Natomas Reach B Option 1002 JnA.pdf

CUI

Justification for Other than Full and Open Competition US Army Corps of Engineers (USACE), Sacramento District (SPK)

FAR 6.302-1 Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements

W9123820C0002 - REDACTED

1. Contracting Activity: U.S. Army Corps of Engineers (USACE), Sacramento District (SPK), Construction Branch, Contracting Division, Sacramento, CA 95814.

2. Description of Action:

The Sacramento District Civil Works Design Section requests a firm-fixed-price (FFP) contract modification to the existing Natomas Reach B contract W9123820C0002 with Teichert-Odin Construction Joint Venture (TOJV). This work was included in Optional Contract Line Item No.

(CLIN) 1002 but could not be exercised within the timeframe allotted by clause 52.217-7 due to a lack of Real Estate (RE) approvals for this 450’ section of levee. The type of fund utilized will be Fiscal Year (FY) 21 general construction funds.

3. Description of Supplies/Services:

The City of Sacramento is one of the most at risk cities in the country for flooding. The levees protecting the city protect it from flooding of the American and Sacramento Rivers. These levees were built over 100 years ago and constructed without independent engineering standards for design and was constructed of materials considered unsuitable for levee construction by today’s standards. These levees are outdated and require to be updated to today’s standards. These levees are prone to water going through the levees (through seepage) and under the levees (under seepage). The Natomas Basin is protected by forty-two (42) miles of ring levees divided into nine

(9) reaches (Reaches A through I, see Attachment A).

The Natomas Basin Reach B contract W9123820C0002 begins just south of the intersection of Garden Highway and Power Line Road, approximate STA 650+50, and extends downstream to just south of Farm Road, approximate STA 772+50. Option 1001, Reach B, for levee construction between STA 716+50 and 768+00, Option 1002 for STA between 768+00 to 772+50 and Option 1003 – Riverside Canal Relocation, for construction between STA 235+46 and 303+56. While options 1001 and 1003 were exercised in accordance with the contract’s required option period, the final originally contracted option CLIN 1002 could not be exercised timely due to a lack of RE clearance.

This justification and approval (J&A) is to add the work contained within Option CLIN 1002, which includes levee construction for the southernmost 450 linear feet of Reach B back into the contract. Option CLIN 1002 was separated out as an option in the contract due to the RE not being acquired in time for advertisement. The Non-Federal Sponsors (NFS) obtained the signed purchase and sale agreement on January 26, 2020 for parcel #225-0210-025 consisting of 28.86 +/- acres of land that was needed to exercise option CLIN 1002. At the time of the purchase signing, the court system had a two-month delay. The court filings did not get officially recorded until 20 July 2020 due to COVID -19. The NFS have had money in an escrow account since January 2020. The current homeowners had an outstanding loan that had to clear title before the NFS’s take title of the purchase area. Many processes have been slowed due to the limitations brought on by the COVID pandemic. For all these reasons, option CLIN 1002 was not able to be exercised prior to its expiration date that was one year from the date of contract award on 14 Nov 2019. Escrow has since closed and the NFS has provided the RE certification package to SPK for review and U.S. Army Corps of Engineers (USACE) certification. The USACE RE certification was completed and received on 2 April 2021.

The Option CLIN 1002 work includes raising and lengthening the approach ramp of Farm Road connecting to Garden Highway on top of the existing levee, along with repaving and restriping.

Traffic closures and detours are required during this construction. Garden Highway is a public road that sits on top of the existing levee. USACE is not allowed to use this as a haul road by the NFS. This road is maintained by the county for daily public use. Reach B is updating and modifying the existing levee, making improvements to the land for the laydown area for staging as well as building the haul and patrol road that will be used by Reach A. It also includes constructing a 150-foot-wide landside seepage berm just south of Farm Road. The new 20-foot-wide patrol road (this patrol road construction will be used as the haul road for Reach A and B) and ramp will be constructed on the north side of Farm Road, along with installation of access control posts and a pipe gate. There is also fencing and a couple mailboxes to be removed and replaced.

The staging area that will be constructed by Reach B is critical for Reach A. When the Reach A Contractor begins Deep Mixing Method (DMM) cutoff wall construction and haul route utilization in Spring of 2022, if Reach B is not constructed this will cause construction concerns, additional cost, and construction delays for both projects. The Contractor will not be able to mobilize without the haul road construction and the laydown area. This laydown area is the key staging area for the batch plant. Reach A doesn’t currently have an alternate solution for this work. If Reach B’s work is not completed ahead of time it would generate another modification to the contract for this work with additional cost and delays to the Government. There is about a 250-foot length of Reach B, in Option CLIN 1002, (from STA 770+00 (Farm Road) to STA 772+50) that is a tie-in between the two projects. This is where the levee improvement measures from Reaches A and B will “overlap” to provide protection against potential seepage due to the change from a seepage berm to cutoff wall system. This overlap creates construction scopes of work that will be completed simultaneously on both projects.

