Jacobs JA_26 Aug_LRB Signed_1_Redacted.pdf

Control Number: LRB-FY24-01

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity: U.S. Army Corps of Engineers (USACE) Buffalo District, 478 Main Street, Buffalo, New York, 14202.

2. Description of the Action: The Buffalo District Office is requesting additional IDIQ capacity for W912P421D0006 (AE SATOC). On 8 June 2021, JE Architects/Engineers PC (Jacobs) was awarded a $35M SATOC to perform the remedial design for NFSS Interim Waste Containment Structure (IWCS). The $35M capacity was based on the 2015 Feasibility Study estimate of ~$500M to remediate the site. The current estimate has grown to ~$1.4B due to cost escalation and engineering details have been added to the conceptual design, to ensure the remedy will be performed in a safe manner to protect workers and the public (Discussed in Section 5). An additional $35M is being requested to complete the 100% design. Funding for the requested value will come from Energy and Water Development Appropriations that do not expire.

3. Description of Supplies/Services: These AE services support USACE remedial action at the Niagara Falls Storage Site (NFSS) as part of the Formerly Utilized Sites Remedial Action Program (FUSRAP). In October 1997, with the passage of Public Law 105-62, Energy and Water Development Appropriations Act, 1998, Congress transferred the administration and execution of FUSRAP to USACE. The DOE retained the responsibility for determining FUSRAP site eligibility and long-term care of remediated FUSRAP sites. In 1998, under Public Law 105-245, Congress further directed USACE that response actions be subject to the administrative, procedural, and regulatory provisions of CERCLA and the National Oil and Hazardous Substances Pollution Contingency Plan (NCP). Accordingly, USACE assumed responsibility for the remedial action process at NFSS.

The capacity of the original IDIQ contract was awarded at $35M with a performance period from 15 Sep 2021 to 14 Sep 2031. Jacobs received the IDIQ to design the entire project through a series of task orders. Award was made partially based on their in-depth experience with the Fernald Closure Project in Ross, OH. Fernald was a uranium processing plant that also possessed K-65 residues. The IDIQ value was calculated based on the Brooks Act statutory design limit of 6% of the estimated construction costs of $500M that was developed in 2015 with the Feasibility Study in accordance with the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). CERCLA prescribes a specific process for the investigation and cleanup of sites listed on the National Priorities List, or Superfund. NFSS is a CERCLA designated site. In 2019 acquisition planning began for the remedial design phase that is the phase NFSS is currently in. The $500M Feasibility Study estimate, at the time of acquisition planning, was the most reliable estimate available to the PDT. An additional $5M was added for Designer of Record services during construction and other services.

Industry was not asked to price the value of the design effort.

Three task orders (TOs) have been awarded under this contract. TO-01 was awarded in March 2022 for the development of workplans. That order totaled $1,674,522.90. Task Order 02 was awarded in April 2023 to develop the 30% design. That order totaled $6,658,011.26. Task Order 03 was awarded in September 2023 for the development of the 60% design. That order totaled $16,487,677.79. The three task orders have expended $24,820,211.95 in capacity leaving only $10,179,788.05 remaining. A modification to TO-03 is expected to drop available capacity to ~$9.3M.

Jacobs, as the Designer of Record (DOR), is developing all the design features at NFSS to build out all the infrastructure required to safely remove highly sensitive K-65 nuclear material from the 10-acre IWCS. Such activities include but are not limited to, developing plans to implement the work, maximizing the use of available funds. Jacobs will propose the work breakdown structure and sequence, ensuring that the work is performed in a logical and cost-effective manner. As part of the process, they may prepare individual bid packages (RFPs) in conjunction with USACE personnel for future remediation contractors. As the DOR, Jacobs will be prohibited from proposing on construction related requirements. Further, as the DOR, Jacobs will assist with Contractor Requests for Information, construction oversight, and Earned Value Management for the individual work packages.

The remaining capacity is not sufficient to complete all the design requirements and to provide construction oversight services for the infrastructure build. Task Order 03 ends in January 2025. It is imperative to the project that the momentum gained to date continue. If Task Order 04 cannot be awarded before January 2025, the project risks departure of key Jacobs’ personnel and loss of all momentum built to date.

The additional $35M requested by this J&A will allow for the completion of the 100% design and DOR services during the infrastructure buildout of NFSS. This modification will not extend the ordering period of the SATOC.

