A10.Consolidation Memorandum for Red Rock & Saylorville D-B Building Construction_Redacted.pdf

DEPARTMENT OF THE ARMY

U.S. ARMY CORPS OF ENGINEERS, ROCK ISLAND DISTRICT

DETERMINATION AND FINDINGS REQUEST FOR CONSOLIDATION

W912EK23R0001 LAKE RED ROCK AND SAYLORVILLE LAKE ADMINISTRATIVE,

VISITOR CENTER AND MAINTENANCE BUILDINGS

The Federal Acquisition Regulation (FAR) 2.101 defines consolidation or consolidated requirement as 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. FAR 7.107-2 requires that consolidation of requirements with an estimated total dollar value exceeding $2 million shall be supported by a written determination that consolidation is necessary and justified in accordance with 15 U.S.C. § 657q.

I have reviewed this requirement and associated market research and determined in accordance with 15 U.S.C. § 657q and FAR 7.107-2 that consolidation is both necessary and justified. This approval is made in accordance with the approval thresholds set forth in Army Federal Acquisition Regulation Supplement (AFARS) 5107.107-review resulted in the following findings:

FINDINGS

1. Introduction: U.S. Army Corps of Engineers, Rock Island District (MVR), plans to consolidate contract requirements to provide one (1) new administrative/visitor center at Lake Red Rock as well as one (1) new administrative building and one (1) new maintenance building for Saylorville Lake. The total construction requirement will have a capacity of . The Rock Island District will award a single firm-fixed-price design-build contract to acquire time-sensitive construction activity related requirements under North American Industry Classification System (NAICS) code 236220, Commercial and Institutional Building Construction. This procurement constitutes consolidation of requirements that involve construction projects to be performed in at least two or more discrete sites within the Rock Island District Area of Responsibility (AOR). MVR has conducted analysis and market research that demonstrates consolidation of this procurement is both necessary and justified.

2. Description of Procurement Action:

a. Project Description: Design and construct a new twenty thousand (20,000) square foot (SF) administration and visitor center building with all new access roads, parking, landscaping, electrical, sewer, and water utilities located adjacent to the existing Lake Red Rock administration building designed to UFC 1-200-02 standards for environmentally sustainable construction. After construction of the new administration and visitor center, demolish existing eight thousand (8,000) SF Lake Red Rock administration building and perform site restoration near Knoxville, IA. Design and construct a new twenty thousand (20,000) SF administration building, and new twenty nine thousand (29,000) SF maintenance building with all new access roads, parking, landscaping, electrical, sewer, and water utilities located adjacent to the existing Saylorville Lake administration building designed to UFC 1-200-02 standards for environmentally sustainable construction.

Demolish existing five thousand five hundred (5,500) SF Saylorville Lake administration building and nine thousand five hundred (9,500) SF maintenance building and perform site restoration near Johnston, IA.

b. Acquisition Strategy/Procurement Summary: The Rock Island District will advertise this requirement as a competitive design-build.

c. Applicability of Consolidation: Section 1671 of the FY13 National Defense Authorization Act (NDAA) amended the definition of consolidation as set forth in Section 44 of the Small Business Act, 15 U.S.C. § 657q. As implemented in FAR 2.101, s the use of 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. The definition applies to this procurement because the design-build contract will be used to perform multiple construction projects

(AOR).

d. Requirements Being Consolidated: Under this design-build contract, MVR will consolidate multiple projects for the design and construction of three (3) new buildings within the Lake Red Rock and Saylorville Lake areas of responsibility (AORs).

e. Procurement History: Historically, MVR has utilized Design-Bid-Build or separate A- E design and firm-fixed-price construction contracts for the construction of buildings.

Designs are either completed through in-house resources, or through separate A-E design task orders, and constructed as firm-fixed-price construction contracts. MVR does not have a history with design build contracts but realizes the need for this contracting mechanism as the District moves forward with increased workloads.

f. Rationale for Consolidation:

(1) 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 acquisition 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 enhance performance or efficiency, reduction in acquisition cycle time, better terms or conditions, or any other supportable benefit per FAR 7.107-2(c). Benefits that are quantifiable are considered substantial if they meet the dollar amounts set forth in FAR 7.107-2(d)(1). For this procurement the estimated value is . Pursuant to FAR 7.107-2(d)(1)(i), for acquisitions in which the value is $94 million or less, the quantitative benefits must be substantial; in this case . As discussed below, the cost savings are expected to exceed .

