P03 - JA Sole Source - SPS North Chicago Cx Services -DC signed.pdf

556-402 Expand SPS -Commissioning Services -Minor -North Chicago IL -36C776-24-AP-1508

VHAPG Part 806.3 OFOC Page 1 of 6 Revision: 03 Effective Date: 04/15/24 Acquisition ID#: 36C776-24-AP-1508

DEPARTMENT OF VETERANS AFFAIRS

Justification and Approval (J&A) For

Other Than Full and Open Competition (>SAT)

Acquisition Plan Action ID: 36C776-24-AP-1508

1. Contracting Activity:

The contracting activity for this requirement is the Department of Veterans Affairs, Veterans Health Administration (VHA), Program Contracting Activity Central (PCAC).

The Office of Capital Asset Management (OCAM) approved funding via a Cost Limit Increase (CLI) on May 13, 2024. A Transfer of Disbursement Authority (TDA) will provide funding on station before Award.

2. Nature and/or Description of the Action Being Processed:

This justification will enable a sole source, new, single award, Firm-Fixed-Price (FFP) contract to a Service Disabled Veteran-Owned Small Business (SDVOSB) firm Enviros LLC, located at 220 Ramsey St Hastings, MN 55033 to provide Commissioning (Cx) Services in support of VHA Minor construction project 556-402 Expand Sterile Processing Services (SPS) at the VISN-12 Captain James A. Lovell Federal Health Care Center (FHCC) in North Chicago, IL.

The Independent Government Estimate (IGE) for Cx Services is $580,178, or approximately 2.85% of the estimated cost of construction.

3. Description of Supplies/Services Required to Meet the Agency’s Needs:

Lovell FHCC requires commissioning services to support a planned phased construction project of approximately $20 million and lasting about 24 months to construct a new Sterile Processing Service (SPS) building addition and to renovate the existing space for SPS support spaces. Cx Services are also required for inspections during the warranty period lasting 12 months after Substantial Completion.

This contract to follow will provide professional commissioning services in the critical role as an independent third-party technical subject matter expert and advisor supporting the VA Contracting Officer and Contracting Officer Representative (COR) to help ensure compliance with the Contract Documents and VA standards during the construction phase and warranty period. This will enable complete and compliant construction and activation of the Expand SPS project located at Captain James A. Lovell FHCC at 3001 Green Bay Rd, North Chicago, IL 60064.

4. Statutory Authority Permitting Other than Full and Open Competition:

For this action, 38 U.S.C. 8127(c), known as the Veterans First Contracting Program, provides the authority to directly contract with an SDVOSB or a VOSB. Check the specific Veterans Administration Acquisition Regulation (VAAR) Subpart clause used below:

(X) 819.7008 Sole source awards to a verified service-disabled veteran-owned small business; or

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Acquisition ID#: 36C776-24-AP-1508

( ) 819.7009 Sole source awards to a verified veteran-owned small business.

5. Demonstration that the Contractor’s Unique Qualifications or Nature of the Acquisition Requires the Use of the Authority Cited Above (applicability of authority):

In order to support the aggressive timeline in awarding both Construction and Commissioning contracts in parallel in August 2024, pursuing a sole source award to Enviros LLC provides the best balance of expedient award and high confidence in the contractor’s capability, interest, and availability in providing Cx services at a reasonable cost; all while meeting VA SDVOSB set-aside goals.

Soliciting sole source to Enviros LLC under 38 USC 8127 authority is the most expedient of contracting vehicles considered. The IGE is $580K, below the $750K threshold, requiring approval only as high as one level above the CO.

Enviros is an SDVOSB currently under a Lovell Commissioning Agent (CxA) BPA Contract #GS-21F-0102Y 36C25223A0022; however, there is not enough capacity on the BPA to issue a Call for Cx services in support of the 556-402 project. Through this BPA, FHCC Engineering notes that Enviros has done good work as a CxA on several Calls / projects and has become very familiar with the Lovell FHCC campus, stakeholders, and processes, and VA (Cx) requirements.

38 U.S.C. 8127(c) states in part:

“…a contracting officer at the Department may award a contract to a small business concern owned and controlled by veterans using procedures other than competitive procedures if –

(1) Such concern is determined to be a responsible source with respect to performance of such contract opportunity;

(2) The anticipated award price of the contract (including options) will exceed the simplified acquisition threshold (as defined in section 4 of the Office of Federal Procurement Policy Act (41 U.S.C. 403)) but will not exceed $5,000,000; and

(3) in the estimation of the contracting officer, the contract award can be made at a fair and reasonable price that offers best value to the United States.”

The implementing regulations at VAAR 819.7008 (b) and (c) state in part:

(b) “The contracting officer’s determination whether to make a sole source award is a business decision wholly within the discretion of the contracting officer...”

