redacted Streambank MATOC ConsolidationDF W9125-22-R-0001_Redacted.pdf

AUG 22

DEPARTMENT OF THE ARMY

U.S. ARMY CORPS OF ENGINEERS, NASHVILLE DISTRICT

CONSOLIDATION OF CONTRACT REQUIREMENTS DETERMINATION

FOR W912P522R0001 STREAMBANK STABILIZATION MATOC

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

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: The Nashville District of the U.S. Army Corps of Engineer plans to solicit offers for flood control, navigation, hydropower, recreation, and ecosystem restoration projects and has conducted market research that demonstrates consolidation of this procurement is 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;

5. Alternative Contracting Approaches and Rationale for Rejection: In determining that a 100% small business set aside MATOC was the best solution for satisfying the flood control and construction requirements of the Nashville District mission, two other alternative contracting approaches were analyzed.

a. Alternative 1, No Consolidation – Multiple Individual Contracts for each

Mission Requirement.

(i) Quality: Increased contract preparation time for the procurement of individual contracts results in decreased quality of service to the District’s clients. Maintaining an aging and failing infrastructure past its service life is not a predictable cycle.

Procurement for individual specific contracts, several months in advance of need, is nearly impossible as unplanned construction needs/requirements are the result of continuous 365-day, 24-hour operations and maintenance of our existing structures and equipment.

Each year there is a planned schedule for all operations and maintenance of the equipment and facilities that the District supports. There is also large, varied, and unplanned work which occurs and not as possible to predict. Thus, it is unfeasible to predict the timing or location of the work required to accomplish this mission in time to prepare individual contracts. The lack of advanced warning renders multiple contracts nearly impossible to anticipate and award.

Therefore, this alternative puts the District at an elevated risk for mission failure.

Whether for routine, unplanned, or emergency work; having a pool of contractors familiar with the Nashville District infrastructure, some of which is unique and not found outside of a USACE District, provides for delivery of a better product as they address similar problems at our various facilities.

This familiarity with both our infrastructure and procedures enhances performing emergency work as they are able to start performance in a reduced timeframe while still delivering a quality product. In addition, the contractor's safety program is enhanced when team members become proficient in executing the safety requirements of the USACE construction program which results in increased efficiency and effectiveness of the USACE quality assurance program.

(ii) Acquisition Cycle: The effort required for multiple procurements would result in schedule delays that could impact mission requirements.

The time required to award a standalone contract versus individual task orders against a MATOC is significantly higher, less efficient, and could potentially prevent the district from meeting all milestones and/or mission requirements. An Invitation for Bid (IFB) takes approximately 120 calendar days to procure and award, a stand-alone Request for Proposal (RFP) takes approximately 180 calendar days to procure and award, a stand alone design-build RFP which has two-steps easily adds another 60 days (refer to Engineer Regulations 1180 _1_90), whereas a task order against a

MATOC would take approximately 30-45 calendar days to procure and award.

Awarding a MATOC requires that most pre-award activities be completed once for each contract to cover the five-year performance period, rather than each time for a multiple number of individual standalone contracts since we still need requirement documents for each task order, such as Independent Government Estimate (IGE), and Weather Day estimates. Awarding standalone contracts increases acquisition efforts and costs. This would also have a significant negative impact on end of year execution due to the time frame in which our operation and maintenance funding is received.

Short acquisition processes allow for minimal and/or reduced operational outages for the District’s locks, dams, levees, etc. Having a MATOC in place which can perform the Design-Build tasks reduces the timeframe fo the government to perform the design and solicit for build activities. Extended operational outages of the infrastructure impacts the navigation industry, increases effort to operate and maintain facilities (resulting in additional expenditures by the Government in both manpower and material), and most importantly, elevates the risk of possible life, health, or safety issues due to operation of these facilities in less-than-optimal condition.

Additionally, weather and pool conditions at the projects can significantly shorten the construction window to accomplish the work. These factors combined with the sometimes unplanned or emergency nature of the work involved, mean there is not sufficient time to utilize individual contracts to perform the necessary work.