4. Authority Cited: 6.302-1(a)(2)(iii) - for DoD, NASA, and the Coast Guard, 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-

(A) Substantial duplication of cost to the Government that is not expected to be recovered through competition

(B) Unacceptable delays in fulfilling the agency’s requirements

5. Reason for Authority Cited: As described in 6.302-1(a)(2)(iii), 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 substantial duplication of cost to the Government that is not expected to be recovered through competition and unacceptable delays in fulfilling the agency’s requirements. The Buffalo District issued a synopsis for SF-330s IAW FAR Part 36.6 procedures and the Brooks Act on 23 Nov 2020. The synopsis closed 02 Feb 2021. The Government received six responses (SF-330s). Four were evaluated. After evaluation, Jacobs was deemed the most highly qualified and received the Request for Price Proposal. They were awarded W912P421D0006 on 08 Jun 2021. Jacobs is now the designer of record to design site infrastructure that will remove, process, package, and ship highly contaminated nuclear materials from NFSS. Failure to approve the capacity request will lead to substantial cost duplication. Most importantly, the project will be significantly delayed, and all momentum and lessons learned will be jeopardized.

Background & Reasons for Costs Growth: The NFSS is a federally owned, 191-acre property located at 1397 Pletcher Road in Lewiston, New York. The main feature of the site is the 10-acre IWCS that is surrounded by paved access roads and chain-link security fencing. The entire site is fenced and entry onto the site is restricted to one locked main gate.

Beginning in 1944, the NFSS was used by the Manhattan Engineer District and U.S. Atomic Energy Commission to store radioactive uranium ore residues and other materials. Uranium ore residues were generated through the processing of uranium ore for development of the atomic bomb. In 1949, highly radioactive uranium ore residues – referred to as the K-65 residues – were shipped to NFSS in 55-gallon drums for storage (and later transferred to a large concrete, former water storage tower). In addition to the residues, radioactively contaminated materials from decommissioning wartime plants and uranium and thorium billets and rods (processed at private facilities) were sent to NFSS for temporary storage.

The K-65 residues represent the main hazard to human health and the environment in the IWCS wastes. This hazard arises from the substantial radioactivity of the residues. The K-65 residues resulted from the development of uranium processing techniques and the production of uranium metal as part of the wartime Manhattan Engineer District/Atomic Energy Commission work conducted by Mallinckrodt Chemical Works located in St. Louis, Missouri. The main uranium ore processed by Mallinckrodt Chemical Works originated from the Belgian Congo (Africa) region, which contained uranium oxide concentrations up to 65 percent (%).

Remnants from typical uranium from the southwestern United States give a radioactive signature of about forty picocuries per gram, about ten times the number of picocuries per liter of air that is considered safe for humans to breathe. The average radium-226 (Ra-226) concentration in the K-65 residues is 520,000 picocuries per gram (pCi/g).

Between 1982 and 1986, the U.S. Department of Energy (USDOE), successor to earlier U.S. energy agencies, conducted cleanup activities at the NFSS. During that time, the USDOE constructed an engineered landfill called the IWCS to house the radioactive residues including the K-65 residues, as well as contaminated soil and other contaminated material such as construction debris. The IWCS is approximately 990 feet long by 450 feet wide and reaches a maximum height of 34 feet above ground surface. The multilayered cap retards radon emissions, infiltration from precipitation, and migration of contamination to groundwater. A clay dike/cut-off wall constructed around and through the near center of the IWCS provides an absorption barrier to horizontal radionuclide migration.

In accordance with the IWCS Record of Decision, the entire contents of the IWCS will be removed, partially treated, and disposed off-site. The IWCS contains approximately 278,072 cubic yards (yd3) of radiologically and chemically contaminated material. This includes approximately 6,030 yd3 of highly radioactive material (K-65 residues) that will require cement solidification and stabilization prior to transport and disposal. The disposition of soil beneath the IWCS will not be known until the material in the IWCS is removed, allowing access and assessment of subsurface conditions.

Shortly into Task Order 02 for the 30% design, it was realized that the $500M construction estimate developed in 2015 would grow to ~$1 4B Therefore, the 100% design will need to grow proportionately to an estimated value of Roughly of the $1.4B will be transportation and disposal efforts that will require little to no design input. When this is considered, the overall project cost increase and cost to complete the 100% design are proportional.

