A02 - JA Mitigation Credits Signed_Redacted.pdf

Control No: MVM-JA-21-001

JUSTIFICATION REVIEW DOCUMENT

OTHER THAN FULL AND OPEN COMPETITION

PROJECT/EQUIPMENT: Mitigation Credits for Indiana Bat Habitat CONTROL NO: MVM 21-001

AUTHORITY: 41 U.S.C. 1901 AMOUNT: $576,600.00

PREPARED BY:

CONTRACT SPECIALIST

NAME: Valerie Marshall

PHONE: 901-544-3343

DATE: 14 Oct 2020

CONTRACTING OFFICER

NAME: Christopher White

PHONE: 901-544-3343

TECHNICAL

NAME: Andrea Carpenter

PHONE: 901-544-0817

REQUIREMENTS

NAME: Mark Smith

PHONE: 901-544-0670

SIGNATURES ARE REQUIRED BELOW:

I have reviewed this J&A and find the justification adequate to support other than full and open competition.

DISTRICT SMALL BUSINESS

SPECIALIST

SIGNATURE:

NAME: Thomas Mercer

DATE:

PHONE: 901-544-4146

ASSISTANT DISTRICT COUNSEL

SIGNATURE:

NAME: Edward McNaughton

DATE:

PHONE: 901-544-0695

JUSTIFCATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Agency: The responsible contracting activity is the U.S. Army Corps of Engineers, Memphis District Contracting Office (CEMVM-CT), 167 N. Main Street, Memphis, TN 38103-1894.

2. Description of the Action: This is a new requirement for a sole source Firm- Fixed- Price supply contract with The Conservation Fund (TCF) for mitigation credits.

The estimated delivery date is within two weeks of contract award. The contract is fully funded with Civil Works Supplemental funds issued under P.L. 115-123.

3. Description of Supplies/Services: The U.S. Army Corps of Engineers (USACE), Memphis District (MVM) seeks to purchase 93 In Lieu Fee (ILF) credits from The Conservation Fund in the State of Missouri to mitigate for habitat impacts to the federally endangered Indiana bat in accordance with (IAW) the Endangered Species Act (ESA). The U.S. Fish and Wildlife Service (USFWS) has determined that the only sufficient and feasible mitigation of a portion of the impacts to Indiana bat habitat is through credit purchase from this fund.

4. Authority Cited: Simplified Procedures for Certain Commercial Items, 41 U.S.C. 1901 as implemented by FAR Subpart 13.501(a), Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements

5. Reason for Authority Cited:

a. Background: MVM is required to complete clearing, snagging, and channel cleanout along approximately 30 miles of Ditch 251 and approximately 38.5 miles of Ditch 1 in New Madrid, Stoddard, and Pemiscot Counties, Missouri for the purpose of returning the authorized flood carrying capacity. Presence of the Indiana bat has been established and must be mitigated per the ESA. Pursuant to the ESA, MVM engaged in formal consultation, and submitted a Biological Assessment to the USFWS per 16 U.S.C. §1536(b). The USFWS response in the form of a Biological Opinion (BO) requires the purchase of 93 credits from the approved USFWS Range-Wide Indiana Bat In-Lieu Fee Program, sponsored by The Conservation Fund, as a Term & Condition. The USACE must purchase the 93 ILF credits to fully satisfy the ESA mitigation requirement associated with the operations and maintenance action along Ditches 1 and 251 in the St. Francis Basin prior to 1 November 2020.

b. Justification: There are only two USFWS approved options for purchasing credits to mitigate impacts to bat habitat in Missouri. One being the subject ILF program, the other is a mitigation bank that is not appropriate due to the location of the bank being outside of the Ozark-Central Recovery Unit. Permittee-responsible mitigation (PRM) is also being performed to partially mitigate this action; however, the USFWS did not approve of the initial USACE plan to perform full PRM of this impact; therefore, the ILF program is the only feasible option remaining to accomplish this requirement.

TCF sponsors the only ILF program with the appropriate endangered Indiana bat habitat restoration occurring in the Central-Ozark Recovery Unit in Southern Missouri. The only other mitigation option is a privately owned mitigation bank located in northern Missouri. Using this bank would require a larger acre to ILF credit ratio, substantially increase the costs (as the applicable bat habitat would not be in the Central-Ozark Recovery Unit) and was not proposed as an acceptable option by the USFWS. Furthermore, the USFWS BO terms and conditions require the ILF purchase from TCF in Missouri in order for MVM to attain ESA compliance.

