W9127822R0075_Consolidation DF_ NMCSD_Redacted.pdf

DEPARTMENT OF THE ARMY

U.S. ARMY CORPS OF ENGINEERS (USACE)

MOBILE DISTRICT (CESAM)

DETERMINATION AND FINDINGS

REQUEST FOR CONSOLIDATION

W9127822R0075

FIRM FIXED PRICE, STAND-ALONE “C” TYPE CONTRACT TO

PERFORM OPERATIONS & MAINTENANCE (O&M) WITH REPAIR

AND MINOR CONSTRUCTION

IN SUPPORT OF THE DEFENSE HEALTH AGENCY (DHA) PROGRAM,

NAVAL MEDICAL CENTER SAN DIEGO (NMCSD)

FAR 2.101 defines consolidation or consolidated requirement as 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. FAR 7.107-2 requires that consolidation of requirements with an estimated total dollar value exceeding $2 million shall be supported by a written determination that consolidation is necessary and justified in accordance with 15 U.S.C. § 657q.

I have reviewed this requirement and associated market research and determined in accordance with 15 U.S.C. § 657q and FAR 7.107-2 that consolidation is both necessary and justified. This approval is made in accordance with the approval thresholds set forth in Army Federal Acquisition Regulation Supplement (AFARS) 5107.107-2(b)(ii), “Consolidation.” My review resulted in the following findings:

FINDINGS

Introduction: Headquarters, U.S. Army Corps of Engineers, Mobile District, plans to solicit offers for a single stand-alone “C” type contract with an estimated value of to meet the DHA O&M and Repair workload that will be performed at two or more discrete sites (per 15 U.S.C. § 657q(a)(2)(B)) under North American Industry Classification System (NAICS) code 236220, Commercial and Institutional Building Construction. The subject solicitation will cover activities at the Naval Medical Center San Diego which covers Southern California. The Mobile District Medical Support Team has conducted market research and analysis that demonstrates consolidation of requirements in this procurement is both necessary and justified.

1. Description of Procurement Action:

a. Project Description:

(1) Mobile District performs studies, investigations, designs, repairs, and construction in support of the DHA program. Each project is assigned a Project Delivery Team comprised of various organizational elements within the Mobile District, including technical (Engineering and Construction Divisions), contracting, legal, project management (including the Deputy for Small Business), as well as the end user and facilities’ engineering organizations. From internal elements, the Mobile District fields an in-house staff that provides project management, technical, contracting, legal, and resource management services to support facility life-cycle programs. The Mobile District's contracting responsibilities for the facilities support include acquisition planning;

procurement actions leading up to award of contracts with associated preparation of documentation and approvals; administration of the resulting contracts, including award and administration of individual task orders and stand-alone “C” type contracts. This contract is intended to provide O&M, incidental repair, and minor construction for medical/healthcare and their support facilities in a continuous and satisfactory condition on a 24 hour a day basis, 7 days per week. The work requirements include preventive, predictive, unscheduled, and emergency maintenance of all facility systems and components including architectural, mechanical, electrical, and instrumentation.

Contractors will require extensive knowledge of the technical requirements, code and accreditation compliance, and patient-related risk.

(2) The purpose of this acquisition is to establish a highly responsive approach to meet the demanding project requirements of its DHA customer. The operation and maintenance with incidental repair and minor construction requirement at NMCSD is a single overarching command with multiple subordinating commands located throughout the San Diego area. Though the mission is extensive, a single Contracting Officer’s Representative (COR) with assistants will support this O&M mission at NMCSD. A single COR with a single prime contractor to execute this O&M mission allows for continuous and uninterrupted O&M service to support the hospital, medical clinics, dental clinics, and laboratories in a uniform manner throughout the NMCSD command. This will save time, cost, and allow for cohesiveness throughout the medical command for the greater San Diego military community. The DHA program, in general, constitutes a significant portion of the Mobile District’s total military program. Mobile District provides the following support to the DHA program: designs, repair and construction, operation and maintenance, renovation, restoration, minor construction, and facilities management. This proposed acquisition is to provide a stand-alone “C” contract to support the Mobile District’s DHA facilities’ mission for Naval Medical Center San Diego, California. The specific portion of DHA’s facilities’ mission addressed by this acquisition plan consists of full-service O&M of real property facilities and repair and minor construction of these facilities and/or systems and components within these facilities. These services are part of DHA’s facility support program, developed to ensure that all medical facilities have contracting tools available to properly operate, maintain, and repair their facilities in accordance with applicable standards, including the Joint Commission standards which ensure patients, staff, and visitors are kept safe from hazards of a hospital environment and that the hospital meets accreditation requirements. This contracting effort, in conjunction with the installation facilities maintenance program, ensures the facilities meet established Department of Defense (DoD) facilities standards. Furthermore, due to the enduring nature of the requirement to ensure compliance with these standards, the necessity for this contract is not expected to be impacted by current or future budget limitations.