The current estimate has grown to ~$1.4B due to cost escalation and engineering details have been added to the conceptual design, to ensure the remedy will be performed in a safe manner to protect workers and the public. Approving additional value as requested in this document will allow Jacobs to continue the design as originally intended with no delays in schedule and provides the most beneficial costs to the government. A macro-level breakdown of the cost growth from the feasibility study estimate to the current working estimate is shown in the following table.

2015 Feasibility Study Estimate ($M)

30% Remedial Design Class 3 Current Working Estimate ($M)

Base Estimate $415.1 $849.5 Contingency $75.5 $280.3 Escalation $0.0 $282.8

Total $490.6 $1,412.6 Base Estimate: Significant Remedial Action (RA) cost elements added during the 30% Remedial Design (RD) Phase: Storage Warehouse, Waste Packaging Facility, Wastewater Treatment Plant, Mechanical Equipment Building.

Significant RA cost elements adjusted during the 30% RD Phase: Site Work, Waste Volumes, Waste Disposal Containers (quantity), Local Wage Rates and Fringes, Contractor Mark-ups.

Contingency: Contingencies for both the Feasibility Study Comparison Estimate (~18.2%) and 30% RD Class 3 Current Working Estimate (~33%) were determined by Cost and Schedule Risk Analysis.

Escalation: Feasibility Study Comparison Estimate costs were presented in 2012 dollars to support Present Value comparison between remedial alternatives. 30% RD Class 3 Current Working Estimate costs were escalated based on initial RA schedule with field activities starting in FY2027.

Justification: Unacceptable delays in fulfilling the agency’s requirements - USACE and Jacobs have a good understanding of how the rest of the design will develop. Both parties are heavily engaged and working together to ensure every aspect of the current design continues to full fruition. Any scenario other than completing the 100% design with Jacobs could be catastrophic for the program.

USACE personnel would have to essentially start the acquisition cycle over again should this J&A not be approved costing the project significant time delays while drawing scrutiny from congressional leaders, the public and USACE HQ. Acquisition planning and document approvals for a new NFSS procurement will take three to six months. Sources Sought to award will be about a 7-months. In total, a full year will be required to get a new contractor at NFSS. This time frame does not account for a new contractor spin up period to absorb and implement Jacobs’ 60% design or start at the 30% conceptual design milestone.

Should industry accept the 60% design documents produced by Jacobs, they will require 6 to 12 months to absorb and relearn what took place to reach the 60% design developed by Jacobs. Another plausible scenario is that industry may disagree with the direction that Jacobs was developing and may want to change the design. Essentially this scenario is starting at the 30% conceptual design and discarding all the 60% design work completed to date. This scenario would likely cause up to a two-year delay.

A break in design under the current contract is an unacceptable delay in fulfilling the Government’s requirements due to the reputational harm to USACE and significant cost increases associated with the delay.

The USACE has been on site for approximately the last 25-years. Activity and publicity at the site since the record of decision in 2019 has increased. The award of the design contract has elevated public and private interests. A stoppage and restart of the design effort will significantly harm the USACE’s reputation with the community and its federal partners. Moreover, USACE HQ and Army is expecting the FUSRAP mission to conclude in 2040. As scheduled currently, NFSS will reach project completion in 2040. A delay because of an AE reprocurement would Likely result in the FUSRAP mission will not be completed by 2040 and the reputational harm to USACE could be significant.

The Government and incumbent contractor have worked for over three-years to develop the design features to safely remediate the site. If this action is not approved, it is very likely the design will be significantly delayed and a high risk to institutional knowledge vacating from the prime contractor.

Duplication of costs to the Government that is not expected to be recovered through competition - If contract capacity is not increased to the AE contract will end with a 60% design. The government estimates in duplication costs. Firstly, USACE personnel will spend approximately in project funds or 9,216 manhours over an estimated 32-week reprocurement period. While a new procurement may not be a complete restart, significant effort and acquisition planning will be required to get a new RFP to industry.

The reprocurement PDT would likely consist of approximately 10-12 USACE personnel. For purposes of this analysis, each team member would spend 60% of their work week to the new procurement.

Secondly, the government would also realize significant duplication of costs through a new contractor acclimation period. A new firm, as the new designer of record, will have to go through all the work products produced by Jacobs. This will be a significant and arduous effort estimated to take 20-FTEs over 26-weeks and in duplicative costs to the Government.

