RileyJ A.docx

Justification and Approval MICC-Fort Riley, KS Control No. 11-0009

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETION

Authority: 10 USC 2304(c)(1) One Responsible Source Amount 1st J&A $11.5M 2nd J&A $6.0M Cumulative Amount $17.5M

david.w.reynolds@conus.army.mil

gary.r.parker@conus.army.mil

larry.mcgee@conus.army.mil

Signatures are required below:

I have reviewed this J&A and find the justification adequate to support other than full and open completion.

Specialist

1. CONTRACTING AGENCY: Mission and Installation Contracting Command (MICC), Fort Riley, Kansas.

2. DESCRIPTION OF ACTION: Request approval to issue a second, noncompetitive, bilateral modification to increase the $61.5M maximum threshold amount for contract number W911RX-07-D-0003, Gracon Corporation, in the amount of $6,000,000.00. The contract ceiling was increased by $11,500,000.00 on 12 May 10 with justification and approval (J&A) control number 09-0021. The cumulative amount of the previously approved J&A and the current requested increase will result in a new ceiling price of $67.5. This is an Indefinite-Delivery/Indefinite-Quantity (ID/IQ) Job Order Contract (JOC). Delivery Orders issued under this contract are firm fixed-price. This modification will provide additional capacity in order to fulfill requirements for real property maintenance and repair and minor construction projects at Fort Riley, KS pending an award of a competitive, follow-on JOC ID/IQ. The follow-on contract is meant to replace JOC contract DABJ41-03-D-0007, awarded to All Cities Enterprises. The JOC delivery orders are traditionally funded with appropriate fiscal year OMA (annual appropriation) funds.

3. DESCRIPTION OF CONSTRUCTION: Job Order Contract (JOC)

a. The Contractor provides all materials, supplies, parts (to include system components), plant, supervision, labor, tools and equipment, except when specified in the delivery order as Government furnished, to repair or construct real property facilities, structures, and infrastructure at Fort Riley, Kansas and other work locations. Contractor's work and responsibility includes all development, planning, programming, administration and management necessary to provide all repair or construction and related services as specified. The Contractor conducts the work in strict accordance with the contract and all applicable Federal, State of Kansas and local laws, regulations, codes or directives. The Contractor is solely responsible to ensure that all work provided meets or exceeds critical reliability rates or tolerances specified. The Contractor provides all related services such as preparing and submitting required reports, drawings, schedules, performing administrative work, and submitting necessary information as specified.

b. The JOC 07 contract is a base year with four evaluated option years with performance beginning 1 March 2007. It is currently in its fourth option year period of performance, 1 March 2011 thru 29 February 2012. The maximum quantity standard selected is US Dollars with the value estimate of $10M per year. Originally, the contract had a $50M dollar ceiling but was increased to meet mission requirements. $11.5M was added in June of 2010, thus the contract currently has a $61.5M maximum value.

c. This proposed modification results in no change to the scope of work, task, or period of performance.

d. The requiring activity for this work is the Directorate of Public Works, Fort Riley Garrison Command (IMCOM).

4. AUTHORITY CITED: 10 U.S.C. 2304(c)(1), as implemented by FAR 6.302-1, Only One Responsible Source and No Other Supplies or Services will Satisfy Agency requirements, as implemented by FAR 6.302-1 (a)(2)(iii).