The document entitled “Range-Wide Indiana Bat In-Lieu Fee Program, Program Instrument” was written by the U.S. Fish and Wildlife Service to verify the ILF program as a reliable mitigation resource:

https://www.fws.gov/midwest/endangered/section7/fhwa/pdf/ILF InstrumentINBA.pdf

Additionally, a Notice of Intent to Sole Source provided interested parties an opportunity to respond to the requirement and provide evidence this requirement could be accomplished via full and open competition or set aside. Those results are listed in paragraph nine. Accordingly, the terms and conditions of the USFWS BO, the results of the Notice of Intent to Sole Source, and additional market research support using a sole source Firm-Fixed-Price supply contract with TCF to purchase mitigation credits without full and open competition pursuant to FAR 13.501(a).

c. Alternatives: Possible alternatives are as follows:

(i) Suspend operations/cancel construction contract on the Ditches 1 and 251

Clearing, Snagging, and Cleanout Project. This option is not acceptable to the Memphis District or the Drainage District due to flood capacity and safety concerns

(ii) Perform PRM for the full amount of habitat. This would require the purchase of at least 93 acres, and likely more, as this option is not in-line with USFWS recommendations. There would be no way to identify, acquire and construct restoration in time for the anticipated construction start date for Ditches 1 and 251.

Therefore, this option is not acceptable, as mitigation is required to be prior to or concurrent with construction

(iii) Purchase credits from the mitigation bank in northern Missouri that is outside of the Central-Ozark Recovery Unit. This would require a higher mitigation ratio, so likely 1.5-2x times the credits required, substantially increasing cost. This option would require re-initiation of formal consultation, which can take 90-120 days to complete.

Therefore, this option is not acceptable, as mitigation is required to be acquired/constructed prior to or concurrent with construction.

d. Impact: If the J&A is not approved, the USFWS will not provide documentation concurring with MVM efforts to conserve federally endangered species. Failure to purchase the 93 ILF credits from TCF would render MVM, and its employees, in non-compliance with the mandatory terms and conditions in the USFWS BO.

As a result, MVM and its employees, would no longer have the protection of the

“Incidental Take Statement” listed in the Biological Opinion. Without this protection, MVM would have to suspends operations and terminate the construction contract on Ditches 1 and 251 Clearing, Snagging, and Cleanout Project. Contractors cannot perform tree clearing along Upper Ditch 251 and Ditch 1 without this protection as MVM would face potential civil and criminal penalties if a “take” IAW the ESA occurred. Suspended operations would significantly increase the risk of failure for MVM’s flood mitigation mission and would subject MVM to contractual termination for convenience costs.

6. Efforts to Obtain Competition: A Notice of Intent to Sole Source was posted to the System for Award Management (SAM) website on 30 September 2020. The notice received two responses detailed in paragraph nine.

7. Actions to Increase Competition: The Notice of Intent to Sole Source, informed the marketplace of the impending procurement of mitigation credits for the Indiana bat habitat restoration. As a result, one of the respondents, Magnolia Partners, LLC, is now seeking USFWS approval to be added as an approved ILF option for mitigation credit purchase in southern Missouri. This action increases the likelihood a future requirement will have the reasonable expectation of at least two responsible vendors who can meet agency needs.

8. Market Research: MVM performed a thorough review of potential available authorized sources for compensatory mitigation for this project, regarding the federally listed species, the Indiana Bat. The St. Francis Basin, Ditch 251 and Ditch 1 Project Delivery Team (PDT) has accessed the Regulatory In-lieu Fee and Bank Information Tracking System (RIBITS) to determine approved ILF credits with sufficient credits available in the St. Francis Basin to satisfy the USACE’s needs.

MVM found one source in southern Missouri – TCF. MVM considered the entire state of Missouri in an effort to increase competition and found one (1) additional source in northern Missouri.

The only other ILF program is in northern Missouri, which would require a larger acre to ILF credit ratio and substantially increase the costs as the applicable bat habitat would not be in kind or in watershed. Additionally, MVM engaged in formal consultation IAW the ESA, which resulted in the USFWS requiring the purchase of the ILF credits from TCF because they provide the only available ILF for the federal listed endangered Indiana bat in southern Missouri (the impacted area).

9. Interested Sources: MVM received two responses to its Notice of Intent to Sole Source: J2RD Environmental Consulting (J2RD) and Magnolia Partners, LLC (Magnolia). J2RD is primarily engaged in environmental consulting and may be an interested party for TCF’s bat habitat restoration actions. However, they are not a USFWS approved source for the purchase of mitigation credits in southern Missouri.

Magnolia is a mitigation company that operates in Missouri. They stated they have a conservation bank for the Indiana bat in Missouri that can provide an alternative to the ILF program operated by TCF. However, according to USFWS, Magnolia does not currently have USFWS approval or a mitigation project on the ground with credits available. USFWS stated Magnolia is working to get their South Fabius River Bank established in Marion County (northern Missouri), but has not been authorized yet, nor have credits been released. As previously addressed, MVM impacts are in the southern service area and it’s not appropriate to mitigate outside of that service area if there are credits available in the same service area. Moreover, seeking credit credits purchase in northern Missouri would require reopening formal consultation.

The requirement to purchase credits before 1 November 2020 would not be met if MVM reopened consultation.

10. Other Factors: TCF is a large business concern for this requirement. The dollar threshold does not require submission of a subcontracting. Moreover, subcontracting opportunities are unlikely as this requirement is strictly for the purchase of mitigation credits and TCF habitat restoration efforts are not a contract performance requirement.