A10_Consolidation_Determination_W912EE23B0007.pdf

DEPARTMENT OF THE ARMY

U.S. ARMY CORPS OF ENGINEERS, VICKSBURG DISTRICT

DETERMINATION FOR CONSOLIDATION

W912EE23B0007 FIRM FIXED PRICE FOR SEDIMENT REDUCTION STRUCTURES,

PHASE XII, FC/MR&T, BIG SUNFLOWER RIVER BASIN COAHOMA, BOLIVAR,

SUNFLOWER, & SHARKEY COUNTIES, MS

COORDINATION PAGE:

The following signatures indicate concurrence with the contents of this document.

Assistant District Counsel

R. Ellis Screws Contracting Officer, Construction and A-E Branch

CONSOLIDATION OF CONTRACT REQUIREMENTS DETERMINATION

(As prescribed by FAR 7.107-2 and AFARS 5107.107-2)

DEPARTMENT OF THE ARMY

U.S. ARMY CORPS OF ENGINEERS, VICKSBURG DISTRICT

W912EE23B0007 FIRM FIXED PRICE FOR SEDIMENT REDUCTION STRUCTURES,

PHASE XII, FC/MR&T, BIG SUNFLOWER RIVER BASIN COAHOMA, BOLIVAR,

SUNFLOWER, & SHARKEY COUNTIES, MS

Rationale

(1) Consolidation may provide substantial benefits to the Government. However, because of the potential impact on small business participation, before conducting an acquisition that is a consolidation of requirements with an estimated total dollar value exceeding $2 million, a written determination shall be made that the consolidation is necessary and justified in accordance with 15 U.S.C. 657q, after ensuring that--

(a) Market research has been conducted;

(b) Any alternative contracting approaches that would involve a lesser degree of consolidation have been identified;

(c) The determination is coordinated with the agency's Office of Small Disadvantaged Business Utilization or the Office of Small Business Programs;

(d) Any negative impact by the acquisition strategy on contracting with small business concerns has been identified; and

(e) Steps are taken to include small business concerns in the acquisition strategy.

2. Introduction:

The U.S. Army Corps of Engineers (USACE), Vicksburg District (MVK), plans to solicit offers for Coahoma, Bolivar, Sunflower, and Sharkey Counties, MS, Sediment Reduction Structures Phase XII, FC/MR&T, Big Sunflower River Basin. MVK has conducted analysis and market research that demonstrates consolidation of requirements in this procurement is both necessary and justified. FAR 2.102 defines consolidation as

(1) a solicitation for a single contract, a multiple-award contract, a task order, or a delivery order to satisfy -- (i) two or more requirements of the Federal agency for supplies or services that have been provided to or performed for the Federal agency under two or more separate contracts, each of which was lower in cost than the total cost of the contract for which offers are solicited; or (ii) requirements of the Federal agency for construction projects to be performed at two or more discrete sites; or;

(2) separate contract as used in this definition, means a contract that has been performed by any business, including small and other than small business concerns.

3. Description of the Procurement Action:

(1) Project Description:

The Big Sunflower River Basin encompasses approximately 4,100 square miles and includes ten counties (Humphreys, Sharkey, Sunflower, Washington, Coahoma, Tallahatchie, Bolivar, Leflore, Issaquena, and Yazoo). It is part of the Yazoo Basin located in northwest Mississippi.

The major maintenance activities on the Big Sunflower River Project are to be accomplished by ten separate items of work. The work consists of furnishing all plant, labor, materials and equipment, and constructing eight (8) riser pipe grade control structures and two (2) outlet repairs in Coahoma, Bolivar, Sunflower, and Sharkey Counties, Mississippi. Principle features of work include clearing and grubbing;

excavation, backfill, pipe fill, embankment, and control of water; engineering fabric; stone protection; corrugated metal pipe; topsoil, fertilizing, seeding and mulching; lime treatment; welding; concrete work; storm water pollution prevention; and environmental protection.

(2) Acquisition Strategy/Procurement Summary:

The procurement will be advertised as a 100 percent Woman-Owned Small Business Set-Aside under Solicitation No. W912EE23B0007, with the intent to award one (1) Firm Fixed-Price (FFP) contract in accordance with FAR 16.202-2. The estimated value of this procurement is $2,523,744. This procurement will meet repair and construction mission requirements under North American Industry Classification System (NAICS) code 237990, Other Heavy and Civil Engineering Construction with a size standard of $45M. The construction period will not exceed two (2) years. MVK has historically utilized this type of contract for similar requirements to successfully execute projects on tight schedules at reasonable costs. Use of a FFP contract is in the best interest of the Government with respect to timeliness, oversight, and administrative costs.

