N3220523R4140 DF Redacted.doc

No.N3220523R4140

DETERMINATION AND FINDINGS FOR

AUTHORITY TO CONSOLIDATE AND BUNDLE CONTRACT REQUIREMENTS

The following findings and determination are made pursuant to 15 U.S.C. 644(e), as implemented in Federal Acquisition Regulation (FAR) 7.107-4 and the Navy Marine Corps Acquisition Regulation Supplement (NMCARS) 5207.107-2.

FINDINGS

Identification of Agency and Contracting Activity

This Determination and Findings has been prepared by Military Sealift Command (MSC), N102D Logistics Services Contracts Branch (N102D), Norfolk, Virginia, a contracting activity under the authority of MSC Head Quarters.

Nature/Description of Action

The requiring code for this acquisition is MSC’s N4 Logistics Division (N4), and the contracting activity is MSC’s N102D Logistics Services Contracts Branch (N102D). The proposed solicitation (N3220523R4140) will result in a single award, Firm Fixed Price contract for Worldwide Logistics Services which will consist of the following services: Ships Lifecycle Logistics, Material Handling Equipment/Ordnance Handling Equipment (MHE/OHE), Special Materials Logistics Type Desk, New Ships Acquisition Logistics, Corrective Maintenance Logistics System (CMLS), Load Management (LM), Combat Logistics Force (CLF) LM, CLF Logistics Officer (CLO) Support and Supply Chain Support. The solicitation will bundle requirements that are currently performed by two contractors under Contract no.s N0003314D6506 and N0003314D6505. The proposed effort is anticipated for award on 20 April 2023 date with an estimated value of $----.

N4 requires these services to provide logistics support for the MSC force necessary to achieve assigned missions. N4 manages worldwide support services in the functional areas of fleet logistics operations, enterprise-wide facilities and Global Shore Infrastructure Program (GSIP) management, acquisition logistics, sustainment logistics, logistics systems and data management, CLF LM, ordnance management, food service management and supply chain management. MSC may be tasked with additional missions as directed by US Fleet Forces and/or United States Transportation Command (USTRANSCOM) in logistics, sustainment logistics, logistics systems, and data management.

Prior to 2013, all of the Worldwide Logistics (WWL) services were provided via a single award, Indefinite Delivery/Indefinite Quantity (ID/IQ) contract that was performed by CACI Inc. – Federal (CACI) (a large business), under Contract Number N0003308D6506. In 2013, the follow-on effort was solicited as a single award ID/IQ; however, upon evaluation of the offers, one small business was deemed capable of performing a portion of the requirement.

In response, it was decided to award the contract as a Multiple Award Contract (MAC) ID/IQ with two identical Performance Work Statements (PWS) to CACI, under Contract No. N0003314D6506 with a base period of one year and four one-year option periods, in the amount of $47,996,096 and Professional Analysis, Inc. (PAI) (a small business) under Contract No. N0003314D6505 with base and four option periods of one year in the amount of $44,702,824. Importantly, Solicitation N0003314R6506 was mistakenly not amended to indicate the change from a single award ID/IQ to a MAC. The contract should have been awarded with only two tasks going from the original PWS to PAI and the remainder to CACI instead of two identical MAC awards that were awarded.

During the life of the MAC, the Performance Work Statements for the two contracts stayed relatively similar overall; however, some functional areas started to separate between the contractors, with PAI predominantly performing only two areas - New Ships Construction support and Special Materials Type Desk support – while CACI did not perform that type of work but instead performed the remainder of the work. As time continued, the contracts were independently modified to suit situational in-scope requirements. Consequently, over time, the two originally identical contracts became two unique contracts with similar overarching requirements but also with blurred lines of responsibility between two contractors.

In June 2020, the MAC ID/IQs expired without a follow-on effort ready to execute. As such, each ID/IQ was individually extended with a bridge contract that had a more tailored PWS to adequately reflect the work performed by each contractor. Contract N3220520C4008 was awarded to CACI as a base with one option period, in the amount of $14,899,365.04. Contract N3220520P2128 was awarded to PAI as a base with one option period, in the amount of $763,211.20.

In June 2022, the MAC ID/IQs expired again without a follow-on effort ready to execute. The MAC ID/IQs is currently under two second bridge contracts. Contract N3220522C4002 was awarded to CACI with one option period, in the amount of $16,165,377.46. Contract N3220522P2122 was awarded to PAI with one option year, in the amount of $977,491.04.

