36C776-24-AP-1291 Consolidation Determination Memorandum.pdf

36C77624R0149

VAAM M807-C Page C-1

CONSOLIDATION DETERMINATION AND FINDINGS

INDEFINITE DELIVERY, INDEFINITE QUANTITY MULTIPLE AWARD TASK ORDER

CONTRACT FOR CONSTRUCTION SERVICES IN VISN 8 – CARIBBEAN

(PUERTO RICO AND VIRGIN ISLANDS)

FINDINGS

I. INTRODUCTION

The Department of Veterans Affairs (VA), Veterans Health Administration (VHA), Program Contracting Activity Central (PCAC) plans to solicit offers for construction services in Veterans Integrated Service Network (VISN) 8 Caribbean VA Healthcare System (VAHCS) and has conducted market research that demonstrates consolidation of this procurement to be both necessary and justified.

II. BACKGROUND

A. Requirement:

The PCAC is contemplating an award of a construction Multiple Award Task Order Contract (MATOC) for each VISN in the United States, which will involve consolidation (which is defined as: “a solicitation for a single contract, a multiple-award contract, a task order, or a delivery order to satisfy … requirements of the Federal agency for construction projects to be performed at two or more discrete sites”).

VISN 8 has stations located in Florida, Georgia, Puerto Rico (PR) and Virgin Islands (VI). The Florida and Georgia locations are part of the contiguous United States and have different weather and local conditions. Therefore, PCAC determined that splitting the VISN into two regions with separate MATOCs would be in the best interest of the government and would involve a lesser degree of consolidation that would benefit contractors. It was determined that the PR and VI regions within VISN 8 have a requirement for on-going facilities construction (including new square footage construction), alterations, and repair of buildings, structures and other real property relating to, but not limited to, civil, mechanical, plumbing, structural, electrical, heating, roofing, site work, heating ventilation and air conditioning, for the following VISN 8 VA Medical Centers (VAMCs) in PR and VI:

Arecibo VA Clinic, PR Ceiba VA Clinic, PR Comerio VA Clinic, PR Euripides Rubio Department of Veterans Affairs Outpatient Clinic, PR Guayama VA Clinic, PR Hato Rey VA Clinic, PR

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Mayaguez VA Clinic, PR Saint Croix VA Clinic, VI Saint Thomas VA Clinic, VI San Juan VA Medical Center, PR Utuado VA Clinic, PR Vieques VA Clinic, PR

The intent of this acquisition is to establish a construction Indefinite Delivery, Indefinite Quantity (IDIQ) MATOC to expedite construction procurements in support of Caribbean VAHCS, all of which are critical to the VA’s mission success.

Construction services in Caribbean VAHCS are currently being accomplished through Federal Acquisition Regulation (FAR) Part 14 and 15 procedures. The need for on-going construction at multiple VAMC’s would be fulfilled with the award of a consolidated IDIQ MATOC to expedite the solicitation process. As a measure of ongoing need, PR/VI has more than in NRM and Minor construction projects in FY25 that need completed. This annual estimate is expected to be higher over the next five years as larger EHRM projects are completed in addition to the possibility of severe weather events that would result in additional contracting actions. This annual estimate with the increased need in future fiscal years supports the maximum contract value. These numbers also demonstrate a large construction workload, and this endeavor would allow the solicitation process to be as expeditious as possible eliminating the need to utilize FAR Part 14 and 15 open market procedures for most construction requirements. An expedited solicitation process would assist greatly in processing the construction projects and ultimately improving care settings and the environment for Veterans served in these geographic areas.

B. Applicable Statutes/ Regulations

In accordance with (IAW) the definition provided at FAR 2.101, “Consolidation or consolidated requirement” means a “solicitation for a single contract, a multiple-award contract, a task order, or a delivery order to satisfy … requirements of the Federal agency for construction projects to be performed at two or more discrete sites.”

While FAR 7.107-2(a) recognizes that consolidating requirements may provide substantial benefits to the Government, further account is given to the potential negative impact upon small business participation. Accordingly, before actions are taken by an agency to consolidate requirements under a subsequent solicitation and/or contract award, accompanied by an estimated total dollar value exceeding $2 million, a written determination is required. In accordance with FAR 7.107-2(a), the senior procurement executive or chief acquisition officer shall make a written determination that the consolidation is necessary and justified for actions exceeding $2 million.

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III. CONSOLIDATION

A. Benefits

In order 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 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 acquisition cycle time, better terms and conditions, or any other benefit.

