B.04.21_Consolidation Determ W912HP26RA001_Redacted.pdf

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CONSOLIDATION OF CONTRACT REQUIREMENTS DETERMINATION

FOR

W912HP26RA001

Multiple Award Task Order Contract for Design Build/Design Bid Build (DB/DBB) East (As prescribed by FAR 7.107-2 and AFARS 5107.107-2)

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: U.S. Army Corps of Engineers (USACE), Charleston District (SAC) plans to solicit offers for a Firm Fixed Price (FFP) Indefinite Delivery Indefinite Quantity (IDIQ) Multiple Award Task Order Contract (MATOC) and has conducted market research that demonstrates consolidation of this procurement to be 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.

This solicitation will satisfy SAC’s construction requirements that will be performed at two or more discrete sites under North American Industry Classification System (NAICS) code 236220, Commercial and Institutional Building Construction. The solicitation will be a 100% small business set-aside, and the MATOC awarded will encompass projects located east of the Mississippi River, with a target of seven awards.

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Market research and analysis conducted by SAC confirms that consolidating requirements under this procurement is both necessary and justified.

The MATOC will have a total contract capacity of , which is based on historical usage data and projected future workload requirements.

The geographic scope includes all states entirely east of the Mississippi River, the eastern portions of states bisected by the river, and the U.S. territory of Puerto Rico. For the purposes of this procurement, “East of the Mississippi River” refers to geographic locations situated east of the river’s main channel.

3. Description of the Procurement Action:

a. Project Description:

The overall objective is to provide a FFP IDIQ MATOC for DB and DBB requirements for most SAC Programs. Under this acquisition plan, SAC intends to issue a solicitation and award a FFP IDIQ MATOC with a total capacity of

, and a performance period of a three-year base plus one two-year option period (total five years). The estimated task order range will be from the simplified acquisition threshold to $ , and possibly up to $ .

The geographic area covered includes all project areas east of the Mississippi River including Puerto Rico. Task orders will primarily be for the following stakeholders: Defense Logistics Agency (DLA), Marine Force Reserve (MFR), Army 81st Readiness Division (RD), Joint Base Charleston, and Fort Jackson.

Figure 1 below shows the various SAC stakeholders throughout the Eastern region. The scope is limited to assigned SAC stakeholders within this region but may also be used for other stakeholders within the SAD boundaries for task orders within the general scope if capacity is available. Work includes Design- Build (DB) and Design-Bid-Build (DBB) construction for new facilities and real property repair and maintenance. The work may include general building repair or renovation, vertical construction, anti-terrorism force protection of new and existing facilities, horizontal construction, and incidental work.

The proposed contract vehicle will allow SAC to ensure the capacity and flexibility to execute its mission on behalf of the district’s stakeholders.

Figure 1: Geographical Coverage by MATOC and Stakeholder

The MATOC pool will include a target of seven (7) contractors but may include more or fewer. This acquisition will consist of two phases, with a single solicitation issued for Phase One. In Phase One, proposals will be evaluated based on Past Performance (Factor 1) and Management Approach (Factor 2). Phase Two will assess the Technical Approach (Factor 3) using a seed or sample project, with price also considered (Factor 4). If a seed project is unavailable, a sample project will be used.

The purpose of this acquisition is to provide readily available contract tools that will enable SAC to execute the design and construction proactively and responsively, renovation and repair requirements identified by all SAC customers, as needed.

The anticipated construction requirements will be predominantly under North American Industry Classification System (NAICS) code 236220 Commercial and Institutional Building Construction. Award will be made to a total target of seven

(7) contractors. This procurement will be set-aside for Small Business.

b. Acquisition Strategy/Procurement Summary: To meet the new construction, renovation, and repair requirements identified by SAC customers at their various facilities over the next five (5) years, SAC intends to award a MATOC with a $ in total capacity. This MATOC pool will support execution of FFP task orders for the missions entrusted to SAC. The scope and complexity will vary considerably between assigned projects. The period of performance will be a base period of three (3) years and a single option period for two (2) years.

