VISN 1 Construction MATOC - Consolidation Memo ab 06292023.pdf

Consolidation of Requirements – Determinations and Findings Acquisition Plan number: 36C241-23-AP-1549

Veterans Integrated Service Network (VISN) 1 Construction Multiple Award Task Order Contract

Determination That Consolidation Is Necessary and Justified

In accordance with (IAW) the definition provided at FAR 2.101, “Consolidation or consolidated requirement” means a solicitation for a single contract, a multiple-award contract, a task order, or a delivery order to satisfy—

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

While FAR 7.107-2(a) recognizes that consolidating requirements may provide substantial benefits to the Government, further account is given to the potential negative impact upon small business participation. Accordingly, before actions are taken by an agency to consolidate requirements under a subsequent solicitation and/or contract award, accompanied by an estimated total dollar value exceeding $2 Million, a written determination is required. In accordance with FAR 7.107-2(a), the senior procurement executive or chief acquisition officer shall make a written determination that the consolidation is necessary and justified for actions exceeding $2 Million.

This determination is issued pursuant to Federal Acquisition Regulation (FAR) 7.107-2(e), that consolidation is necessary and justified for an acquisition exceeding $2 Million based on benefits that are critical to the Veterans Health Administration (VHA), Veterans Integrated Service Network (VISN) 1’s mission success.

A. Background

Solicitation number: 36C24123R0073

Requirement: Indefinite-Delivery, Indefinite-Quantity (IDIQ) VISN 1 Construction Multiple Award Task Order Contract (MATOC)

VISN 1 located within the VA New England Healthcare System (HCS), has a requirement for on-going facilities construction, alterations, and repair of buildings, structures and other real property relating to, but not limited to, civil, mechanical, plumbing, structural, electrical, heating, roofing, site work, heating ventilation and air conditioning (HVAC), for the following VISN 1 VA Medical Centers (VAMC’s): (1) VA Togus, Maine; (2) VA White River Junction, Vermont;

(3) VA Manchester, New Hampshire; (4) VA Central Western MA, Northampton, Massachusetts; (5) Edith Nourse Rogers Veterans Memorial Hospital, Bedford, MA; (6) VA Boston Health Care System, MA, including the Brockton Campus, the Jamaica Plain Campus, and the West Roxbury Campus; (7) VA Providence, RI; (8) VA Connecticut Health Care System, including the West Haven Campus, and the Newington Campus; (9) any Community Based Outpatient Clinics located within VISN 1; and (10) any other VA facility and/or location within the New England Healthcare System. The need for on-going construction at multiple VAMC’s would be fulfilled with the award of a consolidated MATOC to expedite the solicitation process.

As a measure of ongoing need, VISN 1 is one of the oldest Networks in the Nation and has a facility condition backlog of $2.5 Billion in NRM projects. This number represents an assessment of need that will only continue to grow. These numbers also demonstrate a large

Veterans Integrated Service Network (VISN) 1 Construction Multiple Award Task Order construction workload, and this endeavor would allow the solicitation process to be as expeditious as possible eliminating the need to utilize FAR Part 14 and 15 open market procedures for the majority of construction requirements. Funding for construction projects in VISN 1 has grown substantially over the past five years to affect this backlog and an expedited solicitation process would assist greatly in processing the construction projects ultimately improving care settings and the environment for Veterans served in these geographic areas.

The planned consolidated contract will have an estimated ceiling value of $100 Million per contract awarded and will consist of multi-disciplined construction services. Construction services in VISN 1 are currently being accomplished through previously awarded MATOC contracts and full and open competition after exclusion of sources to Service-Disabled Veteran- Owned Small Businesses (SDVOSBs).

B. Selection of Acquisition Strategy

The acquisition team performed the following steps and analyses in selecting the recommended acquisition strategy:

1. Market research: A Sources Sought for the new Construction MATOC was posted to

Contract Opportunities on November 3, 2022. The synopsis identified the proposed requirement as multi-disciplinary and a 100% set-aside for SDVOSBs within the VISN 1 New England HCS. In response to the synopsis, 25 SDVOSBs showed interest in the opportunity. There were no concerns raised by the contractors.

2. Alternative contracting approaches that would involve a lesser degree of consolidation:

An alternative contracting approach to consolidation is to procure each construction requirement open market utilizing FAR Part 14 and 15 procedures. This contracting approach is not advantageous to the Government as both procedures require more Government resources and reviews and result in an overall increased Procurement Administrative Lead Time (PALT) which ultimately impacts mission needs.

Another alternative contracting approach is to have contracting award one MATOC for each of the VAMC’s within the VISN 1 locations. All VISN 1 locations frequently procure identical construction requirements using the same pool of SDVOSBs, therefore, acquiring these requirements through separate MATOC contracts substantially duplicates efforts, becomes inefficient and administratively burdensome.

Conversely, creating a VISN 1 construction services MATOC for a recurring need will reduce duplicative efforts, save time and money, and protect the Government’s interests.

3. Coordination: This Determination and Findings has been coordinated with the Office of Small Disadvantaged Business Utilization for the VHA, as evidenced by the signature block on the last page of this document.

4. Negative impact of the acquisition strategy on contracting with small business concerns:

No negative impacts on small business concerns have been identified as this acquisition

Veterans Integrated Service Network (VISN) 1 Construction Multiple Award Task Order strategy is a 100% SDVOSB set-aside. SDVOSBs identified during the market research phase have expressed capability in multiple/all locations and their chances of receiving an award are not being hindered due to the fact that this procurement involves multiple locations. Additionally, there will be subcontracting opportunities in each location for other small businesses to be utilized.