5. REASON FOR AUTHORITY CITED: Pursuant to FAR 6.302-1 (a)(2)(iii)(B), the incumbent is the only logical source for this work in the described performance period. Award to any other source would result in unacceptable delays in fulfilling requirements and would negatively impact Fort Riley's ability to meet the critical Directorate of Public Works (DPW) mission until a follow-on contract can be awarded, and the follow-on contractor reaches the full performance point. Given the magnitude of the contracted effort (combined total of 829 orders totaling $152,408,116 over eight years) and the critical need to be able to timely place construction orders as the need arises, it would be unduly disruptive to the Government's mission effort to attempt to make a competitive award of multiple projects to new contractors for the less than one (1) calendar year period required to establish the follow-on contract instrument and for that contractor to attain the full performance point (approximately award + 6 months). Any break in the ability to order the construction work currently provided by the existing contract to the current completion schedule and quality expectations is unacceptable. The installation can neither repair/upgrade infrastructure nor comply with common level of service initiatives to the required schedules and quality level without this ceiling increase. Fort Riley has no in-house capability to perform the required work.

a. Introduction

(1) The request is for approval to issue a second, noncompetitive, bilateral modification to increase the $61.5M maximum ceiling/lifetime contract amount for contract number W911RX-07-D-0003 (JOC 07) in the amount of $6M to a new ceiling of $67.5M. This is an indefinite-Delivery/Indefinite-Quantity (ID/IQ) Job Order Contract (JOC). Delivery Orders issued under this contract are firm fixed-price. This will provide additional capacity in order to fulfill requirements for real property maintenance and repair and minor construction projects at Fort Riley, KS pending an award of a competitive follow-on JOC ID/IQ contract meant to replace JOC contract DABJ4I-03-D0007 (JOC 03).

(2) JOC 03 was awarded in October 2003, with a period of performance of 1 November 2003 through 31 October 2004. This contract contains a base year and nine option years, at $10,000,000.00 per year. With less than $1,000,000 in obligations remaining before the contract maximum of $100,000,000.00 is reached, the contract will likely not be available for use beyond the current option year. JOC 07 was awarded in February 2007, with a period of performance of 1 March 2007 through 28 February 2008. It contains a base year and four option years, at $10,000,000.00 per year. The JOC 07 contract is currently in its fourth of four option years. Without the increased ceiling proposed, it is estimated that the JOC 07 contract will top out in September 2011. With the increase, the estimated top-out date moves out to February 2012. The Table below reflects the fiscal year expenditure of the two JOC contracts.

FY

b. Background:

(1) The company holding the JOC 07 contract is the Gracon Corporation (hereafter 'Gracon'), headquartered in Loveland CO (CAGE OB984). Gracon was a small business at time of award, but is now a large business in its current CCR registration for NAICS code 236220. The contractor's performance of the current contract has been rated satisfactory. The contractor is not suspended in the Excluded Parties List or the terminated contractors list.

(2) Job Order contracting has been performed continuously at Fort Riley since at least 1995. The current JOC 03 (ten year expiring max) is the third contract in the series. The JOC 07 (subject of this J&A) was written with different features that allowed it to function as a regular JOC but expanded the scope of work/staffing to include limited engineering and design type functions. Thus the JOC 07 supplements to the engineering pool and talents already possessed by the Directorate of Public Works. The JOC 07 was meant to satisfy requirements of a more complex nature.

(3) When the JOC 03 contract was awarded in 2003, Fort Riley was a low intensity post having had the 1st Infantry Division rebased to Germany in 1996. The 24th Infantry Division (Mech), headquartered on the installation, was a notional headquarters of east coast National Guard maneuver brigades. During the requirements generation there was no indication of the buildup that was in the Fort's future. Subsequently, the award of JOC 07 occurred post BRAC 2005 and the estimates for it were conditioned upon the expectations of the BRAC stated growth. Those estimates did not foresee the Army initiatives programs, construction cost growth, Army manpower growth, accelerated degradation of current infrastructure from the usage increase due to the exponential growth, and the subsequent need to expand Fort Riley's infrastructure to serve the new populations that have occurred subsequent to award. Therefore the generous (at time of award) estimated maximums of both have proven inadequate to fulfill the Fort Riley requirements for the contract life envisioned. To put the difference between projected and actual use into perspective, the JOC 99 over its four year life averaged $8.88M spent per year. JOC 03 was estimated at $10M per year for 10 years and the JOC 07 added another estimated $10M per year for five years of additional capacity. For JOC 03 the graphed growth can be expressed as an average 41 % above the prior year obligations per year for 5 years. For JOC 07 the growth can be expressed as an average 36% above the prior year obligations per year for two years. The reality is that JOC 03 option year 5 increased 129% and the JOC 07 option year 2 increased 199% over the previous year's total.