Individual task orders will be competitively solicited within their respective

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MATOC pools and negotiated to award to a single MATOC contractor. The availability of the MATOCs will efficiently and effectively meet many of SAC’s construction requirements and will also better position SAC to successfully meet short-fused, fiscal year-end acquisition requirements. Use of the MATOC is in the best interest of the Government with respect to timeliness, oversight, and administrative costs.

c. Applicability of Consolidation: As stated above, in accordance with 15 U.S.C. §

657q and as set forth in Sec 44 of the Small Business Act, “consolidation of contract requirements”, means a use of a solicitation to obtain offers for a single contract or a multiple award contract - (A) to satisfy two (2) or more requirements of the Federal agency for goods or services that have been provided to or performed for the Federal agency under two (2) or more separate contracts lower in cost than the total cost of the contract for which the offers are solicited; or (B) to satisfy requirements of the Federal agency for construction projects to be performed at two (2) or more discrete sites. The definition applies to this procurement because this proposed MATOC will be used to perform multiple construction projects awarded on individual task orders at two (2) or more discrete sites.

Requirements Being Consolidated: The planned MATOC will provide DB and DBB Construction at various locations, to include known requirements and requirements specifically developed in coordination with all the customers SAC supports.

a. Procurement History: Historically, SAC has procured this type of work through a combination of various stand-alone C-type contracts or other general construction MATOCs task orders. Existing MATOCs with their corresponding task orders are shown in Tables 1 and 3 below. The projects listed in Table 3 are an accurate representation of the types of projects awarded under these tools and the type of work expected to be awarded under the future MATOC.

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purposes. Nevertheless, these elevated construction inflation rates reflect tangible pressures in labor markets, material costs, and supply chain dynamics, and should be carefully considered when assessing future capacity projections. These figures are based on specialized industry cost indices, notably those from Construction Analytics, which incorporate the Producer Price Index (PPI Final Demand) alongside other building cost indicators to estimate annual inflation specific to non-residential construction.

Finally, to reasonably account for future, unquantifiable workload fluctuations across programs, a 10% adjustment factor was applied after considering both the historical workload average and anticipated reductions to each program’s historical average.

d. Rationale for Consolidation: 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, as 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 or conditions or any other supportable benefit. Benefits that are quantifiable in dollar amounts are considered substantial if they meet the dollar amounts set forth in FAR 7.107-2(d). If the quantifiable benefits do not meet these thresholds, the approving authority may determine that consolidation is necessary and justified if critical to the agency’s mission success and the procurement strategy provides for maximum practicable participation by small business.

Utilizing an IDIQ MATOC to consolidate the requirements for all of SAC’s various customers and programs is necessary to meet SAC’s mission objectives. It provides a contracting vehicle that minimizes acquisition planning and contract execution costs, shortens contracting lead time, ensures operational continuity, and improves competition by competing procurements at the task order level versus relying on multiple individually competed actions with increased lead times. Use of an IDIQ is appropriate in accordance with FAR 16.501-2(a) when exact times and/or exact quantities of future deliveries are not known at the time of award. FAR 16.504(b) indicates that the Contracting Officer may use an indefinite-quantity contract when the Government cannot predetermine, above a specified minimum, the precise quantities of supplies or services that the Government will require during the contract period, and it is inadvisable for the Government to commit itself for more than a minimum quantity. The Contracting Officer should use an indefinite-quantity only when a recurring need is anticipated.

This new MATOC will provide SAC with an acquisition tool and capacity to support awards in a timely and responsive manner, especially during the 3rd and 4th quarter of each fiscal year when much of the work is received and executed.

