B.04.21 Consolidation Memo (Redacted) for PreSol - Navy Fuel Pier FY22 W912EP22B0008.pdf

CUI – Controlled Unclassified Information

Source Selection Information, See FAR 3.104

DEPARTMENT OF ARMY

U.S. ARMY CORPS OF ENGINEERS, JACKSONVILLE DISTRICT

Determination and Findings Request for Consolidation Maintenance Dredging, U.S.

Naval Station Mayport, 50-Foot Project & Navy Fuel Pier 111, 38-Foot Project, Duval

County, Florida

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 the subject 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) 5107-2, “Consolidation.” My review resulted in the following findings:

FINDINGS

Introduction: The U.S. Army Corps of Engineers (USACE), Jacksonville District, plans to solicit bids for maintenance dredging in the Naval Station Mayport (NSM) approach channels and turning basin as well as in the Navy Fuel Pier 111 (NFP

111) berthing area and U.S. Naval Station Mayport, 50-Foot Project, located within Duval County, Florida. The North American Industry Classification System (NAICS) code assigned to this requirement is 237990, Dredging and Surface Cleanup Activities. The current estimated value of this requirement is approximately with an estimated period of performance of 300 calendar days.

This procurement will be unrestricted. The Jacksonville District has conducted market research that demonstrates consolidation of this procurement is both necessary and justified.

1. Description of Procurement Action:

a. Project Description: Project work consists of maintenance dredging in the NSM approach channels and turning basins as well as maintenance dredging in the NFP 111 berthing area U.S. NSM, 50-Foot Project. The contract is split

Source Selection Information, See FAR 3.104 between a Base and one Option. The contract Base element consists of maintenance dredging in the NSM portions of Bar Cut-3, the Mayport Entrance Channel, Turning Basin, Destroyer Basin, and Small Boat Basin. Option A consists of maintenance dredging in the NFP 111 berthing area. For the Base and Option, A, excavated material will be transported to and placed in the Jacksonville Offshore Dredged Material Disposal Area (ODMDS). Work also includes turbidity monitoring, endangered species observers (hopper dredges only), sea turtle trawl-sweeping (hopper dredges only), and marine animal observers (clamshell dredges only).

b. Acquisition Strategy/Procurement Summary: The NFP 111 project was not included in the original consolidation determination under the current South Atlantic Division’s (SAD) Regional Dredging Multiple Award Task Order Contract (MATOC). For this reason, the consolidated required will be procured as an Invitation for Bid (IFB), fully open to all responsible sources.

Maintenance dredging at NSM as well as NFP 111 are well defined requirements and the periods of performance are known; thus, the consolidated requirement will be awarded as a “C” type contract.

(Material dredged from both NSM as well as NFP 111 must be taken to an ODMDS. Coast Guard certified equipment is required to complete transport and

Source Selection Information, See FAR 3.104 dispose of material in an ODMDS safely. Market research shows there are no known small business who own Coast Guard certified equipment. For this reason, procurement of maintenance dredging at NSM as well as NFP 111 must be advertised on an unrestricted basis regardless of whether the work is consolidated).

c. Applicability of Consolidation: As implemented in FAR 2.101, consolidation or consolidated requirement means 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 as this procurement requires maintenance dredging at two discrete sites.

d. Requirements Being Consolidated: A design-bid-build construction contract is needed to enable the Jacksonville District to manage the fulfillment of contract requirements most efficiently. The requirements being consolidated which have previously been awarded as separate requirements are maintenance dredging of NSM including portions of Bar Cut-3, the Mayport Entrance Channel, Turning Basin, Destroyer Basin, Small Boat Basin, and maintenance dredging of NFP 111 berthing area. All material dredged from both locations will be transported to and placed in the Jacksonville ODMDS.

