Consolidation.D&F.W912EE24R0001.Stone.MATOC_Redacted.pdf

CUI

REFERENCES

FAR 2.101 defines consolidation or consolidated requirement 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. 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, 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.

FINDINGS

1. Introduction: The U.S. Army Corps of Engineers, Vicksburg District (MVK), plans to consolidate contract requirements to provide Mississippi River Stone Placement construction services primarily within MVK’s area of responsibility (AOR), in support of the Mississippi River and Tributaries (MR&T) Project. To acquire these construction services, MVK will award MATOCs with a shared capacity of $99.5 million to all qualifying offerors. These MATOCs will meet construction mission requirements under North American Industry Classification System (NAICS) code 237990, Other Heavy and Civil Engineering Construction. These procurements constitute a consolidation of requirements per 15 U.S.C. § 657q(a)(2)(B) in that task orders issued under the proposed MATOC will involve construction at two or more discrete sites. MVK has conducted analysis and market research that demonstrates consolidation of requirements in this procurement is both necessary and justified.

2. Description of Procurement Action:

a. Project Description: Following the Great Mississippi River Flood of 1927, the nation rallied in its support for a comprehensive and unified system of public works within the lower Mississippi Valley that would provide enhanced protection from floods, while maintaining a mutually compatible and efficient Mississippi River channel for navigation. As a result, the

Flood Control Act of 1928 authorized the MR&T project. Maintaining the MR&T project as authorized requires the construction and maintenance of various types of stone navigation structures, to include all types of dikes, chevrons, bend way weirs, hard points, and other river training structures. Additional work may include placement of stone fill and longitudinal peaked stone toe protection in specified areas such as dike fields, revetments, and other locations along the river as well as riprap bank paving to include bank clearing, grading and excavation. Since project initiation, over 1,100 stone navigation structures with a total length of 334 miles of structures and approximately 700 miles of revetment have been constructed.

b. Acquisition Strategy/Procurement Summary: To rapidly respond to challenging and unknown requirements for MR&T Stone Placement construction services, MVK intends to issue a single solicitation and make multiple awards of Firm Fixed-Price (FFP), Indefinite Delivery, Indefinite Quantity (IDIQ) contracts in accordance with FAR 16.503(b), as the Government anticipates recurring requirements but cannot predetermine with precision the exact quantity, nor exact time-period needed. MATOCs will be awarded in an amount not to exceed $99.5 million combined for Mississippi River Stone Placement construction services within the bounds of MVK. Individual task orders will be competed amongst the MATOC awardees. MVK has determined that this procurement will be advertised as unrestricted. The ordering period will not exceed five (5) years.

In accordance with FAR 15.304(c)(1)(ii)(A), MVK intends to award contracts to each and all qualifying offerors. FAR 2.101 defines a qualifying offeror as an offeror that is determined to be a responsible source, submits a technically acceptable proposal that conforms to the requirements of the solicitation, and the contracting officer has no reason to believe would be likely to offer other than fair and reasonable pricing. Each task order Request for Proposal under the resulting contract will contain a project specific Bid Schedule. Proposals will be evaluated by a Source Selection Evaluation Board (SSEB) comprised of representatives of the Corps of Engineers. Factors considered during the award of individual task orders may include, but are not limited to, the following: past performance on task orders issued under this contract, with consideration given to other work not related to this contract; ability to manage the additional work required by the task order; technical capabilities related to the specific work contemplated; small business execution; and price. Other technical factors and their importance to one another may vary from task order to task order; however, the combination of factors considered and their relative importance will be stated in the Request for Proposal for each specific task order.