In accordance with FAR 7.107-2(e)(1), when the benefits of consolidated

During market research, contractors were asked about project sizes and the geographic regions in which they typically operate. For the purpose of this research, the country was divided into three regions: West (AZ, CA, AK, HI, ID, UT, MT, CO, NM, OR, WA), Central (NE, KS, OK, TX, LA, AR, MO, IA, MN, WI, MI, OH, KY, TN, MS, AL), and East (MA, CT, VA, PA, NJ, NY, FL, GA, SC, NC). Contractors were also asked whether regional or national contracts would better support their business. The majority expressed a clear preference for regional contracts.

At the time of the market research, the final structure of the regions had not yet been determined. Historically, SAC has used a two-region model (East and West) for similar MATOCs, which has successfully generated adequate competition. The data did not support dividing the country into three regions, as it would not improve workload distribution or competition.

Based on this analysis, SAC has decided to proceed with a MATOC for the East region at this time. A separate procurement will be conducted for the West region under a future solicitation. This phased approach allows for effective management of resources while maintaining robust competition among small business contractors within each region.

Following market research, it was determined that utilizing a Small Business Set-Aside is an appropriate acquisition approach as there will be adequate competition for a MATOC pool. Further limiting this MATOC will likely impact the number of offers received on some of the more complex DB projects. This determination will be documented on the DD 2579, Small Business Coordination Record.

Furthermore, the market research indicated that the market would better support two regional MATOCs instead of a National MATOC. An East MATOC will include all locations east of the Mississippi River, including Puerto Rico, and a West MATOC, to be

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procured at a later date, will include all locations in the west of the Mississippi River, including Alaska and Hawaii. This approach will allow SAC to support its customers and their various footprints.

5. Alternative Contracting Approaches and Rationale for Rejection:

SAC considered many alternatives. The rationale for rejection will be discussed here. In the analysis of the possible acquisition strategy alternatives, SAC considered stand-alone “C” type contracts and Single Award Task Order Contract (SATOCs). The Project Delivery Team (PDT) determined the most effective approach to meet the mission requirements is to utilize two regional MATOC pools and compete each project within the applicable MATOC. It was determined that “C” type contracts did not provide the flexibility required to quickly respond to changes, emergencies, and year-end requirements. “C” Type Contracts have a much higher PALT time and make it difficult to utilize a “C” contract to rapidly react to a new requirement. This is discussed in “Section

6. Consolidation Benefit Analysis (c) Acquisition Cycle Times” at greater detail. SATOCs offer higher performance risk and could be subject to a poor performing contractor that would be difficult and costly to replace, and higher cost risk without competitive pricing and due to the idea many SATOCs will have to be implemented to cover the same Area of Responsibility (AOR) creating much higher administrative costs. The analysis of the alternative approaches is as follows:

As documented in the Acquisition Plan, the PDT analyzed various contract types, including available and anticipated USACE contracts to determine the best contracting vehicle to achieve the successful completion of the construction activities in support of SAC’s Programs. Two (2) alternatives were identified and analyzed by the PDT.

Alternative 1: No Consolidation Alternative 2: Lower Degree of Consolidation

a. Alternative 1: No Consolidation - Multiple individual contracts, covering each construction need. SAC would primarily utilize competitive Firm Fixed Price “C-type” contract awards to cover each construction need.

Cost Risk: The cost risk in utilizing this procurement type is Low because each requirement is competed separately. This approach brings the lowest risk to pricing.

Performance Risk Performance risk is medium. While there is some assurance of successful performance through competing each requirement, this benefit may be offset if SAC is frequently awarding contracts to new contractors and cannot establish long-term relationships with contractors performing construction under USACE managed projects.

Schedule Risk: Schedule risk is high. The time required to award a standalone contract versus individual task orders against a MATOC is significantly higher, less efficient, and would potentially not allow SAC to meet all milestones and/or mission requirements. A

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standalone construction contract will take between 120 days and 220 days depending on the estimated value of the requirement. Assuming 7 actions a year with five between $ and $ and two actions between $ and $ , our annual lead time will be an estimated 1,040 days each year.