e. Procurement History: Both NSM and NFP 111 maintenance dredging have consistently been performed by other than small businesses under the dredging subset of NAICS Code 237990, i.e. Contract W912EP21C0005 Maintenance Dredging, U.S. Naval Station Mayport, 50-Foot Project, Jacksonville Harbor, 47- Foot Project ,and Construction Dredging, Jacksonville Harbor High Spot Removal, Duval County, Florida, which included NSM and Contract W912EP12C0021 Jacksonville Harbor, Maintenance Dredging 40-Foot Project, Bar Cut 3 through Cut 9, included NFP 111, as no small businesses possess the necessary equipment with sufficient Coast Guard certification to complete the requisite work. Due to the equipment requirements, there are currently no known small businesses which possess the necessary equipment to be determined responsible in accordance with FAR Part 9 on either project as such consolidation of these requirements is deemed to have no impact on small business.

f. 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.

Source Selection Information, See FAR 3.104

Benefits that are quantifiable are considered substantial if they meet the dollar amounts set forth in FAR 7.107-2(d). These thresholds are: (i) Ten percent of the estimated contract or order value (including options) if the value is $94 million or less; or (ii) Five percent of the estimated contract or order value (including options) or $9.4 million, whichever is greater, if the value exceeds $94 million. If the quantifiable benefits do not meet these thresholds, the approving authority may determine that consolidation is necessary and justified if the expected benefits of the consolidated approach are critical to the agency’s mission success and the procurement strategy provides for maximum practicable participation by small business. For this procurement, the quantifiable benefits of consolidation, as required by FAR 7.107-2(c), include quality improvements that will save time and improve performance and efficiency, reduced acquisition cycle times, and cost savings.

g. Benefit Analysis:

(i) Quality. USACE has a pool of dredging contractors with decades of successful dredging, including dredging of the exact locations under this requirement.

Jacksonville’s field team and construction branch have a long history of successfully monitoring and ensuring these types of dredging projects meet USACE, federal, state, and other standards governing dredging projects. It is anticipated consolidation will not negatively impact the required dredging work for this project.

Coordination of work under a single contract will help prevent/avoid any possible conflicts with the transport and disposal of dredged material as well as facilitate communication with all other waterway users such as the Pilots, Navy, USCG, JaxPort, and the Jacksonville Marine Transportation Exchange. Not only is consolidating dredging requirements more efficient in scheduling it also allows the successful contractor the flexibility to manage scheduling resulting in considerable reductions in mobilization and demobilization costs

(ii) Reduction in acquisition cycle times. Consolidation will allow for a reduction in acquisition cycle costs while meeting the needs of the customers. This reduction in the acquisition cycle provides substantial cost saving benefits (quantified below). Much of the work requires award in a short timeframe and construction must be completed within a specific schedule in order for a mission benefit to be realized.

A significant reduction in the acquisition cycle can be achieved by consolidating these projects under a single contract. The reduction is derived by only having one procurement lead-time for the projects versus separate, staggered acquisition cycles for individual projects. As discussed below, there would be an approximate 129-day reduction of the acquisition cycle for one of the projects that can be achieved by consolidating under a single contract.

If the projects were procured separately based on the multiple sites, the

Source Selection Information, See FAR 3.104

Jacksonville District would be required to conduct multiple separate acquisitions, which would require separate plans and specifications, separate IGE’s, separate BCOES reviews, and separate advertisements. The reduced acquisition life cycle results in significant time and cost savings. Consolidating the projects into a single procurement saves at least 129 calendar days per additional project added.

Table 1 reflects the award time required to award one design-bid-build contract.

Considering this process would have to be accomplished one more time if individual contracts for each site were used there is a considerable lead time savings should this project be consolidated as proposed. These days are based on standard procurement timelines developed by Contracting for FY22- procurements.