c. Applicability of Consolidation: Sec 1671 of the FY13 NDAA amended the definition of consolidation as set forth in Sec 44 of the Small Business Act, 15 U.S.C. § 657q. As implemented in FAR 2.101, “consolidation of contract requirements,” with respect to contract requirements of a Federal agency, means the use of a solicitation to obtain offers for a single contract or a multiple award contract to satisfy - (A) two or more requirements of the Federal agency for goods or services that have been provided to or performed for the Federal agency under two or more separate contracts lower in cost than the total cost of the contract for which the offers are solicited; or (B) requirements of the Federal agency for construction projects to be performed at two or more discrete sites. The definition applies to this procurement because a MATOC will be used to perform multiple construction projects, awarded on individual task the scope and location, from 10 to over 50 feet. These unique and challenging conditions make Mississippi River Stone Placement a work of art that requires specialized equipment, experience, and a robust monitoring program during construction. Failure to complete these navigation and flood risk mitigation projects in an effective and timely manner can result on bank failures that can threaten the stability of the Mississippi River levees with potential loss of life as result and impacts to navigation that can result on delays and channel closures. With a potential annual cost of $25M to Navigation Industry and $1.5M in dredging costs per channel shutdown and the stability of our main flood risk mitigation structures and the lives it protects at stake it is imperative that MVK secures a long-term acquisition project that provides for a proven pool of highly responsive, experienced and technically capable construction contractors and maximum flexibility to allow expeditious execution which is adaptable to new and unexpected requirements to meet the MR&T project construction and maintenance needs and avoid channel closures and disruptions to Navigation. Utilizing a MATOC to consolidate these requirements is necessary to meet the MR&T Project mission objectives as it provides for a contracting mechanism with a highly responsible and technically capable pool of contractors to ensure efficient and safe stone placement, minimizes acquisition planning and contract execution costs, shortens contracting lead time significantly, assures operational continuity, increases contracts periods of performance and ensures efficient sequencing of work regionally.

(3) If the quantifiable benefits do not meet the thresholds in FAR 7.107-2(d)(1)(i), 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. Here, as discussed above, the Mississippi River stone placement projects are critical to delivering the MR&T project missions of Navigation and Flood Risk Mitigation. Moreover, structuring the contract as an IDIQ MATOC allows for the maximum practicable participation by small business while still allowing the agency to obtain contracts that are critical to its mission. Admittedly, consolidation can sometimes limit a small business’s ability to compete if they are unable to provide all the services required by the consolidated contract. However, by structuring the procurement as an IDIQ MATOC a small business concern included in the MATOC can bid on individual task orders in the same manner that it could have bid on unconsolidated individual contracts. Consolidation may prove to be beneficial to small businesses as they may be able to derive the benefits discussed in paragraph (2) above.

Furthermore, past participation of small business on the Mississippi River Stone Placement MATOCs exemplifies that a small business can be a successful participant in these IDIQ MATOC contracts.

(4) Consolidation of projects gives contractors an opportunity to execute projects more efficiently, which in turn boosts the USACE’s ability to complete its MR&T construction mission successfully. When two or more projects are combined, the solicitation usually allows a longer performance period to give the contractor the option of performing the two projects in series or concurrently. This longer period gives the contractor flexibility in determining how the work is sequenced. This flexibility reduces the contractor’s risk of performance, which results in lower costs to the contractor and could consequently result in savings to the Government.

A technical review of Sources Sought responses was performed by team members of the Construction Division. Based upon the responses received from the Sources Sought Notice, the reviewing team members determined there were only two contractors capable of performing the work of stone placement at various locations within the boundaries of the MVK along the Mississippi River. The contractors are Luhr Crosby, LLC and Pine Bluff Sand and Gravel Company.

Based on responses received from the contractors, the reviewing team determined that none of the other contractors were capable of performing the required work.

Based upon procurement history, the targeted pool of contractors is fully capable of performing the consolidated requirement and their ability to compete will not be negatively impacted by this approach. Based upon the market research and responses to the sources sought inquiry, the Contracting Officer has determined that open and full competition under an unrestricted solicitation is best to allow both large and small businesses to compete. In addition, advertising as such provides for the maximum practicable participation by small businesses while still allowing MVK to execute its critical mission of providing navigable waterways. The vce2579 and Market Research for this requirement have been coordinated and approved.

5. Alternate Contracting Approaches Considered and Rationale for Rejection: In identifying the best solution for satisfying this requirement, MVK considered utilizing unconsolidated stand-alone source selection contracts to deliver the Mississippi River stone placement mission.