(iii) Cost: Per 15 U.S.C. § 657q(c)(2)(B), “savings in administrative or personnel costs alone do not constitute a sufficient justification for a consolidation of contract requirements” unless the total amount of the cost savings is expected to be substantial in relation to the total cost of the procurement. An individual contract procurement can take a longer amount of time which requires full plans and specifications, an extensive Biddability, Constructability, Operability, Environmental, and Sustainability (BCOES) review, the possibility of more amendments, and Internal Technical Reviews (ITRs).

A task order by its nature can be procured in a reduced amount of time by use of streamlined plans and specifications, minimized BCOES certification requirements and can be negotiated and executed more quickly with this fast-track process. A task order BCOES is completed via a simple scoping meeting which can be performed in a few hours with minimal staffing. The acquisition costs for a task order are approximately 70% of the costs for moderately complex requirements.

The following table compares procurement related costs between base Indefinite Delivery, Indefinite Quantity IDIQ contracts (MATOC and SATOC), as well as standalone contracts. The last three columns include procurement related costs for placement of task orders under the base MATOC. The acquisition costs for: 1) Best Value Trade-Off (BVTO) MATOC $ and 2) Design-build (D/B) costs about

All elements: An extensive BCOES is required for a stand-alone procurement taking a minimum of 1-2 weeks to complete whereas a Scoping Meeting is adequate for Task Orders taking 3-4 hours.

(iv) Terms and Conditions. There is no change in terms and conditions between alternatives.

(v) Other Benefits. Having this MATOC in place is essential to protecting the life, health, and safety of the public along with maintaining industry’s ability to navigate the Tennessee and Cumberland rivers within the District. Contracts for standalone projects will not efficiently or effectively meet the district’s need. Procurements on a project-by-project basis would create delays that a MATOC minimizes. Delaying or deferring critical maintenance and repair work of Nashville District infrastructure diminishes the ability to meet the mission in support of navigation, flood risk management, environmental stewardship, recreation, and water supply. Utilizing individual contracts for each need would unduly delay needed repairs, maintenance, and construction to our facilities. There is also the hidden cost associated with deferred maintenance as any delay in prosecuting the work can cause small problems to balloon into larger ones when left unchecked. These hidden costs cannot be easily quantified, however aging/deficient infrastructure seldom remains stable, but continues to deteriorate, which results in an increased cost and risks the possible failure of our facilities. In the past, LRN Construction MATOCs have been used for immediate work needed at our projects. This work varies from performing necessary maintenance at a lock and dam, to performing emergency work resulting from an accident that has temporarily closed the facility to river traffic. The District work allows for the safe and efficient transport of a wide variety of commodities. Barge traffic traveling through the District’s lock and dam system accounts for hundreds of millions of dollars in interstate commerce each year. The use of the MATOC, can reduce the potential risks by providing a capability to quickly and efficiently maintain and repair the Nashville District’s unique infrastructure.

(vi) Conclusion. Stand-alone contracts for all of the districts’ streambank stabilization construction needs is not a plausible method for procurement. This method would increase redundancy, increase cost, lessen response time, reduce quality, and provide a lower level of service for the district. Utilizing a MATOC specific to streambank stabilization needs, will allow the contractors to have familiarity with performance and work expectations and will substantially reduce the risk of terminations and disputes that arise during individual contract award. In addition, project familiarity and requirements will lead to increased efficiencies for contractors in performance. Based on reasoning provided in paragraph 5 and throughout this Determination, it is critical to the Nashville District mission to have this construction MATOC in place.

b. Alternative 2: Five Single Award Task Order Contracts (SATOCs):

The District considered awarding five (5) SATOCs in lieu of a MATOC to satisfy the requirements for its streambank stabilization construction projects. This alternative would produce a slightly higher degree of consolidation, however similarly to a MATOC, all projected requirements for each SATOC would still be consolidated under an IDIQ procurement mechanism. Moreover, the SATOC approach does not provide any of the benefits of competition at the task order level. The MATOC approach is the better approach overall, providing the best combination of competitive environment and timeliness.

(i) Quality. Even a SATOC to a single contractor or SATOCs to five different contractors would be considered consolidation since it would include two or more construction projects. A task order contract provides the ability to issue more than one requirement against a contract, such as each requirement being discrete projects.

a. A SATOC does not provide any of the benefits of competition at the task order level because a pool of contractors for competing work does not exist. If a pool did exist, the government would have a MATOC;

therefore, a SATOC with only a single contractor would be used before issuing five SATOCs. If wanting five contractors to complete projects, a MATOC is the preferred approach in accordance with FAR 16.5. Both MATOCs and SATOCs are initially procured through competition, but only the MATOC also provides for competition at the Task order level.

