Isabella QA - JA - Redacted.pdf

Control No: SPK-FY21-19 Contractor: Kleinfelder, Inc.

Program: Lake Isabella Dam Safety Modification Project Quality Assurance

CUI – Procurement Sensitive See FAR 3.104

JUSTIFICATION REVIEW DOCUMENT

OTHER THAN FULL AND OPEN COMPETITION

Action:

Out-of-Scope Modification to Contract W91238-18-D-0001, Quality Assurance (QA) Sampling and Testing Services for the Lake Isabella Dam Safety Modification Project

(DSMP)

Authority:

10 U.S.C. 2304(c)(1) as implemented by FAR Part 6.302-1 -- Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

Amount:

Prepared by:

Leah Solomon Contract Specialist Email: leah.solomon@usace.army.mil

Contracting Officer:

Joel Klemmer Contracting Officer Email: joel.r.klemmer@usace.army.mil

Technical Representative:

Tatia Taylor Geologist Email: tatia.r.taylor@usace.army.mil

Requirements Representative:

Stephen Martinez Program Manager Email: stephen.b.martinez@usace.army.mil

Justification for Other than Full and Open Competition

US Army Corps of Engineers (USACE), Sacramento District (SPK) FAR 6.302-1 Only One Responsible Source and No Other Supplies or Services Will

Satisfy Agency Requirements

Contract No. W9123818D0001

1. Contracting Activity:

U.S. Army Corps of Engineers, Sacramento District Contracting Division, Service and Supply Section 1325 J Street, Room 878 Sacramento, California 95814-2928

2. Description of Action:

SPK Engineering Division requests a contract modification to Firm-Fixed Price, Single Award Indefinite Delivery Indefinite Quantity Contract No. W91238-18-D-0001 with Kleinfelder, Inc., 2882 Prospect Park, Suite 200, Rancho Cordova, California 95670. The subject contract is for Quality Assurance (QA) sampling and testing services for the Lake Isabella Dam Safety Modification Project (DSMP) at Lake Isabella, Kern County CA. The initial AE requirements included the contractor providing all the labor, material, equipment, and supervision required to establish and receive certification for an on-site testing laboratory that was certified by USACE prior to commencement of QA testing.

The contractor is also providing critical QA field support services as required. It is noted that the Phase 2 Lake Isabella DSMP is a USACE Mega project with a Dam Safety Action Class (DSAC) -1 classification, which is the highest dam safety risk category for dams in the USACE portfolio.

The Lake Isabella DSMP is considered one of the USACE South Pacific Division’s (SPD) highest priorities due to dam safety and risks to large populations downstream of dams.

Dam safety, and the need to ensure quality support services such as QA services (the subject of this J&A) are critical to the overall success of the Isabella program.

The required modification will increase the current contract capacity by for a total contract capacity of for the period of performance (PoP) of 8 January 2018 to 7 January 2023 (base IDIQ). To establish the value of additional contract capacity required, it was critical to validate the remaining QA testing requirements in relation to the remaining construction activities. The team first verified the current expenditure of contract capacity through the Project Manager analyzing all the QA Lab Contractor’s invoices to date, to validate current spending against the construction activities completed thus far. This analysis showed the average value of the invoices increasing over time (as construction has progressed and material placement increased), indicating that more testing and sampling is required to keep pace with the construction contractor’s aggressive production schedule because testing and sampling frequency is

3. Description of Supplies/Services:

The Construction QA sampling and testing services provided by Kleinfelder under contract W91238-18-D-0001 are in direct support of the Phase 2 Lake Isabella Dam Safety Modification Project (DSMP). These QA services include establishment of an on-site certified materials testing laboratory, and all materials, sampling, field and laboratory testing, and services in accordance with referenced laboratory and test standards. For QA, random sampling and testing is performed to verify that aggregate materials and material placements conform to specified design requirements. All referenced QA testing activities are critical in verifying the construction contractor is conforming to all required construction and material specifications required for this critical dam safety modification project. Construction QA testing is also a critical construction schedule activity that directly impacts the construction contractor’s ability to meet the required construction schedule, any delays in QA testing by the Government can be used by the construction contractor to claim Government Delay and request consideration for the impact caused by a Government delay.

