R10_JOFOC_AES_for_Posting_-_Word.docx

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, REGION 10

ENVIRONMENTAL CLEANUP, EMERGENCY MANAGEMENT PROGRAM

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

FAR 6.302-1 ONLY ONE RESPONSIBLE SOURCE AND NO OTHER SUPPLIES OR

SERVICES WILL SATISFY AGENCY REQUIREMENTS

BACKGROUND

Date: March 26, 2014

Program Office: Environmental Cleanup (ECL), Emergency Management Program

Contracting Officer: Melissa Witcher

Telephone No.: (913) 551-7573

FAX No.: (913) 551-9573

Email: witcher.melissa@epa.gov

Project Identification: Architect & Engineering Services (AES) Contract No. 68-S7-04-01, CH2MHill

Description of Supplies and Services Required Background Information:

On December 10, 2003, the Region 7 Acquisition and Contracts Management Section issued a contract to CH2MHill to provide professional architect/engineer, technical, and management services to Region 10 to support remedial response, enforcement oversight and non-time critical removal activities under the Comprehensive Environmental Response Compensation and Liability Act of 1980 (CERCLA). Contactor services are provided to help address and/or mitigate endangerment to the public health, welfare or environment, and to support States and communities in preparing for responses to releases of hazardous substances, as well as to counter-terrorism.

Contract Amount (Ceiling): $135,796,338.39

The current contract expires on June 10, 2014. This JOFOC extension provides for a one (1) year extension with option to extend up to one (1) additional year. This JOFOC does not seek an increase to the contract ceiling as adequate capacity remains to accommodate this extension. In addition, we intend to maintain the current ceiling to allow for regional crossover work and to ensure sufficient capacity for up to a 24 month extension. However, clause G.4 in the contract allows for an economic price adjustment in January of each year based on the average quarterly increase or decrease to professional wages and salaries as reported by the Bureau of Labor Statistics.

JUSTIFICATION

1. Identification of the agency, and the contracting activity, and specific identification of the document as a “Justification for other than full and open competition”.

The Environmental Protection Agency, Region 10, Office of Environmental Cleanup, Program Management Unit proposes to extend Contract No. 68-S7-0401 via a Justification for Other than Full and Open Competition (JOFOC). The Region 7 Acquisition & Contracts Management Section (ACMS) will be the contracting office issuing this action. A notice of intent to extend this contract on a sole source basis was posted on October 22, 2013. No responses were received.

2. Nature and/or Description of Action to be Approved:

The action requiring approval is a contract modification to extend the contract period of performance. This will not result in a change to the ordering capacity or ceiling under the contract as there is sufficient capacity to accommodate services for the extension requested. The modification will exercise a one-year extension and provide authority for three (3) additional four month option periods that will be exercised only if necessary. This provides the Region with flexibility should the Agency’s new remedial acquisition strategy not be available at the close of the initial one-year extension. This strategy provides opportunity for a seamless transition of work to the contracts awarded under the new remedial action framework (RAF). The total potential of this extension modification will be from June 11, 2014 to June 10, 2016 if all three (3) four month option periods are exercised. Currently, this contract which provides these services will expire on June 10, 2014 if this extension modification is not issued.

3. Description of Supplies or Services Required:

The Agency is poised to begin procurement of Remedial Action Contracts (RAC) type services. Region 10 requires continuance of such services currently under contract to support on-going remedial activities at active superfund sites, including both EPA-lead and Potentially Responsible Party (PRP) lead superfund cleanup projects during the Agency’s national procurement of Superfund remediation services.

Contract services include performance of site management; remedial investigation and feasibility studies; engineering services to design remedial actions; construction management for implementing remedial actions, including issuing and managing subcontracts for construction of the selected remedy and engineering services in overseeing construction; engineering evaluation and cost analysis for non-time critical removal actions; enforcement support, including oversight of remedial investigations/feasibility studies, remedial design, removal action, and negotiation support; and other technical assistance, including community involvement, sampling and analysis support, risk assessment, five-year reviews and pre-design investigations. Services may include technical and management services supporting EPA's coordination and oversight of remedial activities where they are performed by a State, the U.S. Army Corps of Engineers (USACE), a third party or responsible parties identified in enforcement actions. Services would also support activities under the Brownfields Initiative.

There are currently thirty-two (32) Superfund projects that will be impacted if the tasked services do not continue beyond the current contract expiration date of June 10, 2014. At these sites, the contractor is performing Remedial Design (RD) and Remedial Action (RA) oversight, Remedial Investigation/Feasibility Study (RIFS) Oversight, Negotiation Support, EPA-funded RD, RIFS, RA and Focused Feasibility Study (FFS) work.

