Determinations Findings_Letter Contract Yellowstone Flooding Repairs.pdf

U. S. Department of Transportation Federal Highway Administration

Western Federal Lands Highway Division

Determination and Findings

The purpose of this Determination and Findings (D&F) is to document the Government’s determination to utilize a Letter Contract as authorized by FAR 16.603 titled Letter Contracts. As required by FAR 6.302-2 Unusual and compelling urgency, and FAR 16.505(b)(iii), a subsequent Justification for exception to fair opportunity will be documented under separate cover. Per the Transportation Acquisition Manual (TAM) 1216.603-2, the Chief of the Contracting Office (COCO) is the approval authority for the determination for use of letter contracts.

Findings:

In accordance with the requirements of TAM 1216.670, Agency Specific Requirements, Western Federal Lands Highway Division (WFLHD) provides the following information in support of issuing a Letter Contract to the following Contractor for emergency repairs in Yellowstone National Park as a result of historic flooding events on June 13, 2022. Below are details for the Letter Contract as prescribed in TAM 1216.670:

(1) Proposed Contractor: HK Contractors, Inc.

(2) Project Location: 4.5 miles of roadway between Gardiner, MT and

Mammoth, WY in Yellowstone National Park

(3) Contract Number: 69056719D000006

(4) Description of Work: Survey, Cross-section, Erosion Control, Grading, Excavation and Embankment, and Furnish and Install Culverts and Aggregate base.

(5) Amount of Letter Contract: $8,000,000

(6) Performance period: July 11, 2022 to November 30, 2022

(7) Estimated definitized contract: $20,000,000

(8) Type of definitive contract: Firm Fixed Price Task Order under Multiple Award Task

Order Contract (MATOC)

(9) Clauses: All clauses as required per FAR 16.603-4 Contract clauses will be included in the letter contract. In addition, Transportation Acquisition Regulations (TAR) Clause 1252.216-74 will be included. In accordance with TAM 1216.670, profit or fee under letter contracts will not be paid under this letter contract. The letter contract will be followed by formal negotiations for the stated work under a fixed price definitized contract within the timeframes listed under FAR 16.603-2(c).

(10) Statement as to the necessity and advantage to the Government of a letter contract and why no other contract type is suitable:

Because of the unusual and compelling urgency of the flood repairs, see FAR 6.302-2, as per FAR 16.603-2, a letter contract is necessary because the Government’s interests demand that the contractor be given a binding commitment so that work can start immediately. In addition, as stated in FAR 16.603-2, negotiation of a definitive contract is not possible in sufficient time to meet the requirement. Yellowstone National Park has received historic flooding and urgent repairs are needed for the safety of residents, the general public and park staff. In order to meet the construction fixed completion date, which is just prior to arrival of heavy winter rain/snow, WFLHD must issue a letter contract to a contractor already mobilized in Yellowstone National Park. As required per FAR 16.505(b)(iii), a justification for an exception to fair opportunity is documented under separate cover for award of the letter contract.

Additional Background: On the morning of June 13, 2022, Yellowstone experienced a 1-in-500-year flood event. Northern parts of the park received 2-4 inches of rain in a 24-hour period together with at least 5.5 inches of snow melt. The previous record high flow of the Yellowstone River at Corwin Springs was approximately 32,000 cubic feet per second. At more than 50,000 cubic feet per second, the river flow during this flood shattered that record.

The largest flooding impacts occurred on the road section between Mammoth, Wyoming, and Gardiner, Montana, and on the Northeast Entrance Road between Lamar Valley and Cooke City, Montana. Multiple sections of roads were destroyed along with loss of wastewater infrastructure, loss of power to most of the park, and a wide range of mudslides and rockslides within the road corridors. While damage occurred in various locations around the park, the most serious occurred in the northern portion of the Park, specifically the North Entrance Road and the Northeast Entrance Road. These roads provide the only winter access to Cooke City, Montana and must be available for emergency response, school busses, and winter recreation visitors.

The Park Service requested that FHWA design, solicit bids and construct an emergency temporary by-pass road of the North Entrance Road by the end of the 2022 construction season. Upgrading the Old Gardiner Road; a narrow, one-lane, primitive road to a 2-lane functional facility would provide a reliable and safe road for the Gardiner residents, Cooke City residents, visitors, and park staff.

Due to the limited time (July through October) to construct the Old Gardiner Road to functional standards, utilizing a Letter Contract procurement method would ensure this facility is safe for residents and the general public prior to the 2022 winter season.

Recognizing that there is a risk that costs could be higher with this type of procurement, the Park was consulted, and WFLHD received concurrence, that constructing the project this season is a top priority to ensure public safety. The ERFO Program Manager has provided concurrence that the Old Gardiner Road, as a temporary by-pass route is eligible for ERFO funding and Quick Release funding has been authorized. A Procurement Request (PR) will be issued for the amount of the letter contract.

(11) Statement as to the competition received pursuant to FAR 16.603-3(b):

FAR 16.603-3(b) states that letter contracts shall not be entered into without competition when competition is required by Part 6. As per FAR 6.302-2, the unusual and compelling conditions of the historic flooding precludes full and open competition and delay in award of a contract would result in serious injury, financial or other, to the Government. In addition, because work must start immediately, a letter contract must be awarded to a contractor already mobilized in the area. A separate justification for exception to fair opportunity was drafted for approval.

(12) Waiver of Bid Bond

In light of the urgency for this work, it is also reasonable to waive the requirement for receipt of bid guarantee. WFLHD will require the contractor to submit a letter from their bonding company stating that construction contractor will be able to obtain performance and payment bonds for the resulting definitized contract. In accordance with FAR 28.101-1(c), it is recommended that the requirement to obtain a bid guarantee prior to contract award be waived for this solicitation due to emergency nature of the acquisition.

Determination:

On the basis of the above findings, I, Stephanie D. Curtis, Chief of the Contracting Office, hereby determine that no other type of contract other than a Letter Contract is suitable for this procurement, and that it is in the best interest of the Government to waive the bid guarantee for this requirement.

Stephanie D. Curtis Date Chief of the Contracting Office