(3) Applicability of Consolidation:

This requirement meets the definition of consolidation requirements, which is described as a solicitation of a single contract to satisfy the requirements of the Federal agency for construction projects to be performed at two or more discrete sites.

The total estimated value of the requirements exceeds the $2M threshold. MVK intends to consolidate the requirements in the Coahoma, Bolivar, Sunflower, & Sharkey Counties, MS, Sediment Reduction Structures Phase XII, FC/MR&T, Big Sunflower

River Basin project. By consolidating these requirements, MVK will be able to efficiently coordinate and respond to the dynamic requirements of the Sediment Reduction Structures at a significant savings of cost and time. Additionally, consolidation will allow MVK to accommodate the Sediment Reduction Structure scheduling window which is affected by high and low water events and the timing of funding from Congress. This also allows contractors to organize their work more efficiently, offer lower unit cost with a more effective economy of scale, and more efficiently schedule their equipment for the best regional approach to meet the needs of the Corps of Engineers Sediment Reduction Structure program.

4. Results of Market Research:

Current Market Research

(1) Dynamic Small Business Search: DSBS search parameters included all SBA Economic Group Categories, in the states of Arkansas, Louisiana, Mississippi, and Tennessee and produced a listing, where at least one word of the capabilities’ narrative, “Sediment”, with NAICS code 237990, randomized by original start time of search:

PARAMETERS:

NAICS 237990

Locations: Arkansas, Louisiana, Mississippi, and Tennessee Keywords: Sediment

RESULTS:

Small Business Sub‐ Category

No. of SBs Registered

HUBZone Certified 0 8(a) 2

SDB Certified 0 Woman or Women Owned 4 Service-Disabled Veteran 0

Veteran 0

The search returned a total of six (6) firms within the above Economic Group Categories; however, two (2) of the firms identified as a combination of two or more Small Business Sub-Categories.

Procurement History

(2) A review of procurement history for the periods of FY 2017 through FY 2022 revealed four (4) internal awards for Sediment Reduction:

Historical Construction Contract Awards:

Solicitation# Contract#

Contractor

LG/

SM

Procurement Method

Contract Type

Contract Value

# of Bids

W912EE17B0015

W912EE17C0026

Quinn Contracting, Inc.

WOSB

FFP

$1,638,639.03

W912EE19B0014

W912EE19C0012

TLSL Inc.

$2,073,456.50

W912EE20B0009

W912EE20C0007

Quinn

Inc.

$1,278,338.00

W912EE21B0007

W912EE21C0011

Frontier

LLC

$2,575,233.33

TOTAL:

$7,565,666.86

During the internal historical review period, in any one instance of responding to a Sediment Reduction Structure Invitation for Bid, two or more WOSB concerns have submitted bids. Hence, there is sufficient reason to believe that competition will result in receipt of two or more bids.

Furthermore, both historic and current market research supports the expectation of at least six (6) bid responses from a WOSB concern. Therefore, it is recommended that the requirement addressed by this Market Research be set-aside for a Woman-Owned Small Business (WOSB).

5. Alternative Contracting Approaches and Rationale for Rejection:

(1) In identifying that one (1) stand-alone FFP contract as the best solution for satisfying this requirement, the district also considered utilizing a Single Award Task Order Contract (SATOC). SATOCs were not considered in detail as an alternative contracting approach because SATOCs have not been used for this type of work in the past and there is not sufficient time to compete the Multiple Award Task Order Contract (MATOC) awards. Additionally, after award, there is no competition under a SATOC, which makes it difficult to negotiate agreements. The intent of this analysis was to address all alternative contracting approaches that would involve a lesser degree of consolidation, or no consolidation.

The following analysis addresses alternative contracting approaches in detail:

a. Alternative 1: Ten (10) Individual FFP Contracts: The consolidation of one (1)

FFP contract would substantially exceed the benefits of having ten (10) individual contracts to perform the work along the Big Sunflower River Basin. The benefits may include cost savings, quality improvements, reductions in acquisition cycle times, better terms and conditions, and any other identifiable benefits. Though awarding ten (10) individual contracts could provide a lesser degree of consolidation, or no consolidation at all, the benefits of awarding one (1) consolidated contract substantially exceed the benefits of ten (10) individual contracts for the reasons outlined below.

(i) Quality. The iterative process of working with experienced contractors tends to generate a more thorough shared understanding between the contractor and Government for the government’s requirements. While the potential exists for ten (10) individual contract holders to offer competition, one (1) contractor is afforded a greater opportunity to better understand the expectations of the Government in an effort to build project experience and capability for follow on support.