For purposes of background, the scope of the Phase 2 Lake Isabella DSMP project is under construction by Flatiron-Dragados-Sukut Joint Venture firm via a separate construction contract, which consists of modifications to existing dam embankments, modification of an existing spillway, construction of a new spillway, construction of a new labyrinth weir, modification of control towers, conduit, highway and road realignments, and US Forest Service Recreation Facility Relocations. The project includes rock fill and earthwork construction, zoned embankment construction, stone protection, construction of Portland cement concrete structures and fills, pavement construction, construction of buildings, site work and utilities, and other work as required. The project requires on-site production of rock, on-site and off-site production of aggregates, on-site production of borrow soil, obtaining on-site water supply, on-site and off-site production of various Portland cement concrete mixtures, off-site production of hot-mix asphalt concrete pavement mixtures, and on-site production of grout.

QA Services:

Period of Performance: 8 January 2018 to 7 January 2023 Total Value:

Original Ceiling Amount:

Increase:

4. Authority Cited:

The statutory authority permitting other than full and open competition for the proposed follow-on modification is 10 U.S.C. 2304(c)(1), as implemented by FAR 6.302-1 -- Only one responsible source and no other supplies or services will satisfy agency requirements. 10 U.SC.2304(d)(1)(B)(ii), as implemented by FAR 6.302-1(a)(2)(iii)(B), provides that full and open competition need not be provided in instances when services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services when it is likely that award to any other source would result in unacceptable delays in fulfilling the agency’s requirements.

5. Reason for Authority Cited:

Kleinfelder is the only contractor able to provide continuity of QA testing operation support based on the substantial lead time that would be required to establish a new certified testing laboratory at the construction site as well as adequate data management of all current QA testing services provided to date. Validation of the testing data is critical to the successful completion of the referenced construction contract, and a new contractor would need to reverify all the QA testing data performed by Kleinfielder and potentially adopt its QA testing regime so the construction contractor isn’t impacted by the new QA contractor’s testing regime, which would result in a duplication of effort.

It is noted that Kleinfelder was selected for the award of the QA testing IDIQ after a Full and Open competition was conducted resulting in a total of four offers (see Paragraph 10). The timeline for mobilization of Kleinfelder personnel, equipment and instrumentation for testing, calibrations, and ERDC validation/certification of QA Laboratory was approximately 49 days (60 days was provided in the contract). The existing contract also includes demobilization of the contractor lab at the completion of services, which was never intended to happen mid-point during construction. The time to demobilize all instruments, personnel and testing equipment is estimated to be 1-2 weeks but could be greater. The total delay to change to another source would thus be in the order of 2-3 months at a minimum. A re-procurement would also take a minimum of another 6 months. This would account for the time it takes to procure a new contractor. There is only one laboratory facility, which cannot be occupied by two sources, thus the demobilization/mobilization activities are sequential and cannot be achieved simultaneously in the event a new contractor was to mobilize. It is also not feasible to construct a second lab to avoid a gap in services as a secondary on-site lab is estimated to take between six (6) months to twelve (12) months to construct before a lab can be validated and functional.. The current lab took 386 days (~13 months) to construct and 49 days to set up and validate.

Concrete and embankment materials testing activities run around the clock and on weekends/holidays. Transferring the work seamlessly to another Contractor would impart additional unavoidable delay and work stoppage.

Data management is also included in the current contract and the completeness of the body of testing data from all dam safety modification activities directly informs the Post Implementation Evaluation (PIE). The PIE is the assessment performed after dam modifications work is complete to determine if the three failure modes of the dam complex were successfully mitigated, thereby decreasing the overall risk level.