(c) “A determination that only one SDVOSB can meet the requirement is not required…”

The proposed source for this acquisition is Enviros LLC, located at 220 Ramsey St Hastings, MN 55033; a certified SDVOSB by SBA VetCert. Enviros LLC, is determined technically capability for this project based on successful past performance with Veteran’s Affairs.

Enviros has performed projects of related size, scope, and magnitude within the NAICS code 541330 – Engineering Services.

The VA’s technical experts have determined that Enviros LLC, is qualified to perform the required Commissioning services for this project. A discussion and e-mails between the

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Acquisition ID#: 36C776-24-AP-1508

Government and Enviros LLC confirmed the vendor’s interest in receiving an RFP based on acceptable capability, capacity, and commitment to providing fair and reasonable pricing. An award will be made provided that a fair and reasonable price that offers best value to the Government can be obtained.

6. Description of Efforts Made to ensure that offers are solicited from as many potential sources as deemed practicable:

In accordance with the VAAR 819.7008, Sole Source Awards to Service-Disabled Veteran- Owned Small Business Concerns, the Contracting Officer’s determination whether to make a sole source award is a business decision. For the reasons stated herein, and specifically, in response to Paragraph 5, the undersigned Contracting Officer, has determined Enviros LLC, is a qualified, responsible SDVOSB.

As stated above, the determination whether to make award to an SDVOSB on a competitive basis, rather than on a sole source basis, where the same objective (i.e., award to an SDVOSB) will be met is a business decision wholly within the discretion of the Contracting Officer and a determination that only one SDVOSB can meet the requirement is not required as decided in the Government Accountability Office (GAO) Protest B-419691, dated June 24, 2021.

“Here, the VA awarded the short-term, sole source contracts to RAS pursuant to the agency’s authority under the Veterans Benefits Act. As emphasized above, the VA is required to set aside certain procurements “[e]xcept as provided . . . in subsections (b) and (c) . . . .” 38 U.S.C. § 8127(d). Subsections (b) and (c) of the statute set forth the VA’s authority under the Veterans First Contracting Program to award sole source contracts to SDVOSBs. See 38 U.S.C. §§ 8127(b) and (c). Because the VA complied with the requirements of the statute and section 819.7007(a) of the VAAR, we find unobjectionable the VA’s action in awarding the sole source contracts to RAS--an eligible SDVOSB firm. Accordingly, the protester’s assertion that the VA should have competed the procurements is without merit, because the requirement to set aside certain procurements only applies when the VA does not use its sole source authority--as it did here--under the Veterans First Contracting Program. Crosstown Courier Serv., Inc., supra at 3-4.”

A special notice announcing the proposed contract action will be posted under Solicitation 36C77624Q0274 to SAM.gov, the government’s point of entry (GPE). The Justification and Approval (J&A) document will be posted within 14 days after award in accordance with FAR Subpart 6.305. The award synopsis will be posted to GPE in accordance with FAR Subpart 5.301(a)(1).

7. Determination by the CO that the Anticipated Cost to the Government will be Fair and Reasonable:

Based on the authorities cited in this justification, a sole source award to Enviros LLC is proposed pending negotiation of a fair and reasonable price for the work to be performed.

The Independent Government Estimate (IGE) for Cx Services is $580,178, or approximately 2.85% of the estimated cost of construction based upon actual historical awards for similar recent task orders from an existing IDIQ contract between VA and Enviros LLC. It is

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Acquisition ID#: 36C776-24-AP-1508 expected negotiations will result in a price which compares favorably to the IGE and previous projects performed by Enviros LLC.

8. Description of the Market Research Conducted and the Results, or a Statement of the Reasons Market Research Was Not Conducted:

PCAC and FHCC have conducted market research via various techniques to identify potential sources for this requirement including contacting knowledgeable individuals in Government regarding market capabilities to meet requirements, querying the following resources: the Vendor Information Pages, SBA VetCert, and SBA Dynamic Small Business Search, and interviewing potential offeror.

Several discussions were conducted on options for contracting vehicles to enable Commissioning services to be awarded in parallel with Construction services for project 556- 402 Expand SPS by August 2024. On June 11, 2024, the PCAC Contracting Officers (CO’s) Michael Mullen & Dean Flanders (Construction CO’s), Megan Dohm (Intake/Services CO), and Anthony Wilson (A/E CO) and FHCC engineers Brice Johnson (Engineering Manager) and Daniel Lid (COR) discussed the following options and came to the following conclusions:

a. Solicit sole source to Enviros LLC under 38 USC 8127 authority. Soliciting sole source to the SDVOSB contractor Enviros LLC is the preferred option for reasons discussed in Section 5, since it provides a high confidence in capability based on past performance, along with the lowest risk for timely award supporting construction award.

Other options discussed but rejected may be considered as backup options:

b. Seek a different SDVOSB contractor, ideally one familiar with VISN-12, for sole source contract. This option may be viable if Enviros LLC declines interest or negotiations fall through. Such a contractor has yet to be identified.

c. Modify the A/E contract to add Cx services (Michael’s initial recommendation).