(2) The benefits of consolidating this requirement include: significantly increasing the likelihood of more efficient use of civil works funding, reduction in acquisition cycle times, and quality improvements that will enhance performance or efficiency. By utilizing a single award of a firm-fixed-price design-build contract versus three individual contract vehicles, the Government:

Establishes a contract vehicle that will allow the designer of record to re-use design features at both locations. The expectation is the buildings at both locations will be approximately the same size and dimensions. The interior office space will remain identical for 60% of the space utilized. A cost savings in designer of record time is anticipated at , of design costs that MVR would typically expend.

Creates an opportunity for cost savings through scales of economy pricing for supplies and materials The designer of record will have the opportunity to purchase supplies and materials in bulk for three separate buildings. In recent history, market volatility for structural steel, lumber, and building materials has created a strain on project budgets. A design build contract will enable a contractor to identify cost effective materials and time project orders. In comparison with recent IGEs and contract awards, MVR could anticipate a , cost savings for scales of economy pricing.

Creates an opportunity for design freedom for the contractor to procure cost effective materials in a volatile and unpredictable market. In a design build contract, the designer of record will have the ability to more easily identify construction practices and materials that are more readily available in the current market. This will allow for reduced schedule, budget, and labor hours needed to support the contract. In the past two years, schedule slip when materials are not available has cost projects on average . For this project, this cost impact is equal to .

Compared to following the traditional prescriptive requirements for design and construction, the opportunities listed above account for an anticipated cost savings of between reduction of in-house labor, enhanced performance or efficiency, reduction in acquisition cycle time, and better terms or conditions.

(3) The Des Moines Area Office is responsible for the management responsibilities at both Lake Red Rock and Saylorville Lake. Due to their geographic proximity, with the city of Des Moines between them, it is anticipated that the pool of potential offerors for all requirements would be the same, whether or not they are consolidated. Initial market research was conducted utilizing two (2) separate sources sought notices one (1) for Lake Red Rock and one (1) for Saylorville Lake. Secondary market research was conducted with a single sources sought notice to all respondents of the initial market research; this market research was to ensure all respondents would be able to compete and would still have interest in competing if consolidation of requirements was to occur. All vendors responded to the secondary sources sought notice stating they had no objection to the consolidation.

By consolidating this work into a single design-build contract, the Government will eliminate significant duplication of effort, save administrative costs, and minimize the overall procurement schedule. Consolidation also provides the Government the flexibility to execute separate projects concurrently and complete the most critical projects in a timely fashion. Therefore, consolidation of these projects improves the efficiency of the district in meeting the mission to maintain a dependable and reliable management of the two project locations.

A design-build contract will also provide a contracting vehicle that significantly enhances the chances of mission success for the District. Utilizing a design-build, whereby the designer of record and prime contractor work together, will generate a favorable schedule and performance benefits. This contracting method will substantially increase the probability that District projects will be completed in an expeditious manner and per contract specifications.

(4) The Bipartisan Infrastructure Law (BIL) is a 2022 supplemental appropriation that focuses on re- the following requirements for funding execution and project completions:

Through a consolidated design-build contract, MVR will be able to adapt new contracting techniques that will position the District to meet BIL execution requirements.

3. Applicable Statutes/Regulations: 15 U.S.C. § 657q, FAR 7.107-2, and AFARS 5107.107-2.

4. Results of Market Research:

Market research has demonstrated significant interest from small businesses capable of performing the required work. MVR has extensive experience and success working with small business construction contractors for all types of construction. This experience gives MVR confidence in the ability of a small business firm to perform the required construction successfully.

Market Research has identified multiple contractors that reach several of the small business contracting demographics are capable completing this requirement as a consolidated effort. A sources sought notice was posted on beta.sam.gov on March 6, 2022, with a response date of March 31, 2022. A follow up sources sought was completed in August of 2022 to determine interest/capability of a small business to complete this requirement as a consolidated design build contract.

MVR is confident that making this requirement a small business set-aside will ensure adequate competition

Based on the above market research and extensive knowledge of the major players within this industry, the Rock Island District is confident that small businesses can perform the requirement. Therefore, the design-build contract will be solicited competitively as a small business set-aside, request for proposal (RFP). This recommendation allows maximum practicable participation by small businesses.

