MVN_JA to Extend Dustpan Dredge_sbw_Redacted.pdf

CONTROL NO: MVN-23-0004

FOR OFFICIAL USE ONLY

JUSTIFICATION REVIEW DOCUMENT

OTHER THAN FULL AND OPEN COMPETITION

PROJECT/EQUIPMENT: Dustpan Hydraulic Pipeline Dredge AUTHORITY: 10 U.S.C. 3204 (a)(1) AMOUNT: $

PREPARED BY:

CONTRACT

SPECIALIST

NAME: Katherine Younts

PHONE: 504-862-2803

DATE:

23 January 2023

CONTRACTING

OFFICER

NAME: Margaret Maine, East Branch Chief MVN

PHONE: 504-862-2211

TECHNICAL

NAME: Yojna Calix, Chief of Dredging Function MVN

PHONE: 504-862-1935

REQUIREMENTS

NAME: Michelle Kornick, Operations Manager MVN

PHONE: 504-862-1379

23 January 2023

SIGNATURES ARE REQUIRED BELOW:

I have reviewed this J&A and find the justification adequate to support other than full and open competition.

DISTRICT SMALL

BUSINESS SPECIALIST

SIGNATURE: WILLIS.DAVID.JA Digitally signed by

WILLIS.DAVID.JAMES.

MES. Date: 2023.01.23 14:02:40 -06'00'

NAME: David J. Willis

PHONE: 504-862-2627

PROJECT MANAGER

SIGNATURE: KORNICK.MICHELLE.S

Digitally signed by

KORNICK.MICHELLE.SPRAUL

PRAUL.

Date: 2023.01.23 09:17:31 -06'00'

NAME: Michelle Kornick

PHONE: 504-862-1842

DISTRICT COUNSEL

SIGNATURE: TAFF.THOMAS.MIC Digitally signed by

FF.THOMAS.MICHAEL

HAEL.

Date: 2023.01.23 11:32:15 -06'00'

NAME: Thomas M. Taff

PHONE: 504-862-2832

DISTRICT

CONTRACTING CHIEF

SIGNATURE: HALL.CYNTHIA.M Digitally signed by

HALL.CYNTHIA.M.1

. Date: 2023.01.23 14:15:24 -06'00'

NAME: Cynthia Hall

PHONE: 504-862-2874

SCO COUNSEL

SIGNATURE: TRAMEL.ALEXAN

DRIA.POLK.

NAME:

Digitally signed by

TRAMEL.ALEXANDRIA.POLK

Date: 2023.01.24 09:00:48 -06'00'

PHONE:

SIGNATURE:

Digitally signed by DATE: 24 JAN 23

SCO EICHHORN.LAURA.J.

ATLANTA/ALTERNATE

COMMAND ADVOCATE

FOR COMPETITION

NAME:

Laura Eichhorn

Date: 2023.01.24 11:38:47

-05'00' PHONE:

404-562-5051

FAR Part 6 Justification and Approval for Other than Full and Open Competition

1. Contracting Activity: U.S. Department of Army, Corps of Engineers, New

Orleans District, Contracting Division (CEMVN-CT-E)

2. Description of Action: This Justification & Approval (J&A) for other than Full and Open Competition is for an out-of-scope bridge modification in the amount of $ to the existing firm- fixed price contract to Pine Bluff Sand and Gravel Company (PBS&G) for the operation of a dustpan hydraulic pipeline dredge.

New Orleans District (MVN) must modify the contract in January 2023 to ensure that there is no lapse in service. The nine-month bridge will be fully funded with fiscal year 2023 Civil Works funds. There will be no matching funds or contributions from third parties.

3. Description of Supplies/Services: The work will consist of furnishing one fully crewed and equipped self-propelled dustpan hydraulic pipeline dredge and attendant plant for the removal and satisfactory disposal of shoal material. Attendant plant shall be composed of fuel barge, supply barge, landing barge, survey boat, minimum of two tenders, 1000 feet of floating pontoon pipeline, and other attendant or auxiliary plant as may be required. The primary dredging region will be any point on the Mississippi River between Mile 320 AHP (Black Hawk, LA) and Mile 103 AHP (New Orleans, LA). The secondary dredging regions will be any point on the Mississippi River between Mile 953.8 AHP (Cairo, IL) and Mile 320 as well as other waterways within the New Orleans District including: other reaches in the Mississippi River, Calcasieu River and Pass, Gulf Intracoastal Waterway, Chef Menteur Pass to Sabine River, Bayou Lafourche, Houma Navigational Canal, Atchafalaya Basin, Bayous Chene, Beouf and Black, and Mississippi River Outlets Vicinity of Venice.