(ii) Acquisition Cycle. According to the PALT, the average time to acquire ten(10) individual contracts is approximately 160 calendar days. Each contract takes, on average, 60 calendar days to award. Some projects may require a significant amount of back and forth in the process of clarifications. Conversely, the average time to award one (1) FFP is 60 calendar days. This is possible due to all pre-award processes being captured within the base contract. The estimated procurement lead time saved is 540 days on the contract.

Table B – Time Savings Comparison of In-house Procurement to Award One (1) FFP versus Ten (10) FFP Individual Contracts.

One (1) FFP Contracts Ten (10) Individual Contracts Invitation for Bid (IFB) 45 days) X 1 contracts 60

IFB (60 days) X 10 contracts 600

Total – 60 600

(iii) Cost Savings. Per 15 U.S.C. § 657q(c)(2)(B), “savings in administrative or personnel costs alone do not constitute a sufficient justification for a consolidation of contract requirements” unless the total amount of the cost savings is expected to be substantial in relation to the total cost of the procurement.

(a) Table 1 below compares the estimated administrative and personnel costs required for a consolidated FFP contract (historically IFB). These costs are based on standard labor costs developed by MVK Contracting for FY18 procurements, along with historical average procurement support costs for Cost Engineering Division, Programs and Project Management Division (PPMD), and Engineering and Construction Division for acquisition coordination, document review, Independent Government Estimate (IGE) development and site visit attendance. In addition, the average design and procurement costs provided by the Vicksburg District Project Manager for in-house labor required for the engineering and design, drafting, and review of a FFP contract by engineering, cost engineering, and construction branch is approximately $60,000. The in-house costs were derived from historic FFP contract acquisitions for this type of work using the labor rates for the different disciplines mentioned above and the combined total costs associated for each activity required from project conception to award.

(b) Based on information provided by the Vicksburg District Contracting Division, as shown in Table 1 below, the total cost required to award one (1) FFP contract equals $320,000. As shown in Table 2 below, awarding ten (10) individual FFP contracts would cost $3,200,000. As shown in Table 3 below, the one (1) single FFP method would reduce the procurement/close-out cost by $6,120,000.

6. Consolidation Benefit Analysis:

Table 1 – Cost to Award One (1) Consolidated FFP Contract

ORGANIZATION LABOR

Contracting ($30K each) $30,000 Cost Engineering ($30K each) $30,000 Engineering ($30K each) $30,000 Construction ($30K each) $30,000 Mobilization and Demobilization ($200K each) $200,000 Subtotal $320,000 Total Cost to Award One (1) Consolidated FFP

$320,000

Table 2 – Cost to Award Ten (10) Individual FFP Contracts

ORGANIZATION LABOR

Contracting ($30K each) $300,000 Cost Engineering ($30K each) $300,000 Engineering ($30K each) $300,000 Construction ($30K each) $300,000 Mobilization and Demobilization ($200K each) $2,000,000 Subtotal $3,200,000 Total Cost to Award Two (2) Individual Contracts $3,200,000

Table 3 – Cost Savings Comparison of In-house Labor for One (1) Consolidated FFP contract vs Ten (10) Individual FFP contracts

Acquisition Approach

1 Consolidated FFP Contract Cost

10 Individual Contracts Cost

Cost per Procurement of FFP contract $320,000 $3,200,000 Contract Close Out ($5K each) $5,000 $50,000 Subtotal $325,000 $3,250,000 Other In-House Labor ($30K each) $30,000 $300,000

Total $680,000 $6,800,000 Cost Savings to Award One (1) Consolidated Contract vice Ten (10) Individual Contracts

$6,120,000

Dollars are based on the actual number of FY17 procurements and the current projections for FY23. As demonstrated in Table 3, the costs of awarding ten (10) contracts is approximately 50% of the cost of awarding one (1) consolidated contract. In sum, MVK estimates the use of one (1) consolidated FFP contract would generate $355,000.00 in labor savings for the life of the consolidated contract. A FFP contract maximizes the opportunity to acquire high quality professional services at competitive prices while minimizing acquisition time, performance, and schedule risks.

Table 4 – Analysis Summary

BENEFIT 1 Consolidated FFP 2 Individual FFP Quality High High

Acquisition Cycle 30 days 600 days Administrative Cost Low High

7. Bundling:

Bundling (FAR 7.107-3) and/or Substantial Bundling (FAR 7.107-4) are not applicable to this procurement. A bundled requirement is considered necessary and justified if the agency would obtain measurably substantial benefits as compared to meeting its agency’s requirements through separate smaller contracts or orders. Substantial Bundling is any bundling that results in a contract with an estimated value of $8 million or more for the Department of Defense. This acquisition does not meet the definition of bundling since the government is not attempting to consolidate two or more requirements previously provided or performed under separate contracts into a single contract unsuitable for small business. The selected approach is capable of fulfilling all requirements under the FFP contract.

