LPCS DF_Consolidation - Redacted.pdf

DETERMINATION AND FINDINGS (D&F)

CONSOLIDATION OF CONTRACT REQUIREMENTS

The Federal Emergency Management Agency (FEMA) proposes to consolidate the requirements provided under the Disaster Housing and Assessment Teams and Mission Contingency Planning Contract, 70FB8018D00000001 (“Mission Planning Contract”) and the Logistics and Construction Support Contract, 70FB8018D00000037 (“LCSC Contract”). Pursuant to the requirement of Federal Acquisition Regulation (FAR) 7.107-2, Consolidation, the undersigned contracting officer hereby makes the determination that consolidation is necessary and justified based on the following facts and rationale.

I. FINDINGS

A. Background

The FEMA Logistics Management Directorate (LMD) provides logistics capabilities to procure and deliver goods and services that support disaster planning, response, and recovery operations. The primary mission of LMD is to deliver the right resources, to the right place, at the right time to support state, local, tribal, and territorial governments (SLTT). In collaboration with FEMA’s Individual Assistance Division, LMD administers the Direct Temporary Housing Assistance Program which provides temporary housing assistance to survivors of presidentially declared disasters through the provision of services under the Transportable Temporary Housing Unit (TTHU), Direct Lease, Multi-family Lease and Repair, and Permanent Housing Construction programs.

The Direct Temporary Housing Assistance Program is supported by several contracts administered by LMD, including the Mission Planning Contract and the LCSC Contract. The Mission Planning Contract is an indefinite-delivery, indefinite-quantity (IDIQ) contract vehicle that provides advisory and support services that assist LMD in the assessment and planning of direct temporary housing missions. The Mission Planning Contract was awarded on June 24, 2019, to Dewberry Engineers, Inc., a large business, and has a period of performance from June 25, 2019 through June 24, 2024. The maximum value of the Mission Planning Contract is $100 million.

The Direct Temporary Housing Assistance Program is also supported by the LCSC IDIQ contract, which supports and oversees the execution of LMD’s direct temporary housing missions through the provision of logistics and construction support services. The LCSC Contract was awarded to Dewberry Engineers Inc. on September 26, 2018, and has period of performance from September 28, 2023 through March 27, 2024. The maximum value of the LCSC contract is $351 million.

Due to the interdependence and integration of the Mission Planning Contract and the LCSC Contract, LMD intends to consolidate their requirements into a single solicitation in order to increase efficiency, lower costs, and improve its disaster response. The consolidated requirement has an estimated value of $698,701,000 over a 5-year period of performance.

B. Market Research

Market Research was conducted in accordance with FAR Part 7.102, Acquisition Planning Policy and FAR Part 10.001, Market Research Policy to develop an acquisition strategy that best fulfills the government’s needs. To identify potential sources and ascertain their capabilities, capacity, and levels of experience, a Request for Information (RFI) was published on the System for Acquisition Management (SAM.gov) on October 13, 2022 and December 12, 2022. A draft Performance Work Statement (PWS) was also published on SAM.gov on those dates to elicit industry feedback on the planned requirements. In total, eight businesses responded to the RFIs, including five large businesses and three small businesses. Several large businesses cited relevant experience in performing all or a portion of the consolidated requirement. However, only one small business cited relevant experience, which only encompassed a small portion of the requirement.

To encourage industry participation, an industry day event was held virtually via an online video conferencing platform on December 8, 2022. Twenty-five businesses attended the event. Market research also encompassed reviewing the GSA schedules for potential sources and examining the acquisition histories of the existing requirements, including the market research reports, acquisition plans, and source selection documents.

Based on the results of the market research, there appears to be an adequate number of businesses in the marketplace that can perform the consolidated requirement.

C. Alternative Contracting Approaches

The following contracting approaches would involve a lesser degree of consolidation than the proposed consolidation but are not considered viable alternatives for the reasons noted below.

1) Solicit and Award Requirements Separately

An alternative to the proposed consolidation strategy is to award the requirements as separate contracts.

This approach, however, presents several risks, particularly if the requirements were awarded to different contractors. The primary risks associated with this approach are decreased efficiency, higher costs, longer acquisition cycles, and a diminished disaster response, as discussed under Paragraph G, below. These risks, however, could be exacerbated if the contracts were awarded to different contractors, as there would be a greater risk of operational misalignments due to the interdependence and integration of the requirements. Given the criticality of a streamlined response to presidentially declared disasters, this contracting alternative is disfavored.