While expedient, this option is counter to Lovell FHCC practice and preference of hiring a third party CxA to directly advise the VA COR. Lovell FHCC has benefited in the past from--and prefers services of--a third party CxA to ensure that the CxA is providing an unbiased, unfiltered, independent voice by reporting directly to the VA COR.

d. Award a task order off of the CFM Construction Administration BPA contract often used for CxA services. The CO Megan Dohm noted that the procurement timeline can take up to 120 days though they are working to decrease this to 45 days. FHCC review of the list of 14 firms indicates that most are focused on architecture and engineering design capabilities and are not really commissioning firm. Many do not even mention commissioning on their websites. Procurement timeline is also at risk being late to need.

e. Issue a Call to Enviros LLC off of the existing Lovell FHCC CxA BPA Contract #GS- 21F-0102Y 36C25223A0022, for which the NCO-12 GLAC CO is Ryan McMillin.

This BPA has a $2,000,000 five-year ceiling and $200,000 limit per call, which makes

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Acquisition ID#: 36C776-24-AP-1508 this a non-starter. Also, Lovell FHCC Engineering wants to preserve capacity on this BPA to support numerous smaller projects rather than use up capacity on a larger project.

9. Any Other Facts Supporting the Use of Other than Full and Open Competition:

Commissioning services are an essential part of the risk mitigation on the overall SPS construction project by helping the COR to monitor for quality control and compliance with the 556-402 Expand SPS construction Contract Documents (including General Conditions, Construction Drawings, and Specifications) and VA requirements located at the Office of Construction & Facilities Management (CFM) Technical Information Library (TIL) https://www.cfm.va.gov/TIL/ .

The 556-402 Expand SPS construction scope involves phased construction to expand the current footprint of Building 133 and 133 CA to the east by approximately 6,500 square feet, adding two floors to provide the capacity for projected increases in workload and the space required to expand services. This new space will be created adjacent to and connect to the current Sterile Processing Service (SPS) Department. The vacated SPS and Central Supply space will be renovated for additional clinical and administrative space. Renovations to space currently occupied by SPS and Central Supply will also address Facility Condition Assessment (FCA) and workflow deficiencies. SPS program area will total 15,110 sq.-ft., which includes new construction of a 6,520 sq.-ft. building addition and renovation of 8,590 sq.-ft. of existing SPS and Central Supply space. Commissioning support will be paramount to success on this complex construction project.

OCAM approved the Cost Limit Increase (CLI) Request on May 13, 2024, to allocate funding for the overall 556-402 project, setting the construction and commissioning budgets.

The money has been programmed in FY24 and since VA budgets for later Fiscal Years is uncertain there is urgency to award as planned in FY24.

PCAC posted Solicitation 36C77624B0018 at SAM.gov on June 28, 2024, to procure Construction services for the 556-402 Expand SPS project. Bid opening is scheduled for August 8, 2024.

In order to support the aggressive timeline in awarding both Construction and Commissioning contracts in parallel in August 2024, pursuing a sole source award to Enviros LLC provides the best balance of expedient award and high confidence in the contractor’s capability, interest, and availability in providing Cx services at a reasonable cost; all while meeting VA SDVOSB set-aside goals.

10. Listing of Sources that Expressed, in Writing, an Interest in the Acquisition:

On June 13, 2024, the following firm expressed interest and confirmed availability to provide Cx services for this project:

Enviros LLC / UEI: ECT6DLK37A17 220 Ramsey St, Hastings, MN 55033 / phone: 651.319.0170 / website: enviros.co CEO Scott Sinclair / phone: 718.314.6599 / e-mail: ssinclair@enviros.co .

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11. A Statement of the Actions, if any, the Agency May Take to Remove or Overcome any Barriers to Competition before Making subsequent acquisitions for the supplies or services required:

The requirement for Cx services to support construction and warranty periods for project 556-402 Expand SPS is a single requirement not to be required after completion.

In the future, similar Cx services on other construction projects may be procured via other contract vehicles, such as a new IDIQ contract for Cx services that can be solicited among other firms, preferably with SDVOSB status.

12. Requirements Certification: I certify that the requirement outlined in this justification is a Bona Fide Need of the Department of Veterans Affairs and 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.

Brice R. Johnson Engineering Division Manager, Department of Facility Management Captain James A. Lovell Federal Health Care Center

13. Approvals in accordance with the VHAPM Part 806.3 OFOC SOP:

a. Contracting Officer Certification (required): I certify that the foregoing justification is accurate and complete to the best of my knowledge and belief.

Dean W. Flanders Contract Officer, Construction Team 3 Program Contracting Activity Central (PCAC)

b. One Level Above the Contracting: I certify the justification meets requirements for other than full and open competition.

Michael Mullen Supervisory Contract Specialist Division Chief, Construction Team 3 Program Contracting Activity Central (PCAC)