The New Orleans District anticipates adding nine (9) months to the three-year Firm Fixed Price contract W912P820C0002.

Current contract: 02/06/2020 - 02/05/2023 Value: $ Bridge Modification 02/06/2023 – 11/5/2023 Value: $ Revised Contract 02/06/2020 – 11/05/2023 Value: $

The area to be dredged is unique in that shoaling occurs at such a rapid pace that it is not practical to specify a number of cubic yards to be dredged, or to require the contractor to dredge to a specified depth. This is due to the conditions found in the Mississippi River in which sediment is continuously falling out of the water column and settling in the channel template. Also, material sloughs into the channel template from the steep slopes surrounding the channel and there is constant movement of riverbed sediment due to passage of vessels and river current velocity and movement of sand waves along the river bottom. In accordance with CECW-OD Pamphlet

1130-2-520, in these conditions, the unit of measure for these contracts will be hourly because it is not possible to accurately estimate cubic yards to be dredged prior to dredging or after dredging. As a result, it is not possible to accurately assess post dredging conditions to determine cubic yards removed for payment purposes because the riverbed is so dynamic and will experience changes before hydrographic surveys can be obtained. Hourly payment solves this problem because the contractor payment is based on the production of the equipment during the time worked and not cubic yards of material dredged which require verification by survey data. The government specifies the quantity of dredging hours based upon historical data. This hourly quantity is subject to FAR clause 52.211.18 Variation in Estimate Quantities and AFARS 5152.211-9001 Variation in Quantities - Subline Items.

The Wallace McGeorge dustpan dredge maintains a minimum production rate of 3200 cubic yards per pumping hour, as measured with the dustpan head at a depth of 35 to 75 feet, cutting a 6-foot face, discharging through 1,000 feet of floating pontoon pipeline, and pumping medium grained sand with a 2850 horsepower pump brake applied to the pump impeller. The Wallace McGeorge dustpan dredge is capable of continuous operation, which is necessary due to the dynamic shoaling experienced in the Mississippi Riverbed.

4. Authority Cited: 10 U.S.C. 3204(a)(1), as implemented by Federal Acquisition

Regulation (FAR) 6.302-1(a)(2) Only one responsible source and no other supplies or services will satisfy agency requirements.

5. Reason for Authority Cited: As described at FAR 6.302-1(a)(2), when the supplies or services required by the agency are available only from one responsible source, or for DoD, NASA and the Coast Guard, from only one or a limited number of responsible sources, and no other types of supplies or services will satisfy agency requirements, full and open competition need not be provided for.

a. Background.. The Mississippi River deposits an estimated 159 million tons of silt annually in its riverbed and delta. Historically, the Mississippi River high water season occurs during the spring and marks the beginning of the dredging cycle on the Mississippi River. Segments of the river require annual maintenance dredging to remove shoaled sediment from the river bottom to provide the authorized channel depth and allow deep draft vessels to safely navigate the river. Dustpan dredges have historically been used to dredge the Mississippi River between Baton Rouge and New Orleans and remain the best technical solution as well as the most cost-effective method for the removal of shoals. A dustpan dredge is the fastest, most efficient and cost-effective method of meeting these needs. Based upon historical information, the dustpan is the only type of dredge that can meet the government’s needs during the dredging cycle each year. (See Attachment 1

– Facts About Dredging Plant and Equipment.)

A dustpan dredge is a highly specialized system specifically developed for dredging river navigation channels. It uses a wide dredging head with a combination of high-pressure water jets and hydraulic suction to essentially vacuum sediment and silt material from a riverbed and simultaneously deposit it into open water outside of the dredged channel through an attached, extended pipe system. The high-pressure water jets loosen the materials, which are then pulled into the dustpan head and pumped out as the dredge makes parallel passes through the channel prism. The dredge owned by PBS&G, the Wallace McGeorge, was built in 1979 and is the only privately owned dustpan dredge in the United States.