Other considerations and limitations: While this acquisition strategy has been used by SAC to award general construction and renovation, the increased cycle time decreases the quality of service to SAC’s clients by increased acquisition cycle time. Further, SAC leadership has identified that, due to SAC’s robust construction program, continuing to award individual contracts for each construction need is not sustainable due to constrained personnel resources. Given SAC’s finite resources and the time required to award a standalone contract versus individual task orders against a MATOC is significantly higher, less efficient, and endangers milestone and/or mission requirements for many projects.

Furthermore, repeated use of this strategy constrains limited SAC resources due to increased effort in preparation and review of full contract plans and specifications, contract document preparation, coordination with the Small Business Administration, and post-award plan review/acceptance.

b. Alternative 2: Lesser Degree of Consolidation – Awarding multiple Single Award

Task Order Contracts (SATOCs) based on geographical area that cover the entirety of the scope of the contract.

Cost Risk: The cost risk in utilizing this procurement type is medium. This strategy would require more effort to award all of the required SATOCs to cover the entire area required. Further, there is a significant difference in administrative costs associated with executing and administering a MATOC compared to multiple SATOCs that cover the same scope, in part. Multiple SATOCs are not advantageous to the Government due to the costs of procurement, implementation, administration, and oversight associated with each.

Performance Risk: Performance risk is high. SATOCs have inherent performance risk.

A contractor may demonstrate poor performance in the execution of its SATOC projects. If that risk were realized, there is very little remedy available for the Government to respond timely to other requirements. SATOCs provide limited parameters across the board and would require multiple SATOCs in order to meet the full scope mission requirements and leverage the marketplace’s capabilities to successfully complete complex projects.

Schedule Risk: The Schedule risk is low. The schedule risk is much lower than Alternative 1. Awarding as multiple SATOCs would require the pre-award activities be completed only once for each IDIQ to cover the five (5) year performance period, rather than each time for a multiple number of individual standalone contracts. This decreases acquisition efforts.

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SAC considered the award of multiple SATOCs with respective regions to cover the entire CONUS. As previously noted, establishing a MATOC pool of experienced contractors to service their respective regions provides the highest degree of consistency across the program in the quality of performance. A MATOC’s pool of contractors will be selected based on their past experience performing design build construction services. The contractors will gain further experience through the iterative process of responding to RFPs and executing projects. It has been SAC’s experience that MATOC pool contractors develop into a cadre of more highly qualified and competitive offerors than is available in the general contractor community. Contractors awarded individual SATOCs would be selected on similar past performance and experience factors as MATOC contractors and could increase their experience through the iterative task order process of negotiations and performance. The SATOC contracting approach, however, presents the risk that a contractor may demonstrate poor performance in the execution of its SATOC projects. If that risk were realized, there is very little remedy available for the Government to respond timely to other requirements. It is procedurally difficult to remove a contractor, and a new IDIQ contract would have to be put in place before any task orders could be utilized to award to any other contractor. Re-procuring a task order requirement under a MATOC would be significantly simpler, quicker, and less expensive than initiating a competition to replace a SATOC contractor. As a general matter, competition is encouraged, even for task orders for IDIQ contracts. For example, FAR 16.504(c)(1)(ii)(D) has strict requirements for implementing SATOC’s over $100M. While SATOCs that would be awarded under this alternative would be under $100M, and could be allowed, the general preference remains that competition be encouraged on the task order level and the use of SATOCs in this case is deemed not to be beneficial in meeting any government requirement.