(4) The JOC 03 contract functions can be wholly performed by the JOC 07 contract. The JOC 07 contract functions can only be partially performed by the JOC 03 due to the addition of engineering/design staffing/work elements to the JOC 07 PWS.

(5) This request has no competition impact on the JOC 03 follow-on, and the current JOC 07 engineering/design requirement will be included in that new requirement. There will be no JOC 07 follow-on requirement issued.

c. Alternatives: There are five (5) possible alternatives and four (4) are unacceptable in totally overcoming the need for this requested JOC maximum dollar amount/ceiling increase. Only alternative (5), increasing the maximum dollar amount/ceiling increase, fully meets the need and it is therefore the method most beneficial for the Government.

(1) Suspension of Construction Work: The construction work acquired under this contract is tied to successful mission accomplishment and cannot cease without major negative impact on Fort Riley, its residents, workers, and the Army's mission. Fort Riley would be unable to timely award and complete construction projects which are critical components for meeting current and future habitability and mission training needs.

(2) Award of one or more non-competitive 8(a) contracts for individual projects: The 8(a) award concept will be utilized whenever possible in lieu of placing delivery orders against a JOC contract as it is now. Even with 8(a) awards placed where feasible, there remains an anticipated recurring need to be able to quickly place pre-priced construction orders, as resources to do so become available, that only a JOC contract can satisfy. The current Fort Riley JOC 07 contract is the only JOC source available for this installation until the new competitive contract is awarded next fiscal year.

(3) Issuance of individual contracts for each occurring requirement which would have been placed as orders against the active JOC contracts. The JOC contract's basic function is to facilitate the expeditious issuance of numerous construction project delivery orders without the additional costs and schedule associated with the competition of each individual project. Additional costs include, but not limited to, mobilization and demobilization of the contractor, site prep and provision of Government utilities and space/buildings for contractor base of operations/storage, additional use of Government man-hours dedicated to the acquisition itself and to accommodate the individual prime contractor through its inspections, reviews, submittal approvals, purchases, access and operations until the contractor completes its learning curve to the determined successful performance level at Fort Riley. Additional schedule includes, but is not limited to, the calendar time required for the individual requirement acquisition, the contractor to mobilize, and to re-do plans and work until its learning curve has been completed. During this time of Government fiscal constraints, it is prudent to assume that the Government is in no position to expand its workforce or commit overtime resources to cope with the above reasoning. It is therefore in the Government's best interest to continue the use of the JOC 07 ID/IQ contract's functionality.

(4) Send projects to the U.S. Army Corps of Engineers (COE). The DPW is diverting to the COE those projects which are in the COE's purview or that the COE can accommodate. However, the COE district also provides construction support to numerous other activities and many projects for which funds are or are anticipated to become available cannot be supported by the COE within the required schedule at this time and those projects remain in need of placement by Fort Riley.

(5) Increase the total amount maximum ceiling for the current JOC 07 contract. This is the only alternative that will allow Fort Riley to fully meet its needs for the period between now and the award of the follow-on competitive JOC contract. The incumbent contractor (Gracon) is the only source reasonably available to provide timely and priority JOC construction work until the new follow-on contractor is ramped-up to the full performance level. Gracon has the necessary in-place organization, labor structure, equipment, and other resources to ensure successful placement of the construction projects required for Fort Riley. The MICC-Riley/DPW Fort Riley team agrees that given the available data this is the best solution to assure an uninterrupted flow of the required quality level, on-schedule work required during the bridging timeframe. The Government's driver is schedule and its variables are divided among scheduled/unscheduled maintenance/repairs, IMCOM common levels of service initiatives, BRAC additions to Fort Riley, Recovery Act projects, and deployment/arrival schedules of affected military units. The only known responsible source available that can start immediately to satisfy Government's requirements to the desired quality level and schedule is the incumbent JOC 07 contractor. The contractor's unique capability is that it knows the Fort Riley and local supplier/subcontractor system, has worked through its learning curve here, and is already mobilized and on-site. It is therefore in the Government's best interest to modify the current contract's maximum value rather than to compete the short term requirements as separate projects.

