36C260-23-AP-4221-FY25-770 Consolidation DnF NCO20 Construction MATOC Revised - HCA Signed ab 02042025.pdf

ATTACHMENT VAAM M807- C

Consolidation Determination and Findings Template

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Veterans Integrated Service Network (VISN) 20 General Construction (236220) Multiple Award Task Order Contract (MATOC)

FINDINGS

I. INTRODUCTION.

Network Contracting Office (NCO) 20 plans to solicit offers for a general construction MATOC covering eight (8) facilities across Washington, Oregon, Idaho, and Alaska.

NCO 20 has conducted market research that demonstrates consolidation of this procurement to be both necessary and justified.

II. BACKGROUND.

A. Requirement.

This MATOC will replace the MATOC pool that was put in place February 2017 and expired August 2023, after exercising FAR 52.217-8 Option to Extend Services. The MATOC was solicited as an SDVOSB set-aside. The 26 Service-Disabled Veteran- Owned Small Businesses (SDVOSBs) awardees also have socio-economic status as outlined in the table below. The MATOC was awarded with an aggregate value of $75M per contract, which had a combined total ceiling capacity of $1.95B and was awarded for a base period of one-year and two separate two-year options.

Previous MATOC Socio-Economic Status

WOSB 8(a) HUB Zone Disadvantaged Minority Owned 2 0 3 12 3

This acquisition will result in award of up to 12 Indefinite Delivery Indefinite Quantity (IDIQ) contracts with firm fixed price task orders issued against the contract. The contract instrument offers competitive pricing and flexible terms that allow NCO 20 contracting personnel to award construction services under North American Industry Classification System (NAICS) code 236220 quickly and efficiently while saving administrative burden. The size standard for NAICS code 236220 is $45.0M. The requirement has an estimated maximum shared dollar value of $500M and minimum guaranteed value $2,000 per contract. Period of performance for the MATOC is projected to be January 1, 2025, through December 31, 2029. There are no foreseeable implications on regional or agency-wide contracts. This requirement will have a positive effect on small business as it will be solicited as a SDVOSB set-aside.

B. Applicable Statutes/ Regulations.

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FAR 7.107-2(a) requires that when an acquisition includes consolidation exceeding $2M, the senior procurement executive or chief acquisition officer shall make a written determination that the consolidation is necessary and justified.

IAW VAAR 819.201, it is the Department of Veteran Affairs (VA) policy that small business concerns owned and controlled by Veterans shall have maximum practicable opportunity to participate in VA acquisitions, consistent with efficient contract performance and the priorities and preferences established under 38 U.S.C. 8127 and 8128. The VA's contracting order of priority is set forth in VAAR 819.7005: Contracting officers shall consider, in the following order of priority, contracting preferences that ensure contracts will be awarded to SDVOSBs and VOSBs. Market Research efforts showed there are sufficient SDVOSB with multiple socio-economic status as depicted below

WOSB 8(a) HUB Zone Disadvantaged Minority Owned 1 1 2 13 0

IAW policy, and to ensure all small business and socio-economic concerns were sufficiently addressed, market research conclusively shows that there are ample SDVOSBs, which also fall into additional socio-economic programs, to support this requirement. Therefore, it is determined that a 100% SDVOSB set-aside is the best acquisition strategy for this effort.

The Buy American Act is applicable and will be incorporated as prescribed in FAR

25.1102 into the MATOC. Any exceptions will be identified and addressed at the task order level.

C. Market Research.

Market research has been conducted in accordance with FAR 10.001(a)(2)(iv) and has demonstrated that consolidation is necessary and justified. Market research was conducted using NAICS code 236220 to search the Small Business Administration Veteran Small Business Certification (VetCert) web site, the System for Award Management (SAM) website, Small Business Dynamic Search (SBDS), and issued a Sources Sought number 36C26024Q0336 was posted on SAM.gov from 2/22/24 through 3/6/24.

Below table demonstrates the results:

VetCert 3,245 SDVOSBs SAM 4,066 SDVOSBs SBDS 1,116 SDVOSBs Sources Sought 25 certified SDVOSBs and one 8(a)

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Based upon the market research conducted adequate sources for SDVOSB concerns were obtained and after reviewing Small Business Administration's (SBAs) VetCert database to identify verified SDVOSBs, the data supports a 100% set aside for SDVOSB concerns.

Notifications (see FAR 10.001(c)).