The expected benefits of the consolidated acquisition will be discussed in the paragraphs below.

According to FAR 7.107-2(c), benefits other than cost savings or price reduction may also be used to justify consolidation. These benefits include: 1) Quality improvements that will save time or improve or enhance performance or efficiency;

(2) Reduction in acquisition cycle times; (3) Better terms and conditions; or (4) Any other benefit. The consolidation of construction services efforts between all of the stations will clearly achieve benefits (1), (2), and (3) as described in subparagraphs below:

(1) Creating one VISN 8 Caribbean VAHCS construction services MATOC for recurring needs in PR/VI will reduce duplicative efforts, save time and money, provide flexibility to the VISN 8 facilities, and protect the Government’s interests.

The MATOC will establish a pool of highly capable SDVOSB firms with standardized ordering procedures. This will streamline construction acquisitions and increase the Government's ability to obtain quality construction services in the most efficient manner as there is less risk of low-quality performance. The familiarity with the IDIQ holders and the consistent proposal submissions could reduce the evaluation time.

(2) Significant reductions in acquisition cycle times are expected to be achieved through consolidation. The standard VHA Procurement Action Lead Time (PALT) for design-bid-build acquisitions under $7M is 120 days and acquisitions $7M to $50M is 180 days respectively. However, with the Construction MATOC in place, the PALT is reduced by 50% to 60-90 days for each task order. The pre-

VAAM M807-C Page C-5 solicitation time will be greatly reduced due to not having to do full blown market research and complete an acquisition plan.

(3) The terms and conditions will be established by written agreement of the parties in the resultant MATOC contracts and will apply to future task orders between the parties during the five-year ordering period. This should result in increased administrative efficiencies and cost savings with the use of the MATOC.

(4) Under this contract type, contractors may a greater likelihood of receiving a higher quantity of work over an extended period. The increase in job security, paired with the higher expected volume of projects provided by the MATOC, may incentivize contractors to provide the Government more competitive pricing. If contractors receive multiple awards at the various locations, it may incentivize them to provide more competitive pricing because they are already mobilized on these sites.

B. Mission Success

The approval authority may also determine that consolidation is necessary and justified when the benefit thresholds are not met, but the contract is critical to the VA mission success and the procurement strategy provides for maximum practicable participation by SDVOSBs.

VHA’s current owned infrastructure is aged, deteriorating, and does not meet modern healthcare requirements. Additionally, the growth of projected space need has outpaced VA’s execution capability. Without addressing both problems, VA is at risk of systemic failure. The risk is being realized now with costly and repeated repairs to several aging facilities. VHA must act now to avert an increasing risk for potentially catastrophic critical infrastructure failures. VA has developed a long-term capital investment strategy to modernize and optimize healthcare infrastructure.

VHA must ramp up its ability to execute construction projects in VISN 8 Caribbean VAHCS. VHA is planning for an increase in NRM and Minor construction funds over the next five years. Currently, there is not a VISN 8 MATOC for construction in PR or VI to support these VISN facilities. An IDIQ MATOC for construction that enables VHA to acquire construction services from vetted SDVOSB construction firms using a streamlined acquisition process supports the mission essential goal of modernizing Veteran healthcare facilities.

The use of a consolidated MATOC for construction projects is critical to the mission success of each VAMC. Without a construction services MATOC in place to provide streamlined project execution, increased times for projects would occur and result in delays in facility renovations and operations. These delays would jeopardize the effectiveness of these hospitals in serving the Veterans and could ultimately result in mission failure. Therefore, the MATOC is critical to the agency’s mission success.

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F. Inclusion of small business concerns

IAW VAAR 819.201, it is 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. Additionally, within the VA hierarchy of small business program preferences established by 38 U.S.C. 8127(i) (see VAAR subpart 819.70), VA must consider preferences for certified SDVOSBs first. Market Research conducted supports the 100% SDVOSB set-aside.

Additionally, there will be subcontracting opportunities in each location for other small businesses and SDVOSBs to be utilized.

This Determination and Findings has been coordinated with the Office of Small Disadvantaged Business Utilization for the VHA, as evidenced by the signature block on the last page of this document.

DETERMINATION

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

Attachments:

1. VHA Procurement PALT Standards

2. Market Research Report

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.

Date

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

Date

3-5-2025

3/6/2025

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Date

Concur:

Date

Concur:

Date

Approve:

3/6/2025

03/26/2025

3/20/2025