Justification and Approval for Other than Full and Open Competition.pdf

TO: Contracting Officer, USAID/West Bank and Gaza (WBG)

CC: Agency Competition Advocate

FROM: Office of Economic Growth, Natural Resources and Infrastructure (EGNI), USAID/WBG

RE: USAID/WBG Architecture and Engineering Services

SUBJECT: Justification and Approval for Other than Full and Open Competition (J&A)

1. This document sets forth the facts and rationale justifying the use of other than full and open competition.

This document was prepared by the EGNI at USAID/WBG pursuant to the authorities under the Expedited Acquisition and Assistance Procedures (EPP) for West Bank and Gaza, approved on January 11, 2024, to provide justification for the use of other than full and open competition for the award of the USAID/WBG Architecture and Engineering (A&E) Services Indefinite Delivery, Indefinite Quantity (IDIQ) contract. Your approval of this Justification and Approval (J&A) constitutes the justification for other than full and open competition as required by Tab 1 (Determination and Findings (D&F) Authorization for the Use of Other than Full and Open Competition of Contracts) of the EPP.

RECOMMENDATION

It is recommended that you approve this justification for use of other than full and open competition pursuant to the Action Memorandum “Expedited Acquisition and Assistance Procedures (EPP) for West Bank and Gaza”, approved on January 11, 2024. Your approval of this J&A constitutes the justification for other than full and open competition as required by Tab 1 (Determination and Findings (D&F) Authorization for the Use of Other than Full and Open Competition of Contracts) of the EPP.

2. The nature and/or description of the action being approved:

This is a request to approve a sole source follow-on IDIQ contract award to the US A&E firm AECOM in the amount of $100 million for a three year ordering period plus two years of implementation. AECOM (“the Contractor”) will provide A&E services to support the Mission’s construction activities in the areas of water/sanitation, health, youth, economic growth, energy, border crossing, humanitarian emergency activities, solid waste, and other infrastructure sectors. These services include engineering planning, design, conducting studies and assessments, and providing oversight and construction management services.

3. Description of the supplies or services required, including an estimated value:

The purpose of the USAID/WBG A&E Services IDIQ is to obtain the Contractor services to provide multi-discipline engineering and construction management services in support of the Mission’s infrastructure construction program implemented in the West Bank, Gaza, East Jerusalem, and Israel. These are professional services of an architectural or engineering nature associated with research and data gathering, planning, development, design, studies, assessments, construction, alteration, repair, procurement, construction management, capacity and institutional building, operation and maintenance services, and any other services related to infrastructure development.

These services will be provided to support USAID’s construction-related efforts in the following areas: water security infrastructure, solid waste management infrastructure, climate change infrastructure, vertical structures, health, roads and traffic management infrastructure, economic development infrastructure, humanitarian emergency response interventions, USAID-identified procurements necessary to uphold USAID objectives, and any additional infrastructure activities of a similar nature that may arise to advance USAID humanitarian and development objectives in response to the dynamically changing political landscape.

The WBG A&E IDIQ is a five year program (three year ordering period plus two years implementation period), with an overall ceiling price of $100,000,000. Funding will be obligated under separate Task Orders with the exception of the minimum Guaranteed of $75,000 which will be obligated under the IDIQ Contract.

4. Statutory authority permitting other than full and open competition:

AIDAR 706.302-70(b)(3)(ii) and 40 U.S.C.§113(e)(2); see “Expedited Procedures Package for West Bank and Gaza,” January 11, 2024. The D&F is attached to this file in Tab 1. The EPP can be used to allow the Agency to respond quickly and effectively to meet critical needs in USAID’s West Bank and Gaza programming.

5. A demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited:

As cited in the EPP for the West Bank and Gaza dated December 23, 2023 and approved by USAID’s Administrator, the security situation in Israel, the West Bank, and Gaza is dynamic, unpredictable, and continues to deteriorate, increasing USAID’s need for rapid and flexible programming. Since October 7, 2023, when armed Hamas-affiliated militants entered Israel killing more than 1,200 civilians and kidnapping hundreds, over 11,000 rocket attacks originating from Gaza targeted populations in central and southern Israel. In response to the initial attack, Israel declared war with Hamas and the Israeli Defense Forces (IDF), mobilized hundreds of thousands of reserves, directed massive military airstrikes, and entered Gaza to conduct ground operations.

The situation in the West Bank and East Jerusalem remains tense, as many communities have been locked down for months due to security operations and other restrictions on movement.

The lockdown, combined with the revocation of work permits, has resulted in the loss of more than 150,000 permit jobs, significant losses in weekly income, and a projected contraction of the GDP, profoundly disrupting the West Bank economy. protests, “lone-wolf” terrorist attacks, IDF operations, and settler violence have sharply increased, leading to further conflict, instability, and the deaths of hundreds of civilians.

