Redact DF for consolidation New England_Redacted.pdf

U.S. Army Corps of Engineers Engineering & Support Center, Huntsville

GEOGRAPHICAL TASK ORDER (GTO) NEW ENGLAND INCLUDING NEWPORT,

RI; GROTON, CT; AND PORTSMOUTH, NH

DETERMINATION AND FINDINGS FOR CONSOLIDATION

NAICS: 561210 – Facilities Support Services

This document contains proprietary, or source selection information related to the conduct of a Federal Agency procurement. The Office of Federal Procurement Policy restricts the disclosure and receipt of this information (41 U.S.C. Div. B of subtitle I). The unauthorized disclosure of this information may subject both the discloser and the recipient to the contractual, civil, and/or criminal penalties as provided by law.

CONSOLIDATION OF CONTRACT REQUIREMENTS DETERMINATION

OPERATIONS AND MAINTENANCE (O&M) SERVICES SUPPORTING THE

MEDICAL TREATMENT FACILITIES OF GEOGRAPHICAL TASK ORDER (GTO)

NEW ENGLAND INCLUDING NEWPORT, RHODE ISLAND; GROTON,

CONNECTICUT; AND PORTSMOUTH, NEW HAMPSHIRE

RATIONALE

Consolidation may provide substantial benefits to the Government. However, because of the potential impact on small business participation, before conducting an acquisition that is a consolidation of requirements with an estimated total dollar value exceeding $2 million, a written determination shall be made that the consolidation is necessary and justified in accordance with 15 U.S.C. 657q, after ensuring that—

(a) Market research has been conducted;

(b) Any alternative contracting approaches that would involve a lesser degree of consolidation have been identified;

(c) The determination is coordinated with the agency’s Office of Small Disadvantaged

Business Utilization or the Office of Small Business Programs;

(d) Any negative impact by the acquisition strategy on contracting with small business concerns has been identified; and

(e) Steps are taken to include small business concerns in the acquisition strategy.

FINDINGS

1. Introduction

The U.S. Army Engineering & Support Center, Huntsville (CEHNC) Operation & Maintenance Engineering Enhancement (OMEE) Program plans to issue a solicitation for a new task order utilizing the existing OMEE Program Multiple Award Task Order Contracts (MATOCs). The total estimated value of the planned acquisition, including all exercised option periods, is with a twelve (12) month base year and three (3) twelve-month option periods. The acquisition will be solicited using North American Industry Classification System (NAICS) code 561210 – Facilities Support Services with a small business size standard of $47M.

This OMEE VII task order will combine two or more requirements for services previously performed under multiple contracts and will not result in a task order unsuitable for award to small business concerns. CEHNC has conducted an analysis that demonstrates consolidation of operations and maintenance services is both necessary and justified. FAR 2.102 defines consolidation as

(1) a solicitation for a single contract, a multiple-award contract, a task order, or a delivery order to satisfy -- (i) two or more requirements of the Federal agency for supplies or services that have been provided to or performed for the Federal agency under two or more separate contracts, each of which was lower in cost than the total cost of the contract for which offers are solicited; or

(ii) requirements of the Federal agency for construction projects to be performed at two or more discrete sites; or;

(2) separate contract as used in this definition, means a contract that has been performed by any business, including small and other than small business concerns.

2. Description of Procurement Action

Project Description: The objective of this task order is for the Contractor to provide all personnel, equipment, tools, vehicles, materials, supervision, subcontracts, and other items and services necessary to perform all operation, maintenance, repair and facility management support tasks and functions for medical facilities as defined in the Performance Work Statement (PWS) at Naval Health Clinics in Newport, RI; Groton, CT; and Portsmouth, NH. The PWS also includes the following optional services: Pest Control/Entomology and Grounds Maintenance Services.

To support the needs of the Government in the future, additional facilities and incidental ancillary support services may be added to this task order. Such services constitute snow and ice removal services, environmental and laundry services, environmental compliance services, biomedical equipment maintenance, engineering studies, additional Real Property Income Expense (RPIE) inventories, etc.

Acquisition Strategy/Procurement Summary: In 2024, CEHNC awarded a MATOC which had two suites, composed of six (6) Other Than Small Businesses (OTSB) and six (6) Small Businesses (SB) with a total shared capacity of $2.35B. The total value of the acquisition, including all optional ordering periods, is approximately The total period of performance will include a 12-month base period and three 12-month option periods, for a total duration of 48 months.