The current and ongoing construction is with Teichert-Odin JV (TOJV) for the base contract and all other Optional CLINS. This period of performance will extend into August of 2022.

Option CLIN 1002 Period of Performance: 90 days

4. Authority Cited:

The statutory authority permitting other than full and open competition for the proposed follow-on modification is 10 U.S.C. 2304(c)(1), as implemented by FAR 6.302-1 -- Only one responsible source and no other supplies or services will satisfy agency requirements. 10 U.SC.2304(d)(1)(B), as implemented by FAR 6.302-1(a)(2)(iii)(A), provides that full and open competition need not be provided in instances when services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services when it is likely that award to any other source would result in substantial duplication of cost to the

Government that is not expected to be recovered through competition and FAR 6.302- 1(a)(2)(iii)(B), Unacceptable delays in fulfilling agency’s requirements.

5. Reason for Authority Cited:

Issuance of a follow-on contract action (i.e. out-of-scope modification) of the existing contract W9123820C0002 is the most expedient and cost-effective alternative to meeting the agency’s immediate need for the construction of the remaining project. USACE need not engage in full and open competition for this requirement because the criteria in FAR 6.302-1(a)(2)(iii) are met, as indicated below.

A. Original Source. TOJV is the original source of the work described in paragraph 3, which was initially included in awarded contract W9123820C0002 for the Reach B Project. This project was initially solicited on a competitive basis as Unrestricted and was awarded with FAR 14 Invitation for Bids where TOJV was determined to be the lowest priced qualified offeror.

B. Follow-On Contract. Adding the work described in paragraph 3 as a follow-on contract action (i.e. modification to contract W9123820C0002) is the most expedient and cost-effective means to meet the project requirements. The SPK office examined several alternatives for fulfilling this requirement: 1) use of full and open competitive procedures, 2) use of the existing Dam Maintenance and Recreation Construction Multiple Award Task Order Contract (MATOC) and 3) a follow-on contract action (i.e.

out-of-scope modification) in accordance with FAR 6.302. The first and second alternative would not allow for performance to begin immediately, would leave the area unprotected during another flood season, and would result in a substantial duplication of cost to the Government. The only viable alternative is to select a single responsible contractor in close proximity to the work required. The responsible contractor, TOJV, has already successfully constructed a significant portion the Reach B project through (W91238120C0002). The completed scope includes is described in paragraph 3 above.

C. Highly Specialized Services. The construction services provided for this project are highly specialized as evidenced by both the special standards of responsibility included in the original procurement and the use of a pre-qualified sources list for the original solicitation. Additionally, TOJV has extremely valuable and extensive experience on the Reach B Project with on-the-ground knowledge of this project and how the work at the tie-in points between Reach A and Reach B will need to occur. TOJV has a comprehensive knowledge and familiarity with the project site and are currently onsite and ready to work. TOJV has also developed crucial relationships with local entities and has done extensive testing on both borrow materials and existing materials located at the site. TOJV has control of the existing borrow source and haul routes for the project for the duration of the Reach B contract.

D. Unacceptable Delay to the Government. FAR 6.302-1(a)(2)(iii)(B) provides that full and open competition need not be provided in instances when services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services when it is likely that award to any other source would result in unacceptable to delays in fulfilling the agency’s requirements. If this work is competitively award it would leave a portion of the levee at risk for flooding for an additional season. Delaying construction by another year will result in cost growth, further schedule overruns, and ultimately fail to meet the projects objective to reduce flood risk. Agency requirements are that the work within CLIN 1002 must be completed by March 2022. The timing of this work has become critical to avoid an unacceptable delay to the overall Natomas flood risk reduction project. Specifically, additional delay to this CLIN 1002 work will result in a delay to the follow-on work in Reach A of the Natomas project. Mobilization of another contractor into the existing Reach B levee repair work area poses its own complications. The Government has invested significant historical engineering and work on the subject levees, and continuity between the installation practices of the overlapping Reach B and impending Reach A areas to ensure underseepage protection is critical.

Substantial Duplication of Costs. FAR 6.302-1(a)(2)(iii)(A) provides that full and open competition need not be provided in instances when services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services when it is likely that award to any other source would result in substantial duplication of cost to the Government that is not expected to be recovered through competition or unacceptable delays in fulfilling the agency’s requirements. In this case, award to any other source would result in substantial duplication of costs that are not expected to be recovered through competition plus the time and cost of contracting personnel as well as a technical review team.