Additionally, the MATOC strategy is offering approximately seven (7) total contracts, and the SATOC strategy would likely not yield seven different SATOCs as the distribution of projects would not correlate with the creation of that many regional SATOCs. Additionally, SAC does not have the human capital needed to manage 7 different SATOCs as each task order executed under a SATOC would require more extensive and detailed proposal evaluations and negotiations compared to a competitive acquisition that is experienced under a MATOC. Lastly, while in theory this SATOC approach would involve lesser degree of consolidation, it also removes the competitive pricing found within the use of a MATOC. Thus, the government will find themselves paying higher prices for each of the requirements throughout the five (5) year period.

A summary of the acquisition alternatives is included as follows:

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procedures is 60-80 days. This reduced lead time allows SAC to respond faster, increasing the success of the overall mission.

Requests for execution of work are often not received by SAC until the third and fourth quarters of the fiscal year. The late project priority determinations by customers and corresponding late delivery of funding necessitates that SAC utilize flexible and efficient procurement strategies. These externally imposed end-of-year procurement requirements are most successfully addressed by the streamlined acquisition procedures provided under FAR Part 16, where there is no requirement to advertise a project for 15 days, or to provide prospective contractors 30 days to submit a proposal.

Accordingly, if SAC is constrained to “C” contracts for each project, any requirements that are presented in the fourth quarter would be at significant risk, or impossible, to award before funds cease to be available for obligation within the corresponding fiscal year.

Other considerations and limitations: The government also considered the use of 8(a) sole source contracts for actions to fulfill the needs of this program. However, that strategy would only apply to those procurements not using the two-phase design-build procedures at FAR 36.3. It is important to note that many procurements under this planned contract will be design-build construction projects that are required to use two-phase selection procedures.

6. Consolidation Benefit Analysis:

Cost Risk: The cost risk associated with this procurement method is low. By leveraging a MATOC, each task order is competitively solicited from the full pool of contractors, fostering robust price competition. This continuous competition for individual task orders ensures consistently competitive pricing, maximizing cost efficiency for every project.

Performance Risk: Performance risk is low. By establishing a MATOC pool of contractors that have direct experience with the construction activities and satisfactory past performance, there would be little performance risk associated with each task order. Also, the task order competitions could be structured to mitigate any significant performance risks inherent with that specific acquisition. Unlike Alternative 1, this alternative helps to also encourage the development of a long-term relationship between the Government and the MATOC contractors by allowing us to have a continuous relationship. Efficiencies are created in submittals, and with that the review process becomes more streamlined. The government and the contractor are then able to more readily review and process submittals.

Schedule Risk: The Schedule risk is low. The schedule risk is much lower than Alternative 1. Awarding this proposed MATOC would require the pre-award activities be completed only once for each IDIQ to cover the five (5) year performance period, rather than each time for a multiple number of individual standalone contracts. This decreases acquisition efforts and costs. This would also have a significant benefit end-of-year execution where personnel resources are ready significantly strained.

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in meeting mission requirements. Having MATOCs in place allows SAC to execute awards more quickly to support programs funded with expiring appropriations, where timely obligation of funds is essential. Without the ability to award rapidly, SAC risks delays that could jeopardize the successful execution of projects within fiscal year constraints, particularly during the end-of-year award surge. Therefore, establishing this MATOC ensures the command has the contracting flexibility needed to meet statutory and operational requirements, not just a preference for convenience.

d. Terms and Conditions: There is anticipated to be no difference in terms and conditions between various acquisition methods.

e. Conclusion: Standalone contracts for all DB and DBB needs are neither practical nor efficient. Repeating full acquisition cycles for each project would add significant cost, redundancy, and delays. A MATOC reduces these burdens by establishing a prequalified pool of contractors through one rigorous competition, then issuing task orders under streamlined procedures. This approach improves responsiveness, lowers administrative workload, and reduces overall procurement costs.

MATOCs also reduce performance risk by ensuring task orders are competed among contractors with proven DB/DBB experience and satisfactory past performance. In addition, standardized requirements and contractor familiarity with program expectations lead to greater efficiency, consistency, and fewer disputes than with stand-alone contracts.