Stand-alone Invitation for Bids based solely on pricing were not considered as a viable alternative as it does not allow for the technical evaluations to ensure bidders meet the requirements to construct large stone placement structures on the Mississippi River. The challenging work conditions inherent to working on the Mississippi River discussed in paragraph 2.f(2) above make Mississippi River Stone Placement a work of art that requires specialized equipment, experience, and a robust monitoring program during construction.

Failure to complete the navigation and flood risk mitigation projects in an effective and timely manner can result on bank failures that can threaten the stability of the Mississippi River levees with potential loss of life as result and impacts to navigation that can result on delays and channel closures. On such challenging site conditions and with such must at stake, quality of the product and safety of USACE and Contractor employees on site are critical considerations when selecting a contracting mechanism for execution of the Mississippi River stone placement projects. Just as MATOCs, stand-alone source selection contracts allow for technical evaluations to happen during the procurement process to determine whether interested bidders are technically capable of performing the specific work on the solicitation.

The technical evaluation process ensures that the stone placement work is awarded to a contractor which can effectively, efficiently, and safely accomplish the work. The main trade off from awarding unconsolidated stand-alone source selection contracts vs a consolidated MATOC with task orders is total acquisition cycle time with as much as 4.04 years added over 5 years with the unconsolidated method.

Therefore, MVK considered and rejected the alternative approach of issuing stand-alone construction contracts for Mississippi River Stone Placement construction requirements.

a. Time Savings: A complicating element of the construction and repairs under the MR&T project is the difficulty in estimating future year annual funding levels. While the project is anticipated to continue to receive substantial funding during the life of this procurement, it remains subject to significant annual fluctuations in funding, which directly impacts priorities within the project. MVK minimizes this uncertainty by using IDIQ acquisition actions to create capacity to accomplish the mission requirements and flexibility to respond to those requirements or funds that arrive on short notice.

Additionally, the work performed under the contract is often dictated by rapidly changing river levels that cannot be accurately predicted in advance.

(1) The use of task orders under a MATOC streamlines the procurement process and is significantly more expeditious than a stand-alone construction contract strategy.

Historically, the required time from project start to contract award, Procurement Acquisition Lead Time (PALT), averages approximately 150 days and includes internal reviews (DQC, ATR, BCOES), procurement related activities, such as sources sought, market research, coordination with SBA, creating solicitation, legal review, and administrative activities necessary for soliciting/awarding the contract. Having multiple projects under development at the same time for similar work would result in overlapping reviews, tie up labor resources, and decrease administrative efficiencies. In addition, the likelihood exists that the same MVK personnel would be working on multiple projects, increasing the time required from project start to contract award for the individual projects. In contrast, task orders under a MATOC do not require advance notice, voluminous solicitations and proposal submissions, or source selection boards for non- IFB solicitations.

(2) Stand-alone construction contracts are solicited as sealed bid invitation for bids, per FAR 36.103(a) and FAR 36.213-3, and have an average PALT of 90 days. MATOCs have a PALT of 120 days on average, task orders issued under a MATOC have a PALT of 45 days on average. A stand-alone construction contract requires that a pre-solicitation notice (synopsis) be posted at least 15 days before a solicitation is posted, per FAR 5.203(a), and a bidding period of at least 30 days is required when a synopsis is required, per FAR 14.202-1(a). Issuing a pre-solicitation notice is excepted for task orders issued from a MATOC in accordance with FAR 5.202(a)(11), as the requirement would have been previously synopsized just prior to the issuance of the solicitation for the MATOC, and the minimum 30-day bidding period is not required. Much of the reduction in PALT from issuing task orders is due to these exceptions.