Market research was conducted to determine whether there are any other dustpan dredges that can meet the requirements as specified in paragraph 3 above, “Description of Supplies & Services.” The market research confirmed that the only privately owned dustpan dredge available in the United States is the Wallace McGeorge. MVM procured the services of the Wallace McGeorge under unrestricted RFPs from 2000 to 2019. In August of 2000, solicitation number DACW66-00-R-0005 allowed offerors to construct or to modify a vessel to operate as a dustpan dredge. PBS&G, with its existing dustpan dredge Wallace McGeorge, was the lowest offeror of the proposals received. The unsuccessful offerors have not expressed further interest since that time. Subsequent contract awards have been solicited competitively, to include a 2012 solicitation that again allowed the construction of a new dustpan dredge or conversion of an existing dredge into a dustpan dredge, and PBS&G has been the only offeror.

The next dustpan contract, Contract No. W912EQ-16-C-0008, was solicited competitively by MVM as an unrestricted RFP (See Attachment 2 – Justification of Procurement Method and Attachment 3 – Source Selection Plan Dustpan Dredge) and was awarded to PBS&G on 25 July 2016 in the original amount of $ , with one base year and two option years.

Both option years were exercised for a total cost for Contract No.

W912EQ16C0008 in FPDS-NG of $ . MVM issued a modification to extend the term for an additional period of six months beyond the second option year, which took performance to 22 December 2019. Reference J&A Control Number MVM-JA-19-01 (see Attachment 4 – J&A MVM-JA-19-01). In 2020, the procurement was transferred from MVM to MVN, as MVN is the main user of this dredge. The current dustpan contract, W912P820C0002, was sole sourced to PBS&G (see Attachment 5 – J&A MVN-19-0016). It was awarded on 5 February 2020 in the original amount of $ with one base year and two option years. Both option years have been exercised to date, the total cost to-date of Contract No. W912P820C0002 in FPDS-NG is $ via Modification P00008 with several modifications pending.

As the sole source follow-on contract is anticipated to be valued at

$ for a five-year contract, it meets the requirement for CAS coverage in accordance with CFR Title 48 Chapter 99, 9903.201-1. PBS&G needs additional time to submit an acceptable initial disclosure statement to Defense Contract Audit Agency (DCAA) and become compliant with cost accounting standards (CAS). To date, DCAA has rejected PBS&G’s initial disclosure twice and has identified non-CAS compliant accounting practices in their review. As a result, PBS&G has engaged the services of an outside consultant to address the items of concern identified by the auditors. They anticipate being able to submit an adequate initial disclosure statement within the 2nd quarter of FY23. DCAA requires three months to review the initial disclosure and conduct a review of their financial systems. Nine months allows for adequate time in case there are delays or additional concerns to address.

b. Justification: USACE is mandated by Congress to deepen and maintain a

50’ deep draft navigation channel in the Mississippi River within the primary dredging region and a dustpan dredge is the most technically appropriate method of meeting this requirement which also meets the Federal Standard.

The dredge Wallace McGeorge is the only contractor-owned and contractor operated (COCO) dustpan dredge in the United States since construction in 1979. As explained in sub-paragraph c. and d. below, a dustpan dredge is the fastest, most efficient, most cost effective and engineering sound method of meeting these needs. The dustpan dredge meets the requirements of the Water Resources Development Act of 2007, P.L 101-114, 121 Stat. 1041 (WRDA of 2007) Section 2037(c)(A) which reaffirmed the long-standing federal position that the costs associated with dredging for construction, operation, or maintenance of an authorized federal water resources project are limited to the most cost-effective means, consistent with economic, engineering, and environmental criteria. PBS&G, with its existing dustpan dredge Wallace McGeorge, was the lowest offeror of the proposals received.