Results of Market Research

There were two Sources Sought Notices (SSN) posted to SAM.gov with the intent to release a consolidated RFP for all actions described above. The initial Sources Sought Notice was posted on 15 March 2021 with selected North American Industry Classification System (NAICS) Code 541990 - All Other Professional, Scientific and Technical Services, and FSC/PSC Code R706 - Support - Management: Logistics Support. Nine (9) companies responded to the SSN. Based on the technical review of the responses, ------------------------------------------------. The table below summarizes the results of the capability determination from the initial SSN posting.

Company Business Size Rating American President Lines, LLC (APL) Large

CACI, Inc - Federal Large

Cervello Technologies, LLC Small

GEP Technical, Inc (GEP) Large

MI Technical Solutions, Inc (MITS) Small

PAI, Inc Small

QED Systems, Inc (QED) Large

RF Logistics, LLC (RFL) Small

RIO Defense Logistics, LTD Small

After reviewing the NAICS web site, a more relevant NAICS Code 541990, was determined to be a more relevant fit to the service requirement and logistics support. It is important to note, that since the initial SSN posting, the small business that was previously found to be capable under NAICS code 541990, PAI, is now a large business.

Subsequently, the original NAICS Code used in market research was determined to be an unsuitable NAICS Code as it only identified overarching technical, scientific, and professional services that did not clearly identify the eight areas of the Worldwide Logistics (WWL) Services requirement. Additionally, the responses were not clearly reflective of the NAICS Code requirement. Therefore, a second SSN was posted to SAM.gov on 08 October 2021, with NAICS code 541614 - Process, Physical Distribution, and Logistics Consulting Services. Seven (7) responses were received; two (2) by large businesses and five (5) by small businesses. The Government determined that -------------------------------------------- the requirement based on the Sources Sought Notice (SSN) responses and technical evaluation. The table below displays those results.

Company Business Size Rating ASCI Federal Services, LLC Small

CACI, Inc - Federal Large

Translogistics, LLC Small

United Support Services, Inc Small

MITS

Small

QED

Large

RFL

Small

A Special Notice for an Industry Day was posted to SAM.gov on to 14 October 2022. An Industry Day was held on 01 November 2022 to allow prospective offerors to be briefed on the requirement, contract type, and draft PWS. Thirty-one (31) companies participated in the WWL’s Industry Day. Eleven (11) companies participated in person and twenty- one (20) companies participated virtually. All prospective offerors were given the opportunity to have a fifteen (15) minute One-on-One meeting with MSC, either in person or virtually. Seven (7) companies requested an in person One-on-One meeting, which took place on 01 November 2022, and four (4) companies requested to participate in a virtual One-on-One meeting, which took place on 02 November 2022.

The below table summarizes the participants of Industry Day, whether the participant attended virtually or in-person, and the business size of potential vendors.

01 November 2022 Industry Day Vendor Name

CAGE

Business Size In Person or Virtual Attendance Cervello Technologies, LLC

53PR6

Small - VOSB In Person Watershed Security, LLC 561H6 Small -VOSB In Person Serco, Inc 512G1 Large In Person Amentum Services, Inc 9K376 Large In Person PAI, Inc.

1S6K2 Large In Person

KPMG, LLP

7QEG9

Large In Person CACI, Inc - Federal

1QU78

Large In Person Valkyrie Enterprises, LLC

4TGX1

Large In Person Cydecor/ Ironclad

3HBG4

Large In Person

QED

7B572 Large In Person Sports Innovation Xcelerator, LLC (C5BDI)

8YZE3

Small In Person Challenge Unlimited, Inc.

1BXS3

Large Virtual WSP USA, Inc N/A Small Virtual J.P. Morgan Chase 388P9 Large Virtual RIO Logistics (S) PTE, LTD

QC932

Large Virtual Herdt Consulting, Inc

3GYJ7

Large Virtual TPZ Logistics, LLC

9DDY4

Small Virtual United Support Services, Inc

8VZD1

Small Virtual Global, a 1st Flagship Company 1D208 Large Virtual TransLogistics, LLC

32GW8

Small-WOSB Virtual RA Federal Services, LLC

96YL6

Large Virtual Continental Drive Away, Inc

8DDK4

Small-WOSB Virtual Alliance Global Group

6UUW6

Small - SDVOSB Virtual Starblast, Inc

8EWM6

Small - SDVOSB Virtual Alpha Omega Global, LLC

6ZRY2

Small - SDVOSB Virtual Caladwich Consulting, LLC

7KSG2

Small - SDVOSB Virtual Anderson & Associates Federal Solutions, LLC

9CK98

Small -

SDVOSB

Virtual ASCI Federal Services, LLC

8ZNA7

Small-WOSB Virtual MMS Logistics, LLC

9DP90

Small-WOSB Virtual Direct Xpress Logistics- Xpress Cargo, Inc

9DDU6

Small-SDB Virtual Olgoonik Global Security, LLC

652R2 Small-SDB Virtual

Actions designed to maximize small business participation as contractors, including provisions that encourage small business teaming

As required by FAR 15.304(c)(4) and DFARS 215.304(c)(i), the requirement shall evaluate the extent of participation of small business concerns.

