W911XK19C0020-P00002 JA Superior Entry_Redacted.pdf

LRN-20-04

Justification and Approval for Other than Full and Open Competition

1. Contracting Agency: U.S. Army Corps of Engineers (USACE), Detroit District (CELRE), Contracting Division, Detroit, MI

2. Description of the Action: This document establishes the justification and requests approval to execute an out of scope modification to Roen Salvage Company (Roen) under Contract number W911XK19C0020, FY19 Superior Entry North Pier Repair Project. This is a Firm-Fixed Price (FFP) construction contract to repair the last remaining 288 feet at the end of the north pier at Duluth-Superior Harbor, St. Louis County, MN. The additional feet will be funded with FY20 O&M Funds.

3. Description of Services: USACE Detroit District, as part of its civil works responsibilities, is the requiring activity for this out of scope modification. The applicable North American Industry Classification System (NAICS) code is 237990, Other Heavy and Civil Engineering Construction.

The awarded contract requires approximately 935 linear feet of pier repair, located in Duluth, MN. The proposed work under the sole source modification will implement four (4) new contract line items (CLINs), consisting of the following: additional 288 linear feet of repairs to the Superior Entry North Pier, fill stone, and scour stone comparable to the repairs being installed under the current contract and concrete fill for channel side of pier (instead of grout) for the new work. The FY19 contractor submitted a Value Engineering Change Proposal (VECP) which has been accepted by the Government. This accepted change is for concrete fill instead of grout for the channel side of the pier; therefore, the FY20 work includes concrete fill design to match. Repair work consists of removing the 4 feet by 5 feet knee wall of the existing concrete pier. The existing north pier structure will be encased in a steel sheet pile (SSP) wall with stone fill and concrete. Scour stone will be placed at the base of the SSP. Stone removal and replacement will be required at the SSP drive line. The contractor will demobilize from the site when the work is completed. The proposed modification is follow on work continuing to the end of the pier, is estimated at $4M and would not increase the overall contract period of performance, which has a current completion date of 1 July 2021.

4. Authority Cited: 10 U.S.C. 2304(c)(1) as implemented by FAR 6.302-1(a)(2)(iii)(A), Only One Responsible Source and no other supplies or services will satisfy agency requirements.

Services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services when it is likely that award to any other source would result in substantial duplication of cost to the Government that is not expected to be recovered through competition.

5. Reason for Authority Cited:

a. Background:

Duluth-Superior Harbor, Minnesota and Wisconsin is located at the extreme western end of Lake Superior. The cities of Duluth, Minnesota, and Superior, Wisconsin, are on the north and south sides, respectively. This project will repair the Superior Entry North Inner-pier which consists of approximately 2,096 feet of concrete monolithic structure founded on timber piles.

Approximately, 980 feet of the structure is a revetment type structure and the remaining 1,116 feet consists of a pier structure. The outer 19 feet of the structure consists of a pier head which changes surface elevation and overall cross section. The structure was constructed in the early 1900’s and has only been slightly modified throughout the life of the structure. The structure is beginning to deteriorate and several of the concrete monoliths have been dislodged from the original alignment due to vessel impacts. The goal of this project is to reestablish the structural integrity of the aging Superior Entry North Inner Pier so that it can continue to function as it was originally intended.

The FY19 Superior Entry North Pier Repair scope of work extends from sta. 10+65 to sta.

20+00. It included two options for an additional 230 feet of north pier repairs for a project total of 935 feet but did not included the last remaining 288 feet at the end of the north pier. Multiple bids were received for the FY19 work and several were significantly lower than the Current Working Estimate (CWE).

USACE Detroit District (LRE) awarded the FY19 Superior Entry North Pier Repair construction contract to Roen in the amount of $8,433,900.00 on 24 September 2019. The Notice to Proceed (NTP) was issued on 4 October 2019 with a construction completion date of 1 July 2021.

The funding needed for the remaining 288 feet of the north pier repair work at the Superior Entry North Pier was obtained after the FY19 Superior Entry North Pier Repair contract (W911XK19C0020) was awarded.

While this is the same type of work, due to the dollar estimate for this additional work and the fact that the FY19 scope clearly had the work cutoff at STA 20+00; the Contracting Officer determined this work to be out of scope. The proposed FY20 work extends from sta. 20+00 to 22+88.64. The USACE design for the FY19 contract includes termination piles at sta. 20+00, so there would be a separation of work.

There are work space concerns with having multiple contractors working at the pier during the same time. Currently there will be one contractor and government workers working at the pier, see below for Figure 1 depicting the work areas. The Government floating plant is working on the revetment (blue polygon) and the FY19 contractor will be working on the section of the pier shown in the red polygon

However, it is much more difficult and significantly increases safety risks to have two separate contractors tie their portions of the work together rather than having just one contractor complete the entire work. Increased safety risks could occur with added congestion in the waterway with multiple construction contractor vessels and recreation vessels. If two contractors complete the work, the FY19 Contractor would need to install termination piles at the transition point. If one contractor performs all the work there would be no need for termination piles to be installed.