8. Considerations, Facts, Reasoning Supporting the Determination:

A DD2579 has been signed by the Contracting Officer and Deputy for Small Business.

Both concur that consolidation of this requirement is necessary and justified.

Consolidation will allow the districts to efficiently coordinate and respond to the dynamic requirements of the Sediment Reduction Structures. Consolidation will result in a significant savings of cost and time, as well as accommodate river stage dependent construction and environmental windows. Consolidation will allow river contractors to more effectively organize their work, lower unit costs due to economy of scale, and more efficiently schedule their equipment and resources to achieve an efficient regional approach to meet the needs of the Corps of Engineers Mississippi River Sediment Reduction Structure programs. Moreover, consolidation of this requirement is both necessary and justified because the benefits of consolidation are critical to the success of MVK’s mission and the procurement strategy provides participation to small businesses to the maximum extent practicable.

9. Summary:

(1) Although this total small business FFP solicitation constitutes consolidation of sediment reduction structure requirements at two (2) discrete sites into one (1) consolidated FFP contract, this approach provides the best combination of competitive procedures, timely acquisition, cost efficiency, quality, and capable prime contractors to execute maintenance sediment reduction on the MVK navigation channels.

(2) For the reasons indicated above this consolidation is necessary and justified and is critical to the agency’s mission success. There is a maximum of $6,120,000 in cost benefit associated with this consolidation; also, these necessary and justifiable benefits significantly increase the likelihood of mission success, reduce acquisition cycle times, provide improved quality that will enhance performance or efficiency, as outlined in FAR 7.107-2(c), and are substantial. The sediment reduction program is critical to the mission of USACE in that it provides navigable Federal waterways which are vital to many aspects of Mississippi’s economies.

(3) Other alternatives noted above were considered, however, they would result in significantly higher costs and increased acquisition cycle time. Additionally, it is significantly less burdensome for the District’s Contracting and Operations Divisions to administer a consolidated scope of work for the Big Sunflower River Basin than numerous stand-alone contract actions. The findings of the market research and the documentation provided herein support the conclusion that consolidation of requirements is both necessary and justified, based on sound business judgment in view of the size, complexity, and potential number of efforts to be executed in support of MVK’s Civil Works program, and the consolidated approach provide advantages that substantially exceed the benefits of an approach that provides less consolidation.

10. Program Manager/Requiring Activity Justification: Market research has been conducted utilizing dynamic online searches in conjunction with a comparison of historical data from previous procurements of similar size, scope and complexity and the determination has been made that there is a reasonable expectation of receiving offers from (2) two or more responsible small business concerns that are competitive in terms of fair market prices, quality, and delivery. The market research does not support a further set-aside of the requirement into any specific socio-economic programs beyond a woman-owned small business set-aside.

Pursuant to AFARS 5119.202-1(1), I hereby support the consolidation of Coahoma, Bolivar, Sunflower, & Sharkey Counties, MS, Sediment Reduction Structures Phase XII, FC/MR&T, Big Sunflower River Basin.

Gregory Anderson Date Signed Project Manager

11. Office of Small Business Program Coordination: Pursuant to FAR 7.107-2(a)(3), I agree that a consolidated requirement for Coahoma, Bolivar, Sunflower, & Sharkey Counties, MS, Sediment Reduction Structures Phase XII, FC/MR&T, Big Sunflower River Basin is justified and necessary.

Demetric Erwin, Deputy Date Signed Office of Small Business Programs

DETERMINATION

Based on the foregoing rationale, I hereby determine, pursuant to the Federal Acquisition Regulation Supplement 7.107-2 and Army Federal Acquisition Regulation Supplement 5107.107, that the consolidation of the requirements for Coahoma, Bolivar, Sunflower, & Sharkey Counties, MS, Sediment Reduction Structures Phase XII, FC/MR&T, Big Sunflower River Basin is both necessary and justified and will serve the best interests of the Government. In accordance with AFARS 5119.202-1, all preference program (socio-economic programs) were considered, and it has been determined to be in the best interest of the Government to advertise this consolidated requirement as a woman-owned small business set-aside.

Davita S. Baloue Chief, Vicksburg District Contracting Office

Attachments:

Market Research DD Form 2579 Informal Acquisition Plan