2) Partial Small Business Set-aside

Another contracting alternative is to set aside a portion of the existing requirements for small businesses and to consolidate the remainder of the requirements into a single contract. Although certain services may be suitable for small businesses to perform, due to the high level of interdependence and integration of the requirements, a small business set-aside would result in the same cost and performance risks associated with two contractors performing the requirements. Therefore, this contracting approach is also not considered a viable alternative.

D. Office of Small and Disadvantaged Business Utilization

This determination has been coordinated with the agency’s small business liaison and the Department of Homeland Security, Office of Small and Disadvantaged Business Utilization (OSDBU).

E. Impact of Acquisition Strategy on Contracting with Small Businesses

The proposed acquisition strategy is not anticipated to have a negative impact on contracting with small business concerns, nor is it expected to decrease their likelihood for an award. However, due to the size, complexity, and geographical dispersion of the work to be performed, the likelihood of successful performance by a small business concern has been low, historically. During the acquisition process of the existing requirements, the technical proposals submitted by all small business concerns were determined to be technically unacceptable. Despite the unlikelihood of successful performance by a small business concern, the solicitation for the consolidated requirement will be unrestricted.

F. Inclusion of Small Business Concerns

Several steps have been taken to include small business concerns in the acquisition strategy of the proposed consolidated requirement, including an Industry Day event and the publication of two RFIs.

To further maximize small business participation in the performance of the contract, all offerors other than small business concerns will be required to submit a small business subcontracting plan as an element of their proposal. In addition, all offerors will be required to submit a small business participation plan.

The small business subcontracting goals for this acquisition are as follows:

All Small Businesses 43% Small Disadvantaged Businesses (both Section 8(a) and non-Section 8(a) firms) 5% Women-Owned Small Businesses 5% Service-Disabled Veteran-Owned Small Businesses 5% Historically Underutilized Businesses 3%

G. Benefits of Consolidation

1) Improved Service

The primary mission of LMD is to deliver the right resources, to the right place, at the right time, to support state, local, tribal, and territorial governments. The proposed consolidation will enable LMD to carry out its mission more effectively by streamlining operational functions and eliminating duplicative tasks that unduly prolong the planning and execution of direct temporary housing missions.

State, local, tribal, and territorial governments impacted by presidentially declared disasters rely heavily on LMD and other FEMA components when they have insufficient resources to shelter and house their displaced residents. Through Direct Temporary Housing Assistance provided by FEMA, residents of eligible communities can receive sheltering assistance and direct temporary housing while permanent housing options are identified and secured.

Timely and efficient execution of direct temporary housing missions is crucial since a single disaster can leave hundreds or even thousands of disaster survivors without adequate housing. The Mission Planning and LCSC contracts play a crucial role in the provision of direct temporary housing by providing the planning, logistics, and project management services needed to successfully plan and carry out temporary housing missions. By streamlining operational functions and eliminating duplicative tasks, the proposed consolidation will enable displaced disaster survivors to transition to temporary direct housing sooner and without unnecessary delays.

2) Cost Savings

Table 1 – Total Estimated Cost Savings

Cost Savings Total % Savings Reduced Acquisition Cycle Times $11,257,334 1.61% Increased Efficiencies $2,701,760 .39% Decreased Program Expenses $27,162,760 3.9% Total Potential Savings $41,121,854 5.9%

Market research suggests that the proposed consolidation strategy has the potential to achieve substantial cost savings. By reducing acquisition cycle times, increasing efficiencies, and decreasing program expenses, the proposed consolidation strategy has the potential to save the Government an estimated $41,121,854 over a 5-year period of performance. These anticipated cost savings are discussed below.

a) Reduced Acquisition Cycle Times /Shorter Housing Missions

The proposed consolidation would reduce acquisition cycle times by eliminating the process of awarding an additional task order after the need for a direct temporary housing mission has been determined. The lead time to solicit and award a task order can be up to 2-4 weeks, causing unnecessary delays when responding to declared disasters.

Furthermore, due to the interdependence and integration of the requirements, a transition period would be necessary to facilitate the transfer of information between contractors and to coordinate critical housing mission functions. This transition period would create an overlap of services, causing temporary housing missions to be prolonged by at least 30 days.

During the 5-year period of performance of the contract, a total of 40 declared disasters are estimated.

