36E776-20-AP-0441 Consolidation Determination Memorandum.pdf

36C776-24-R-0035

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CONSOLIDATION DETERMINATION AND FINDINGS

VETERAN AFFAIRS ARCHITECT-ENGINEER SERVICES INDEFINITE DELIVERY,

INDEFINITE QUANTITY MULTIPLE AWARD TASK ORDER CONTRACT

FINDINGS

I. INTRODUCTION

Program Contracting Activity Central (PCAC) plans to solicit offers for Architectural and Engineering Services and has conducted market research that demonstrates consolidation of this procurement to be both necessary and justified.

II. BACKGROUND

A. Requirement

The principal purpose of this Multiple Award Task Order Contract (MATOC) is to expedite PCAC�s Architect-Engineer (A-E) procurements in support of the Electronic Health Record Modernization (EHRM) Program and targeted critical infrastructure modernization, which is critical to the VA�s mission success, with a secondary purpose of expediting PCAC�s A-E procurements for Minor construction projects and, as needed, VISNs� and Network Contracting Offices� (NCOs) Non-Recurring Maintenance (NRM) projects nationally. Due to the unprecedented budget increases proposed for the next 5 years and anticipated increases for the years to come, the Department of Veterans Affairs, PCAC is seeking Firms to perform A-E services in support of the Healthcare Environment & Facilities Programs (HEFP) office nationally, which consists of 18 Veterans Integrated Service Networks (VISNs) across the five (5) VA regions. The MATOC is not intended to replace Indefinite Delivery, Indefinite Quantity (IDIQ) contracts for A-E services which are currently available within PCAC, the VISNs, and NCOs. The A-E services are required to be performed or approved by a person licensed, registered, or certified. It has been determined that a firm-fixed-price (FFP) MATOC is appropriate, and each subsequent task order will be firm-fixed-price. Additionally, the Ordering Period shall be from the date of award for a ten (10) year / 120-month period. The maximum quantity of services the Government will acquire under the proposed contracts is $5,000,000,000 over the ten (10) year / 120-month period. MATOC competition will be sought via request for SF-330s announced on Contract Opportunities on SAM.gov. The acquisition will be set aside for Service-Disabled Veteran Owned Small Business (SDVOSB), with awards being made following procedures set forth in the Selection of Architects and Engineers Statute, FAR 36.6, VAAR 836, and VAAM M836.6. NAICS 541330 applies to this acquisition and has a size standard of $25,500,000.

B. Applicable Statutes/Regulations

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This determination is issued pursuant to Federal Acquisition Regulation (FAR) 7.107-2(e), that consolidation is necessary and justified for an acquisition exceeding $2 million based on benefits that are critical to the Department of Veteran�s Affairs mission success.

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.

Based on the market research conducted and the resulting analysis, adequate sources of supply for small business concerns were obtained and after reviewing SBA VetCert database to identify verified and capable SDVOSBs and VOSBs, the data supports setting aside the procurement to SDVOSBs.

Notifications (see FAR 10.001(c))

VA Small Business Specialist and local Small Business Administration (SBA) procurement center representative (PCR) (see FAR 10.001(c)(1)

Results of Market Research

A request for information (RFI) was published on SAM.gov on Jan 18, 2022, under solicitation ID 36C77622Q0111 with a response date of Jan 24, 2022, the responding contractors were considered technically qualified, and met the SDVOSB set aside per the VA Veterans First Program. Given that the program has considered these contractors to have provided sufficient evidence that they can meet the requirements and that their recent performance on existing IDIQs provided reasonable evidence of expertise necessary to perform the functions of the requirement IDIQ. Please see the sources sought consensus evaluation report for further analysis.

have or are currently performing A-E requirements for

To identify the potential impact of inflation a follow up to the RFI was sent 4 Nov 2022, to the Firms found capable asking the following question: �If required by the solicitation, would your firm be willing to provide the Government with rates for a 10-year period?� Of the who responded replied they were willing to provide negotiated rates for a 10-year period.

To identify any cost savings that may result from a 10-year ordering period the following question was submitted with the question in the follow up RFI 4 Nov 2022:

�If providing rates for a 10-year period is feasible, would there be a cost-savings to the Government? If so, what is the anticipated percentage? Example 0%, 5%, 10%.� Of the who responded were willing to consider a discounted rate that ranged from

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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. Congress has committed to increasing Minor Construction and NRM funding to address critical space issues and address failing utilities. As a result, VHA anticipates an unprecedented increase in NRM funding, as well as a steady increase in Minor Construction funding.

