JA Stone Milwaukee urgency redacted_Redacted.pdf

DEPARTMENT OF THE ARMY

U.S. ARMY CORPS OF ENGINEERS, CHICAGO DISTRICT

231 SOUTH LA SALLE STREET, SUITE 1500

CHICAGO, IL 60604

CELRC-CT 30 April 2024

MEMORANDUM FOR RECORD Control No. LRC-FY24-04

SUBJECT: Justification and Approval (J&A) for Other Than Full and Open Competition for Armour Stone for Milwaukee Harbor

1. Contracting Agency: The U.S. Army Corps of Engineers, Great Lakes and Ohio Rivers Division, Chicago District.

2. Description of the Action: The Chicago District, Operations & Regulatory Division, Lake Michigan Project Office, Harbors Maintenance requires immediate delivery of stone. The Government intends to fulfill this need with a new firm-fixed price, commercial product, purchase order, using $748,880 in Civil Works (CW), Operations and Maintenance General (O&MG) appropriated funds (symbol 3123). The intended recipient of the sole source award is the incumbent under W912P623C0010 dated 31 March 2023, Midwest Construction Company (“Midwest”), Unique Entity Identifier (UEI) VPLVZEFWPLK9, located at 920 Central Avenue, Suite 10, Nebraska City, NE 68410.

3. Description of Supplies/Services: The Government has an immediate need for supply and delivery of 8,140 tons of 3 to 7 ton armour stone to the Milwaukee Harbor located in Wisconsin. The cut stone must meet ASTM C127, 127, C 135, D 535, D5312, D5312, C 295, and D 4992 production standards.

4. Authority Cited: Under the authority of 41 U.S.C. 1901, as implemented by Federal Acquisition Regulation (FAR) 13.501(a), Sole source acquisitions.

5. Reason for Authority Cited:

Under FAR 13.106-1(b)(2), the Government may solicit from a single source using FAR 13.501 requirements. FAR 13.106-1(b) provides examples of legitimate needs for single sources such as urgency, exclusive licensing agreements, brand-name or industrial mobilization.

The Government has an urgent requirement to deliver stone to Milwaukee, requiring delivery 8,140 tons by the end of May.

Midwest has the current unique qualifications to meet the agency’s urgent needs. Over the past decade, Midwest supplied the stone to the Chicago district except for in 2014 and 2019, demonstrating having the established supplier network of quality stone, and skilled personnel to delivery stone meeting the standards, in at least a satisfactory manner. Commercial services may include additional quality requirements support the

Control Number: LRC-FY24-04 use of FAR 52.246-11 Higher Level Contract Quality Requirements, and or use of FAR 53.209-3 First Article Approval—Contractor Testing. FAR 9.304 lists exceptions to the government requiring testing and approval. FAR 9.304 Exception (c) Products normally sold in the commercial market does not apply because characteristics may change. In this case, the mined quarry veins can change in produced stone characteristics.

Criteria for Stone Quality Test Test Method Acceptance Criteria Specific Gravity ASTM C 127 2.6-3.0 for stone material Absorption ASTM 127 < 1 percent or > 3 percent Los Angeles Abrasion ASTM C 535 < 20 percent loss after 500 revolutions Freeze-Thaw ASTM D 5312 < 2 percent loss after 35 cycles Wetting-Drying ASTM D 5313 < 2 percent loss after 80 cycles Petrographic Examination ASTM C 295 No deleterious materials allowed Field Examination ASTM D 4992 No deleterious materials allowed Field Examination ASTM D 4992 No detrimental discontinuities

On 25 April 2024, Midwest confirmed they have available for immediate delivery from the Waterloo Wisconsin Quarry, 10,000 tons of stone meeting the required ASTM standards prescribed in the product description (ASTM C 88, C 127, C 295, C 535, D 5312, and D5313). This is important because not all quarries can produce stone meeting our requirements. Additionally, previously approved quarries may not have stone meeting our requirement, as

a. Background.

The urgent need arises from a 22 April 2024 agency filed protested for a 17 April 2024 awarded Contract (W912P624D0005) under solicitation W912P624R0006.

That three-year Indefinite-Delivery, Indefinite Quantity (IDIQ) contract had a ceiling of $17M for three harbors on it. The Government has an immediate need for delivery to one of those harbors- Milwaukee. The Government needs stone by 11 May 2024. Performance need is too short in the future to permit a reprocurement or wait for agency determination. IAW FAR 33.103 (g), the agency has 35 days to make a decision, but the Government needs stone in less than two weeks.

FAR 33.103 (f)(3) requires the agency to suspend performance for timely filed protest pending resolution of the protest within the agency, including any review by an independent higher level official, unless continued performance is justified, in writing, for urgent and compelling reasons or is determined, in writing, to be in the best interest of the Government. Such justification or determination shall be approved at a level above the contracting officer, or by another official pursuant to agency procedures. This was a timely filed protest, so the Government suspended performance on 22 April 2024 under task order W912P624F0015.