Based on the Independent Government Cost Estimate (IGCE), if 40 declared disasters were prolonged by 30 days, the estimated cost of the Mission Planning Contract would increase by approximately $11,257,334 over a 5-year period of performance. Thus, by consolidating the existing requirements, the Government could realize cost savings of approximately $11,257,334.

b) Increased Efficiencies

Table 2 – Increased Efficiencies

Projected Mission

Planning Costs by Contract Period

@ 5% Savings

@ 8% Savings

Base Period $6,362,000 $318,100 $508,960 Option Year 1 $6,552,000 $327,600 $524,160 Option Year 2 $6,749,000 $337,450 $539,920 Option Year 3 $6,950,000 $347,500 $556,000 Option Year 4 $7,159,000 $357,950 $572,720

Total $33,772,000 $1,688,600 $2,701,760

The proposed consolidation strategy is expected to generate substantial cost savings by increasing operational efficiencies and eliminating overlap, duplicative work, and certain expenses. Specifically, the proposed consolidation is expected to reduce badging, preparedness, mobilization, and demobilization costs, as well as administrative expenses such as invoicing and recordkeeping.

Additionally, the proposed consolidation would decrease duplicative travel expenses, as only one deployment of staff would be necessary under a single task order rather than the two that would be required if the existing requirements were not consolidated.

Based on market research, the proposed consolidation is likely to reduce mission planning costs by approximately 5% to 8%. When considering that the estimated cost of mission planning services over the 5-year contract performance period is $33,772,000, the proposed consolidation is projected to save the Government up to $2,701,760 over the life of the contract.

c) Decreased Program Expenses

Table 3 – TSA Expenditures for Direct Temporary Housing Assistance (DTHA) Recipients

Disaster No.

Year

State

No. of Families

No.

Days Stayed

No. of Rooms

Average Daily Cost Per Room

% Families Receiving

DTHA

TSA Cost Per Day

Estimated Total Cost

4611 2021 LA 803 63.14 1,882 $138.52 100% $260,694.64 $16,460,259.57

4673 2022 FL 176 36.53 472 $274.40 100% $129,516.79 $4,731,248.70

4724 2023 HI 66 17.67 69 $616.91 7.58% $3,226.56 $57,013.36

Total 1,045 117.34 2,423 $21,248,521.63

The proposed consolidation is expected to streamline operations and eliminate a transition period between contractors, enabling temporary housing missions to be completed quicker and more efficiently. The shortened duration of temporary housing missions will significantly reduce the expenditures of the Transitional Sheltering Assistance (TSA) program and other Government programs that provide sheltering and supportive services to displaced disaster survivors.

TSA is a sheltering program administered under FEMA’s Individual Assistance program. It provides short-term accommodations, such as hotel and motel rooms, to displaced disaster survivors who are waiting to transition to temporary or permanent housing. The standard daily rate paid by the TSA program per room is approximately $180 per day including taxes. This rate, however, can increase substantially after a disaster, when housing supplies are limited, and demand is high. Due to the high daily costs of hotel and motel accommodations, as well as the large number of TSA recipients waiting for Direct Temporary Housing Assistance, delays in the execution and completion of temporary housing missions can have a staggering impact on TSA program costs.

Table 3 above shows TSA expenditures from 2021 to 2023 on sheltering accommodations for disaster survivors who transitioned to direct temporary housing provided under the Direct Temporary Housing Assistance program. Based on the data above, for each declared disaster, the TSA program paid for an average of 808 rooms, which provided shelter for disaster survivors who ultimately transitioned to temporary housing provided by the Direct Temporary Housing Assistance program. The average daily cost per room was $343.28 per day. Based on this data, the TSA program incurred an average expense of $181,085.07 per day to shelter disaster survivors waiting to transition to direct temporary housing.

Since the proposed consolidation is expected to decrease the duration of housing missions by at least 30 days, the cost savings to the TSA program would be approximately $5,432,552 per year, or $27,162,760 over a 5-year period of performance.

II. DETERMINATION

Based upon the information provided above, I hereby determine the following:

Pursuant to the authority of 15 U.S.C. 657q and FAR 7.107-2(b), the proposed consolidation of the requirements is necessary and justified in that the benefits of the consolidation acquisition strategy substantially exceed the benefit of each of the possible contracting approaches discussed above, and this action is in the best interest of the Government.

Prepared by:

Ebony Taylor Contract Specialist

Approved by:

Lassey Wilson-Bahun Contracting Officer

Head of Contracting Activity Office of the Chief Procurement Officer

Chief Procurement Officer, or designee Department of Homeland Security

EBONY T

TAYLOR

Digitally signed by

EBONY T TAYLOR

Date: 2024.03.19 13:45:50 -04'00'

LASSEY A Digitally signed by LASSEY

A WILSON-BAHUN

WILSON-BAHUN Date: 2024.03.19 11:46:38 -04'00'

BOBBY J

MCCANE

Digitally signed by

BOBBY J MCCANE

Date: 2024.03.25 10:58:55 -04'00'

ANN F VAN

HOUTEN

Digitally signed by ANN F

VAN HOUTEN

Date: 2024.03.27 07:13:37 -04'00'