The events of October 7 and the subsequent Gaza war fundamentally altered the landscape, risks, and complexities of project execution in the West Bank and Gaza. This underscores the pressing need for the Mission to work with contractors who possess extensive experience in navigating WBG’s implementation challenges and have a thorough understanding of unique USG and local requirements. Contractors must also have established networks with relevant authorities and a roster of locally certified subcontractors to ensure seamless execution given the exigencies faced. It is crucial at this time to prevent and/or mitigate implementation risks that could jeopardize foreign aid programs.

The A&E IDIQ will provide services that are essential to USAID/WBG. These services allow USAID to identify, plan, design, and deliver infrastructure that is urgently needed to support critical development and humanitarian needs. It also provides for vitally important Construction Management (CM) services that are an instrumental oversight function during the implementation of construction activities and necessary due to USAID’s limited access to sites and the lack of internal resources to conduct such work.

Currently, the U.S. engineering firm AECOM is providing A&E, including CM, services to the Mission under an existing IDIQ contract. Under this contract, the Contractor provides essential planning, design, and construction management for all infrastructure needs under various technical programs including water, sanitation, health, youth, rapid response activities, and energy, among others. To date, the Contractor delivered highly rated services to the Mission in the execution and oversight of construction activities, which led to the delivery of sound infrastructure projects throughout the WBG.

Given the heightened security situation and the fact that the U.S. Government (USG) urgently needs to scale up its humanitarian and development assistance in order to mitigate the impacts of the humanitarian, political, and economic crisis unfolding in WBG, USAID needs a mechanism that quickly responds and delivers. Procuring this requirement through other than full and open competitive means is, therefore, in the best interests of the USG for the following reasons:

● AECOM is currently in the process of conducting the planning for and design of several health, youth, economic growth, energy, wastewater projects and rapid response activities. All of these designs will lead to construction projects that are critical for the USG to achieve its objectives. AECOM is also currently designing health related infrastructure activities that are part of a Presidential commitment for assistance to East Jerusalem Hospitals Network.

Additionally, other ongoing designs include water and wastewater projects that will be implemented in some of the most critical and conflict-sensitive areas in the West Bank. A&E best practices suggest that firms that complete the planning and become the designer of record should also conduct construction management services. Transitioning from one A&E contractor that is responsible for the planning and design of Mission projects to another that will provide CM services for the same will cause significant oversight issues that could negatively impact continuity at a crucial time for the West Bank and Gaza. Such issues include delays in implementation, “designer of record” liabilities because the designer and the A&E providing oversight for the project are two different entities, and other fiduciary and reputational damages that can ensue should the performance of the A&E not be seamless.

This increases the USG’s risk to an unacceptable level.

● A new A&E firm would need to spend a significant amount of time and effort learning about the projects and the work environment. Before beginning any work, a new A&E firm must analyze and study the design documents, understand the basis of design, visit project sites, meet and engage with beneficiaries and other stakeholders, and learn the permitting criteria/requirements that must be met during the construction phase. Adding mobilization time, selection, and hiring locally and U.S. staff based on the skills required for each project, the A&E firm will require a large amount of time to be relatively efficient; this time may exceed one year. Under the current circumstances, USAID/WBG does not have this time and must be successful in meeting the demands on the ground and must start construction and delivery as soon as possible. In addition, having the planner and designer of the construction project doing the CM will eliminate and reduce disagreements, disputes, and claims during construction. Modifications during construction may be required in any construction project to meet unanticipated situations or at the request of the construction contractor. The project planner/designer has the capacity to respond rapidly to these changes or requests and decide whether they are rational and genuine adjustments, lowering USAID's risk of delays and claims. These arguments and disagreements between the construction contractor and the CM contractor (who is not the designer) about interpretations of the design, could result in a complete cessation of work, creating considerable delays, embarrassment, and reputational risk.

● AECOM is well established in the West Bank and is robustly operating in the area, with offices and local and expatriate expertise that have ample resources to quickly respond to urgent USAID requests. AECOM is extremely knowledgeable about the current context and the status of the Mission’s infrastructure as well as the immediate needs unfolding due to the crisis. AECOM conducted several studies and assessments regarding urgently needed services;

is well aware and knowledgeable of the political divisions, administrative authorities, and USG regulatory requirements for this work; and possesses productive and close working relationships with the Israeli authorities and Palestinian counterparts that are needed to facilitate projects and approve the delivery of supplies, material and equipment. This deep knowledge and understanding of the operating environment will allow USAID to quickly respond to pressing infrastructure needs.