The Government does not plan perform the FAR 33.103 (f) override the stay in performance. Instead the Government is pursuing a sole source procurement with the incumbent, the preferred method of obtaining urgent or in the best tries to plan the stone harbor work three years in advance. In 2024, the Government planned to have delivered 4,000 tons of stone by truck every 2 weeks to the Milwaukee harbor between 11 May and 28 September, and 2,500 tons of stone by barge every 2 weeks to Calumet harbor after 28 September and by the end of the working season.

At each harbor, the Government uses a floating plant to place the stone along the breakwater. Every day the floating plant sits costs the Government $6,500/day for personnel labor. The plant schedule may have 17 working days missed due to a 30-day protest delay and equates to a total cost of $110,500. Further constraints this year is our plant needs to stop this summer so our vessels can get to a dry dock. Dry dock occurs as part of regularly scheduled routine maintenance for the safety and longevity of our vessels. Therefore, delays will reduce the amount of work the Government can accomplish this year and create additional mission impacts next fiscal year.

Calumet is the last harbor planned harbor on the schedule this year. The Government will pay higher prices for the stone not delivered this year to Calumet. The Government planned to delivery 10,000 tons of stone to Calumet harbor by barge, and next years proposed prices are a ton than this year. Based upon the competitive prices under solicitation W912P624R0006, the Government projects the price of total stone to Calumet to increase by next year. Additionally, the price to have a barge delivered for delivering the stone to a harbor under the protested contract is . That price stands whether we ship 1 ton or 100,000 tons to a harbor. Next year’s barge price will increase by . The weekly use of the barges costs next year.

For 10,000 tons of stone, at 2,500 tons for two barges every two weeks, delay until next year increases the weekly barge use .

6. Efforts to Obtain Competition:

a. As previously mentioned above, the Government solicitated (W912P624R0006) a requirement this year . However, the agency received an agency protest. The contract under protest is a small business set-aside, three-year IDIQ supply requirement with a $17 Million dollar ceiling.

b. Effective competition. The Government will provide the required FAR 6.305(a) notice within 14 days after contract award, as required by FAR 13.501(a)(1)(iii). The notice required by FAR 5.201 (synopsis of a proposed contract action) shall be published, and any bids or proposals received shall be considered. However, a FAR 5.202 (a)(2) exception exists for synopsizing when the time frame is limited because of urgent conditions. As explained above, we are operating in urgent conditions.

c. Subcontracting competition. The Government has provided a list of sources for the contractor to compete supply source. The incumbent has identified on source of supply which already has 10,000 tons available for immediate delivery.

7. Actions to Increase Competition: The Government intends to overcome the current barrier, by resolving the agency protest under solicitation W912P624R0006 and utilize the competitively awarded IDIQ contract W912P624D0005.

8. Market Research: Over the past decade, only three firms have received awards for delivering the stone: Luhr Bros. Inc. in 2014, Crowley Holdings, LLC in 2019, and Midwest. Over the past 4 years, for the Chicago District stone need. Therefore, the Government performed market research to identify and notify as many possible sources as possible for competition under solicitation W912P624R0006.

On 14 February 2023 the Government searched for stone suppliers in Sam.gov, and Federal Procurement Data System-Next Generation (FPDS-NG), and the Dynamic Search Small Business (DSBS), under the North American Industry Classification System Codes, 423320, Brick, stone and related construction material merchants, wholesalers, 150 employee small business size standard and NAICS 327991, Cut Stone and Stone Product Manufacturing, 500 employee small business size standard.

Under sam.gov, the common types of solicitations using this NAICS 423320 includes 500 tons of ABC stone DoD W50S87-21-Q-5011, 1000 tons of riprap NPS P15PS02599, and 3,750 tons of surge stone. Under sam.gov, the common types of solicitations using NAICS 327991 includes engraving type cutting stone such as granite and headstones to cemeteries. DOE 4-B139-Q-00065-00, DHS

70B01C23R20138437, DOS DOS-SS11796454, VA 36C78623R0035, FWS

0040602313.

In FPDS-NG, USACE had less than the 139 procurements using NAICS 327991, 1/3 less than the NAICS 423320. Top suppliers included. The incumbent and the Stone Construction Company Inc. were top suppliers too. The only orders placed (27 total, includes all modifications) under the incumbent were with LRC. The Corps has over 200 procurements using this NAICS 15% of the Army’s total procurers under this NAICS in FPDS-NG. Top suppliers included Crest Quarry Properties (W911RX05D0009), Inc. and the Stone Construction Company Inc. USACE has over 200 procurements using NAICS 423320, 15% of the Army’s total procurers under this NAICS in FPDS-NG. Top suppliers included Crest Quarry Properties (W911RX05D0009), Inc. and the Stone Construction Company Inc.

In DSBS, only one small business listed in WI, Sheboygan. Illinois had 3, marble and granite companies, the other 2 are masons. One mason cut stone to match historic buildings. The other mason also is included in the NAICS above. IN had two firms, but one predominately transported steel to manufacturers and fabricators. In DSBS, three firms listed in IL, all three specialized in transportation of stone. In WI and IN, each had only one firm.

o AMS Elite Solutions, Inc. in Grayslake, IL, (UEI UNW7RY8RFHL3, POCs