(3) Historically, the funding for this work is prioritized as emergencies and is expected to be executed by fiscal year end. Unfortunately, requests for execution of such work is typically not received by MVK until the third and fourth quarters of the fiscal year, after the annual high river events. The late project priority determinations by customers and corresponding late delivery of funding necessitates that MVK utilize flexible and efficient procurement strategies. Although the funds received are “no year” funds, past practice is for MVK to obligate the funds within the fiscal year received or risk the funds being reassigned to other projects. 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 bidders 30 days to submit a proposal. Accordingly, if MVK is constrained to stand-alone construction contracts, any requirements that are presented in the fourth quarter would be at significant risk for award before funds cease to be available for obligation within the corresponding fiscal year.

(4) Most important, however, is the constraints of the stand-alone construction contract process on MVK’s ability to take advantage of available river stages in the award of these requirements. Historically, the agency can only estimate river stages, or the depth of the water in the river, 60 days in advance. Given yearly fluctuations in the river level missing a favorable river stage can mean sometimes waiting a year or more for favorable river stages to return. When this happens the levee work which supports keeping the Mississippi River open as a critical national transportation route and which is critical to the agency’s mission success cannot be accomplished. Different windows for specific tasks occur concurrently throughout the lower river, necessitating the need to award concurrently and quickly on different contracts as they occur. Consolidation allows MVK to compete task orders that take maximum advantage of the available performance windows. The difference between a 45-day PALT for MATOC procurements and a 90-day PALT for stand-alone construction contracts is critical to the agency’s mission success since the MATOC PALT allows the agency to quickly respond during favorable river stages and accomplish mission critical levee work when it is needed. Thus, consolidation is in the government’s best interest due to the timing restrictions, anticipated rate of frequency of orders issued, and the ability of the government to schedule the work efficiently. As shown in Table 6 below, and based on information provided by the Contracting Division, the total PALT time saved by awarding each MATOC with 10 task orders each year for 5 years vs 10 standalone “C” type contracts for each MATOC requirement for 5 years is 2,130 calendar days (see Table 6).

one contracting effort rather than having multiple teams working separately on individual river construction contracts.

(2) Successful, Timely Mission Completion. Having a MATOC in place, consisting of contractors who are technically capable of performing the work, MVK can reduce procurement acquisition lead time for each project. By utilizing MATOCs for these MR&T projects, there is a much lower risk of obligation and execution failure resulting in enhanced flood risk and failure to comply with the associated guidance. By having MATOCs in place consisting of contractors who are technically capable of performing the work MVK can significantly reduce the risk of delaying or preventing work from being accomplished due to mistakes in bid by inexperienced contractors, contract terminations and delays due to contractors failing to have financial and equipment capabilities necessary to handle concurrent projects, and protests; all which are detrimental to the agencies mission success as the agency is tasked with executing the MR&T project.

d. Quality. The iterative process of working with experienced MATOC contractors tends to generate a more thorough shared understanding between the contractor and Government for the Government's requirements. While the potential exists for stand-alone construction contract holders to end up being poor performers, MATOCs allow for competition and selection to preclude subsequent award to poor producers, resulting in a “good to great” contractor being selected to perform every project.

e. Summary. In summary, the cost benefits of consolidation for each of these MRL requirements under each MATOC equates to $1.67 million in savings versus the use of stand-alone construction contracts, which does not meet the cost savings required to meet the definition of substantial benefits in order to justify consolidation of requirements. However, this consolidation provides other substantial benefits through vital qualitative benefits that are critical to provide protection and flood risk reduction against the “greatest flood” (a USACE modeled catastrophic flood event) having a reasonable probability of occurrence. Combining these requirements in order to ensure a proper contracting vehicle is in place to allow reliable, experienced, skilled contractors to begin construction, as quickly as possible, is critical in allowing MVK to provide expedited mission execution as directed by the Director of Civil Works and to quickly respond to changing river conditions. Consolidation is in the government’s best interest due to the timing restrictions, anticipated rate of frequency of orders issued, and the ability of the government to schedule the work effectively and efficiently. As mentioned previously, the total time saved by awarding each MATOC with 10 task orders each year for 5 years vs 10 stand-alone construction contracts each year for 5 years is 2,130 calendar days of PALT. The MATOC offers a critical, necessary step to deliver an aggressive, effective, and efficient MR&T project and Drive Quality Project Delivery as directed by the Director of Civil Works.

