000 in various combinations NSN Nomen U/P 6505-01-174-9919 Antidote Kit, Mark I 13.66 6505-01-926-9083 Atropine Injection 4.71 6505-01-125-3248 Pralidoxime Injection 8.43 6505-01-274-0951 Diazepam Injection 8.11 6505-01-302-5530 Morphine Injection 5.00 6505-01-362-7427 Antidote Inj (ATNAA) 8.49 Above pricing is based on pricing from Meridian Medical Technologies' current contract (Bridge 3), which will expire on September 30, 2010. The following is a brief description of the services: i) Base Maintenance Service. This requirement includes services that are industrial, technical, managerial, and administrative, for the purpose of maintaining a "warm industrial base". On this line Meridian covers the salaries and benefits of managerial personnel (indirect labor) who are responsible for the program. This line allocates plant overhead costs computed as a percentage of Cost of Goods Sold and profit associated with the production of the estimated quantity of auto-injectors indicated. This line partially prepays unit prices for each auto-injector purchased. ii) Logistics Maintenance includes services for the storage and stock rotation of DLA-owned pre-positioned components. iii) The Readiness Enhancement Program involves maintaining a trained contingency of twenty-five (25) second and third shift workers to insure adequate production of the auto-injectors in the event of a Surge. iv) Due to the critical nature of the items involved, the Surge Option will still be included, which will enable DLA to maintain the supply requirements of a 2 Major Theatre War (2MTW). The Surge, when invoked, is to be delivered in 150 days. v) An Additional Quantity provision is separately priced and only invoked if the 2-month estimate of auto-injectors is exhausted. The price of the auto-injectors on this line will not contain any prepayments already contained under the line for Base Maintenance (CLIN 0001) and will fully reflect all the costs to manufacture the additional specified quantity estimates. Ordering the full additional quantity would constitute the maximum quantity amount under the bridge contract authorized herein. 4. 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. 5. The nerve agent antidotes are used to counteract the effects of nerve agent poisoning in a combat situation. The morphine is a potent pain killer. Because of their critical application, these items have been designated as mobilization essential by the Services. These supplies and related services are covered under an existing Industrial Base Maintenance Contract (IBMC) with Meridian Medical Technologies (Meridian). The current contract, SPM200-05-D-0010, is due to expire on September 30, 2010. Three bridge contracts have been issued since the expiration of the base contract. The first bridge ran from July 31, 2008 to March 31, 2009. That bridge was necessary due to changes in the requirements of the follow-on contract. The changes were necessary to accommodate Meridian's growing non-Government business and to find ways of meeting the Services' surge requirements. These changes added considerable time to the planning phase of the acquisition. The second bridge was started on April 1, 2009 and expired on December 31, 2009. This second bridge was necessary because the evaluation on Meridian's follow-on proposal was still ongoing when the first bridge was set to expire. An audit by the Defense Contract Audit Agency (DCAA) on Meridian's proposal was also ongoing. The DCAA informed our office that Meridian failed to obtain and perform an adequate analysis of their subcontractor's cost and pricing data. DLA Troop Support did not anticipate this action by the DCAA because, on previous contracts, DCAA had not questioned Meridian's subcontractor cost data, and the data that was provided was always considered adequate and thorough. A further finding of the DCAA was that Meridian's costs were not considered recent enough to make an assessment. The firm provided actual 2007 rates and DCAA asked for 2008 rates, which Meridian eventually provided in July 2009. The third bridge was started on January 1, 2010 and is set to expire on September 30, 2010. The third bridge was necessary because the audit on the follow-on proposal took an unanticipated seven (7) months and was not delivered until July 20, 2009. The audit found a majority of Meridian's proposal unsupported, which complicated developing negotiation objectives. In fact, DLA Troop Support had to request additional DCAA assist audits on subcontractors after receiving DCAA's audit of the proposal. Additionally, after opening negotiations with Meridian on November 17, 2009, DLA Troop Support found that the parties were far apart on resolving major issues, and could not find the follow-on proposal fair and reasonable. During this bridge, DLA Troop Support studied changes to the minimum sustaining rate (MSR), which is the rate believed to be necessary to maintain a warm industrial base. Changes to the MSR resulted in further changes to Meridian's proposal. The price of the third bridge was determined not fair and reasonable. Negotiations had been elevated, in accordance with regulations, to include the Chief of Pricing & Strategy, in an attempt to obtain fair and reasonable pricing. The Director and Deputy Director of Medical Supplier Operations were also involved in negotiations; however, Meridian would not yield on the 18% profit level, which far exceeded the Government objective. (The weighted guidelines suggested