Providing an additional layer of competition at the Task Order level is an important consideration in major procurement actions. It results in better pricing and incentives performance with past performance evaluations if they occur at the task order level.

b. If a SATOC contractor ends up becoming a poor performer, the District would be in jeopardy of mission failure with no other immediate options available. Replacing a performer would be onerous, necessitating lengthy termination and re-procurement actions. In a MATOC context, however, replacing a failed contractor is much easier, involving only issuance of a new task order; a process that is significantly simpler, quicker, and less expensive. The government can also include past performance as a factor when competing task orders.

c. Any surge in requirements could put too much demand on one SATOC.

A surge could stretch the contractor too thin, which could result in increased risk of unsuccessful performance as corners might be cut and quality is reduced

(ii) Acquisition Cycle. Compared to “C” contracts, SATOCs, like MATOCs provide a more streamlined acquisition approach. While SATOCs may result in less number of proposals to evaluate, they increase the amount of effort to negotiate fair and reasonable prices as adequate price competition does not which is critical to the success of the USACE mission (See acquisition cycle and cost discussion under Alternative 1 below). This procurement strategy provides maximum practicable participation by small business. The following paragraphs in this section, as well as the Section 5 analysis (Alternative Contracting Approaches), detail the benefits of this proposed consolidation.

(2) Utilizing the MATOC in accordance with FAR 16.504 to consolidate the requirements for streambank stabilization construction projects within the Nashville District boundaries is necessary to meet mission objectives, increase efficiency, streamline processes, decrease costs due to contractor economies of scale, provide faster response times, leverage delivery, performance, and program closeout. Additionally, multiple projects will be performed in the same geographic area, thereby increasing the knowledge of the local conditions, and reducing mobilization costs for the contractors in the MATOC pool.

(3) We have a continuous requirement to support the operations and maintenance of fourteen (14) navigation locks, ten (10) dams, and multiple flood damage reduction projects (Dams and Levees) within the Nashville District. Each year there is a planned schedule of operations and maintenance that the District/region supports. Additionally, there are also deferred maintenance projects which are only executed if the infrastructure deteriorates to a point necessitating repairs or if funding becomes available (normally toward the end of the fiscal year). There is also a large, varied, and unplanned work requirement which is difficult to predict. The lack of advanced warning for emergencies and repairs to aging infrastructure renders it nearly impossible to anticipate and expect. In recent years, the District has experienced an increase in this type of work due to the aging infrastructure.

(4) Individual contracts for specific projects can take several months and up to a year to award. The government needs shorter acquisition processes using task order procedures to minimize damage risk and costs as well as reduce operational outages at critical infrastructures, i.e., Locks, Dams, Levees. Having a MATOC in place the District will permit timely responses to unpredictable work requirements, reduce risk of further damage to streambanks, and mitigate potential for increased overall repair costs to the government.

(5) The use of an IDIQ MATOC is optimal for execution of projects throughout the year and at year end due to emergency requirements and for requirements not firmly committed for execution in that FY. Traditionally, these types of projects are scoped mid-to-late spring for late 3rd or 4th quarter award(s), with limited funds and limited time to fulfill the requirements.

(6) Further, it is important to note that the District considers this MATOC as one tool in our contracting toolbox and not as the default method to procure these types of construction projects. The intent is to use the MATOC when the constraints imposed either limit the procurement to use of the MATOC or provide the best option for completing the work within the cost and/or time limitations for the individual project. The

District takes a deliberate approach engaging all acquisition Project Delivery Team (PDT) members and leadership to employ the best acquisition strategy to fulfill the Government’s requirement/need(s). The District pursues any, and/or all, tools in the acquisition or procurement of all contracts. The small business Design-Build/ Design- Bid-Build and large business construction MATOCs are flexible approaches to the District’s overall procurement /acquisition strategy when time, funding, schedule, or urgent and compelling needs are required. The District’s overall program and contracting goals fully supports small business opportunities with IFB or BVTOs, set asides, etc. which fosters competition in small business.