The following is a list of all thirty-two sites:

Seventeen (17) are Region 10 oversight: Asarco RA OS, Anchorage Terminal RIFS OS, Blackbird/Cobalt Mines RD/RA OS, Conda Mine RIFS OS, Upper Columbia River RIFS OS, Quendall Terminals RIFS OS, Kerr McGee RA OS, Gay Mine RIFS OS, Monsanto RA OS, St. Maries Creosote RD OS, Lockheed West Seattle RD/RA OS, Tulalip Landfill RA OS, Midnite Mine RD/RA OS, Ballard Mine RIFS OS, Enoch Mine RIFS OS, Henry Mine RIFS OS and Palermo RIFS OS.

Two (2) are Region 8 and 9 oversight projects: Region 9 Whittier Narrows LTRA OS and Region 8 Warm Springs O&M OS.

There are seven (7) Region 10 EPA-lead sites where the contractor is charged with performing the work to remediate Superfund sites: Bunker Hill (RD), Moses Lake (RD), Ruston North Tacoma (RA), Salt Chuck Mine (RIFS), Wyckoff [(FFS) two task orders], and Asarco Slag Peninsula (RD).

In addition, there are two (2) Region 8 projects: Libby GW FS and Clark Fork River Technical Support.

There are three (3) Region 9 projects: Iron Mountain Mine RA, Omega Chemical Negotiation Support and Stringfellow RIFS. And finally, there is one (1) Region 2 project: Gowanus Canal RIFS.

All thirty-two projects are in various phases of remediation. Maintaining current project schedules ensures that cleanup will occur efficiently and economically. This is vital to the Agency mission.

4. Identification of Statutory Authority Permitting Other Than Full and Open Competition:

The statutory authority permitting other than full and open competition relative to this request is 41 U.S.C. 253(c)(1). Only one responsible source and no other suppliers will satisfy agency requirements as implemented by paragraph FAR 6.302-1 of the Federal Acquisition Regulations (FAR).

5. A statement demonstrating the unique qualifications of the proposed contractor or nature of the acquisition requiring the use of the authority cited.

The current contractor, CH2M Hill Inc., is uniquely qualified to complete the work on the projects in progress and to provide remedial services to Region 10 until such time as the RAF is implemented and the national contracts are in place for the following reasons:

a. CH2MHill has the necessary knowledge, staff, and experience to complete this work in the most cost effective and efficient manner for the EPA.

The projects being performed are at complex Superfund-lead sites. For example, the contractor is currently in the process of finalizing two Remedial Designs for the Bunker Hill Superfund site.. These designs will be implemented during the 2014 summer construction season, however, they will not be completed prior to the expiration of the contract. Any other contractor would first need to become familiar with the site and the work done to-date in order to be able to complete the designs. This would result in increased cost to the government, delay in completion of the designs and result in significant project delay as the remedial services would move into the 2015 construction season. The history and knowledge the contractor has on these sites makes them uniquely qualified to complete the remaining work established in the existing work plans in an efficient and economical manner.

b. These services are needed on an ongoing basis while the Agency finalizes the development of this innovative new RAF to support and ensure continuance of services on both the fund-lead projects and the oversight projects.

Region 10 is dependent on the AES contracts to meet mission critical work related to cleanup of Superfund sites. The Region does not have sufficient in-house resources or expertise to review PRP’s deliverables to ensure that the work being performed is protective of human health and the environment or to continue the efforts to cleanup sites where EPA is leading the cleanup effort. In addition, the opportunity for crossover task orders is limited as each regional office requires sufficient RAC capacity while waiting for the contracts to be issued under the new RAF.

Extending the current contract to maintain continuity of services serves as the best decision in meeting the Government’s need without causing significant financial harm, creating unnecessary breaks and delays in services, and damaging on-going enforcement and community engagement actions. Continuity of services via a JOFOC modification will result in significant cost savings and better, more efficient project performance.

Without the issuance of an extension, Region 10’s ability to support Agency mission requirements will be severely impacted. This contract extension will provide critical remedial support on several on-going key projects and allows for a seamless transition when this contract is re-procured.

A competitive follow-on contract has not and will not be issued prior to this contract’s expiration due to EPA developing a new national procurement strategy for all Superfund remedial activities. This new strategy is known as the Remedial Acquisition Framework (RAF). When finalized, the RAF will significantly impact the way the agency procures remedial services, resulting in improved efficiencies, increased competition and increased support of small business. As the acquisition strategy is still in the development stage, anticipated award may not be in sufficient time to ensure continuance of the Region 10 contract work.