IAW FAR 52.219-9, a subcontracting plan is required from other-than-small businesses, and a small business participation commitment document will be required by both large and small businesses. The resulting solicitation will include a small business participation evaluation factor.

As mentioned previously, an Industry Day was held to allow small businesses the opportunity to examine partnering and subcontracting teaming. To maximize small business participation, MSC inquired during the One-on-One meetings if prospective offerors were interested in being the prime or to be part of a team as a subcontractor and what the recommended minimum quantitative requirement (MQR)(based on total contract value) of small business participation should be in a resulting small business participation evaluation factor. The following table identifies the companies that participated in a One-on-One meeting with MSC, whether the company is large or small, if the company planned to be the prime contractor and to be part of a team as a subcontractor, and what MQR percentage that company recommended. It is important to note that two or more small businesses did not indicate interest in being a prime contractor; however, multiple small businesses expressed interest in subcontracting and also teaming with other small businesses in order to accomplish the requirement.

Company Business Size Prime or Subcontractor

MQR

Valkyrie Enterprises, LLC Large Not Sure 15-20% CACI, Inc-Federal Large Prime 20% PAI, Inc Large Prime Unsure Amentum Services, Inc Large Prime 20-25% Cydecor/ Ironclad Large Subcontractor 20% Cervello Technologies, LLC Small Subcontractor 40%

KPMG, LLP

Large Either 32% MMS Logistics, LLC Small Prime Unsure

ASCI

Small Subcontractor 50% Olgoonik Global Security, LLC Small Subcontractor 35-40%

Actions Designed to Maximize Small Business Participation as Subcontractors

Pursuant to FAR 7.107-4(b)(3) and FAR 7.107-4(b(4)), actions designed to maximize small business participation as contractors, including provisions that encourage small business teaming, and actions designed to maximize small business participation as subcontractors (including suppliers) at any tier under the contract, or order, that may be awarded to meet the requirements are required by both large and small businesses.

Currently the incumbent, CACI Inc –Federal, final individual subcontracting report (ISR) for N0003314D6506 indicated $---- was subcontracted to small business over the life of the contract, equating to approximately 12.4% of the total contract value ($----). CACI Inc -Federal’s March 2022 regular ISR for N3220520C4008 indicated $---- was subcontracted to small business over the life of the contract, equating to approximately 16.4% of the total contract value ($----).

The other incumbent, PAI, did not submit a subcontracting plan for N0003314D6505 or N3220520P2128 since they were a small business at the time of both awards and thus not required to submit a plan. However, as a small business, PAI contributed $---- towards small business percentage under contract N0003314D6505, equating to approximately 18.8% in comparison to the total contract value of both contracts that service the proposed future WWL requirements, N0003314D6505 and N0003314D6506. PAI contributed $---- towards small business percentage under contract N3220520P2128, equating to approximately 4.8% in comparison to the total contract value of both contracts N3220520P2128 and N3220520C4008.

Based on the historical small business participation under the current incumbent and the results of the previous stated market research efforts, the Government will require both large and small businesses to submit a small business commitment document (SBCD) with a 25% MQR, which will be an evaluation factor in the source selection plan. The proposal of a 25% MQR under the follow-on contract would equate to $---- of small business subcontracting value over the life of the contract, which is based on the Independent Government Estimate (IGE) ($----).

Benefits of Planned Consolidation

MSC has determined that the consolidation and bundling of Contracts N3220520C4008 (CACI) and N3220520P2128 (PAI) into one combined follow- on action provides substantial benefits to the Government. These benefits are tangible to the Government in terms of efficiency and quantifiable in terms of favorable cost impact.