The unsuccessful offerors have not expressed further interest since that time.

c. Alternatives: There is no other contractor-owned dustpan dredge available in the United States to provide this type of dredging. A new entrant to the competitive field would likely require the Government to pay another contractor to construct a new dustpan dredge which would take a minimum of 3 years to complete and a cost of approximately $140,000,000. The cost is an extrapolation based on the 2017 prices to build a 30-inch hydraulic cutter section dredge ($60M) and an 8500 cubic yard hopper dredge ($110M) in the New Orleans area ( “Weeks Marine Building $60 Million Dredge for Coast Projects” Times Picayune Jul 20, 2017 article), as well as industry input. On 22 June 2022, the MVN Contracting Office posted a sources sought, W912P822B0066, to SAM website with a response date of 8 July 2022 and the results were only one response from PBS&G. As noted previously by MVM, over the past 22 years, PBS&G, the owner of the Wallace McGeorge, has been the only contractor to propose on the work.

i. Procuring a new Dustpan Dredge: If another private company had interest in constructing a dustpan dredge,then it would take a minimum of 3 years to design and construct and approximately $140,000,000.

This dustpan dredge contract is necessary starting 6 February 2023 for dredging of the Mississippi River and to accomplish the mission of the highest navigation priority in the United States.

ii. Retro-fitting an Existing Ship to a Dustpan Dredge. This course of action has been tried in historic procurements at MVM. However, the cost of retrofitting is so prohibitive, even the prospect of a ten-year contract is not sufficient to encourage entrance into the market. As there is no use for this specialty dredge outside of this reach of the Mississippi River, the prospect of losing a bid opening would result in a $140,000,000 vessel sitting idle for up to 5 years waiting for re-procurement of the contract as there is no other work available for this specialty dredge. The Efforts to Obtain Competition section below provides a full discussion of the procurement.

iii. Self-Performing: USACE owns and operates three dustpan dredges, the dredges Jadwin, Hurley and Potter. Of the three, only the dredge Jadwin and Hurley can perform the required work. The dredge Potter is only capable of shallow dredging and would not have the ability to reach the 50 foot depth. Both dredges Jadwin and Hurley are regularly scheduled to perform dredging in the deep draft channel of the Mississippi River. All three dredges (the government owned government operated (GOGO) Jadwin and Hurley, along with the contract Wallace McGeorge) are fully utilized and used concurrently and not in place of one another. There are currently 12 locations in this reach of the Mississippi River which require annual dredging. Each location is approximately 2-3 miles long, 500 ft wide and each takes 1- 4 months of dredging after the high water season has caused sediment to accumulate in the channel prism. Dredging of these 12 locations is required at the same time every year which requires simultaneous work of the 3 dustpan dredges. Currently, three specialized dustpans, two GOGO and one COCO, meet the minimum requirement to maintain the channel in most dredging cycles. A decision to invest in an additional deep-water dustpan dredge for the Corps’ fleet would be made at the highest level of government and is outside the purview of New Orleans District’s Operations Division. As such, the alternative to only use the current GOGO deep water dustpan dredges, Jadwin and Hurley, would not meet the mission for the highest priority navigation channel in the United States.

d. Impact: Over $400 Billion of the nation’s trade utilizes the Mississippi

River and it is a vital conduit for transporting equipment, materials and commodities necessary to support Department of Defense missions. The Mississippi River is the highest priority navigation channel in the United States. The deep draft ship channel between New Orleans and Baton Rouge provide access to the #2 and #7 highest tonnage US Ports (Port of South Louisiana and Port of Baton Rouge). Maintenance of this channel provides an 8:1 return on investment. The channel handles over 500 million tons of cargo annually and accounts for 18 percent of US waterborne commerce.

The Mississippi River carries an estimated 60% of US grain shipments, 22% of oil and gas shipments and 20% of the nation’s coal. Exxon Mobile’s Baton Rouge Refinery, located at the northern most deep draft dredging area, is the 4th largest oil refinery in the US and the 12th largest in the world and can process 13.7% of the country’s refining capacity. The Mississippi River, the largest river system in North America, is the main stem of a 12,350 mile long network of inland navigable waterways and links the heartland of the US to the coast.

Without the three dustpan dredges dredging concurrently, the navigation channel will quickly become deficient and will result in navigation width and depth restrictions for vessels. The economic value of this maritime transportation system is measured in billions of dollars. Population affected could include the majority of the United States. Impacts will include light loading and or diversion of vessels to other world ports. A deteriorating channel increases the chances for vessel groundings or accidents that may include consequences such as environmental damage, bodily injury, complete closure of the Mississippi River and national economic loss.