d. Justification:

(1) The existing contract provides key technical staff and construction contract administrative requirements already in place resulting in no reduction of construction procurement and increases the timeliness of project development and construction. The availability of the JOC contract's technical staff is important because it supplements the in-house technical staffing in developing projects to the point of procurement. Without this capability, more burdens will be put on the in-house technical staff and will reduce capability and timeliness. Increasing the existing maximum amount as requested will ensure these construction capabilities are retained and kept in-place until the new JOC contract can be procured and stood up.

(2) The unique characteristics that only Gracon can meet are its experience serving Fort Riley and local supplier/subcontractor system. Additionally, Gracon has worked through its learning curve here, and is already mobilized and on-site. It is the only provider that can perform the Government's less than one year bridging requirement with an acceptable risk to the Government. Government's risk levels considered are on price, schedule, and the required quality level.

(3) The JOC provides pre-competed relatively accelerated procurement over other methods for maintenance and repair requirements of Fort Riley real property and infrastructure from $2K to $3M. Without the requested increase, this contract may reach its monetary maximum prior to the new contract being procured and available at its full performance. If this happens all of the maintenance and repair requirements will have to be individually procured by other methods, such as simplified acquisitions, Invitation for Bids, or offloading to the Corps of Engineers MATOC contracts. All of these alternatives will significantly strain the currently resourced design, administration, compliance, and procurement staff capacity of Fort Riley Public Works, Garrison Command administrative staff, and the MICC-Fort Riley. Also since these methods of procurement normally take significantly more time to procure (at a minimum,180 days added to the construction schedule) than the issuance of a JOC delivery order, mission critical timelines/deadlines are more likely to be missed thus resulting in reduced mission capability, or mission failure as well as absorption of increased costs that include, but are not limited to, those associated with providing alternate housing/facilities/infrastructure to displaced/deploying/returning, units/personnel/equipment in the short term as they await project completion.

(4) Due to the rapid response from identification of a requirement to occupancy of the JOC contract, it is the preferred method of procurement for previously unidentified or short suspense projects. Due to the inability of Fort Riley to determine budget allocation, and anticipate mission schedules and requirements, many of Public Works’ projects require a very short suspense for award and short construction schedule to meet the mission requirements. Also, due to JOC having the capability to encompass a majority of construction disciplines and requirements, it provides the Public Works with a method to acquire the majority of its contract requirements without individually competing and procuring what has been historically up to 140 additional separate contracts. This additional work load and 180 day minimum addition to the construction schedule would significantly burden everyone involved in the procurement process, designers, inspectors, Contracting Officer Representative (CORs), Resource Management Office (RMO), budget personnel, and MICC-Riley contract and administration personnel.