5. Steps taken to include small business concerns in the acquisition strategy: IAW VAAR 819.201, it is the Department of Veteran Affairs (VA) policy that small business concerns owned and controlled by Veterans shall have maximum practicable opportunity to participate in VA acquisitions, consistent with efficient contract performance and the priorities and preferences established under 38 U.S.C. 8127 and 8128. Additionally, within the VA hierarchy of small business program preferences established by 38 U.S.C.

8127(i) (see VAAR subpart 819.70), VA must consider preferences for verified SDVOSBs first.

IAW policy, and to ensure all small business concerns were sufficiently addressed, market research conducted conclusively shows that there are ample SDVOSBs to support this requirement. As described in the paragraph above, the SDVOSBs identified during the market research phase have expressed capability in multiple/all locations.

C. Benefits of Consolidation

1. In order 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 a lesser degree of 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 and conditions, or any other benefit. The expected benefits of the consolidated acquisition will be discussed in the paragraphs below.

The approval authority may also determine that consolidation is necessary and justified when the benefit thresholds are not met, but the contract is critical to the VA mission success and the procurement strategy provides for maximum practicable participation by SDVOSBs. In this case, the use of a consolidated MATOC for construction projects is critical to the mission success of each VAMC. Without a construction services MATOC in place to provide streamlined project execution, increased times for projects would occur and result in delays in facility renovations and operations. These delays would jeopardize the effectiveness of these hospitals in serving the Veterans and could ultimately result in mission failure. Therefore, we believe the MATOC is critical to the agency’s mission success.

A. The anticipated financial benefits do not meet the thresholds in FAR 7.107-2(d)(1).

However, the expected benefits not quantifiable in dollar amounts are critical to the

Veterans Integrated Service Network (VISN) 1 Construction Multiple Award Task Order agency's mission success and this procurement strategy provides for maximum practicable participation by small business.

B. According to FAR 7.107-2(c), benefits other than cost savings or price reduction may also be used to justify consolidation. These benefits include: 1) Quality improvements that will save time or improve or enhance performance or efficiency; (2) Reduction in acquisition cycle times; (3) Better terms and conditions; or (4) Any other benefit. The consolidation of construction services efforts between all of the stations will clearly achieve benefits 2 and 3 as described in subparagraphs below.

a. Significant reductions in acquisition cycle times are also expected to be achieved through consolidation. The typical PALT standard for design-bid-build acquisitions under $7M is 120 days and acquisitions $7M to $50M is 180 days respectively. However, with the Construction MATOC in place, the PALT is reduced by 50%.

b. The terms and conditions will be established by written agreement of the parties in the resultant MATOC contracts and will apply to future task orders between the parties during the five-year period. This should result in increased administrative efficiencies and cost savings with the use of the MATOC.

Since the Construction MATOC has been in place, it is well established that it has received more advantageous terms and conditions as a direct result of its use of a MATOC vehicle. Under this contract type, contractors have a greater likelihood of receiving a higher quantity of work over an extended period. The increase in job security, paired with the higher expected volume of projects provided by a MATOC incentivizes contractors to provide the Government more competitive pricing. If contractors receive multiple awards at the various locations, it may incentivize them to provide more competitive pricing because they are already mobilized on these sites.

2. In addition to the benefits to the Government outlined above, consolidating these construction services efforts into a MATOC is in alignment with the statutory preference for multiple award contract types outlined in FAR Part 16. According to FAR 16.505(c), the contracting officer must, to the maximum extent practicable, give preference to making multiple awards of indefinite-quantity contracts under a single solicitation for the same or similar supplies or services to two or more sources. Furthermore, FAR 16.504(c)(ii)(D)(1) indicates that no task or delivery order contract in an amount estimated to exceed $100 Million (including all options) may be awarded to a single source. For these reasons, we believe that consolidating the construction service requirements under a multiple award IDIQ contract is not only justified, but also encouraged by federal regulation.

D. Need for Consolidation

Veterans Integrated Service Network (VISN) 1 Construction Multiple Award Task Order

The financial benefits do not meet the thresholds in FAR7.107-2(d). However, they are critical to the agency’s mission success as explained in the benefits above and this procurement strategy provides for maximum practicable participation by small business.

E. Determination

Based on the above facts, I determine that in accordance with FAR 7.107-2:

1. The necessary steps have been taken to support the need for consolidation,

2. The benefits of the acquisition are critical the agency’s mission success, and

3. As a result, consolidation for the above referenced requirement is necessary and justified.

Heather M. Libiszewski- Gallien 905228

Digitally signed by Heather M. Libiszewski- Gallien 905228 Date: 2023.04.06 10:47:45 -04'00'

Heather Libiszewski-Gallien Date Contract Specialist, NCO 1 Regional Procurement Office-East

Digitally signed by KARLA ROTONDO Date: 2023.04.06 11:01:57 -04'00'

Karla Rotondo Date Contracting Officer, NCO 1 Regional Procurement Office-East

Digitally signed by Tammy A Fox 706200 Date: 2023.04.10 13:06:25 -04'00'

Tammy Fox Date Division Chief, NCO 1 Regional Procurement Office-East

Digitally signed by Jules Y. Tchoujan 100128 Date: 2023.05.02 10:30:56 -04'00'

Jules Tchoujan Date Senior Director, AST Office of Small and Disadvantaged Business Utilization

Joseph P. Maletta Executive Director, Acquisition

Date

VHA Head of Contracting Activity (HCA)

Angela Billups, Ph. D Date Executive Director and Senior Procurement Executive

Office of Acquisition and Logistics (003A)

KARLA ROTONDO

Tammy A Fox 706200

Jules Y. Tchoujan 100128