The expected benefits in terms of quality, schedule, and workforce are critical to N4 Logistics Division’s ability to provide worldwide support services in the functional areas of fleet logistics operations, enterprise-wide facilities and Global Shore Infrastructure Program (GSIP) management, acquisition logistics, sustainment logistics, logistics systems and data management, Combat Logistics Force (CLF) load management, ordnance management, food service management and supply chain management. These benefits are as follows:

Quality and Schedule: To solicit and award separate contracts for services that are similar in scope to the same vendor is inefficient. This approach would lead to higher contract costs, slippage of milestones and schedules, and quality control redundancies. Those redundancies, in turn, greatly increase the work required to administer the overall requirement.

Specifically, if bundling the previously-unified requirements did not occur, there would be duplicative quarterly program review support, duplicated Contract Data Requirements List (CDRL) and Data Item Descriptions (DID) deliverables, and duplicated management of CDRLs and DIDs. The consolidation of the requirements will also reduce overlap leading to overall improvement of services.

In addition, managing two separate contracts with two separate but non-severable requirements has led to discrepancies in schedule deadline issues and data input. While many of the discrepancies were acknowledged and resolved by the contractor, there have been on numerous occasions during meetings with both contractors and the Contracting Officer Representative (COR) of the contractors redirecting culpability of performance discrepancies and fault to the other contractor.

Consolidation of WWL services will increase the quality and timeliness of services provided by having fewer discrepancies between multiple contractors and removing the ability to avoid responsibility of any poor performances by redirecting culpability on another contractor.

Unquantifiable benefits also include eliminating duplication of processes for concurrent requirements. The development of multiple acquisition documents (Request for Proposals, Business Clearance Memorandums, technical evaluations, etc.) are also eliminated.

Consolidation will increase the quality of services provided by:

Workforce Benefits: The consolidation of the efforts will enable the Contractor to provide a better and more efficient service by leveraging the technical capabilities of their workforce.

Consolidating the required effort under a single C-type contract with one (1) Prime would provide an overall increase in workforce stability and provide consistent workforce expectations across staff supporting the effort. Furthermore, having a single Prime is more beneficial than several Primes since there will be only one specific point of contact for both the Government and Contractor. This will allow for performance of the contract to be monitored more effectively by avoiding a Prime attributing poor performances to the failure of another Prime, which has occurred repeatedly on the current set of contracts. In addition, the ability to monitor contract performance effectively allows for a prompt response time to resolve any contract deficiencies, which will result in an overall more efficient and effective workforce and services.

Cost: From a cost-savings perspective, MSC will realize quantifiable cost savings on several fronts. Each of the areas covered by the Worldwide Logistics effort are in essence non-severable in that one directly affects the other as data created by one contractor is provided to the other contractor for analysis, usage, and/or input into systems. However, by having two separate contacts with unrelated companies there is a substantial duplication of costs to achieve the performance metrics required within both contracts by the Government. The table below provides an annual estimated savings based on removing this duplication between two contractors.

Duplication of Contractor Costs (Efficiencies) Savings/Yr

Number of Personnel Cost (Current CACI pricing plus 4% escalation) Hours Total Cost Two Separate Program Managers

Two Separate Project Managers

*Data Systems Management Specialist

* Data Technician

Total $1,253,241.60 *Separate data personnel would be required in order to provide reports and metrics. Number of personnel is conservative.

Currently, each contractor provides a program manager, project manager, and a team of data management specialists and data technicians to meet the requirements within each contract. By having all type desk support under one contract, there are efficiencies to be gained by the removal of duplicate effort to track and report the same data. Extrapolated over the 5.5 years of performance, the estimated cost savings is $6,892,828.80.

The Government’s current manning levels and funding limitations preclude the Government from performing the requirements of the PWS.

Government Estimated Re-work (Quality Issues) Savings/Yr Labor Category/ GS Level Per Hour Cost Number of Personnel Hours Per Week/ Per Person Hours Per Year/ Per Person Total Hours Total Cost N44, Sr ILS/ Configuration Analyst, GS 13

N44, SMLTD Type Desk, GS 13

N44 MHE Type Desk, GS 12

N44 OHE Type Desk, GS 14

N46 CLF Logistics Management, GS 13

N48, Supply Chain Management Analyst, GS 12

N48, Supply Chain Management Analyst, GS 11

N49 COR, GS 13

$386,620.00

The overall efforts of the requirement are interconnecting. The outputs of one area directly effects the inputs of several others. For instance, the management of two contracts for one requirement has shown to require continuous rework for incorrect data entries inputted by one contractor to be received by the other, and as a result, likewise requires continuous mediation between the two contractors to resolve conflicts for the deficiencies. It would be beneficial to the Government to minimize the continuous rework and mediation to resolve data entry conflicts. Extrapolated over the 5.5 years of performance, the estimated cost savings is $2,126,410.

