Redacted_Consolidation Determination Memo_W912BV23R0013.pdf

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

CONSOLIDATION OF CONTRACT REQUIREMENTS DETERMINATION

FOR 6000 AREA MECHANICAL REPAIRS

(As prescribed by FAR 7.107-2 and AFARS 5107.107-2)

FAR 2.101 defines consolidation or consolidated requirement as 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. FAR 7.107-2 requires that consolidation of requirements with an estimated total dollar value exceeding $2 million shall be supported by a written determination that consolidation is necessary and justified in accordance with 15 U.S.C. § 657q.

I have reviewed this requirement and associated market research and determined in accordance with 15 U.S.C. § 657q and FAR 2.101 and 7.107-2 that consolidation is both necessary and justified. This approval is made in accordance with the approval thresholds set forth in U.S. Army Corps of Engineers Acquisition Instruction (UAI) 5107.107, “Consolidation of Contract Requirements.” My review resulted in the following findings:

RATIONALE

1. 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.

2. Introduction: Headquarters, U.S. Army Corps of Engineers (USACE), through its Tulsa District plans to solicit offers for Dedicated Outside Air Units (DOAU) at Buildings 5955 and 6050, Ft. Sill, Oklahoma.

The solicitation would result in a single firm fixed price (FFP), “C-type” contract under North American Industry Classification System (NAICS) code 236220, Commercial and Institutional Building Construction. A consolidated procurement will assist the Tulsa District mission to provide these required repairs of DOAU at Buildings 5955 and 6050.

3. Description of the Procurement Action: This consolidated action will provide all site investigations, design and construction documents, shop and manufacturing drawings, materials, labor, equipment, supervision, testing, submittals, and construction to perform the requirements of this project to make the justified. These qualitative benefits are important considerations in the proposed procurement and further strengthen the rational for approval of the recommended alternative and are discussed below.

7. Bundling:

a. Bundling: 15 U.S.C. 6310) & 644(e) and FAR 7.107-3 require a determination as to whether bundling is applicable to the procurement, any implications, and a bundling determination based on definition.

FAR 2.101 defines bundling as a subset of consolidation that combines two or more requirements for supplies or services, previously provided or performed under separate smaller contracts (see paragraph (2) of this definition), into a solicitation for a single contract, a multiple award contract, or a task or delivery order that is likely to be unsuitable for award to a small business concern ( even if it is suitable for award to a small business with a Small Business Teaming Arrangement) due to:

i. The diversity, size, or specialized nature of the elements of the performance specified;

ii. The aggregate dollar value of the anticipated award;

iii. The geographical dispersion of the contract performance sites: or

iv. Any combination of the factors described in paragraphs (i), (ii) and (iii) of this definition.

(2) "Separate smaller contract" as used in this definition, means a contract that has been performed by one or more small business concerns or that was suitable for award to one or more small business concerns.

FAR 7.107-3 annotates that market research may indicate that bundling is necessary and justified if an agency or Government would derive measurably substantial benefits (see FAR 10.001(a)(2)(iv) and (a)(3)(vi)). According to FAR 7.107-3(c), Measurably substantial benefits may include, individually or in any combination or aggregate, cost savings, price reduction, quality improvements that will save time or improve or enhance performance or efficiency, reduction in acquisition cycle times, better terms and conditions, and any other benefits. The agency must quantify the identified benefits and explain how their impact would be measurably substantial. The agency may determine bundling to be necessary and justified if, as compared to the benefits that it would derive from contracting to meet those requirements if not bundled, it would derive measurably substantial benefits equivalent to 10% of the estimated contract or order value (including options) or $9.4 million, whichever is greater, if the value exceeds $94 million.

b. The requirements for repairing DOAU repairs have previously been provided or performed under separate construction contracts awarded by the contracting branch. In addition, this work will be performed at two or more discrete sites. Because of these facts, the proposed acquisition is considered to be consolidated. The proposed acquisition provides for a small business set-aside based on the market research, thus is not considered to be a bundled acquisition.

The Competition in Contracting Act (CICA) requires solicitations to provide for full and open competition except where restrictions on competition are necessary to satisfy the procuring agency's needs. In such a case, restrictions on competition are allowed but only to the extent necessary to satisfy the agency's needs. Bundled procurements combine separate requirements into one contract; thus, they have the potential to restrict competition in violation of CICA by excluding firms that can provide only a portion of the bundled requirement. However, substantial cost savings achieved through the reduction of duplicative efforts and operational efficiency can be a reasonable basis for restricting competition where requirements are bundled. The savings and efficiencies that are anticipated to be achieved through this acquisition justify any restriction on competition presented by the consolidated requirement and provide a reasonable basis for the agency's action, which involves the least amount of consolidation necessary to execute the mission.

8. Considerations, Facts, Reasoning Supporting the Determination: By combining this work effort at Dedicated Outside Air Units (DOAU) at Buildings 5955 and 6050 under a consolidated single contract, the Contractor will be able to realize efficiencies by managing program risks and project management costs across multiple sites. Small Business Coordination Record (DD Form 2579) was reviewed and approved by the Deputy of Small Business on 6 January 2023.

9. Summary: For this procurement, the quantifiable benefits of the recommended approach meet/exceed the threshold set forth in FAR 7.107-2(d), In addition, the expected benefits of the consolidated approach are the most cost beneficial, are critical to the agency’s mission success, and the procurement strategy provides maximum practicable participation by small businesses IAW FAR 7.107-2(e).

The recommended alternative provides more comprehensive and consistent cost reduction to the government. It also allows for more efficient and consistent contract administration and allows the government the best opportunity to effectively fund for the project costs. Other alternatives would result in increase in cost, increased mobilization and demobilization costs and administrative costs. No other alternative would allow the Government to provide the comprehensive "cradle-to-grave" construction services with the level of quality, timeliness, and costs savings required to meet USACE mission requirements in the most advantageous, effective, and cost-efficient manner possible. Considering the facts provided, the benefits of consolidation will substantially exceed the benefits of the alternative contract approaches.