MEMO FOR RECORD - Consolidation Determination_Redacted_final.pdf

Determination and Findings for CO FLAP LAR 10(1) Horsetooth and Carter Lake Reservoirs

Controlled by U.S. Department of Transportation, Federal Highway Administration, Central Federal Land Highway Division, Office of Business Operations, Acquisitions & Contracting Branch, 720-963-3500

U. S. Department of Transportation Federal Highway Administration

Central Federal Lands Highway Division

Determination and Findings

In accordance with Section 44 of the Small Business Act (15 U.S.C. 657q) as amended, the consolidation of contract requirements is suitable for the rehabilitation and reconstruction of various parking lots and access routes at the Horsetooth Reservoir and Carter Lake in Larimer County, Colorado. The estimated value is (inclusive of base and option items). The solicitation will be issued as a total small business set-aside.

Additionally, under Section 44 of the Small Business Act, the head of a Federal agency may not carry out an acquisition strategy that includes a consolidation of contract requirements of the Federal agency with a total value of more than $2,000,000, unless the Senior Procurement Executive or Chief Acquisition Officer for the Federal agency, before carrying out the acquisition strategy-

(a) conducts market research;

(b) identifies any alternative contracting approaches that would involve a lesser degree of consolidation of contract requirements;

(c) makes a written determination that the consolidation of contract requirements is necessary and justified; and

(d) identifies any negative impact by the acquisition strategy on contracting with small business concerns.

Per Transportation Acquisition Manual (TAM) 1207.107-2, all consolidation determinations required by Federal Acquisition Regulation (FAR) 7.107-2(a) in accordance with 15 U.S.C. 657q shall be approved by the Senior Procurement Executive.

Findings:

Background

15 U.S.C. 657q(a)(2) defines the “consolidation of contract requirements”, as the use of a solicitation to obtain offers for a single contract or a multiple award contract —

(a) to satisfy two (2) or more requirements of the Federal agency for goods or services that have been provided to or performed for the Federal agency under two or more separate contracts lower in cost than the total cost of the contract for which the offers are solicited; or

(b) to satisfy requirements of the Federal agency for construction projects to be performed at two (2) or more discrete sites.

Controlled by U.S. Department of Transportation, Federal Highway Administration, Central Federal Land

Alternative Contracting Approaches and Benefits of Proposed Acquisition Strategy

Alternative contracting approaches to consolidation would involve issuing separate individual solicitations for the contract by unit. These procurements would be sealed bid or negotiated procurements. The alternative can be summarized as follows:

- Alternative 1: Bidding two (2) contracts

The purpose of this acquisition is to rehabilitate and reconstruct various parking lots and access routes at two (2) discrete sites within Larimer County. The scope is similar in nature for the two (2) discrete project sites resulting in larger contract quantities and similar contract administration requirements.

Therefore, work performed at less locations under separate contracts would most likely result in more time for procurement and higher costs due to smaller contract quantities and duplicative contract management costs.

Additional Benefits of the Proposed Acquisition Strategy

1. There are potential reductions in the government staff time to develop solicitations, evaluate proposals, assess contractor offers, and administer contracts. This efficient use of agency resources continues to be an important consideration when selecting an acquisition strategy.

2. Solicitations on the consolidated contract have a shorter acquisition cycle; thus, allowing the construction to start sooner. If the projects were bid separately, the solicitations would have to be staggered resulting in one (1) to two (2) additional months in the pre-award phase of the projects which would result in loss of season for construction. In addition, there will be time saved by the Government in making the Responsibility Determination as well as other award activities which are estimated to save approximately one (1) to two (2) weeks.

3. CFLHD’s partners in at the U.S. Bureau of Reclamation and Larimer County have expressed support for this method of procurement as it would allow an expeditious rehabilitation of the project sites which aligns with the goals of the Federal Lands Access Program project and optimizes contractor time, provides for phasing flexibility, and will maximize available resources to complete the work.

4. Cost savings in both the preliminary engineering and construction phases were estimated considering the following scenario:

- Scenario 1: Comparing Alternative 1 (bidding two (2) contracts) to a single consolidated contract

During the final design, advertisement, and award phases there are typical costs involved on projects independent of contract size. These are related to assembling the Plans, Specifications, and Estimates (PS&E) packages, preparing the solicitation documents, evaluating bidder questions, analyzing bids, and assembling the award documents. The Government estimates savings in the final design and procurement phases of approximately in Scenario 1 for a single consolidated contract.

Controlled by U.S. Department of Transportation, Federal Highway Administration, Central Federal Land

During the construction contract administration phase, consolidating work will realize efficiencies in coordination, submittal reviews, and preparatory work that reduces administration personnel time for larger versus smaller projects, including the number of inspectors required. The Government estimates savings associated to contract administration to be approximately in Scenario 1 for a single consolidated contract.

In addition to the estimated savings in developing and administering less construction contracts, there are cost savings due to economies of scale, mobilization, and escalation in the bid items resulting from the consolidation. The Government used bid history data gained through other contracts of similar nature and magnitude to calculate costs savings being achieved by consolidating work into larger contracts in comparison to the estimate provided for the individual contracts. The Government estimates savings in direct construction costs would amount to in Scenario 1 for a single consolidated contract.

A summary of the cost savings is shown in the table below:

Activity

Estimated Costs when procuring by unit (Alt. 1; 2 Contracts)

(A)

Estimated Cost for Consolidated

Contract (1 contract)

(B)

Potential Consolidation Savings when procuring 1 contract instead of 2 (C = B - A)

Percent Savings when procuring 1 contract instead of 2

Preliminary Engineering (PE)

Construction Engineering (CE)

Construction Contract (CN)

Totals

*Overall percent savings when compared to the cost of the construction contract (CN) per FAR 7.107-2(d)(1)(i).

Negative Impact to Small Businesses

There are no known negative impacts from this the acquisition strategy on small business concerns.

Market research was conducted to determine the availability of sources, including small business concerns capable of performing this work. The results of that market research confirmed that small businesses possess the specialized staff and experience required to perform the services.

Steps taken to include Small Businesses

Small Business concerns are included in the acquisition strategy and the solicitation will be competed as a total small business set-aside.

Controlled by U.S. Department of Transportation, Federal Highway Administration, Central Federal Land

Determination:

Based upon the findings above and pursuant to the authority in Section 44 of the Small Business Act (15 U.S.C. 657q) as amended, this acquisition strategy involving the consolidation of the two (2) discrete sites into a single contract is justified for the rehabilitation and reconstruction of various parking lots and access routes at the Horsetooth Reservoir and Carter Lake in Larimer County, Colorado. CFLHD will proceed with procuring the work of this requirement in a single procurement based on cost analysis and rationale presented above. The benefits of the acquisition strategy, a savings substantially exceed the benefits of the alternative contracting approach. Further, the benefits threshold of ten percent of the estimate contract value for this proposed consolidation as prescribed in FAR 7.107-2(d) are also met.