6. Bundling Analysis:

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. Definition of the Competition in Contracting Act (CICA) Bundling Principle: This acquisition does not meet the definition of bundling, as it does not attempt to consolidate “two or more requirements for supplies or services, previously provided or performed under separate smaller contracts that are likely to be unsuitable for award to a small business concern”. The requirements being consolidated have all been previously advertised on an Unrestricted basis and have never been offered under a small business set-aside.

c. Applicability of 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. 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; Major Contracting Services, Inc., B- 406980, October 10, 2012; and Outdoor Venture Corp., B-299675; B-299676, Jul 19, 2007.)

Consolidation of requirements is necessary to allow MVK to meet the MR&T construction needs of its customers in a cost effective and timely manner. Consolidating requirements under MATOC contracts enables the Government to gain many efficiencies and cost savings (see Rationalization of Consolidation section above) that result in a product that is delivered in a timely and efficient manner to our Federal and non-Federal sponsors without any adverse impact on competition or execution by Small Business concerns.

This procurement is intended to be advertised under full and open competition on an unrestricted basis. 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. However, substantial cost savings achieved through the reduction of duplicative efforts and operational efficiency can be a reasonable basis for restricting competition where requirements are bundled. As demonstrated above, substantial cost savings will be accomplished through consolidation of these requirements. These projects have been consolidated in the past using stone placement MATOCs as a procurement vehicle. Competition to small businesses is restricted by the limited number of contractors with the ability and equipment to perform this work. As such, MVK does not reasonably expect to receive offers from two or more small business concerns.

However, this procurement does not restrict small businesses from submitting proposals as resulting contracts may be awarded to both large and small businesses. MVK has no information, nor has it received any comments from the stone placement community, to suggest that placing each Mississippi River Stone Placement project under separate contracts, or regrouping them in some other manner, would create additional interest and allow other contractors to perform this work.

7. Considerations, facts, and reasoning supporting the determination: All facts, considerations and rationale have been covered previously in the findings. Consolidation will allow MVK to efficiently coordinate and execute these crucial stone placement projects at a reduced acquisition time frame and will produce increased quality and performance due to the selection of qualified and experienced contractors. Most importantly, consolidation of this requirement will allow the MR&T Project to successfully execute the mission of providing flood risk mitigation and safe and reliable Navigation on the Mississippi River.

8. Summary: Though these approaches constitute consolidation, they provide the best combination of competitive procedures, timely acquisition, cost efficiency, flexibility in scheduling and issuing work, maximum practicable participation by small and large businesses, quality, and capable prime contractors necessary to execute and successfully complete stone placement on the Mississippi River within MVK’s AOR. Stand-alone source selection contracts were considered but determined to result in higher costs, decreased administrative efficiencies, increased acquisition cycle time, and much higher probability of substantial delays in performance and possible mission failure. Additionally, it is significantly less burdensome for MVK’s Contracting and Construction Divisions to administer each MATOC rather than numerous stand-alone construction contracts. While there are some cost benefits associated with these consolidations, substantial benefits are realized in these acquisitions in the higher likelihood of mission completion, reduction in acquisition cycle times, and quality improvements that will enhance performance or efficiency, as outlined in FAR 7.107-2(c). The total estimated savings identified due to consolidation is approximately 1.12 million in combined estimated costs over the life of each $99.5 million contract. Although these savings do not meet the required threshold to qualify as substantial benefits, there are independent qualitative benefits that are substantial, critical to the agency’s mission success, and provide participation to small business to the maximum extent practicable. The decreased PALT from 90 to 45 days is critical to the agency’s mission success in allowing timely responses to mission critical work during appropriate river stages since the agency can only estimate river stages 60 days in advance and could miss critical windows for project execution if a lesser degree of consolidation was provided. These substantial qualitative benefits justify the chosen approach. The findings of 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 number of efforts to be executed. The consolidated approaches provide advantages that substantially exceed the benefits of an approach that provides a lesser degree of consolidation.