VHA is planning for an increase in NRM funds from a current level of in FY23 to in FY28, an increase of . VHA is planning for an increase in Minor Construction funds from a current level of in FY23 to in FY28, an increase of

A large portion of the NRM funding will be dedicated to FCA corrections, including a new targeted infrastructure set aside in funding that will target critical utility systems such as electrical distribution, emergency power, boiler plants, and elevator systems.

VHA must ramp up its ability to execute Minor Construction and NRM projects.

Currently, there is not a national VHA A-E acquisition tool to support efficient and standardized selection of design services. VHA must establish a structure that will enable effective obligation of the increased appropriations that are anticipated.

The work needed to maintain VHA infrastructure is essential to the mission of caring for the Veteran. NRM program funds are authorized for non-recurring replacement, repair, alteration, or improvement of physical infrastructure. Over the next several years, Congress intends to invest billions of dollars in NRM to replace aging infrastructure and resolve critical utility risks. Minor Construction allows for the construction of new space within the currently authorized spending limit of

Both programs are focused on resolving the highest priority space and infrastructure deficiencies at VA Medical Centers. An A-E IDIQ that enables VHA to acquire design services from vetted A-E firms using a streamlined acquisition process supports the mission essential goal of modernizing Veteran healthcare facilities.

B. Procurement Strategy

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The acquisition will be set aside for SDVOSB, with awards being made following procedures set forth in the Selection of Architects and Engineers Statute, FAR 36.6, VAAR 836, and VAAM M836.6.

C. Alternative Approaches

The following are contracting approaches that would involve a lesser degree of consolidation:

Take No Action: (not selected) Taking no action or �doing nothing� does not support PCAC with expediting the procurement of the overwhelming budgeted workload for A-E services.

Continuing to take �no action� will continue to compromise efficiencies gained using an IDIQ vs a �C� type contract, resulting in fewer A-E service awards directly affecting the VA�s implementation of EHRM. For example, in FY22, for the Electronic Health Record Modernization and the NRM program, with design obligations estimated at were postponed to the next FY due to the delayed acquisition process. This represents significant delays to a mission critical EHRM program the Secretary of the VA has prioritized. NRM and Minor Construction capital projects are prioritized based on VHA, VISN and Medical Center needs to maintain infrastructure, improve access, and support strategically important objectives such as Electronic Health Record deployment and Women�s Health initiatives. NRM funding is typically 1 year money, which means it expires at the end of each Fiscal Year if not obligated.

Any acceleration in Procurement Action Lead Time (PALT) is important when trying to make annual obligations. In some cases, if an A-E IDIQ acquisition vehicle is not available, NRM projects are pushed to the next fiscal year and funds either returned or are spent on lower priority requirements. Those delays result in unobligated funds and delays to the construction contracts.

Perform Services In-House: (not selected) The VHA does not currently possess sufficient staffing to perform the required A-E services.

Utilize Another Government Agency: (not elected) In order to utilize another Government agency via an assisted acquisition, this would be required to be awarded as an Interagency Agreement (IAA) and would be conducted in accordance with (IAW) the procedures set forth under FAR Subpart 17.5 and VA Acquisition Manual (VAAM) Part M817. Currently, an IAA exists between the VA and USACE (VA101F15M0005). Awarding an IAA is determined to be

VAAM M807-C Page C-6 unnecessary as VHA possesses the resources to perform all acquisition activities, including awarding and administering a contract.

(4) Orders Against GSA Federal Supply Schedule Program: (not Selected) Federal Acquisition Regulation (FAR) Section 8.004, �Use of other sources,� encourages agencies to consider satisfying requirements from or through non-mandatory sources, such as Federal Supply Schedules before considering commercial sources in the open market. However, orders against General Services Administration (GSA) Federal Supplies Schedules are not a feasible acquisition alternative as the SOW requires the work of a firm that performs Architectural and Engineering type services as defined in the Selection of Architects and Engineers statute (formerly known as the Brooks Act) to include certification of designs or construction services as defined in the Federal Acquisition Regulation Part 36 and Part 2. GSA does not provide this in their schedules.

(5) Blanket Purchase Agreements (BPAs) using Simplified Acquisition Procedures: (not selected) using Simplified Acquisition Procedures to award BPAs as prescribed at FAR Section 13.303 is not a feasible acquisition alternative as individual purchases shall not exceed the simplified acquisition threshold pursuant to FAR paragraph 13.303-5(b). Historically, orders against the previous contracts often exceeded the simplified acquisition threshold.