For these reasons, MATOCs offer a more efficient, consistent, and lower-risk method of execution than serial stand-alone contracts while still maintaining the opportunity for robust competition and responsibility determinations at the task-order level.

While it is noted that the expected quantifiable benefits are meaningful, they do not meet the thresholds for a substantial benefit at FAR 7.107-2(d)(1)(ii) and cannot justify consolidation on cost savings alone. However, based on the reasoning in this analysis, having construction MATOC tools in place that dramatically reduce acquisition cycle times is critical to the success of SAC’s programs (FAR 7.107-2(c)(2)). Many of SAC’s requirements involve projects that are time-sensitive, driven by mission needs, statutory deadlines, or seasonal construction windows. Delays in procurement directly translate into delayed project starts, missed environmental windows, extended impacts to stakeholders, and in some cases the inability to meet supported agency mission requirements. A MATOC will allow SAC to compete and award task orders within weeks rather than the many months required for a stand-alone procurement, ensuring that projects can be initiated and executed within required timeframes. The fact that this acquisition is being set aside for small business concerns also ensures maximum practicable participation by small businesses while providing the efficiency and responsiveness necessary to meet program demands.

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satisfy the agency’s needs. 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 one portion of the bundled requirement.

d. Applicability of CICA Bundling Principle: Although this action constitutes

CICA bundling by combining like and related construction and MILCON support with design capabilities, it is consistent with industry practice and necessary to satisfy the customers’ needs. This procurement will allow SAC to leverage economies of scale, streamline acquisition cycles, and eliminate duplication of efforts by establishing MATOCs with responsive and responsible contractors to perform individual task orders as the need arises. This is critical given the SAC’s mission to support a variety of different customers (DLA, MFR, Army, and 81st RD) across United States.

8. Considerations, Facts, Reasoning Supporting the Determination: All facts, considerations and rationale have been covered previously in the findings. The DD 2579 was prepared, reviewed, and signed by the Contracting Officer, Deputy for Small Business, and the Small Business Administration (SBA) Procurement Center Representative (PCR).

9. Summary:

Though this MATOC constitutes consolidation in that it combines construction at two (2) or more discrete sites, this approach provides the best combination of competitive procedures, timely acquisition, cost efficiency, quality, and capable prime contractors to execute the requirements. The quantifiable benefits of consolidation are or of the estimated MATOC value, which does not exceed the minimum standard of 5% applicable to this acquisition (FAR 7.107-2(d)(1)(ii)). However, this savings is supplemented by significantly decreased acquisition cycle times and increased contractor/government relationships that will enhance contractor performance and efficiency. Other acquisition alternatives were considered but would result in higher costs and increased acquisition cycle time that would be detrimental to the missions entrusted to SAC.

The consolidated approach provides advantages that substantially exceed the benefits of alternate approaches. Based on sound business judgment in view of the size, complexity, and number of efforts to be executed for SAC customers, the findings of the market research, and the documentation provided herein, consolidation of requirements is both necessary and justified.

CONSOLIDATION OF CONTRACT REQUIREMENTS DETERMINATION

for

W912HP26RA001

Multiple Award Task Order Contract

The following Senior Contracting Official, South Atlantic Division (SCO-SAD) Office of Counsel, personnel signature indicates concurrence with the contents of this Acquisition Plan:

Date:

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CONSOLIDATION OF CONTRACT REQUIREMENTS DETERMINATION

for

W912HP26RA001

Multiple Award Task Order Contract

I hereby determine, pursuant to the FAR 7.107-2, AFARS 5107.107, USACE Acquisition Instruction (UAI) 5107.107-2-100(b)(ii)(A)(1) that the consolidation of the requirements for a Multiple Award Task Order Contract (MATOC) for Design Build/Design Bid Build (DB/DBB) East Construction for the Charleston District, with a capacity of $ , is both necessary and justified and will serve the best interests of the Government.

Senior Contracting Official South Atlantic Division