6. Efforts to Obtain Competition: In accordance with Defense Federal Acquisition

Regulation Supplement (DFARS) 205.205-71, DFARS 206.302-1(d), and DFARS Procedures, Guidance and Information (PGI) 206.302-1(d), a sources sought notice, W912P822B0066, was posted by MVN to Federal Business Opportunities website on 22 June 2022 to announce the Government’s intent to issue a new dustpan contract. The synopsis had a response date of 8 July 2022. Only one source responded to the notice and that was Pine Bluff Sand and Gravel Company

(PBS&G).

For the Contract W912P8-20-C-0002, MVN solicited this requirement as a sole sourced RFP to PBS&G as a result of our findings from Sources Sought Notice W912P819SS0004. This sources sought notice was posted by MVN to Federal Business Opportunities website on 25 March 2019 to announce the Government’s intent to issue a new dustpan contract. The synopsis had a response date of 9 April 2019. Only one source responded to the notice and that was PBS&G. Although no known small businesses have expressed an interest in this project, PBS&G was required in this contract to subcontract 30% of its work to a small business.

To extend Contract No. W912EQ-16-C-0008 for an additional 6 months, MVM posted a synopsis on 13 May 2019. No responses were received for Synopsis No.

W912EQ-19-M- 0001 from any contractor other than PBS&G. In accordance with FAR 5.203(a) this notice of intent to solicit and negotiate a sole source contract action was posted for the required fifteen (15) days before the issuance of the modification.

MVM solicited their FY16 requirement as an unrestricted RFP with HUBZone Evaluation preference. The requirement was solicited and awarded on a competitive basis to provide opportunities for small and disadvantaged firms. Only one proposal was received, which was PBS&G. Although no known small businesses have expressed an interest in this project, PBS&G was required in Contract No. W912EQ- 16-C-0008 to subcontract 30% of its work to a small business.

MVM advertised on 16 Aug 2000 Solicitation DACW66-00-R-0005 which allowed open competition whereby any contractor could construct a new dustpan dredge or modify an existing dredge so that it would conform to the requirements of a dustpan dredge set forth in the specifications. The specification was set up as two bid lots, such that it allowed for a contractor with an existing dustpan dredge to bid and it also allowed a contractor without an existing dustpan dredge a one year period to “construct, modify, improve, alter, or otherwise prepare a dredge for work under this contract”. The contract period spanned over an eleven year period and included a 5 year base period with 5 one year option periods to follow. There was more than one contractor who submitted proposals, but Pine Bluff Sand and Gravel was, ultimately, the low bidder for the 11 year project. It was awarded to them on 2 July 2001 (DACW66-01-C-0016). The 11 year solicitation proved that constructing a new dustpan dredge or modifying an existing dredge to conform to the requirements of a dustpan dredge cost substantially more than the existing dustpan dredge, namely, the Wallace McGeorge. One of the main detriments for any competing contractor is that the Corps’s requirement is for three dustpan dredges to work concurrently and the Corps currently has two GOGO dustpan dredges. There is only a need for one COCO dustpan dredge to perform dustpan dredging within the primary dredging region. There are no comparable dredging conditions to the lower Mississippi River and no other locations in the United States that require a dustpan dredge capable of operating in approximately 75 feet of water. Because of the highly specialized work, industry has not been compelled to build new dustpan dredges to substitute for the dredge Hurley and dredge Jadwin or add to the U.S. dustpan fleet. There are no other needs throughout the nation for this type of dredge, so contractors view it as highly risky to invest substantial sums of money in a piece of equipment that would require almost year round work for the next 20+ years in order to recoup their investment.

Near the conclusion of the 11 year contract, MVM issued an unrestricted RFP, W912EQ-12-R-0005, with the option to build a dustpan dredge over a 3 year period and then perform work over a 1 year base period with 3 – 1 year option periods to follow. PBS&G was the successful bidder (and only bidder) to compete for this contract.

7. Actions to Increase Competition: MVN will continue to advertise a sources sought notice for all future requirements. MVN has discussed the Mississippi River dredging requirement at industry-related conferences and Small Business Conferences and will continue this effort. By continuing to advertise and publicly discuss the requirement, and by continuing to consider terms to accommodate the construction of a vessel by potential offerors in order for them to be able to perform the work, the Government will continue to actively seek new entrants into the market.