Disruptions to lab support, causing delays to construction, could in turn lead to gaps in the data, increasing risk to the completeness, and success of the PIE assessment

The need for an increase to the base IDIQ ceiling, and a sole source for QA services arise are from two primary challenges occurring on the Phase 2 Lake Isabella DSMP.

These challenges are (a) Schedule Delay and (b) Quality Management of the construction contractor. Tertiary logistical challenges are also described below.

a. Challenge – Phase 2 DSMP Schedule Delay At the start of the Mega project, the construction contractor experienced significant delays delivering facilities on the project’s critical path which resulted in overall schedule delay. These include the aggregate processing plant and concrete batch plant delayed by 8 months due to problems with overseas equipment getting through customs controls and payment issues with subcontractors; Construction of new QA Laboratory building delayed from original schedule of July 2018 to April 2019 due to construction contractor management issues; Government approval of a blasting team for excavation operations was also delayed by 6 months due to disagreements on specifications. In 2019 SPK enforced contract requirements for dewatering, material stockpile, and contract restrictions on performance of seasonally restricted works at the Aux Dam when it was clear there was insufficient time to excavate to the foundation of the Aux Dam and embank back to original flood elevation by the start of flood season. This led to the project effectively losing the 2019 construction season and delaying the project by one year (one construction season).

The Phase 2 project includes modifications to existing Main Dam and Aux Dam. The baseline schedule anticipated embankment of the Aux Dam in 2019 and embankment of the Main Dam in 2020. However due to construction contractor delays, the works were performed over 2020, 2021, and scheduled to be completed in 2022.

Due to the significant delay in the Phase 2 schedule, the QA services need to continue to match performance of current Phase 2 works. As further described in this section there is no scenario where a change in contractors providing QA services would avoid a gap in services. Open competition resulting in a change of QA services contractor would result in double efforts on the part of Government to oversee Mobilization/Demobilization of contractors and validation and certification of the new laboratory equipment and staff by USACE ERDC. It is critical to the success of the construction contract that there be consistency in our QA testing process, any new contract solution would introduce an unacceptable schedule and performance risk to the construction contract.

b. Challenge – Phase 2 DSMP Quality Management To ensure quality the Sacramento District needed to structure its organization to effectively manage the project. The PM, Contracting, Engineering, and Construction organizations have been structured to efficiently manage the quality of the construction contractor’s submittals and overall construction. The District’s revised organizational structure to manage this project is a key lesson learned and enabled the Government to overcome the construction contractor’s planning shortfalls that have affected quality and been problematic. Key aspects of the organizational structure include:

i. SPD Dam Safety Production Center (DSPC) leads the Planning, Engineering, and Design phases and leads Engineering Support to Construction.

ii. Isabella Resident Office current organizational structure enables efficient quality management (Forward PM, Quality Assurance Unit, Technical Review Unit, Office Engineering Unit, Engineering Unit, DSPC Unit, Project Controls Unit).

iii. HQ led Design, Construction Evaluations and A-E led Safety Assurance Reviews by industry subject matter experts provide third party internal and external review of quality management.

In the context of quality management, the QA services provided by Kleinfelder is viewed as an extension of the Isabella Resident Office’s Engineering Unit (Government oversight) and is an integral component of on-going quality management.

An out-of-scope modification, to the existing contract W9123818D0001 to increase the ceiling of the base IDIQ contract is the most expedient and cost-effective alternative to meeting the Sacramento District’s immediate need for the continuation of QA sampling and testing services for the remainder of the project. A Full and Open competition for this requirement would not be beneficial to the Government for reasons detailed above and below.