Due to the level of complexity of the work and location of all three sites, it has been determined that this procurement can be conducted under the small business MATOC suite.

FAR 52.217-8 “Option to Extend Services” will be evaluated at the time of award, and may be exercised, if necessary. The acquisition will be conducted as a best value tradeoff using FAR 15.101-1 procedures with evaluation criteria relevant to medical facility O&M.

Applicability of Consolidation: This acquisition constitutes consolidation because the solicitation for this task order is to satisfy two or more Defense Health Agency (DHA) requirements for medical operations and maintenance that have been performed under multiple contracts, each of which was lower in cost than the total cost of the task order for which offers are solicited.

Requirements Being Consolidated: The OMEE Project Delivery Team (PDT) intends to consolidate O&M services located throughout New England for Naval Health Clinics in Newport, RI; Groton, CT; and Portsmouth, NH. The optional services: Pest Control/Entomology and Grounds Maintenance at these locations are currently being completed under the Naval Facilities Engineering Systems Command (NAVFAC).

Procurement History: Currently, NAVFAC provides medical facilities O&M services for the Naval Health Clinics in Newport, RI; Groton, CT; and Portsmouth, NH. The Defense Health Agency (DHA) recently became responsible for these facilities as a result of a multi-year transition to move all Department of Defense (DoD) medical facility oversight to DHA. The Project Manager communicated through the funding customer, DHA and the sites, to retrieve procurement history with limited success. DHA requested CEHNC support to provide a more streamlined contract solution for these services. Due to the transition between agencies, not all historic information is available. The known procurement history details were identified from the Federal Procurement Data System (FPDS) and are listed in Attachment 1. There were ten contracts that ranged from small business to other than small business.

Rationale for Consolidation: To be determined necessary and justified, the benefits of the consolidated acquisition must substantially exceed the benefits that would be derived from alternative contracting approaches that involve less consolidation. Such benefits may include quantifiable cost savings or price reductions as well as other benefits, regardless of whether quantifiable in dollar amounts, to include quality improvements that will save time or improve or enhance performance or efficiency, reduction in acquisition cycle time, better terms or conditions, or any other supportable benefit. Benefits that are quantifiable are considered substantial if they meet the dollar amounts or percentage of contract value set forth in FAR 7.107-2(d). In accordance with FAR 7.107-2(d), this acquisition must realize in quantifiable benefits. Alternatively, the approving authority may determine that consolidation is necessary and justified if the benefits are critical to the agency’s mission success and the procurement strategy provides for maximum practicable participation by small businesses.

Now that Defense Health Agency (DHA) controls all DoD medical facilities, it is reasonable to establish requirements by location rather than continue to separate facilities by military branch. The Naval Health Clinics at Newport, RI; Groton, CT; and Portsmouth, NH are a 3.5-hour drive. OMEE VII small business vendors have demonstrated their ability to successfully perform across similarly geographically dispersed locations on previous task orders.

3. Results of Market Research

In accordance with FAR 10.002(b)(2) Market Research Procedures, market research was conducted for the OMEE VII MATOC from 31 March 2021 through 20 October 2021. This programmatic market research is revalidated annually with the last revalidation conducted on 09 August 2024. Under FAR 16.505, the Contracting Officer will apply a Rule of Two

(2) analysis at the task order level to determine if the requirement will be set aside for the Small Business MATOC holders including, but not limited to, consideration of dollar value, complexity, level of risk, and location of the work.

In addition, the Project Manager used a programmatic OMEE Acquisition Decision (Unrestricted vs Small Business) matrix, which entails the facility details, facility square footage, and acquisition method determination (Attachment 02). This matrix provides vital information to the magnitude to what type of contractors are needed to perform in this acquisition. As a result, it was determined to set-aside for small business.

This acquisition is consolidating approximately 10 contracts into a single award. As stated in the acquisition history section, information regarding historic contracts is not readily available. Therefore, FPDS data was used to calculate the approximate cost savings resulting from this consolidation. However, each historic contract had a different period of performance, which introduces inherent uncertainties in the accuracy for these sites. In addition, the data referenced is based on IDIQ contracts, not task orders, which makes it difficult to break down and accurately compare the costs associated with each specific site.