(3) DHA’s program of O&M with Repair and Minor Construction of medical/healthcare facilities is complex due to the special requirements not found in typical commercial construction.

Construction and maintenance performed in an occupied healthcare facility is unique from other facility types in technical requirements, code and accreditation compliance, and patient-related risks. Patient privacy issues, infection, contamination and dust control, noise mitigation, short or no-notice disruption of work due to medical emergencies, interim life safety requirements for incapacitated patients and their responsible staff members, and similar issues impact a contractor’s ability to perform the required work. If a contractor does not have adequate experience working in a functioning facility, they cannot respond to the critical impact these types of issues have on a project.

b. Acquisition Strategy/Procurement Summary: To meet the demanding O&M with Repair and Minor Construction requirements of Naval Medical Center San Diego, CESAM Medical Support Team intends to award a Firm-Fixed-Price (FFP) “C” contract in accordance with FAR Part 16.202. The intended contract will provide support for the type of requirements that have been previously met through a task order with USACE Huntsville Center. The single action covered all the facilities under the NMCSD command. The period of performance will be for one twelve month base year with three one year options, for a total of four years. Based on market research, with coordination from USACE Small Business Advocate and SBA Procurement Center Representative, the District intends to advertise this procurement as an unrestricted competitive requirement.

NAICS code 236220 is the appropriate classification for this procurement.

This is not a new procurement method for supporting this type of program; however, this is a new USACE Mobile District customer. This acquisition will service as a new contracting vehicle to support the O&M and Repair mission at NMCSD. The mission at NMCSD is currently being supported by a USACE Huntsville Center O&M contract, W912DY20D0061-W912DY21F0141.

c. Applicability of Consolidation: As stated above, Sec 1671 of the fiscal year (FY) 2013

National Defense Authorization Act (NDAA) amended the definition of consolidation as set forth in Sec 44 of the Small Business Act, 15 U.S.C. § 657q. As implemented in 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 -- (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. The definition applies to this procurement because a single stand-alone “C” type acquisition will be used to execute this DHA requirement at NMCSD / Balboa. This acquisition is at two or more discrete sites across the NMCSD command.

d. Requirements Being Consolidated: The planned stand-alone “C” type contract will provide full-service repair and construction of real property facilities and/or their systems and components throughout the NMCSD Command. The NMCSD Command consists of 11 health clinics throughout California and include the following:

Naval Branch Health Clinic (NBHC) Marine Corps Recruit Depot (MCRD) San Diego Bldg. 596, 35000 Guadalcanel Ave, San Diego, CA 92140

Naval Air Station (NAS) North Island Naval Branch Dental Clinic (NBDC) and Medical Clinic 600 and 601 McCain Blvd, Coronado, CA 92135

Branch Medical Clinic (BMC) Marine Corps Air Station (MCAS) Miramar 2496 Bauer Rd, San Diego, CA

Naval Amphibious Base (NAB) Coronado Bldg. 506 3538 Bougainville Road., San Diego, CA 92155

Naval Branch Health Clinic El Centro Bldg 523 8th Street, El Centro, CA 92243

NBHC Naval Training Center (NTC) San Diego 34800 Bob Wilson Drive, San Diego, CA 92134-5000

Naval Mine & Anti-Submarine Warfare Command (NMAWC)32389 Echo Lane, San Diego, CA 92147

NBHC Kearney Mesa 8808 Balboa Ave, San Diego, CA 92123

NBHC Naval Station (NAVSTA) San Diego 2310 Craven St. Bldg 3300, San Diego, CA 92136 NBHC Area Dental Laboratory (ADL) NBHC SARP Clinic (Building 268) NBHC Dental Repair Building (3231) NBHC Branch Health Clinic (3300) NBHC Army Vet Warehouse (3155) NBHC NEX Pharmacy (3187-A)

Naval Auxiliary Landing Field (NALF) San Clemente Island Navy Island located off the California Coast – Los Angeles County

Naval Base (NAVBASE) Point Loma

The sites that will benefit from an award of a stand-alone contract is listed in Figures 1.1-1.2. The total facility square footage (SF) for NMCD and Clinics are 1,993,143. It should be noted DHA’s program of O&M and Repair of healthcare and medical facilities is complex due to the special requirements not found in typical commercial healthcare facilities. Construction and maintenance performed in an occupied healthcare facility is unique from other facility types in technical execute the acquisitions within the district. While this approach could provide a lesser degree of consolidation, or no consolidation at all if individual contracts are awarded for single requirements, the benefits of the single consolidated stand-alone “C” type contract approach substantially exceeds the benefits of a separate stand-alone “C” type contract for each discrete site.