By consolidating and bundling this effort into one, there is only one Procurement Acquisition Time Line (PALT) to contend with, and one set of pre-solicitation documents required. Given the number of Acquisition professionals required to draft, review and approve all of these documents in the 394- and 407-day PALT respectively, that estimated cost is $616,587.87 as outlined in the table below:

Reduction in Acquisition Cycle Time

Step 1 Hourly Cost (2022 GS Pay Table) Number of Personnel Est. Hours Worked/ Person Number of Personnel x Est. Hours Worked Total Cost

GS15, PWS

Development

GS14, PWS

GS13, PWS

GS13, COR

GS13, KO

GS12, CS

GS15, 1st Source S

GS14, 1st Source S

GS13, 1st Source S

05, 2nd Source S

GS14, 2nd Source S

GS13, 2nd Source S

$616,587.87

Lastly, there is an oversight and administration cost associated with having two separate contracts. By consolidating and bundling this effort, there is a 50% reduction in number of invoices, monthly COR reports, PMR’s, annual CPARs, and contract modifications. The team has estimated the hours included in these administration tasks as outlined in the table below:

Annual Reduction in Acquisition Administration

Step 1 Hourly Cost (2022 GS Pay Table) Number of Personnel Number of Personnel x Est. Hours Worked Total Cost

GS13, COR

GS13, KO

GS12, CS

GS13, Finance

$45,335.60

Extrapolated over the 5.5 years of performance, the estimated cost savings is $249,345.80.

These quantifiable benefits are estimated based on historical information, actual pricing data, and Government expertise. The estimated consolidated and bundled savings are provided in the table below:

Total Estimated Bundling Savings Description Annual Savings Years Total Cost Duplication of Costs

Government Rework

Reduction in Acquisition Cycle

Reduction in Administration

$9,885,172.47

The estimated savings that are quantifiable in dollar amount of $9,885,172.47 are substantial and exceed the $9.4M Threshold required by FAR 7.107-3(d)(2).

Additionally, the total value of all the savings, $9,885,172.47, exceeds ten percent of the total estimated cost of this contract, $9,625,532.54. Therefore, as the total savings amount exceeds ten percent of the total estimated contract value (including options), it is a sufficient justification for bundling under FAR 7.107-3(e).

Alternative Acquisition Strategies

There were three (3) alternatives to consolidating and bundling acquisition strategies that were considered. The first alternative would be to maintain the status quo. This course of action would keep two separate contracts with two separate but non-severable requirements. This approach has a high risk of continued negative performance issues, a lack of quantifiable savings, and requires Government intervention to ensure MSC’s mission. The second alternative would be to break each of the eight mission areas into severable service contract actions. This dis- aggregation of the requirement would enhance the opportunity for competition and possible small business participation; however, dis- aggregation is high risk to the Government because the output/deliverable of one contract has been shown to impact the ability of another contractor in a separate requirement to execute its requirements effectively, requiring Government intervention to ensure MSC’s mission.

It could also come at an increased cost to the Government. The third alternative would be to not contract for Worldwide Logistics Services. N4 has the expertise in house to complete all requirements, and N4 performing the requirements would remove most of the quality and oversight issues indicated above. However, N4 is not staffed at a level that is close to adequate to perform this requirement nor would the command increase staffing to ensure quality services would be provided due N4 not being adequately funded and staffed to carry out the tasks and deliverables of the PWS. In order to meet the requirement, N4 would need a minimum of an additional one hundred twenty (120) billets globally, which is the current contractors staffing level.

Comparison of Benefits

The consolidation and bundling approach described throughout this document is determined to be the most efficient and effective way forward. As indicated within this Determination and Findings (D&F) document, the efficiencies gained in the consolidation of the contracts was determined to be the most practicable strategy after Government review and market research indicated that having one Prime Contractor that can satisfy the Government’s requirement would provide a substantial cost savings and assurance of MSC’s mission readiness through Worldwide Logistics Services being performed successfully. The alternative approaches identified above therefore present little benefit to the Government, increase risk to the Government, or are not currently feasible.

DETERMINATION

For the foregoing reasons, this consolidation and bundling approach is necessary and justified as the benefits to the Government through quality, schedule, cost savings, and ultimately fleet readiness substantially exceed the benefits of the alternative acquisition approaches.

Head of the Contracting Activity Approval Date