(5) It would be neither cost effective nor realistic to award a short term interim JOC ID/IQ contract, if this increase in ceiling from $61.5M to $67.5M is not approved. This is due to the significant time and cost investment for preparation of procurement documents. The Unit Price Book (UPS), which contains approximately 40,000 line item descriptions and prices, and contract specifications, would have to be updated, which costs approximately $12k. Additionally it would be unrealistic that a contractor could provide the required key technical staff in the engineering disciplines on short notice and for short durations for an interim contract. Historically, it takes Government and contractors a minimum of six months to backfill an engineer technical position. Since the contract would be only for an interim of approximately one year the offerors would not be able to diversify the relatively high startup cost over multiple years resulting in a high overhead coefficient which would increase cost significantly for projects' performed under the contract. Even on a new JOC contract it takes the contractor staff approximately six months to learn the process and requirements before becoming efficient at developing projects and preparing delivery order requirements. Management plans, safety plans, quality controls plans, and key staff personnel qualifications would have to be submitted and approved. Since an interim contract would not have an existing pre-approved product submittal library for common construction materials, then material/product submittals will have to be submitted and approved on each individual delivery order, which adds significant time to the construction completion. All of these capabilities are already developed and approved for the existing contract, if the requested increase in maximum is approved.

(6) Due to base realignment and closure (BRAC) plus ups, many deployment and redeployments, and realignment and relocation of organizations, building renovations and repair projects have been at an all time high. To accommodate this drastic increase in construction requirements, the JOC 07 contract was awarded to supplement JOC03. As stated above, currently the JOC03, in its eighth contract year, is now at $99M, and will expire in the current option year due to meeting the contract maximum value. This leaves the current JOC07 contract procurement vehicle as the sole JOC source to timely react to short suspense unidentified maintenance, repair, and mission requirements. At the current expenditure rate on the combined two contracts, the current JOC 07 contract is anticipated to run out of contract capacity (max ceiling price) before a new JOC contract can be awarded, leaving the Fort Riley, KS Directorate of Public Works with no sure way to timely react to these unplanned unidentified requirements within the time frame required by the mission.

(7) The JOC 07 has $4.5M total remaining for the last remaining option year. At the rate of expenditure of the average of the last three full fiscal years, the JOC07 contract could be near its maximum value limit early in this final option year. In Apr 2011, delivery order 258 was issued with a value of $2.9M. It is not unusual to sporadically issue high dollar delivery orders. Increasing the maximum as requested will provide contract capability well into the 4th option year without reaching the maximum contract value. Currently the 4th option period will expire 29 February 2012.

(8) The replacement contract for the JOC 03 is projected for award in August 2011, if the selection process goes smoothly and no protests are received. If delays occur in the procurement process, it is feasible that Fort Riley could run out of JOC capability without the requested increase in the maximum contract amount of the JOC07 contract.

e. Impacts: The Fort Riley Directorate of Public Works’ mission supports training, mobilization, readiness, and deployment by providing quality engineering, environmental, housing, and facilities to everyone within the Fort Riley community. This mission includes overall responsibility for real property facilities, structures, and infrastructures at Fort Riley, Kansas, to include construction projects, maintenance, operations, and alterations. Work performed under the JOC 07 contract is integral to the success of that mission. Throughout the Army Force Generation (ARFORGEN) cycle, the Fort Riley Directorate of Public Works uses this contract to accomplish unscheduled mission essential infrastructure support such as maintenance and repair of troop housing, sustainment facilities, training facilities (including ranges), as well as Non-Appropriated Fund facilities and Morale, Welfare and Recreation facilities that support the Ft. Riley troop and family population. The non-approval of the requested $6M increase could adversely impact basic services such as running water, sewers, storm drains, and construction repairs to hangars, barracks, offices, dining facilities, warehouses, loading docks, railhead, training areas, and range areas. Any break in the ability to order the construction work that is currently provided by the JOC 07 contract to meet the current completion schedule and quality expectations is unacceptable. For example, Fort Riley DPW could neither repair nor upgrade infrastructure, and the Fort Riley DPW could not comply with Installation Management Command common levels of service initiatives. The DPW would also not be able to timely award and complete construction projects which are critical components for meeting current and future habitability and mission training needs. Further, not approving this J&A request for the needed $6M increase in value of the JOC 07 contract is the difference between mission and non-mission accomplishment of 5 deployable brigades. The non-availability of JOC task orders would directly and immediately adversely impact the entire ARFORGEN cycle throughout the installation and create mission failure and potentially hazardous conditions in a very short time. Also, any delays associated with BRAC additions for Fort Riley, Recovery Act projects and deployment/arrival schedules of affected military units are unacceptable. The availability of the JOC contract’s technical staff is important because it supplements the in-house technical staffing in developing projects to the point of procurement. Without this capability, more burdens will be put on the in-house technical staff and will reduce capability and timeliness. It is therefore critical that this J and A be approved.