(1) Quality. Establishing a single contract for all locations to service the DHA supported

NMCSD facilities assures a higher degree of consistency in the quality of performance.

The contractor will be selected based on their experience performing maintenance and repair services in similar type healthcare and medical research facilities. While offerors on single facility “C” contracts would be selected on similar past performance experience, a contractor has less certainty of being awarded multiple contracts and thus the quantum of critical experience would not be shared or achieved across all facilities.

Multiple contractors performing at the NMCSD facilities puts such contractors in a perpetual learning curve that would negatively impact the facilities, because of varied standards of contractor performance, resulting in increased oversight and administrative costs. The benefit of the end user only working and coordinating with a single prime contractor will improve the operational readiness of the facilities, eliminate redundancies which could result in higher costs to the customer.

(2) Acquisition Cycle. A negotiated “C” type procurement takes approximately 140 days from scope development to award. Of these 140 days, 100 equate to actual man hours worked. Accordingly if a “C” contract is required for each of the ten locations these requirements would require approximately 5 people full time between contracting, program management, and engineering division in order to move the requirements along at the same time or an additional 1,700 hours (approximately) if the same persons worked all ten locations.

In addition to the qualitative benefits that result from the iterative process of negotiating and executing repair and construction efforts with multiple contractors, the greater certainty of regular work places the contractor in a stronger position to stabilize relationships with their bonding company(s) and subcontractors, thus reducing risk to the Government during execution.

(3) Terms and Conditions: Between the two alternatives, there is no appreciable difference in the contract terms and conditions.

(4) Cost Savings: In accordance with FAR 7.107-2(d)(3)/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.

The single stand-alone “C” contract approach creates a higher degree of consistency in the quality of performance, reduces acquisition timelines and manpower requirements, allows the contractor to establish stable relationships with their subcontractors, and maximizes competition creating the opportunity to directly negotiate high quality repairs and construction at fair and reasonable prices. Additionally, as Government provided bundling by combining like and related O&M and repair and construction incidental to the O&M mission, it is consistent with industry practice and necessary to satisfy the customers’ needs. This procurement will allow the Mobile District to leverage economies of scale, streamline acquisition cycles, and eliminate duplication of efforts by establishing a single “C” contract approach, through consolidating requirements at several facilities into one contract. This is low risk for overall mission failure, yet high quality contractor performance, to satisfy DHA’s need for a responsive, yet cost effective approach to meeting its mission requirements for the NMCSD facilities.

7. Considerations, facts, and reasoning supporting the determination: All facts, considerations, and rationale have been covered previously in the findings. All concur that consolidation of this requirement is both necessary and justified.

8. Summary: The quantifiable benefits do not meet the requirements of the dollar amounts set forth in FAR 7.107-2(d) however; consolidation is necessary and justified as it is critical to the agency’s mission success and the procurement strategy provides for maximum practicable participation by all business concerns. This unrestricted stand-alone “C” type contract requirement constitutes consolidation in that it combines operation, maintenance and repair and minor 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 contractors to support the DHA mission at Naval Medical Center San Diego.

Failure to award this acquisition in the time needed will result in mission failure, which could negatively impact the Mobile District and DHA supported healthcare system throughout Southern California. Additionally, the Mobile District’s DHA program mission readiness will be drastically impacted, which will negatively affect the ability of the military branches (Army, Navy, and Air Force) and other tenant organizations to accomplish their mission on a state and national level. Therefore, the consolidated approach is critical to the success of not only the NMCSD facilities, but also the Mobile District. 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 at NMCSD, and the consolidated approach provide advantages that substantially exceed the benefits of an approach that provides a lesser degree of consolidation.

W9127822R0075

FIRM FIXED PRICE, STAND-ALONE “C” TYPE CONTRACTOR TO

PERFORM OPERATIONS & MAINTENANCE (O&M) WITH REPAIR

AND MINOR CONSTRUCTION

IN SUPPORT OF THE DEFENSE HEALTH AGENCY (DHA) PROGRAM,

The following signatures indicate concurrence with the contents of this document.

W9127822R0075

FIRM FIXED PRICE, STAND-ALONE “C” TYPE CONTRACT TO

PERFORM OPERATIONS & MAINTENANCE (O&M) WITH REPAIR

AND MINOR CONSTRUCTION

IN SUPPORT OF THE DEFENSE HEALTH AGENCY (DHA) PROGRAM,

I hereby determine, pursuant to the FAR 7.107-2, AFARS 5107.107, USACE Acquisition Instruction (UAI) 5107.107-2-100(b)(ii)(A)(2), and UAI 5137.590-3(a)(ii) that the consolidation of the requirements for O&M with incidental repair and minor construction at DHA NMCSD / Balboa is both necessary and justified and will serve the best interests of the Government.