5. Alternate Contracting Approaches Considered and Rationale for Rejection:

a. Alternative One - Stand- -alone C type contracts.

(i). Quality. Using individual contracts may lead to inconsistent quality of construction between buildings. Having one contractor perform design and construction of multiple buildings within a consolidated design-build contract will allow for creation of efficiency(s) and innovation during the design and construction by working through their vendor network for supplies and materials.

Consolidation of this requirement may help the Government realize a lower price via scale of economy pricing.

(ii). Acquisition Cycle. Advantages of a consolidated design-build contract will enable the district to realize efficiencies of the design and construction process to be completed concurrently. The aforementioned efficiencies could not be realized with multiple, standalone design-bid-build, C type contracts. The timeline for funding execution and construction completion, per current guidance, is better suited for a consolidated design- .

b. Alternative Two Multiple Design-Build Contracts

(i). Quality. Using individual design-build contracts may lead to inconstant quality of construction between buildings. Having one contractor perform design and construction of multiple buildings allows them to gain efficiencies and innovation of design and construction of buildings by working through their vendor network for supply and materials. Consolidation of this requirement may help the Government realize a lower price via scale of economy pricing.

(ii). Acquisition Cycle. Advantages of a combined design-build contract will enable the district to realize efficiencies of the design and construction process to be completed concurrently. The aforementioned efficiencies could not be realized with multiple design build contracts. The timeline for funding execution and construction completion, per current guidance, is better suited for a consolidated design-

c. Alternative Three AE-Designs and follow-on C-Type Awards

(i). Quality. Using design of this requirement would require accelerated efforts from the AE contractor. These efforts would entail increased cost, potential quality issues and the potential for future modifications.

(ii). Acquisition Cycle. Having AE contracts does not allow for the capture of efficiencies of concurrent design and construction.

The District has realized that the resource needs of AE design and internal resources does not allow for a significant cost or time savings.

infrastructure requirements would double all pre-award efforts and add significant administration post-award.

d. Cost Savings. administrative or personnel costs alone do not constitute a sufficient justification for a consolidation of contract relation to the total cost of the procurement. To be considered substantial, the quantifiable benefits of consolidation must meet the thresholds set in FAR 7.107-2(d)(1), which for procurements less than $94M is 10% of the estimated contract value. Per FAR 7.107-personnel costs alone is not sufficient justification for consolidation unless the cost savings are expected to be at least 10 percent of the estimated contract or order value (including options) of the consolidated requirements, as determined by the senio The following is a list of specific benefits that result from the use of a design-build that consolidates multiple requirements and project sites within a single contracting vehicle.

a) Contracting Division Efficiencies: MVR Contracting (CT) considered the time summary for staff efficiencies. The analysis indicates a significant time savings for CT staff alone. Managing one consolidated design-build contract compared to three stand- tracts is substantial. The time savings identified by utilizing a consolidated design-build contract is a significant time savings which permits Contracting to efficiently and effectively support the construction requirements in a timely manner and still maintain adequate and cost-effective staffing to accomplish other Contracting needs.

b) District Efficiencies: MVR analysis indicates an estimated financial cost savings of by consolidating this design-build contract into one awardable contract compared to having multiple separate contracts. This estimated cost savings will permit more money to be obligated for the awarded contract.

The overall benefit of this financial savings realized by the use of a consolidated design-build is the effective and expedient construction of these three (3)

Summary Alternative Approaches.

In summary, the cost benefits of consolidation of these requirements under a design-build contract versus the use of multiple individual does not meet a quantifiable amount in cost savings required to meet the definition of substantial benefits in order to justify consolidation of requirements. However, this consolidation provides other substantial benefits ese requirements in order to ensure a proper contracting vehicle is in place to allow a reliable, experienced, skilled contractor to begin construction, as quickly as possible, is critical in allowing MVR to provide expedited mission execution as directed by the Director of Civil Works. Consolidation is in the funding limitations, resource constraints, and the Government to schedule the work effectively and efficiently.