Table 1 –Time Required for Design-Bid-Build Contract

Timeline Design-Bid-Build

Procurement Package Received 1 Day

Market Research report / Sources Sought 30 Days

Small Business coordination 7 Days

Legal Review Solicitation 7 Days

Issue Pre-solicitation Notice 15 Days

Issue Solicitation 30 Days

Pre-Award Survey/Responsibility Determination 25 Days

BOB Review Award Package 7 Days

Legal Review – Award 7 Days

Total Lead Time 129 Days

(iii) Cost Savings. IAW FAR 7.107-2(d)(1) “Benefits that are quantifiable in dollar amounts are substantial if individually, in combination, or in the aggregate the anticipated financial benefits are equivalent to:

(i) Ten percent of the estimated contract or order value (including options) if value is $94 million or

(ii) Five percent of the estimated contract or order value (including options) or $9.4 million, whichever greater, if the value exceeds $94 million.

(2) Benefits that are not quantifiable in dollar amounts shall be specifically identified and otherwise quantified to the extent feasible.

Source Selection Information, See FAR 3.104

Finally, consolidating enables one contractor to schedule the work (equipment and workforce) efficiently since the contractor has the responsibility of defining the project schedule based on contract requirements enabling one contractor to schedule and accomplish the mobilization/demobilization considerably decreasing these costs. Due to a host of variables, i.e., port of origin, current workload, available dredges/crews, impacting mobilization/demobilization costs this cost was not defined; however, consolidations accomplished in the past have resulted in a considerable amount of savings.

Approval of consolidation into a design-bid-build general construction contract will provide significant cost savings compared to individual procurements and drastically reduce costs performance risk, scheduling risk, logistical risk, and administrative costs. One consolidated contract affords the contractor maximum flexibility to manage their schedule. Said flexibility will result in lower costs due the contractor having more control over mobilization and demobilization for both projects, which is a major cost associated with dredging contracts as it tends to range from or more, of the total contract cost.

A single design-bid-build contract maximizes the opportunity to acquire high-quality, professional services at competitive prices while minimizing acquisition time, and performance and schedule risks. Consolidation of these requirements is necessary, and in the government’s best interest and will result in the best value for the government.

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

5107.107-2

3. Results of Market Research: A Sources Sought Notice (SSN) was posted to SAM.gov via Solicitation Number W912EP22Z0004, from 09 February 2022 to 03 March 2022.

. All capability statements were reviewed to determine if the firms were capable of completing the work. The Government analyzed their responses to see if there would be any negative impact on competition if these two requirements were consolidated and the statements found the following results:

Market research demonstrated that combining both requirements will have no impact on competition. Historically the successful bidders have utilized a hopper dredge for the Entrance Channel and for Bar Cut-3 portions and a clam shell and scows to dredge the remainder. Due to this market research and uniqueness of this project it has been determined in the best interest of the Government to solicit this requirement as unrestricted. With this requirement needing an Ocean Material Disposal Site (ODMDS), Coast Guard certified equipment is required.

4. Alternative Contracting Approaches and Rationale for Rejection:

Source Selection Information, See FAR 3.104

a. Stand-alone Design-Bid-Build Contracts: The Jacksonville District considered the issuance of separate IFBs, which would result in multiple design-bid-build construction contracts. While the issuance of separate IFBs is viable, this alternative would have a tremendous impact on the schedule. Issue concurrent solicitation would be another option, but it would limit competition and it would create additional workload for contracting and other departments. Separate acquisitions add at least 129 calendar days to the acquisition schedule per each contract accomplished beyond the first contract. This alternative also duplicates the acquisition process with regard to the development of a separate set of plans and technical specifications, IGEs, and requisite certification reviews, resulting in a large increase in administrative costs. Furthermore, the amount of in-house labor and associated costs would significantly increase during each acquisition phase.

b. Multiple/Single Award Task Order Contracts: The Jacksonville District considered utilization of the South Atlantic Division’s Regional Dredging MATOC, which is frequently used for maintenance dredging requirements. While utilization of the MATOC would be beneficial as it affords the Government access to responsible contractors and streamlines the procurement process, thereby reducing acquisition timeframes, the NFP 111 project was not included in the original consolidation determination under the South Atlantic Division’s (SAD) Regional Dredging Multiple Award Task Order Contract (MATOC); thus, it cannot be advertised under this procurement vehicle. As this action is for the consolidation of two (2) one-time purchase requirements, there is no anticipated cost savings in establishing a multiple or single award task order contract for so few known requirements. Also, additional administrative burden would be placed on the government as having multiple contractors require detailed coordination and oversight to ensure the material placement, movement of equipment, and debris removal are accomplished in accordance with required standards.