☒ VA Small Business Specialist, Shayne Park and local SBA Procurement Center Representative (PCR) Yuri Dyson were notified of this acquisition. The PCR reviewed this document and did not view the consolidation memo as necessary as this is not newly combining construction work at two or more sites into one contract as the now expired MATOC was already doing that. Although the previous MATOC was in fact a consolidation, the consolidation was never approved.

☒ Affected incumbent small business concerns (see FAR 10.001(c)(2)). The incumbent contractors are/were all small business concerns as the previous MATOC was an SDVOSB set aside. This acquisition is proposed as 100% SDVOSB set-aside. Of the 26 incumbent SDVOSB contractors, 1 is no longer registered in SAM.gov, 2 are now large businesses, and 23 are still registered as small businesses in SAM.gov. 17 incumbent contractors responded to the sources sought expressing interest in this acquisition. In addition, the incumbent small businesses that are no longer considered a small business as they are now considered a large business (based on revenue) are still able to participate with any SDVOSB awarded a contract as a subcontractor.

Results of Market Research (FAR 7.707-2(1)).

Based upon the market research conducted and the resulting analysis, there is an adequate number of SDVOSB concerns interested and the data supports a 100% set aside for SDVOSB concerns.

III. CONSOLIDATION.

A1. Benefits

To be determined necessary and justified, the benefits of the consolidated acquisition must substantially exceed the benefits that would be derived from alternative contracting approaches that involve a lesser degree of consolidation. Such benefits may include quantifiable cost savings or price reductions as well as other benefits, regardless of whether quantifiable in dollar amounts, to include quality improvements that will save time or improve or enhance performance or efficiency, reduction in procurement acquisition lead time (PALT), better terms or conditions, or any other supportable benefit.

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Reductions in PALT are expected to be achieved through consolidation. The new MATOC will utilize a Task Order Proposal Request (TOPR) process. Utilizing a TOPR will streamline the acquisition process and will potentially reduce the PALT by an estimated 30 days. This estimate is based calculating the time required to prepare formal solicitations, post pre-solicitation notices, post solicitation publicly and perform extensive source selection process. Using the estimated 75 projects that would be awarded under the MATOC and the PALT standards; this MATOC would provide more than 2,250 PALT days saved over the life of the MATOC.

The terms and conditions will be established in the resultant MATOC and will apply to all task orders issued against each contract. Having the terms and conditions established at the MATOC level should result in efficiencies with the use of the MATOC.

The terms and conditions of the contract are consistent and known throughout the life of the contract and will flow down to each task order. The terms and conditions are not likely to change, thereby creating efficiencies in contract preparation which reduces administrative burden for contracting personnel. The continuity of the terms and conditions provides efficiencies for all involved by having clear and consistent content structure, which becomes familiar over time.

Under this contract type, contractors have a greater likelihood of receiving a higher quantity of work over the life of the contract, resulting in increased job security. The increase in job security, paired with the higher expected volume of projects provided by a MATOC, incentivizes contractors to provide the Government more competitive pricing on subsequent task orders.

The anticipated financial benefits are not quantifiable and cannot be demonstrated to meet the thresholds in FAR 7.107-2(d)(1). However, the expected benefits not quantifiable in dollar amounts are critical to the agency's mission success and this procurement strategy provides for maximum practicable participation by small business.

The efficiency of this procurement reduces administrative cost and burden. With current staffing, the use of a streamlined TOPR better serves each facility supported by NCO 20, allowing more project requirements to be addressed.

In addition to the benefits to the Government outlined above, consolidating these efforts into a multiple award contract is in alignment with the statutory preference for multiple award contract types outlined in FAR Part 16. According to FAR 16.505(c), the Contracting Officer must, to the maximum extent practicable, give preference to making multiple awards of indefinite-quantity contracts under a single solicitation for the same or similar supplies or services to two or more sources. For these reasons, we believe that consolidating the Construction Service requirements under a MATOC is justified.

A2. Mission success.

Without a MATOC in place to provide streamlined project execution, increased procurement times for acquisitions may occur and could result in delays in construction

VAAM M807-C Page 5 of 7 deadlines. Projects are forecasted for each fiscal year, and then further refined by quarter for obligation. Increased procurement time affects the planning process and causes a backlog of necessary projects which support the care of our Veterans.

Therefore, we believe the MATOC vehicle is critical to the agency’s mission success.