The Remedial Acquisition Framework Group (RAFG) began work in November 2012. The effort to examine the remedial contracting on a national level was initiated to identify cost savings in a tightening fiscal climate. The goal was to look for efficiencies in the use of both our internal resources and external resources. After the kick-off of this national effort, staff from headquarters Office of Acquisition Management (OAM) and Office of Superfund Remediation and Technology Innovation (OSRTI) visited all the regions to better understand the current remedial contracting situation throughout the nation. Some concerns identified were multiple contracts with the same company with varying reporting and management requirements and inconsistencies among the regional contracts. After visiting all the regions, a meeting was held of the RAFG to draft the RAF. Following this meeting, several committees were established to work on the details related to the new RAF. However, as work continued by these committees, issues were identified that the current proposed framework did not resolve. In addition, a Request for Information was issued to obtain industry input on parts of the potential RAF. Input was received in September 2013. After considering industry input and the issues identified by the committees, it was determined that the proposal put forth by the RAFG required revision. A new proposal was drafted in October 2013. The RAFG met in December 2013 and made progress towards a revised acquisition strategy.

Throughout this process, Region 10 and Region 7 have been working with the RAFG to create a strategy to replace our current contract that is consistent with the RAF. After the RAFG developed their initial proposal indicating that a contract competition would be conducted at the national level, Region 7 ceased work on the Region 10 full and open RAC procurement to be consistent with the RAF. Region 7 and Region 10 continue to be actively engaged in the RAFG and have adjusted regional acquisition strategies to match the anticipated national strategy to be implemented under RAF.

Considering the ongoing effort to revise the existing procurement strategy and the national directive that new Superfund remedial services contracts must be consistent with the new RAF, Region 10 and Region 7 have not and will not award replacement contracts for our current AES contracts.

Approval of this justification allows the Agency time to issue an extension of services on a sole source basis to accommodate the implementation of strategic sourcing for the next round of contracts to provide Remedial Action Services.

c. Transitioning projects would impact project schedules and be too costly to the government.

When contracts end, EPA experiences transition costs and delays which are anticipated. However, having a short-term contract, instead of an extension of the current contract, to fill the time before the RAF is implemented would have significant adverse impacts on these current complex projects in terms of delays and added costs. Specifically, EPA would have to incur these delays and added costs twice – for a short-term transition and then again when we move to a new contract issued under the RAF. In addition, each transition also adversely impacts others involved with the projects including the PRP’s, the PRP’s contractors, citizen interest groups, tribal organizations involved with the cleanups, and other governmental organizations. All parties and interests would have to adjust their respective staffing schedules as the project schedule is adjusted to allow the new contractor time to become familiar with the history of and the current work at the sites.

A new contractor would incur excessive cost and schedule risk to provide the services for a short term of one year or less. While it would be technically possible for other contractors to provide the required services, this could only be achieved by expending considerable government resources and time; the incumbent contractor already has the organization in place to provide these services without any transition. It is not cost effective for the EPA to negotiate and award a new short-term contract with any other source. This type of remedial services contract would normally be a multiple-year contract due to the complexity and longevity of projects to be performed. The significant cost involved in participating in a Brooks Act procurement precludes any value that might be realized in competing this requirement for such a brief duration. The set-up costs for these types of contracts are typically spread over multiple years. For a short-term contract, however, all set-up costs would need to be recovered quickly and the costs would be passed on to EPA creating a contract with inflated costs compared to the typical RAC. Also, because these are time and material contracts, extensive reporting is required to ensure that costs are reasonable. To issue a short-term contract to fill the time between contract expiration and award of new contracts under the RAF would be costly to a new contractor.

d. No other offeror could immediately perform all of the services without incurring substantial cost and causing unacceptable delay.

At this juncture, only one truly responsible source for these services exists. The incumbent contractor has been performing these services for ten years and is intimately familiar with the sites, EPA’s process and procedures, and reporting requirements. The start-up costs have been spread over the life of the contract and have led to significantly reduced overhead costs to the government. They are also able to immediately provide the required services and meet the contract requirements. The anticipated procurement lead time to place the follow on contract would result in a break in services. In addition, waiting for the Agency to finalize the new RAF will result in an unacceptable break in service or significant delays on critical on-going projects being performed for the protection of human health and the environment.

Although the schedule and pace of the work on our oversight projects is dictated by the Potential Responsible Party (PRP), continuity of services performed by the contractor remains an important concern for EPA. Any break in performance on these sites could result in schedule delays that could endanger the public health and the environment.

Most of the oversight projects on this contract have major deliverables currently under review. Due to the size and complexity of these documents and the lengthy historical knowledge of the contractor, it would be fiscally and technically prudent to avoid a short term contract to complete this work.

If these task orders do not continue through the end of the review cycles, EPA costs would escalate due to a new contractor’s need to review the universe of existing documents and come up to speed on the project - also, resulting in delaying project progress.