6. Bundling Analysis:

a. Definition of Bundling. FAR 2.101 defines bundling as consolidation that combines two or more requirements for supplies or services, previously provided or performed under separate smaller contracts, into a solicitation for a single contract, a multiple award contract, or a task or delivery order that is likely to be unsuitable for award to a small business concern (even if it is suitable for award to a small business with a Small Business Teaming Arrangement) due to: (i) The diversity, size, or specialized nature of the elements of the performance specified; (ii) The aggregate dollar value of the anticipated award; (iii) The geographical dispersion of the contract performance sites: or (iv) Any combination of the factors described in paragraphs (1)(i), (ii), and (iii) of this definition.

b. Applicability of FAR Bundling Definition. This acquisition does not meet the FAR definition of bundling since the Government is not attempting to consolidate two or more requirements for services or supplies previously provided or performed under separate contracts into a single contract or task order unsuitable for small business.

c. Definition of the Competition in Contracting Act (CICA) Bundling Principle. This principle, as developed by Government Accountability Office (GAO) case law, focuses on whether the combined requirement (new, old, or otherwise) restricts competition, and whether the agency is consolidating or bundling a requirement unnecessarily. GAO has defined this principle as follows:

CICA generally requires that solicitations permit full and open competition and contain restrictive provisions and conditions only to the extent necessary to satisfy the needs of the executive agency. [41 U.S.C. 3301.] Since [bundled or] consolidated procurements may combine separate, multiple requirements into one contract, they have the potential for restricting competition by excluding firms that can furnish only a portion of the requirement.

Guardian Moving & Storage Co., Inc., B-410171, *3 (Comp. Gen. Nov. 6, 2014) (quoting Aalco Forwarding, Inc., et al., B-277241.12, B-277241.13, 6 (Comp. Gen.

Dec. 29, 1997)).

d. Applicability of CICA Bundling Principle. The proposed consolidation does not

Bundling prohibitions. The CICA requires solicitations to provide for full and open competition except where restrictions on competition are necessary to satisfy the procuring agency's needs. 41 U.S.C. 3301. Bundled procurements combine separate requirements into one contract; thus, they have the potential to restrict competition in violation of CICA by excluding firms that can provide only a portion of the bundled requirement. The District has no information to suggest that separate contracts for each lake area would stimulate additional interest in bidding from other contractors capable of doing this work. Though it may be possible to award multiple stand-alone contracts, this approach would not increase competition. The savings and efficiencies that are anticipated reduced labor costs, enhanced performance or efficiency, reduction in acquisition cycle time, and better terms or conditions justify the use of a consolidated design-build contract.

7. Considerations, facts, and reasoning supporting the determination:

The design-build, which is a small business set-aside, is awaiting approval from SBA. All facts, considerations, and rationale have been covered previously in the findings. Consolidation will allow MVR to efficiently coordinate and respond to infrastructure requirements at Lake Red Rock and Saylorville Lake. Most importantly, this will allow the district to meet the critical agency mission while providing maximum practicable participation by small business. The consolidation of these requirements is both necessary and justified and allows maximum participation to small businesses.

8. Summary: Though this approach constitutes consolidation, it provides the best combination of competitive procedures, timely acquisition, cost efficiency, flexibility in scheduling and issuing work, MVR staff efficiency, and maximum practicable participation by small business.

Individual s and individual design-builds were considered but were determined to result in higher costs, decreased administrative efficiencies, and increased acquisition cycle

Engineering, Contracting and Construction Divisions to administer one design-build contract rather than separate contracts. These substantial qualitative benefits justify the chosen approach under FAR 7.107- 2(d)(1)(i) without requiring an analysis of unquantifiable benefits under FAR 7.107-2(c). The findings of the documentation provided herein support the conclusion that consolidation of requirements is both necessary and justified in view of the size, complexity, and number of efforts to be executed. The consolidated approaches provide advantages that substantially exceed the benefits of all approaches that provide a lesser degree of consolidation.

W912EK23R0001

LAKE RED ROCK AND SAYLORVILLE LAKE ADMINISTRATIVE, VISITOR

CENTER AND MAINTENANCE BUILDINGS

Upon the basis of the findings above and with the concurrence of the SBA, I hereby determine, pursuant to the authority of FAR 7.107-2, 15 USC § 657q, and Army Federal Acquisition Regulation Supplement 5107.170-3 "Consolidation of Contract Requirements," that the proposed consolidation of two or more discrete construction projects for the Department of Defense and other Federal Agencies within the Rock Island District is both necessary and justified.