Thirdly, there is also a chance industry would not accept Jacob’s 60% design due to liability reasons.

Therefore, a complete restart from the 30% Conceptual Design would be required. This effort is also estimated at 20-FTEs, but with a 1-year period and roughly in duplicative costs to the Government.

While it seems logical that the incumbent will have a clear advantage over the competition, that assumption comes with risks. The significant delay between contracts would result in key Jacobs’ personnel moving to other projects. That could dilute their technical capability in future SF-330 submittals. An estimate of reprocurement costs are as follows:

Staff Members FTE Equivalent for Each Team Member (Time spent on reprocurement)

32-Week Reprocurement Period (Hours)

FTE Factor x Hrs x Staff Members

Total Hours x Avg Fully Burdened Hourly Rate ($140)

NFSS PDT

Reprocurement Team (USACE

Personnel)

12 0.6 1280 9,216 $1,290,240

Staff Members FTE Equivalent for Each Team Member

26-Week Acclimation/Re view Period (Hours)

FTE Factor x Hrs x Staff Members

Total Hours x Avg Fully Burdended Hourly Rate ($150)

Eventual Awardee PDT Spin up Period (New Contractor)

20 100 1440 28,800 $4,320,000

Staff Members FTE Equivalent for Each Team Member

52-Week 60% Design Rework Period (Hours)

FTE Factor x Hrs x Staff Members

Total Hours x Avg Fully Burdended Hourly Rate ($150)

Eventual Awardee Potential 60% Design Rework (New Contractor)

20 100 2880 57,600 $8,640,000

Total Reprocurement Costs: ~$5,610,240 - $14,250,240

Alternatives: There were two potential alternatives discussed after the original TO-03 proposal was received and it became evident the $35M IDIQ capacity would not be sufficient to get to 100% design: Early Contractor Involvement (ECI) and a Regional AE MATOC.

USACE and other agencies such as NAVFAC uses ECI as an alternative construction project delivery method to traditional methods like Design-Build and Design-Bid-Build. ECI involves forming a team of the owner, designer, and contractor at the beginning of a project, and can potentially allow the builder to start work before the design is complete. This can lead to faster completion, improved cost certainty, and subcontract transparency. ECI was discussed during a planning meeting in late 2023.

No personnel at the District or Regional Contracting offices had ever utilized ECI, therefore, the learning curve to incorporate ECI was very steep. Applying ECI on a highly complex FUSRAP project with USACE personnel not seasoned with the ECI process presented risks and made this COA impractical.

A review of the Regional MATOC that included Jacobs was accomplished by the District Contracting Officer and determined this project was outside the scope of that MATOC.

Impacts: The IWCS is monitored by a series of sensors on the cap and around it. In 2018, elevated levels of radon were detected emanating from the IWCS. The cause was likely the result of desiccation of the topsoil and grass covering the IWCS. The issue was remedied by placing more soil, seed and increasing watering rates of the IWCS. While this was a minor event at the site and there have been no other known instances of elevated levels of contamination coming from the unit, it highlights the need for the timely remediation of the site in accordance with current schedules.

FUSRAP funding is available and programmed for coming years, but funding and time are limited. USACE HQ is closing the entire FUSRAP program in 2040. USACE HQ and Army is expecting the FUSRAP mission to conclude in 2040. As scheduled currently, NFSS will reach project completion in 2040. A delay because of an AE reprocurement would Likely result in the FUSRAP mission not being completed by 2040. The reputational harm to USACE could be significant and could result in the loss of future FUSRAP type programs such as the cleanup of Perfluoroalkyl and polyfluoroalkyl substances (PFAS), also known as "forever chemicals”.

10. Other Factors: As stated previously, NFSS falls under the Comprehensive Environmental Response, Compensation, and Liability Act. Before the 2019 IWCS Record of Decision, other significant milestones occurred in accordance with CERCLA procedures. Those milestones included Site Designation, Preliminary Assessment, Site Inspection, Remedial Investigation, Feasibility Study and Proposed Plan. These milestones occurred over several years and were executed with in-house USACE employees and various contracts. The below chart shows the remediation process and timeline starting with the 2019 IWCS ROD. All previous contracts supporting NFSS were awarded using competitive procedures. An 8(a) vendor under W912P421C0015 is currently providing operations and maintenance services at the site.