There would be cost and time benefit to the Government if the termination piles could be eliminated and the current contractor could complete the entire project in one contract as opposed to having two contractors meet at a shared termination point.

b. Justification:

The awarded Contractor has had to overcome several challenges that are not typical for a marine construction project. This project scope is considered highly specialized based on the following:

The required SSP for Lake Superior requires coating application and special handling of the SSP to not damage the coating during installation. The current contractor developed a template for SSP installation with integration of high-density polyethylene (HDPE) material for a unique and efficient way for protecting the SSP coating during installation.

A similar project specific SSP template and means for SSP coating protection would be required to be developed by a new Contractor as well.

The Contractor and marine equipment must have the expertise and ability to place grout or concrete from floating marine equipment. This method for concrete placement is not common even among the awarded marine contractor.

The Contractor was required to develop a plan on how to fill pier cells in lifts to maintain structural stability of the pier structure. The Contractor is required to continuously monitor the movement created by the SSP installation.

The SSP length is 65 feet for the original contract, the required SSP lengths for the modification scope is 80 linear feet long. The Contractor must have marine crane equipment and knowledge on how to drive the SSP from floating marine equipment out in the open Lake Superior (at the end of the North Pier). The equipment needed to drive 80 feet of SSP is not commonly seen/used on the Great Lakes. The current contractor has the expertise and will obtain the equipment to drive 80 feet of SSP.

The current Contractor submitted a value engineering proposal to place concrete in lieu of grout which provided a total shared cost savings of approximately $500,000. The current Contractor has the ability to place concrete since they obtained additional real estate closer to the job site that allows for the requirement from batch to placement of concrete within 90 minutes. If a Contractor was unable to obtain real estate in close enough proximity, they would not be able to place concrete and therefore would have to place grout instead, which would be at a much higher cost to the Government than concrete.

In accordance with FAR 6.302-1(a)(2)(iii), services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services when it is likely that the award to any other source would result in -

(A) Substantial Duplication of cost to the Government that is not expected to be recovered through competition.

A substantial duplication of costs could be avoided by using Roen to complete the remaining 288 feet at the end of the north pier. Having two separate contractors would require the potential for twice the sunk costs related to mobilization, demobilization, Supervision & Administration (S&A), safety, procurement, etc.

i. The cost savings are mostly seen on the following items:

(a). Construction contract cost including mobilization/demobilization. A new contract to perform this work is estimated at $4M based on the IGE; however, if this work is completed by Roen, it is anticipated that savings for mobilization/demobilization and concrete placement (VECP) would be seen on the overall cost. The anticipated cost savings is based on the CWE if the work is completed by the FY19 Contractor.

(b). Field office S&A efficiencies on Requests for Information (RFIs), submittals, meetings, etc. S&A for O&M projects is 5.6%. It is anticipated that an efficiency factor of 80% would be seen if this work was completed via a modification versus new contract.

(c). Contracting labor support costs for modification versus new contract action for the construction contract.

(d). Operations Project Manager labor support costs for modification with no time extension versus new contract action for a new construction contract. This is an estimate for the project manager’s labor for their efforts for the duration of a new contract would be another 12 months.

(e). Contracting labor support costs for modification versus new Quality Assurance (QA) task order contract.

(f). Construction Admin Branch (CAB) labor support during construction for the construction contract. CAB labor during construction is $3,000/month for the additional 12 months of construction for a new contract plus $3,000 for closeouts. This assumes a contract award after July 2021 and with construction completion end of 2022.

(g). Real Estate (RE) labor estimate for RE Agreements for FY20 work if a new contract is required.

(h). CAB labor for pre-award survey for a new construction contract.

(i). CAB labor efficiencies preparing and administering QA task order modification versus new QA task order contract CAB labor for QA task order is approximately $5,000 for preaward activities plus $2,500/month for the additional 12 months of construction for a new contract plus $3,000 for closeouts.

ii. Construction contract QA/Quality Control (QC) administration effort by the

Government would increase. If the additional work was executed by modification to the FY19 contract, it would avoid duplication of costs. The following are the additional Government QA oversight needs if two construction contracts were awarded.

(a). There would be twice as many Cranes/Load Handling Equipment (LHE), a USACE designated high hazard activity to be reviewed and approved by the Government.

(b). There would be twice as many equipment inspections to be performed by the Government.

(c). There would be twice as many safety meetings to attend for the Government.

(d). Double the three phase inspection from the Government’s side.