Awarding a follow-on contract action to TOJV to accomplish the work described in paragraph 3, would eliminate the duplication of costs associated with general conditions or fixed costs and ensure continuity of existing operations and the integrity of contractor warranties. This elimination of duplication of costs includes avoiding mobilization and retaining an existing field office staff that is familiar with the project area, security, and other subcontractors. TOJV familiarity with the project area and established relationships with landowners, local material suppliers and subcontractors will help facilitate and maintain the aggressive construction schedule, while another contractor would be forced to incur these general conditions/ fixed costs over a longer period of time. If the TOJV contract is modified to add the work, the contractor can perform the work on an immediate basis. If awarded to a new contractor, would require several months to obtain pre-construction submittal approvals before the work could be performed.

The time necessary to identify and solicit another contractor qualified to the Government’s Special Standards of Responsibility for these levee repairs can delay the construction and increase cost. If competed with full and open competition, there would also be additional labor cost in addition to the duplicate cost that is currently included in the contract. To solicit full and open competition on beta.SAM it would take approximately five (5) months and the cost of labor for this additional contracting effort would be approximately $40-45k. This labor cost can increase depending on how many proposals received and if discussions are required. This would equate to an additional total cost of approximately $180k which is 22% of the total cost of the work to be completed for Reach B. On the other hand, to process a contract modification would take about a month with a labor cost of approximately $12k to $15k and would not have the duplication of costs.

Based on the analysis above, TOJV has a significant advantage over competitors considering that TOJV is already mobilized and very familiar with the project site and has established relationships with USACE, the NFS, borrow material operator, and local landowners. Cost by TOJV was originally submitted in the original proposal for Option 1002 and found fair and reasonable by the Government. It is anticipated that this advantage will be reflected in TOJVs proposal and schedule for the completion of this work. It is estimated that the Government would incur duplicative costs for just the features of work as listed and incur additional labor cost for the PDT to include contracting. Based on the synopsis posted on beta.SAM no other contractor responded or showed any interest in this work.

The use of a new procurement, that may result in a new contractor, that would result in not only additional cost but will create logistical issues due to having to use a shared haul road, only one laydown/staging area and a portion of the construction by two different contractors in the same “overlapping” area between the two projects. There would be a need for additional time for sufficient coordination between the new contractor and TOJV.

TOJV is currently mobilized and can continue the scope of work without any interruptions or delays.

6. Efforts to Obtain Competition:

a. Notice of Intent to Sole Source: With the purpose to obtain competition for this acquisition the Contracting Officer posted a Notice of Intent (NOI) to Sole Source on the Governmentwide Point of Entry (GPE) at beta.SAM in accordance with FAR 6.302.1, “Only one responsible source and no other supplies or services will satisfy agency requirements.” The intent was to allow all responsible sources may submit a capability statement, proposal, or quotation, which shall be considered by the agency. The NOI was posted on 3 March 2021 with a due date of 18 March 2021. No responses were received in response to the NOI.

b. Effective Competition: Based upon the information in paragraph 5, competition for this action is not feasible. TOJV is the only source with the technical expertise and the Government is allowed to sole source in accordance with FAR 6.302-1(a)(2)(iii)(A) and (B), “Only one responsible source and no other supplies or services will satisfy agency requirements”.

c. Subcontracting Competition: Subcontracting competition will be achieved via incorporation of the work into the existing contract via modification, and accordingly is covered by its current Subcontracting Plan.

7. Actions to Increase Competition: As stated below in the Market Research section and above in the Efforts to Obtain Competition section, a notice of intent was posted to see if industry was interested in this work, and no responses were received. This work was already part of the larger contract, which was advertised full and open as an invitation for bid with special standard of responsibility. At the time of bid opening, there were 3 bids, which is moderate competition.

With the no responses to the NOI, there isn’t much else we could do to increase competition for this work, as it was never intended to be a separate contract, but rather an option we needed more time to secure the real estate rights.

8. Market Research: In accordance with FAR 6.302-1, 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 NOI was posted to the GPE at beta.SAM.gov on 3 March 2021 for 15 days. The Government did not receive any responses to the NOI. This will be a follow-on contract for specialized construction services to meet the requirements for Reach B. This statement of work (SOW) was included in the original contract as an option but was not exercised before the expiration date due to not having the RE Certification of approval.

9. Interested Sources:

Based on the NOI that was posted on beta.SAM.gov, to date no other sources have written to express an interest.

10. Other Facts: This J&A is for expired contract Option CLIN 1002 work at Reach B, which is one (1) of nine (9) distinct work areas (reaches) comprising the ARCF Natomas Basin project area.