In summary, due to significant schedule delay(s) of the Phase 2 DSMP and quality control issues on the part of the prime construction contractor, there is a need to continue QA services to account for a substantial increase in volume of QA testing not forecasted at the time of award of the existing contract. The increased testing requirements occurring early in the construction project has resulted in the contract ceiling amount being met at the height of project construction, which will be insufficient to complete the project testing requirements through completion of construction. The increase was determined based on an Engineering cost estimate and supported by cost forecasting from historical expenditures.

6. Efforts to Obtain Competition:

In accordance with FAR 5.202(a)(11), this action has been synopsized.

a. Effective Competition: Because this is a sole source action, effective competition is not applicable.

b. Subcontracting Competition: N/A

7. Actions to Increase Competition:

There will not be a need for further QA testing after the Lake Isabella Dam Safety Modification Project is complete.

8. Market Research:

A Notice of Intent to sole source sources sought was posted to beta.sam.gov on 5 May 2021. No responses were received. Market Research determined that no other contractors could provide the service without a significant gap in services.

9. Interested Sources:

To date, no other sources have written to express an interest.

10. Additional Facts:

Phase 2 DSMP contains the full scope of critical Dam Safety modifications to address urgent and compelling life safety concerns. Current funding for QA services is anticipated to run out by 16JUL21, and the Sacramento District seeks to increase the ceiling of the base IDIQ to allow the award of a new task order by 16JUL21 to avoid a gap in services, and temporary shutdown of Phase 2 Isabella DSMP as a result of the prime construction contractor delays. Contract delays would increase risk to the public (300,000 people live downstream of the project). The current dam safety risks could result in potential life loss in the range of 1000-2000 human individuals. A gap in QA services could delay project by one construction season (1 April – 31 October) which would result in risk to public safety, and USACE not meeting its Congressional commitment to project completion by 2022.

Management of QA Testing Invoicing: It is noted that the contractor (Kleinfelder) only does testing and related activities at the direction of USACE and only for items specifically detailed in the contract. None of the testing activities are at Kleinfelder’s discretion, and the items they invoice for are only what the USG has directed them to perform. Details such as dates underscoring individual items such as Expedited Testing, Night Work, etc., are included with invoices and verifiable. Test results are received for every test, and data management database activities are submitted compiling project test data per the contract. The COR and Engineering team review Kleinfelder invoices upon receipt each month, discussions are held between COR, Lab Manager and/or Kleinfelder as needed pertaining to each monthly pay application prior to approval for payment. It is noted that based on the unique and complex nature of this QA testing support contract, the Chief of Engineering Division is the primary COR, which gives a senior member of the District visibility and direct oversight and management of this key support contract.

Price Fair and Reasonable Determination: It is noted that the base IDIQ was solicited competitively, with four (4) offers being received. Below is an abstract of the offers on the base IDIQ:

11. Technical Certification: I certify that the supporting data under my cognizance which are included in the justification are accurate and complete to the best of my knowledge and belief.

Tatia Taylor Geologist

Signature:

12. Requirements Certification: I certify that the supporting data under my cognizance which are included in the justification are accurate and complete to the best of my knowledge and belief.

Stephen Martinez Program Manager

13. Fair and Reasonable Cost Determination: A fair and reasonable cost determination will not be made for this action to increase the ceiling. The fair and reasonable cost determination will be made before the issuance of the modification to the task order.

14. Contracting Officer Certification: I certify that this justification is accurate and complete to the best of my knowledge and belief.

Joel R Klemmer

Reviewed:

Maureen A. McAndrew SWD Division Counsel U.S. Army

Signature

Approval Based on the foregoing justification, I hereby approve this modification to single award IDIQ W91238-18-D-0001 for QA sampling and testing services for the Lake Isabella DSMP to increase the ceiling for the estimated amount of on an other than full and open competition basis pursuant to the authority of 10 U.S.C.2304(c)(1), Only One Responsible Source, subject to availability of funds, and provided that the services or property herein described have otherwise been authorized for acquisition.

Michael C. Orr USACE Alternate Advocate for Competition