6. Efforts to Obtain Competition:

A notice of intent to issue a JOFOC for these contract services was published in Federal Business Opportunities (FBO) on October 22, 2013. No responses to the notice’s request for interested parties to submit their capability to perform the requirements were received. This JOFOC notice will be published in the Fed Biz Ops in accordance with FAR 5.201, and 6.305. Competition for these services is not viable at this time given that EPA is significantly changing how Superfund remedial services are procured and managed. Subsequent Superfund remedial services contracts will be competitively procured under the new Remedial Acquisition Framework (RAF).

7. Determination of Fair and Reasonable Cost:

Relative to other projects, the contract fixed rates were determined fair and reasonable based on a cost analysis of the proposal at the time of original award and have been adjusted in compliance with the Bureau of Labor Statistics data relative to the affected labor categories, however, it is anticipated that the current contract rates will be re-negotiated in an effort to lower costs. In addition, opportunities to negotiate fixed price task orders will be pursued to realize additional cost savings on projects that lend themselves to a fixed pricing arrangement.

8. Market Research:

Market research was conducted as part of the preparation of the Procurement Initiation Notice for the follow-on contract. Prior to the decision to issue this JOFOC, consideration was given to the use of Regional crossovers to obtain the required services. However, all EPA regional offices are subject to the new RAF strategy and do not have excess capacity to allow other Regions to use crossover task orders to continue services during this interim period. Region 10 reviewed the Central Contractor Registration and listings of current contractors performing similar services for EPA. We found that there were a significant number of small and large businesses performing similar work. In addition, as mentioned above, a Notice of Intent was issued October 22, 2013 regarding the planned extension. The Notice requested that any interested parties submit evidence of their capability to fulfill the requirement by November 4, 2013. No companies responded to this request with information on their qualifications. The RAFG is performing market research as part of the development of the RAF and the initial Request for Information did identify multiple large, medium, and small size firms capable of providing remedial services to EPA. It is anticipated that many of these companies will compete for and be awarded national contracts under the RAF. Those awarded contracts will be available to perform future Region 10 projects. Though there are multiple firms with the resources and experience to perform the statement of work, having performed similar contracts in other EPA Regions, these firms do not have the site specific knowledge needed to complete the current on-going work requirements.

9. Additional Supporting Facts:

Upon completion of the national Remedial Acquisition Framework Group’s (RAFG’s) effort, we anticipate replacing the subject contract with national contracts that conform to the RAF. It is anticipated that these will be multiple-award contracts which will provide greater opportunity to small businesses. Moving from a single award to a multiple award contract is in line with the national contracting goal to increase competition.

10. Interested Sources:

Re-procurement of this contract was included in our Acquisition Plan and inquiries have been received from both large and small businesses on the status of the re-procurement. The RAFG issued an Amendment to the existing Request for Information related to the new RAF in late February 2014 and will utilize responses received to develop a listing of interested sources. Once this justification for Other than Full and Open Competition is publicized, in accordance with FAR 5.704 and FAR 6.305, a listing of interested sources will be added to the file for future reference.

11. Proposed Actions to Overcome Barriers to Competition:

A sources sought/request for information notice was issued in August 2013 and an amendment to that notice was issued in February 2014 for the national contracts planned to be issued under the RAF. It is anticipated that these will be a combination of Full and Open and Small Business Set-aside Multiple Award Contracts. EPA has been performing market research to determine if industry has the capability and capacity to perform this work, on a national level. The intent of this revised procurement strategy is to increase competition. It is our hope that this new strategy, once finalized, will provide increased opportunity for qualified firms to provide Superfund remedial services to EPA Region 10.

12. Contracting Officer and COR Certification:

We hereby certify that this justification is accurate and complete to the best of my knowledge and that the EPA will be best served by the approval of this JOFOC for the Region 10 Architectural and Engineering Services (AES) contract with CH2M Hill. The Contracting Officer (CO) and Contracting Officer Representative (COR) are in complete agreement that this JOFOC represents the most advantageous method with which to retain these services until such time as the national contracts under the new RAF are awarded. The level and extent of contamination present at these sites poses significant risk to human health – even more so to young children. Should services be interrupted, there is no guarantee that funding could be obtained in a timely manner, leaving thousands of citizens at risk for an extended period of time. Consequently, the CO and COR maintain that this action is necessary for the continuance of work critical to the success of the Agency mission. A single transition to the new RAF strategy embodied in the national contracts to be awarded provides the most seamless and economical way forward. This JOFOC extension will be for an initial one (1) year period to June 10, 2015. In addition, it will include three (3) four months option periods through June 10, 2016 to be exercised only as necessary. This will provide sufficient time for new RAF contracts to be awarded and avoid a break in critical project services on the existing Region 10 CH2MHill contract. A break in service would adversely affect the EPA’s mission to protect human health and the environment.