(6) Indefinite Delivery, Indefinite Quantity (IDIQ) Contracts: (selected) An IDIQ MATOC is a feasible acquisition alternative. IAW FAR Part 16.501-2 pursuant to 41 U.S.C. 4101, IDIQ contracts are appropriate when exact times and/or exact quantities of future services are not known at the time the contract will be awarded. The MATOC will establish a pool of highly capable firms, pre-negotiated rates, and standardized ordering procedures. This will streamline A-E acquisitions and increase the government's ability to obtain quality designs in the most efficient manner as there is less risk of low-quality qualification statement (via Standard Form (SF) 330).

Additionally, this approach could reduce the PALT an estimated 60 days. The VHA PALT Standards for A-E procurements with an estimated cost between $1M and $7M indicate a PALT of 120 days for definitive �C� type contracts for A-E procurements. The PALT Standards indicate a PALT of 60 days for an A-E task order. While the Selection of Architects and Engineers statute is still required for each proposed task order, the pre-solicitation time will be greatly reduced due to not having to do full blown market research and complete an acquisition plan.

Additionally, firms will have an SF 330 on file to assist in streamlining the submission requirements. The familiarity with the A-EIDIQ holders and the consistent submissions could reduce the evaluation time. To fulfill HEFP�s need expediting the procurement of EHRM A-E services, a MATOC vehicle is the best approach to execute the �record� number of A-E requirements and do so within the budgeted FY.

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(7) Single Award Type �C� Contracts: (not selected) PCAC is currently using this approach. Although this approach is �feasible� it isn�t �practical� based on HEFP�s record number of budgeted A-E requirements.

Like the MATOC approach above, the �C� Type must also be awarded following the Selection of Architects and Engineers statute however, the amount of time to award is significantly longer. As stated above in the IDIQ approach, a �C� type contract approximately 120 days to award versus 60 days for a Task Order to award. Based on HEFP �s record number of budgeted A-E workload the use of �C� Type contracts is not a practical approach to fulfill the requirements in a timely manner.

D. Negative Impact

The proposed MATOC is essential in assisting the agency with meeting its mission goals and will potentially provide efficiencies to the Government. It is anticipated that this MATOC will have a limited negative impact on the SDVOSB community;

however, some mitigation techniques will be implemented in order to alleviate any negative impacts.

(1) General:

The Government intends to make as many awards as practicable, potentially as many as fifty (50). Each contract will have an ordering period of ten (10) years and the Government reserves the right to reopen competition at any time during the term of the contract to ensure an adequate number of firms are always available to achieve effective technical qualifications and competition on all task orders. The ordering period for new awardees will not exceed the overall maximum term of the original MATOC.

(2) Lack of exclusivity: The proposed MATOC will primarily be used by PCAC personnel. Additionally, the NCOs will also have the ability to use the IDIQ;

however, this MATOC is not a mandatory contract for VHA. As a result, the

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NCOs may still choose to use or pursue their own Indefinitely Delivery Vehicles (IDVs) or standalone contracts for A-E services. Due to the lack of exclusivity, firms will still have the ability to compete for A-E related services within other NCOs that choose not to utilize the proposed MATOC. While there are NCOs that do currently have IDVs in place for A-E services, they were not set up to and cannot support requirements procured by PCAC for various reasons to include ceiling limitations. PCAC does not currently have any contracting vehicles in place for A-E services.

(3) On-ramping Procedures: On-ramping procedures will be included to add and potentially remove businesses throughout the life of the contract. The on-ramping procedures will occur at scheduled times and at frequent enough intervals to allow additional SDVOSBs the opportunity to compete on the MATOC. The on-ramping procedures will also be transparent as these opportunities will be posted at SAM.gov. Moreover, the eligibility requirements included in the on-ramping procedures will not be more restrictive as the Government will simply use the criteria established in the initial solicitation.

In summary, the proposed MATOC is critical to the agency�s mission success as discussed above and will potentially offer efficiencies to the Government. Based on the information presented above, these efficiencies will be balanced with support for SDVOSBs. It is estimated that upwards of firms may be awarded contracts under the proposed MATOC, which is proportional with the number of firms that have been awarded contracts historically at PCAC. It is acknowledged that there may be some minimal impact; however, measures such as on-ramping, lack of exclusivity, and transparency will assist in mitigating any potential negative impacts throughout the life of the contract.

E. Inclusion of small business concerns: Market Research conducted supports the 100% SDVOSB set-aside.

Attachment: VHA Procurement PALT Standards

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IV. DETERMINATION

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

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

Concur:

Concur:

Concur: