Redacted ETFO for UOC.pdf

DEFENSE THREAT REDUCTION AGENCY

8725 JOHN J . KINGMAN ROAD, STOP 620 1

FORT BELVOIR, VA 22060-6201

EXCEPTION TO FAIR OPPORTUNITY JUSTIFICATION

1. Nature and/or Description of the Action

The Defense Threat Reduction Agency contracting activity proposes to procure, without requesting proposals from all four Cooperative Threat Reduction Integrating Contract (CTRIC) II contractors, an effort entitled "Unified Operations Center" (UOC). Bechtel National, Inc.

(BNI) will be the only contractor solicited to provide the required technical effort.

2. Description of the Supplies/Services Required

The Cooperative Threat Reduction (CTR) program requires services to renovate a facility in Moscow, Russia to serve as the Russian's center for the management of its nuclear weapons storage site security. The facility will house the main node of the Centralized Operational Management System, which is the backbone of the storage security management effort, as well as associated administrative functions. DTRA proposes to acquire the renovation services via a Task Order (TO) under CTRIC II IDIQ (HDTRAl-11-D-0010); the scope ofthe proposed TO will be to complete the renovations of an existing building to serve as the UOC. The anticipated period ofperformance (PoP) for the proposed TO will be 29 June, 2012 through 25 October, 2013 with a value of$13.5M.

Currently, Bechtel National Inc. (BNI) is performing the UOC renovation services under TO DTRAOI-01-D-0013-0017, which was awarded competitively under the CTRIC I IDIQ. Four of the five contract holders competed for the current TO. There have been several delays on this project rendering contract completion impossible on the current TO. The current TO will expire on 5 September 20 12, and there is not enough time to complete renovations before the current

TO ends. Although the contractor, BNI, began perfom1ance on the current TO in a timely manner, several incidents prevented BNI from completing the required tasks on the current TO.

First, the Russian executive agent delayed the release of the first site survey due to procedural issues with the performing subcontractor. BNI conducted due diligence in the competition for this subcontract which included getting the bidder list approved by the Russian executive agent. However, several issues arose between the executive agent and the subcontractor, unbeknownst to BNI. These issues prevented the subcontractor from returning to the building that was to be renovated following their initial, incomplete site survey work. Thus, the subcontractor was unable to complete the site survey, which in turn delayed BNI from moving forward in its renovation plans.

Feiget Highlight

Feiget Highlight

Feiget Highlight

Feiget Highlight

Feiget Highlight

Feiget Highlight

Second, structural integrity issues further delayed BNT's progress in its renovation plans. The structural survey revealed structural integrity issues and necessitated an additional focused survey to be performed by a different subcontractor to detennine the extent of the structural integrity issues.

Third, the renovation project was further delayed when the Russian executive agent revealed they could not obtain title to the building. The Russian executive agent had made assurances previously that they had the title to the building. However, without the proper documentation of the title, permits for renovation work cannot be issued. This issue was not revealed until after the second site survey was completed in October 201 1.

Fourth, the Russian executive agent required additional time to identify a new building that was suitable for the mission. The location of the renovations has changed from Ochakovo to Sokol 'niki, but both locations are situated in Moscow, Russia.

Thereafter, DTRA conducted a site visit and ultimately agreed to move forward at the new location. Because renovations of an existing building are necessary to achieve the creation of the UOC and an ECP, under the current TO, BNI has begun the preliminary work in January 2012 to start renovations at this new site.

BNI will not be able to complete all the necessary renovations at the new site before 5 September 2012. Another contract must be awarded in order to complete the renovations at the current site.

DTRA proposes to award a TO under CTRIC II to BNI pursuant to the authority and justification provided below.

3. Authority for Exception to Fair Opportunity

This Exception To Fair Opportunity (ETFO) will be issued pursuant to FAR 16.505(b)(2)(i)(B) and (D). FAR 16.505(b)(2)(i)(D) exempts the order from fair opportunity if"[i]t is necessary to place an order to satisfy a minimum guarantee." BNI is currently performing this work under a TO to the CTRIC I contract (DTRAOI -01-D-0011-0017). Because of the above mentioned Government caused delays BNI will not be able to complete work under their current TO due to the contract expiring on September 5, 2012. A TO awarded w1der the CTRIC II contract is not only a logical progression of the work to date, under an appropriate contract vehicle, it wiU also fulfill the Government's obligation of a minimum guarantee to BNI.

4. Justification Rationale

Minimum Guarantee

Pursuant to FAR 16.505(b)(2)(i)(D), a TO may be awarded on a sole source basis to satisfy the minimum guarantee of the indeftnite delivery, indeftnite quantity (IDIQ). Three of the four contract holders under CTRlC IJ have been awarded TOs. BNI is the only contractor who has not yet been awarded a TO. Awarding BNI a TO under CTRIC II IDIQ will satisfy the

Page 2 of6

DAI # 2910

Feiget Highlight

Feiget Highlight

Feiget Highlight

Feiget Highlight

Feiget Highlight

DAI # 2910

II IDIQ will satisfy the $500,000.00 minimum guarantee. This is a good opportunity for DTRA to satisfy the minimum guarantee because a need currently exists and BNI is familiar with the project needs and risks based on its current experience.

5. Market Research

Market research was originally performed for the CTRIC II IDIQ contract and it included conducting industry day meetings and one-on-one meetings with different contractors, including

BNI. Market research has been performed for this proposed task order award as well. In performing the current task order, the Government, through BNI, learned about individual subcontractor’s capabilities and what options the Government has in approaching the renovation project. Mostly, the US Government learned of the restrictions and limitations in doing renovations/construction in Russia for the Russian UOC. Under the current task order and through BNI, the Government learned the approval processes required by the MOD and of subcontractor’s abilities and capabilities in Russia. Access is a key issue and not every subcontractor has immediate or even equal access to the site of the renovations.

The Government identifies the CTRIC II IDIQ contract is an appropriate vehicle to achieve the

UOC project requirements because the requirements of the UOC project are within scope of the

CTRIC II IDIQ. Additionally, the Government has been in constant communications with BNI during the performance of the current task order in support of the UOC project. The

Government determines that BNI has the capability to perform the requirements of the UOC project, especially considering that the scope of the requirements is almost identical to that in the current task order. The UOC project aligns with the listed services. Specifically to:

- Consolidate and secure WMD related technology and materials and

- Increase transparency and encourage higher standards of conduct.

6. Other Supporting Facts

Other facts support awarding a task order to BNI. For example, BNI has started the preliminary work for renovations, including being competing and awarding subcontracts to do the renovation work in Russia, receiving approval from the Russian Federation MOD for these subcontractors to do the work, ensuring that its subcontractors have access to the site and beginning work site surveys. Furthermore, BNI is familiar with the intricate MOD review and approval process and is familiar with the site and the specific renovation tasks that will be required. BNI has cultivated working relationships with the MOD and its subcontractors. BNI also is familiar with the risks associated with this project, and because of its current performance on the current task order BNI is in a better position to appreciate what the risks are and how to mitigate the risks.

contractor would have to repeat these same tasks and obtain approvals from the MOD, whereas

BNI has already obtained the requisite approvals and competed its requirements.

Additionally, BNI will be fu lly ready to perform the actual renovation work in the proposed TO because it has and will perfonn many of the preliminary renovation work, including site and environmental surveys, roof repairs, ordering new elevator cars, cables and other materials, under the current TO. Because of its current performance at the site, BNI will be able to make a seamless transition from one TO to another. BNI is in a better position to efficiently complete the renovations and in a timelier manner because of its current experience because the proposed TO is a continuation of the same work in the current TO.

Under the current TO, of the contract award amount of$18,214,407, BNI has only been paid $2,435,062 for the limited work it has been able to do on this renovation project. By awarding

BNI the proposed TO, BNI will be given an opportunity to fully perform on a project they were competitively awarded and to earn the full contract value of that project.

7. Subsequent Actions

None.

Page 4 of6

Technical Certification

I certify that the data and information forming the basis for this justification arc accurate and complete to the best of my knowledge and belief.

Project Manager Date

Contracting Officer Certification and Determination

I certify that this justification is accurate and complete to the best of my knowledge and belief.

Additionally, I determine that the order represents the best value consistent with Federal

Acquisition Regulations.

Contracting Officer Date

General Counsel Coordination

This justi fication islis not legally sufficient.

Attorney Date

' . ? , j

I • - .. l

Competition Advocate Date

Approval

Based on the above justification, I hereby approve accomplishment of this acquisition by means of limited sources.

Head of Contracting Activity Date