● Planning and delivery of infrastructure projects in the West Bank and in Gaza is a complicated process requiring extensive knowledge, experience and familiarity with the political divisions and jurisdiction, laws and requirements governing the project. Local contextual knowledge is key to the success of any A&E firm and there is a sharp learning curve before any implementation can occur. Delivery of material and equipment is a complicated process, especially in Gaza, which requires extensive coordination with Israeli authorities and strong familiarity with . Unfamiliarity and lack of experience with the local context and processes, such as the entry of material could delay projects for several months, could be detrimental to USAID’s plans to improve the infrastructure in the region.

● Under the current circumstances, timeliness is essential. Given the crisis, USAID must quickly respond to the urgent needs and be able to mobilize resources quickly. Awarding a contract to AECOM will reduce the potentially and unnecessary lengthy mobilization time and costs spent on ensuring a new firm is effective in this role. Establishing offices, selection, hiring and mobilization of staff, procurement of IT, office furniture, modification of office space, and other mobilization matters is not only costly, but is a lengthy process and will require several months. In addition, knowledge and learning of the local conditions, processes, establishing relationships, establishing procedures and manuals, etc., is very lengthy and will require more than a year for a new A&E to be fully effective and be able to respond to USAID’s requests.

● Based on ADS Chapter 300.3.3, Procurement Action Lead Time (PALT), the lead time required for the award of a full and open Indefinite Quantity Indefinite Quality (IDIQ) contract is 327 days. Should the procurement process start immediately, based on the PALT, an award will not be made before March 2025, thereby posing a significant risk to the USAID/WBG’s ability to obligate the water earmark funds before their expiration on September 30, 2024.

The USG urgently needs to scale up its humanitarian and development assistance in order to respond to the unfolding crisis in the region. Given the immense infrastructure needs due to the war in Gaza, as well as the corresponding crisis and economic instability in the West Bank, USAID needs to urgently procure a mechanism to provide these essential Mission services so that it is prepositioned to respond. To be effective in addressing urgent and emerging infrastructure needs to produce immediate results, and to ensure successful implementation in the current rapidly fluctuating environment, USAID must expedite its normal planning and competitive award processes to meet foreign policy objectives. Therefore, it is recommended to use the exceptions to full and open competition authority provided under the EPP to award a contract to AECOM.

6. Description of the efforts made to ensure that offers are solicited from as many potential sources as practicable, including whether a notice was publicized as required by FAR 5.2

[AIDAR 705.2].

Publication of a notice is not required per the determination at AIDAR 705.202(b) as it is not practical under the circumstances. As described above, due to the immediate need for USAID/WBG to scale up its humanitarian assistance (HA) and development programming, and in order to mitigate the impacts of the humanitarian, political, and economic crisis currently unfolding, it is not practicable to solicit offers from potential sources at this time.

7. A determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable:

For each Task Order issued under the IDIQ contract, a USAID Activity Manager (Engineer) will prepare and validate an Independent Government Cost Estimate (IGCE) prior to issuing any Request for Task Order Proposals. The IGCE provides a basis for assessing the reasonableness and fairness of the price proposals. Additionally, each proposal received in response to a Task Order will be reviewed by the price evaluation committee in accordance with FAR 15.404-11, utilizing the following techniques to ensure that the awarded task order’s prices are fair and reasonable:

● Comparison of proposed prices received in response to the solicitation. In accordance with 15.403-1(c)(1)(i) – adequate price competition establishes a fair and reasonable price;

● Comparison of proposed prices with independent Government cost estimates;

● Comparison of the proposed prices to historical prices paid, whether by the Government or other than the Government, for the same or similar items;

● Comparison of proposed prices obtained through market research for the same or similar items;

● Review of the unit prices in accordance with FAR 15.404-1(f); and

● Review of Unbalanced Pricing in accordance with FAR 15.404-1(g).

8. Description of the market research conducted, and the results or a statement of the reasons market research was not conducted:

No market research was conducted. Over the last two decades, the Mission competed and procured similar services. Given the historical trends, no new market research was deemed necessary to expeditiously procure these services.

9. Other facts supporting the use of other than full and open competition:

In addition to the justification detailed above, this J&A provides the flexibility that is essential to the Mission’s ability to implement programming to mobilize technical, financial, and other resources quickly to respond to the crisis and recovery needs in Gaza, as well as the worsening situation in the West Bank. Expeditiously providing assistance in as responsive a manner as possible takes priority over other options that would delay such assistance, especially where delay or inflexibility could compromise USAID's ability to provide necessary support. The timeframe required by fully competitive award procedures, if followed, would not enable USAID to act in a manner consistent with U.S. foreign policy.

10. Sources, if any, that expressed an interest, in writing, in the acquisition:

Publication of a notice is not required per the determination at AIDAR 705.202(b) as it is not practical under the circumstances.

11. The actions the Agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required:

The Mission intends to conduct a competitive new procurement for an A&E IDIQ after this IDIQ expires.