6. EFFORTS TO OBTAIN COMPETITION: Past market research of both current JOC contracts was performed and currently market research is being conducted relative to the JOC follow-on requirement. Past history indicates that there has never been a problem associated with receiving two or more responsive and responsible offers from the market. Therefore, Fort Riley has developed the opinion there is a full expectation that there will be two or more responsive and responsible offers to the follow-on solicitation. As relates to this J&A request, the plan to increase the maximum ceiling and reasoning was synopsized in FedBizOpps on 14 April 2011. There have been zero (0) inquiries or comments from the marketplace to date.

7. ACTIONS TO INCREASE COMPETITION: The Fort Riley follow-on acquisition process is currently underway and it is estimated it will be a small business competitive award of a single source ID/IQ contract of 4 years duration (base with three option years) with a $50M ceiling price. This J&A action, if approved, is the only proposed noncompetitive action for this continuing requirement with the sole possible exception being if a mission impacting severe delay in the competitive follow-on award process occurs and a further increase in ceiling price adjustment is indicated by the circumstances then occurring.

8. MARKET RESEARCH: The requirement of FAR 5.201, publicizing intent of contract action, was performed 07 December 2009 for the JOC 03 follow on contract. See paragraph 6 above. See also paragraph 7 above relative to competition research and paragraph 9 below relative to interested sources.

9. INTERESTED SOURCES: The notices required by FAR 5.201 have been published and any bids or proposals received shall be considered. Gracon is the sole known responsive and responsible source that telephonically inquired to this J&A notice for the proposed ceiling increase. To date, no other sources have expressed an interest in writing. To date, no other sources of any kind have indicated an interest in any way toward serving as the bridge period performer or otherwise objecting to this potential increase of award value. Gracon, the incumbent contractor, is the only known source capable of satisfactorily providing services at the required full performance level for the bridging period of this request.

10. OTHER FACTORS: Subcontracting Competition. The incumbent contractor is not contractually required (small business at time of award) to have an approved subcontracting plan.

11. TECHNICAL/REQUIREMENTS CERTIFICATION: "I certify that the supporting data under my cognizance which are included in the J&A are accurate and complete to the best of my knowledge and belief."

NAME: Larry McGee DATE: 18 April 2011 TITLE: Director Of Public Works SIGNATURE:

12. MANAGEMENT REVIEW/APPROVAL: "The requirement herein described is a valid requirement of the activity named in paragraph 3 of this J&A. The technical and requirements information contained in the J&A represent the minimum needs of the government. The only way to satisfy this requirement is by limiting competition as described herein.

NAME: Colonel Kevin P. Brown DATE: 11 May 2011 TITLE: Commander, Fort Riley Garrison SIGNATURE:

13. FAIR AND REASONABLE COST DETERMINATION: "I hereby determine the anticipated cost for this contract action is fair and reasonable." The JOC Fort Riley Price Book and coefficient comparison for the third option year exercise were used as the basis for this determination. The option was exercised 13 January 2010. Current pricing was evaluated at time of award and was determined fair and reasonable at the last option exercised.

NAME: Gary R. Parker DATE: 14 April 2011 TITLE: Contracting Officer SIGNATURE:

14. CONTRACTING OFFICER CERTIFICATION: "I certify that this J&A is accurate and complete to the best of my knowledge and belief."

NAME: Gary R. Parker DATE: 14 April 2011 TITLE: Contracting Officer SIGNATURE:

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