a profit range of 11-13% based on contractor risk.) A fourth bridge is necessary because we are unable to make an award on the follow-on contract before the September 30 expiration of the current bridge contract. Although we are nearing the end of discussions, such discussions have taken longer than anticipated because Meridian is unwilling to revise its proposal, which the Government does not consider fair and reasonable. Negotiations for the follow-on once again included the Chief of Pricing & Strategy in an attempt to obtain fair and reasonable pricing. While Meridian made some concessions on price, there is still a very large difference in price and the Contracting Officer is unable to support Meridian's prices. The 2-month period on the fourth bridge will be used to finalize discussions and obtain final review and approval of Meridian's proposal. The Director of Medical Supplier Operations was once again involved in discussions for this fourth bridge. In lieu of letting the current contract lapse for this short period, the Government has determined that it is essential to maintain the readiness and surge capability that the contract provides. Meridian is the only known domestic source for these specialty auto-injectors, which have been designated as mobilization essential by the Services. As the incumbent contractor for the auto-injectors, Meridian 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 and contingency situations. Meridian additionally provides unique technical, qualitative, and managerial services for the purpose of maintaining readiness and mobilization capability (i.e., Base Maintenance/Service). The services provided incident to the supply contract ensure that adequate capacity is available - to maintain a warm industrial base. This investment partially prepays unit prices for each auto-injector purchased. When orders are placed for new injectors, DLA pays for the direct labor, direct materials, G&A overhead, and profit associated with the ordered production. Meridian also provides special services such as storage and stock rotation of DLA-owned pre-positioned components. 6. The search for potential alternate sources for these items is a continuing function of DLA Troop Support's Medical Readiness Unit. Currently no other domestic or Canadian firm has a license to market these highly specialized items. One other firm, Sanofi-Aventis, has expressed interest in entering this market and may have the capability to produce these items; however, they are only in the research and development stage. Even if they proceed with the project, they would need to complete regulatory compliance with the FDA, a process that could take 2-4 years, and they would need to produce the auto-injectors in the U.S. or Canada. The auto-injectors are military-unique items for which a very limited commercial market exists. (Most non-DoD purchases of the auto-injectors are by other state and local governments.) Additionally, any alternate manufacturing sources must have approval of one or more New Drug Applications (NDA) from the FDA at time of award, under federal law. There are no known firms currently going through the NDA process. This bridge will not be synopsized in accordance with FAR 5.202(a)(10). This justification will be made available for public inspection, after award, in accordance with FAR 6.305. 7. The pricing for the fourth bridge is based on the current contract pricing of the third bridge, which was determined to be not fair and reasonable. Since we anticipate that the fourth bridge will also include an 18% profit rate, the Contracting Officer cannot make the certification that the anticipated price will be determined fair and reasonable. Due to the critical nature of these items, the bridge should proceed with the determination that the offered price be considered not fair and reasonable, and the award decision document will contain a determination to this effect. 8. Market research for additional sources is an ongoing task of DLA Troop Support's Medical Readiness (MR) Commodity Business Unit. Currently, no other domestic or Canadian firm has the capability to produce nerve agent antidotes and morphine auto-injectors. 9. 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 injector or component is manufactured in the United States or Canada by a company that is a producer under the industrial preparedness program; 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. 10. No other sources have expressed an interest in this bridge contract. 11. Due to the critical nature of this item, public law 10 U.S.C. 2534 and DFARS 225.7005 govern the procurement of this item and cannot be waived. DLA Troop Support will, however, entertain any future inquiries from possible sources that meet the above requirements at time of any subsequent award. 12. I hereby certify that this justification is accurate and complete to the best of my knowledge and belief. ______________ _______________________________ Date NEIL McAVINUE Contracting Officer ____________________ _________________________ Date WILLIAM J. KENNY Executive Director Troop Support Contracting and Acquisition Management
- Web Link
-
FBO.gov Permalink
(https://www.fbo.gov/spg/DLA/J3/DSCP-M/SPM20005D0010/listing.html)
- Record
- SN02370236-W 20110202/110131234558-9fa167c58bd9f2f58a1fa27d424e1cd1 (fbodaily.com)
- Source
-
FedBizOpps Link to This Notice
(may not be valid after Archive Date)
| FSG Index | This Issue's Index | Today's FBO Daily Index Page |