8. Market Research: Based upon the response to the sources sought and procurement history, the recommended procurement method is to pursue a Sole Source contract to the large business Pine Bluff Sand & Gravel Company. There is not a reasonable expectation that anyone other than PBS&G can meet this requirement.

PBS&G has been the only firm to bid on the subject project and based upon industry responses over the past decade, there are currently only three Dustpan Dredges in the US that have the technical capability to dredge the deep draft ship channel between Baton Rouge and New Orleans. USACE owns two of the three and the third, the Wallace McGeorge, is owned by PBS&G. PBS&G has established a good record of past performance in fulfilling this requirement.

9. Interested Sources: See Paragraph 6 for the synopsis information. To date, the only source to express interest in the acquisition is Pine Bluff Sand & Gravel (PBS&G). No other sources have written to express interest in this acquisition.

10. Other Factors.

a. Procurement History: In 2020, MVN sole sourced Contract W912P8-20-C- 0002 to PBS&G. MVM procured this requirement from 2000 to 2019 and PBS&G has been the only company to submit a bid for this requirement during that time. Reference Contract No. W912EQ-16-C-0008, W912EQ- 12-C-0011, W912EQ-00-C-0016, which all three were full and open, no set aside used.

b. Previous Solicitations by MVM which have incorporated time for other bidders to convert their current dredge vessel to meet the Government requirement have been unsuccessful in attracting additional competition.

Date: 2023.01.23 09:13:13 -06'00'

I certify that the supporting data under my cognizance which are included in the justification are accurate and complete to the best of my knowledge and belief.

Name: Yojna Calix Title: Chief of Dredging Functions

Date: 23 January 2023 Signature: CALIX.YOJNA.SINGH Digitally signed by CALIX.YOJNA.SINGH

Date: 2023.01.23 10:23:49 -06'00'

Digitally signed by KORNICK.MICHELLE.SPRAULKORNICK.MICHELLE.SPRAUL Date: 2023.01.23 09:18:24 -06'00' Signature: Title: Operations Manager MVN Date: 23 January 2023 Name: Michelle Kornick

I certify that the supporting data under my cognizance which are included in the justification are accurate and complete to the best of my knowledge and belief.

I certify that this justification is accurate and complete to the best of my knowledge and belief:

Name: Margaret Maine Title: East Branch Chief MVN

Date: 23 January 2023 Signature: MAINE.MARGARET.COOKSEY. Digitally signed by MAINE.MARGARET.COOKSEY

Date: 2023.01.23 09:13:45 -06'00'

11. Technical Certification

12. Requirements Certification

13. Fair and Reasonable Price Determination

I hereby determine that the anticipated cost or price to the Government for this contract action will be fair and reasonable. The basis for this determination will include comparison with an Independent Government estimate (IGE), cost analysis and price analysis. As part of this basis, certified cost or pricing data will be required.

Name: Margaret Maine Title: East Branch Chief MVN

Date: 23 January 2023 Signature: MAINE.MARGARET.COOKSEY Digitally signed by MAINE.MARGARET.COOKSEY

14. Contracting Officer Certification

15. HQ Legal Counsel Review I have reviewed this J&A and find the justification adequate to support other than full and open competition.

Name:

Title:

Tristan Brown Senior Procurement Attorney

Date:

Signature: BROWN.TRISTA Digitally signed by

BROWN.TRISTAN.S

N.S. Date: 2023.01.26 00:14:12

Based on the foregoing justification, I hereby approve the procurement of the Dustpan Hydraulic Pipeline Dredge on an other than full and open competition basis pursuant to the authority of 10 U.S.C.3204(c) FAR 6.302-1(a)(2)(iii)(A), subject to availability of funds, and provided that the services and property herein described have otherwise been authorized for acquisition. STIGLICH.JILL.E. Digitally signed by

Date: Signature:

STIGLICH.JILL.E.

Date: 2023.01.27 09:46:26 -05'00'

Jill E. Stiglich Head of the Contracting Activity U.S. Army Corps of Engineers

Approval Signature Block