7. Bundling:

a. Definition of Bundling. FAR 2.101 defines bundling as consolidating 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 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) through (iii) of this definition.

b. Applicability of FAR Bundling Definition. This acquisition does not meet the definition of bundling since the government will be procuring this requirement via 100% small business set aside.

c. Definition of the Competition in Contracting Act (CICA) Bundling Principle.

This principle, as developed by the Government Accountability Office (GAO) case law, focuses on whether the combined requirement (new, old, or otherwise) restricts competition, and whether the agency is consolidating or bundling a new requirement unnecessarily. In order to justify CICA Bundling the agency must show "a reasonable basis for why the bundling is necessary to meet the agency need." (Vantex Serv., Inc., B-29041 5, Aug. 8, 2002, and Outdoor Venture Corp., B-299675; B-299676, Jul. 19, 2007).

d. Applicability of CICA Bundling Principle. 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. As noted in the charts above, a MATOC will result in substantial cost savings achieved through the reduction of duplicative efforts and operational efficiency which is a reasonable basis for restricting competition where requirements are bundled. Efforts are duplicated when the government repeats the process of finding qualified vendors on a project specific basis. Once qualified vendors are identified, efficiencies in the industry and government exist by limiting competition to that pool. Unqualified entities do not waste time developing and submitting proposals that the government would waste time evaluating. Additionally, the evaluation factors can be limited in a MATOC to exclude qualifications since the award process would have considered the qualifications. This reduces pages and pages of evaluation per offeror that each government official would have had to read and evaluated.

8. Considerations, Facts, Reasoning Supporting the Determination: Above, the government has considered procurement of discrete projects on an individual basis, under a SATOC and under a MATOC, with a MATOC being the method in the governments best interest. MATOCs for the Nashville District play an essential component in enabling the Government to meet various small business goals and targets. Procurement of this MATOC may enhance small business participation through increased sub-contracting opportunities through the use of multiple prime contractors.

Both concur that consolidation of this requirement is both necessary and justified.

Consolidating the discrete projects for an efficient competition process between qualified MATOC contractors allows the government to limit consideration to contractors who have proved they have the skills and competencies to meet the specialized government needs for project similar in nature. This limitation reduces overall administrative costs to the government, permits for more timely site specific awards.

The timely awards mitigate potential for more damage of a riverbank and mitigate risk to infrastructure, lives and the environment.

The Government has considered all of the above information to make a determination that any minor disadvantages are greatly outweighed by the value provided to the Government by using this consolidated MATOC approach. Based on the facts and reasoning used to make this determination, the District believes there are substantial benefits in quality, cost, and in the District’s overall ability to execute the program.

Other general construction contract MATOCs do not include the specialized skill set to perform river work. The Government has demonstrated that the streambank stabilization MATOC is necessary and justified to meet the needs of the Government under the conditions/restrictions requiring its use.

9. Summary: Though this MATOC constitutes consolidation in that it combines construction at two or more discrete sites in one contract, this approach provides the best combination of competitive procedures, timely acquisition, cost efficiency, quality, and capable prime contractors to execute the construction project requirements.

Individual contracts were considered but would result in significantly higher costs and increased acquisition cycle time. Additionally, it is significantly less burdensome for the District’s Contracting and Construction Divisions to administer one MATOC using a regional pool of contractors than numerous individual contracts or multiple MATOCs/SATOCs. Based on the facts and circumstances of this project, the current acquisition strategy is necessary and justified since the benefits of this strategy substantially exceed the benefits of the alternative contracting approaches, as described above. The alternative approaches would not allow the Government to produce contracts at the desired level of quality and timeliness needed for mission execution. The findings of the market research and the documentation provided herein support the conclusion that consolidation of requirements is both necessary and justified, based on sound business judgment in view of the size, complexity, and number of efforts to be executed within LRN, and the consolidated approach provides advantages that substantially exceed the benefits of a less consolidated approach.

DETERMINATION

Based on the foregoing rationale, I hereby determine, pursuant to the Federal Acquisition Regulation Supplement 7.107-2 and Army Federal Acquisition Regulation Supplement 5107.107, that the consolidation of the requirements for flood control, navigation, hydropower, recreation, and ecosystem restoration projects is both necessary and justified and will serve the best interests of the Government.

Date:

District Contracting Chief

Attachments:

(Market Research, Approved Acquisition Strategy and/or Plan, solicitation)