(1). Double the Preparatory Meetings to attend for the QA Inspector.

(2). Double the Initial Meetings to attend for the QA Inspector.

(3). Double the follow up inspections for the QA Inspector.

(e). There would be twice as many submittals to review for the Government. This is increased workload for the field, safety office, technical coordinator, and designer. If everything was under one contract the submittals would not need to be duplicated. To name a few: APP, EPP, CQCP, AHAs, and Material Submittals

(f). There would be twice the required QA Daily Reports to prepare each day by the Government

(g). There would be double the coordination between the Government and Contractors.

(h). Increase and duplication of ACO, COR, Project Engineer, Contracting Officer, and Contracting Specialist duties.

(i). Additional QA task order contracts which would double the number of contracts to be awarded and could double the current QA task order contract costs.

iii. The following are the additional construction contract costs if two construction contracts were awarded:

(a). A smaller scope than the FY19 project (935 linear feet compared to the modification of 288 linear feet) could reduce the amount of competition from what was seen on the FY19 contract.

(b). Two separate contracts would require two mobilization/demobilization costs (c). Added administrative cost of an entire contract action versus significantly lesser administrative cost of executing a modification.

Cost summary table:

If by Roen If by Others Additional Cost

Construction Schedule

CCD 1 July 2021 CCD end of 2022

FY20 Work Construction Value

$3,200,000* $4,000,000* $800,000

Field S&A (5.6% of construction value)

$179,200 $224,0000 $44,800

CT construction contract action (Mod vs New Contract)

$5,000 $20,000 $15,000

Additional Ops PM $20,000 $40,000 $20,000 Additional CAB construction support

N/A $27,800 $27,800

CAB effort on out of scope modification J&A

$10,000 N/A -$10,000

Real Estate N/A $7,000 $7,000 CAB pre-award survey for new construction contract

N/A $3,000 $3,000

CT QA contract action (Mod vs New Contract)

$5,000 $10,000 $5,000

CAB QA task order (Mod vs New Contract)

N/A $39,000 $39,000

Total $951,600 *Note: Values based on IGE and CWE.

The total dollar value of savings for the above items is estimated to be $951,600.

These costs are not expected to be recovered through competition based on the fact that Roen is already onsite performing the work, is gaining efficiencies in doing the original FY19 work and was the low bidder during the original solicitation.

c. Alternatives: The alternatives that were available to the Government were a new contract solicitation or out of scope modification to the FY19 construction contract. The reason why a new contract solicitation were unacceptable is based on safety concerns and duplication of costs.

The safety risks are increased if there are simultaneous construction contract activities conducted by two separate contractors on the pier due to increase of vessel traffic congestion in a high traffic area in the harbor to include both contractors, shipping industry and recreation vessels.

d. Impacts: The impacts for a new contract would be increased safety concerns and substantial duplication of costs. If the work is accomplished with a new contract the Government would incur additional costs estimated at $951,600.

6. Efforts to Obtain Competition: Competition was obtained to the maximum extent practical while meeting the agency’s requirements for the original contract solicitation.

a. Notice of Intent to Sole Source. A Notice of Intent (NOI) to Sole Source was posted to beta.SAM.gov by the District on 18 March 2020 which stated the intent to modify Contract number W911XK19C0020, Superior Entry North Pier Repair. The primary purpose of this notice is to publicize this contract action prior to contract modification, as mandated in FAR Subpart 5.2, Synopses of Proposed Contract Actions and FAR Subpart 6.3, Other Than Full and Open Competition, and also to meet the requirements of DFARS PGI 206.302-1(d).

b. Effective Competition. Based upon the information in paragraph 5, there will be no competition for this action. The action is for a sole-source, out-of-scope contract modification to the FY19 contract, which was competed under the provision of clause FAR 52.214-19, Contract Award-Sealed Bidding-Construction. The original contract was competed under the provision of FAR 52.214-19 with the expectation adequate competition and multiple bids were received.

c. Subcontracting Competition. Roen is a small business who is self-performing the original work and works to obtain as much competition as possible in its subcontracting opportunities. Roen plans to utilize the same suppliers for the modification work as the original work.

7. Actions to Increase Competition: This J&A supports a discrete requirement that will end when the project is complete. Therefore, there are no planned actions to increase competition for the requirement covered by this J&A.

8. Market Research: No responses were received as a result of the published NOI. As a result, the substantial duplication of cost to the Government deems Roen is the only viable option to fulfill this work.

9. Interested Sources: To date, no other sources have written a response to the NOI to express an interest in this requirement. Roen is deemed the only known source capable of satisfying the Government’s need within the required cost and timeframe.

10. Other Factors: N/A

Figure 1: Work areas.

USACE Floating Planting work area in blue; FY19 contract area in red, and the FY20 work area in green