B. Procurement strategy.

To ensure maximum participation, this will be solicited as a 100% SDVOSB set-aside using competitive procedures. Any SDVOSB certified through the SBA VetCert that meets the $45.0M size standard may submit a proposal for this acquisition.

The intent is to award up to 12 contracts with a shared capacity of $500M across all MATOC holders and a guaranteed minimum of $2,000. The maximum value was calculated by taking current estimates of projects that are intended to be issued against this MATOC over the five-year period.

Under the previous acquisition awarded in FY 17, we awarded to a pool of 26 SDVOSB contractors. Over the life of the contract nine contractors either were no longer eligible due to loss of SDVOSB status or requested that their option year not be exercised, reducing the eligible pool of SDVOSB contractors to 17. Since FY 21 until the MATOCs expired in FY 23, 11 contractors actively participated in the Fair Opportunity Process.

During that time, we received two or more offers and the 11 contractors that were still participating supported the program with no issues. Therefore, a pool of 12 contractors is sufficient to ensure competitive project procurements under this acquisition. We anticipate a pool of 12 contractors will enhance the overall quality of participating contractors and increase the competitiveness of project procurement.

C. Alternative approaches.

Alternative 1: Use available Veterans Affairs (VA) owned construction resources. The VISN considered performing some of the work in house, however, Facilities Management Services (FMS) at the VISN and individual facility level do not have the resources to perform the projects of this magnitude that would be solicited under the

MATOC.

Alternative 2: Establish an unrestricted MATOC and award to qualified contractors regardless of business size vs awarding as a 100% SDVOSB set-aside. During market research, it was found there were 3,245 SDVOSB contractors in Small Business Administration’s Veteran Small Business Certification (VetCert) and 4,066 in SAM under NAICS 236220. This alternative was eliminated because it is not compliant with the Veterans First Contracting Program, 38 U.S.C. 8127- 8128.

Alternative 3: Solicit individually for all requirements as a set-aside for SDVOSB on the open market. It is not advantageous for the Government to consider procuring all construction projects individually as it will increase the procurement lead times required

VAAM M807-C Page 6 of 7 for individual contracts, impeding mission success. NCO 20 has utilized a MATOC for an extended duration which has met almost every construction requirement.

Alternative 4: Award site specific MATOCs resulting in a separate pool of contractors for each facility within VISN 20. The current VISN 20 facilities have near identical construction requirements. We would anticipate that many of the same contractors would participate in each VISN 20 facility contract, resulting in award of several contracts to the same vendor. Meeting these requirements through separate MATOCs substantially duplicates efforts and would be inefficient to execute.

D. Negative impact

Over a 5-year period this acquisition would remove up to $500M worth of projects from the overall marketplace, allowing only those SDVOSBs who are awarded this MATOC to compete for subsequent task orders. However, small businesses will be able to participate as subcontractors.

E. Inclusion of small business concerns.

The Veterans Benefits, Health Care, and Information Technology Act of 2006 requires the Department of Veterans Affairs to give priority to Veteran-Owned and Service- Disabled Veteran-Owned small businesses when awarding contracts. In accordance with Department of Veterans Affairs policy, market research, and previous procurement history, there is high confidence that a 100% SDVOSB set-aside will meet NCO 20’s construction requirements and is the best procurement strategy for this organization.

The projects for this MATOC range as low as $2,000.00 and up to $30,000,000.00. The variety in magnitude of projects under NAICS code 236220 provides an inclusive environment for all applicable SDVOSB concerns to compete for this MATOC and individual task orders thereafter.

IV. DETERMINATION.

Based on the above, I hereby determine that in accordance with FAR 7.107-2(a) that consolidation is necessary and justified.

PREPARED BY: I hereby certify that the supporting information and data used to complete this determination is accurate and complete to the best of my knowledge and belief.

Peggy L. Corcoran Date Contracting Officer Network Contracting Office 20 (NCO 20)

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REVIEWED BY: I have reviewed this determination and find it to be accurate and complete to the best of my knowledge and belief.

S. Dale Allen Date Director of Contracting Network Contracting Office 20 (NCO 20)

Concur:

Curtis M. Jordan Date Executive Director, Regional Procurement Office West Head of Contracting Activity (HCA)

Approved:

Dr. Angela Billups, Ph.D.

Date

Executive Director, Senior Procurement Executive