Furthermore, the new acquisition includes work that was not previously performed under contract, further complicating the comparison. Utilizing historic contract pricing to estimate potential cost savings lacks the specificity and granularity needed for accurate site-level analysis, and therefore, this comparison is unreliable for assessing true cost savings or performance differences needed to identify historic pricing.

4. Alternate Contracting Approaches and Rationale for Rejection:

According to 15 U.S. Code § 657q, “Consolidation of Contract Requirements” and FAR 7.107-2 (a) (2), “Consolidation,” an analysis must be done to identify any alternative contracting approaches that would involve a lesser degree of consolidation of contract requirements to determine if the consolidation of contract requirements is necessary and justified. For this acquisition there were two alternatives that were considered and evaluated. The 1st alternative is to perform ten (10) stand-alone contracts for all three locations. The 2nd alternative is to award three separate orders (one for each location).

Alternative 1: No Consolidation - Ten (10) Standalone Contracts. Awarding these projects as standalone contracts would offer minimal, if any benefit, and would likely result in greater variability in both quality and consistency. Given the critical importance of life and safety for patients and staff at the medical facilities supported by the OMEE program, it is essential that the Government fosters strong, ongoing relationships with its contractors.

Standalone contracts do not support the long-term collaboration necessary to achieve this objective. In contrast, utilizing a MATOC structure enables the Government to build lasting partnerships that promote the quality, consistency, and efficiency required for this specialized and sensitive with the Joint Commission (TJC) standards. Failure with TJC compliance will lead to loss in reputation, patient trust, and ultimately their ability to continue operating.

Awarding all projects as standalone contracts is not a feasible approach due to the significant time constraints it imposes. The OMEE Program anticipates approximately 250 contract actions annually, not including subsequent modifications. This high volume of work cannot be supported through individual procurements without causing substantial delays.

Historically, CEHNC has been able to award MATOC task orders within approximately 120 days of receiving a complete requirement package. In contrast, standalone contracts would extend the acquisition timeline by an additional six to twelve months, significantly delaying the execution of critical repair and renewal work.

The standalone process requires extensive additional effort of duplicating documents for which programmatic documents already exist such as market research, acquisition plan, request for service contract approval, anti-terrorism and operations security, commerciality determination, etc. Further, multiple documents would require duplicate versions if not consolidated such as source selections, prenegotiation memorandum, price negotiation memorandum, discussion letters, unsuccessful letters, debrief letters, in-scope determination memorandum, nondisclosure agreements, technical evaluations, price evaluations, small business coordination record, determination and findings of options—which cumulatively slow down delivery because we are having to write ten (10) versions of these for each standalone contract instead of utilizing our programmatic documents. Soliciting and awarding standalone contracts would result in unacceptable delays to fulfilling customer requirements For medical facility projects, these delays are unacceptable, as they risk negatively impacting the life, health, and safety of patients, staff, and their ability to operate.

MATOC task orders provide the responsiveness and efficiency necessary to meet these urgent and recurring needs.

While unrestricted standalone contracts may offer the potential benefit of broader competition—potentially resulting in lower pricing—the Government anticipates that sufficient price competition can be achieved through the MATOC SB Pool, which includes 6 small businesses. The restricted MATOC approach also provides significant additional benefits, including streamlined acquisition processes and enhanced collaboration with a pool of pre-qualified contractors. This approach enables the Government to issue a task order more efficiently, leverage contractor familiarity with the program, reduce performance risk, and realize economies of scale—advantages not easily achieved through individual standalone procurements.

Based on market research from OMEE VII MATOC, the pool of qualified vendors with proven success in medical-related services remains consistent. It is likely that the same vendors competing for MATOC awards would also pursue standalone contracts. Therefore, the MATOC model benefits both the Government and industry by reducing administrative burden and overhead, while still fostering meaningful competition.

The proposed program cost listing set forth in the below tables is a representative comparison of the contract costs to award typical customer requirements under by standalone contracts versus placing task orders under an existing MATOC. CEHNC calculates an estimated cost of for ten (10) standalone contracts and for each task orders (See Table 01 and Table 02). These cost estimates are derived from actual historical costs experienced by CEHNC OMEE medical program acquisitions.

The proposed level of consolidation provides the most beneficial level of consolidation that still promotes competition and balances the administrative costs and leverages best practices for increased quality.