The requirements are known for this requirement and there is no benefit realized from establishing a Task Order Contract.

5. Bundling:

a. Definition of bundling. FAR 2.101 defines bundling as consolidating two or more requirements for supplies or services, previously provided or performed under separate smaller contracts, into a solicitation for a single contract that is likely to be unsuitable for award to a small business concern 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 (i) through (iii) of this definition.

b. Applicability of FAR Bundling Definition. This acquisition does not meet the definition of bundling since the requirements are not suitable for small business concerns, even if individually solicited, as evidenced by procurement history and

Source Selection Information, See FAR 3.104 market research.

c. Definition of the Competition in Contracting Act (CICA) Bundling Principle.

This principle, as developed by the 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 new requirement unnecessarily. In order to justify CICA Bundling the agency must show "a reasonable basis for why the bundling is necessary to meet the agency need." (Vantex Serv., Inc., B-29041 5, Aug. 8, 2002 and Outdoor Venture Corp., B-299675; B-299676, Jul. 19, 2007). 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. In such a case, restrictions on competition are allowed but only to the extent necessary to 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 a portion of the bundled requirement.

d. Applicability of CICA Bundling Principle. Competition is not being restricted unnecessarily by this procurement being advertised; the consolidation of this action is necessary to provide the best value to the Government and the requirements being consolidated are no more than what is required. Substantial cost savings achieved through the reduction of duplicative efforts and operational efficiency, as discussed above in the Benefit Analysis paragraph, can be a reasonable basis for restricting competition where requirements are bundled. For this procurement, the quantifiable benefits of consolidation, as required by FAR 7.107-2(c), meets the requirement of substantial benefits that exceed 10% of the estimated contract value. Though it may be feasible to award multiple individual “C” type contracts, the savings and efficiencies that are anticipated to be achieved through this acquisition justify the use of a single consolidated “C” contract, which involves the least amount of consolidation necessary to execute the mission. This acquisition does not meet the definition of bundling since the requirements are not suitable for small business concerns, even if individually solicited, as evidenced by procurement history and market research.

6. Considerations, Facts, Reasoning supporting the determination: All facts, considerations, and rationale have been covered previously in the findings. The DD Form 2579 has been signed by the Contracting Officer, Deputy for Small Business and the SBA Procurement Center Representative. All concur that consolidation of this requirement is both necessary and justified.

7. Summary: Consolidation of these maintenance dredging projects under a single contract will allow the Jacksonville District the maximum flexibility to respond in a timely, efficient, and cost-effective manner to our customers’ needs. This strategy postures the Jacksonville District with the most efficient contracting approach to meet mission needs while promoting competition to the maximum extent practical.

The quantifiable benefits of consolidation include quality improvements that will

Source Selection Information, See FAR 3.104 save time and/or improve or enhance performance or efficiency and a reduction in acquisition cycle times exceeding the standard in FAR 7.107-2(c)(1) and FAR 7.107-2(c)(2) and are further supplemented by the price benefits. Completing each of the projects as separate contracts was considered, but that alternative would result in significantly higher costs and an increased acquisition cycle time while not providing a benefit to the Government. Additionally, it is significantly less burdensome for the Jacksonville District’s Contracting and Construction Divisions to award and administer one (1) design-bid-build contract vice multiple stand-alone design-bid-build contracts. The findings of the market research and the documentation provided herein support the conclusion that the consolidation of requirements is both necessary and justified. This decision is based on sound business judgment in view of the location and number of efforts to be executed and the consolidated approach advantages that substantially exceed the benefits of a lesser degree of consolidation.