5. Consolidation Benefit Analysis

In addition to the cost impacts described above, there are additional non-quantifiable impacts for acquiring the O&M service requirement through use of a single MATOC task order versus acquiring them through multiple task orders or stand-alone contracts. The impacted areas include combined corporate resources, acquisition cycle time, post-award administration, and built-in contractor risk.

a. Combined Corporate Resources: The primary mission of the OMEE program is to conduct both preventative and corrective maintenance at the medical facilities, to ensure they are operable and available to provide care to patients. One of the major issues that contactors run into at their sites, specifically the smaller task orders, is a lack of resources or qualified personnel. Often, when there is turn over, it is difficult for a contractor to get a replacement technician extremely quickly. When there is an emergency or situation, the contractor is forced to subcontract that work out, increasing the prices of the repair. This limits the amount of maintenance that can be completed during the task order. With the proximity of the 3 locations being manageable, and the task order being consolidated into one, instead of 3 or more task orders, the contractor has the ability to have a technician work at one of the of the other 2 locations for a period of time, instead of hiring a subcontractor. This saves costs, ensures consistent maintenance and coverage, prevents a backlog of incomplete work orders, and provides options to help in emergency situations.

b. Acquisition Cycle Time: Significant improvements in the acquisition cycle time are achieved by awarding task orders under a MATOC over stand-alone contracts.

Additionally, there would be significant reductions in the schedule for awarding one task order instead of 3. On a MATOC, there are programmatic documents that reduce the acquisition schedule. Each task order that would be awarded would also need a transition period to hire individuals and get access to the base. Sometimes this process can take a while. By having the task orders consolidated, and sharing resources, there can be coverage as quickly as needed, and the transition period could be shortened as needed.

Solicitations for task orders, while usually solicited for 30 days, have the opportunity to be less than 30 days, as each of the contractors on the MATOC is aware of the general requirements that needed for each location. While each location has some unique elements, there are several items that are standard and can be applied or previous knowledge that can be used to help propose quickly to meet a requirement.

c. Post-Award Administration: The consolidation into one task order also allows a single point of contact for contractor response. If there is a situation at one of the sites, or something occurring in a region, we are able to contact a primary POC that should be aware of the impact at all locations. This will improve contractor response time and provide better service to the end user. This also allows for simplification of the deliverable and submittal schedule. Having a single primary contact responsible for the deliverables and information from all 3 locations will provide more efficient communication and delivery.

6. Bundling Requirements.

a. Small Business Bundling - Bundling as defined in FAR 2.101 means a subset of consolidation that combines two or more requirements for supplies or services, previously provided or performed under separate smaller contracts into a solicitation for a single contract that is likely to be unsuitable for award to a small business concern. Bundling does not apply to this acquisition as consolidating these requirements does not result in unsuitability of a participation by a small business contractor. The current OMEE MATOC includes six small business contractors, all of whom can perform a range of facility-related services, including plumbing, HVAC, pest control, electrical, and fire suppression. These contractors have demonstrated experience executing task orders under the MATOC with estimated values ranging from $1.1 million to $14.6 million. As it pertains to 2.101(1)(i), all three sites are medical clinics. Most of the small business contractors on the OMEE MATOC have experience at clinics and hospitals. Additionally, each site contains clinics, thus the experience necessary to perform on New England’s GTO is the same experience needed on the consolidated task order. Consolidating the task orders does not significantly change the geographical dispersion covered by the task order. Moreover, suitability for a small business concern is demonstrated by the fact that a small business fosters economic growth, supports job creation, and promotes innovation, while also ensuring a more diverse and equitable marketplace.

b. The Competition in Contracting Act (CICA) of 1984 bundling does not apply to this acquisition. Although the procurement combines separate requirements into one contract, it will not exclude firms that can provide only a portion of the bundled requirement. This project will be competed as a small business set-aside on the OMEE VII MATOC and all vendors in this pool have the proven capability and capacity to provide all aspects of the required services. Small businesses under the OMEE program have historically performed a range of facility-related services, including plumbing, HVAC, pest control, electrical, and fire suppression. These contractors have demonstrated experience executing task orders under the MATOC with estimated values ranging from $1.1 million to $14.6 million indicating combining these requirements will not limit competition.

Further, there is no reduction in the competitive environment. These services were previously solicited under single and multiple award task order contracts (SATOC and MATOC), and this new acquisition will be competed on a MATOC amongst six small businesses maintaining and potentially increasing competition over historic means.

7. Consideration, Facts, and Reasoning Supporting the Determination

The Small Business Administration (SBA) Procurement Center Representative and CEHNC