W9127823R0055_DF Consolidation Final Review(BC)_1_Redacted.pdf

DEPARTMENT OF THE ARMY

U.S. ARMY CORPS OF ENGINEERS (USACE)

MOBILE DISTRICT (CESAM)

DETERMINATION AND FINDINGS

REQUEST FOR CONSOLIDATION

W9127823R0055

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,

MEDICAL RESEARCH AND DEVELOPMENT COMMAND (MRDC),

MULTIPLE LOCATIONS

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 total (six month base and three one-year option years) 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 Medical Research and Development Command (MRDC). 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, O&M 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 research facilities and laboratories on a satisfactory condition on a 24 hour basis, seven days per week, 365 days (on-demand capabilities on nights/weekends/holidays). 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 Medical Research and Development Command, is a single overarching command with multiple subordinating commands located in Natick, Massachusetts; Fort Rucker (Dothan), Alabama; Forest Glenn, Maryland; Aberdeen, Maryland; Fort Detrick, Maryland; Dover Air Force Base, Delaware; and Silver Springs, Maryland.

Though the mission is extensive, a single Contracting Officer’s Representative (COR) with assistants will support this O&M mission at MRDC. 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 medical research facilities and laboratories in a uniform manner throughout the MRDC. This will save time, cost, and allow for cohesiveness throughout the medical command for the greater military community in that region. 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 MRDC. The specific portion of DHA’s facilities’ mission addressed by this acquisition consists of full-service O&M of real property facilities and repair and minor construction of bioresearch 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 military 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 MRDC, CESAM Medical Support Team intends to award a Firm-Fixed-Price (FFP) “C” contract in accordance with FAR 16.202. The intended contract will provide support for the type of requirements that have been previously met through a task order with CESAM Medical Support Team. The single action covered all the facilities under the Medical Research and Development Command. The period of performance will be for a six month base and three one year options, for a total of three and a half 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. This acquisition will serve as a new contracting vehicle to support the O&M and Repair mission at MRDC. The mission at MRDC is currently being supported by a CESAM Medical Support Team O&M contract, W9127818D0100-W9127820F0061, which will expire on 6 February 2024.

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 MRDC for construction at two or more discrete sites across the MRDC.

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 MRDC. The Medical Research and Development Command include the following:

operations. DMLSS is segmented/decentralized with individual servers serving individual facilities, however under certain commands some groups of individual facilities are connected on one DMLSS server. The MRDC DMLSS server is one that covers multiple individual facilities as listed above in paragraph d.

The contractor providing O&M will utilize DMLSS in every action performed at the facility and will be fully responsible for maintaining the accuracy, which is used by the Government on this contract as contractor performance metrics as well as used by the facility for Joint Commission accreditation and for system/equipment repairs and replacements. It is necessary for only one contractor to have complete control over an individual server, to ensure information input and manipulation is maintained by the sole responsible party and to not inadvertently share one contractor's internal performance practices/plan with another. Although JMLFDC can decentralize the current DMLSS server covering MRDC, both a delay in meeting the required O&M full performance date as well as monetary waste would occur, which creates an unacceptable mission failure. Breaking up the existing server is expected to take, at best, a twelve-month timeline, based on the current structure of JMLFDC and prior experience for a like action. DHA had previously requested from JMLFDC an action timeline to decentralize a server, which at a minimum is approximately three to six months. This process includes procurement of new servers and licensees, as well as data transfer. However, even if the call was put in to JMLFDC to decentralize the MRDC servers, the action would not start to be processed until approximately 01 December 2023.

The program staffing of JMLFDC is currently under a contract “bridge” which expired 01 September 2023. The new JMLFDC staffing contract was awarded at the end of Fiscal Year 2023, there is an expected “ramp-up” of the new contractor, which will delay the start of revising the system. Therefore, with full performance of the MRDC O&M required to be started by 6 February 2024, the timeline of Spring to early Summer 2024 for the potential completion of decentralizing the existing server would be unacceptable. Additionally, as DMLSS will be phased out of being the sole facilities operations system by March 2024, which will be replaced with LogiCole platform, efforts to manipulate DMLSS, time/effort for data transfer and procurement of new servers, would be overcome by the Spring of 2024. The total DMLSS transition with the DHA facilities is expected to be complete by the end of 2026, therefore this contract will be solicited as a six-month base and three one-year option years. With the utilization of LogiCole, which is a cloud-based platform and not a server-based platform like DMLSS, the next acquisition of O&M services for the MRDC will not be consolidated based on the above justification. The cloud-based platform will be easier manipulated and able to be decentralized as needed.

Additionally, MRDC research and laboratory facilities are centrally managed by the MRDC headquarters in order to ensure that all facilities are maintained and performing at the required level. The nature of the operations being performed at these facilities are potentially harmful to the surrounding communities. These facilities, if compromised, will negatively impact our national security. It is of utmost importance these facilities not only are centrally monitored, but the level of security and protocols in place should be uniform and having a single prime contractor handling all O&M operations throughout the command is vital to the success of this program/operation. A different prime contractor at each facility increases the possibilities that a facility may be compromised and/or not achieving the required performance level.

(3) In accordance with FAR 7.107-2(e)(1), when the benefits of consolidated requirements are not quantifiable as stated at FAR 7.107-2(d)(1), the consolidation must be determined to be necessary and justified based on the anticipated benefits of being critical to the agency’s mission success and that the procurement strategy provides the maximum practicable participation by small business. The work required under the proposed solicitation involves the performance of O&M with incidental repair and minor construction at MRDC facilities. The consolidated approach is critical to the success of not only the Mobile District but the DHA program. Additionally, to what is discussed above, this consolidation will expedite the acquisition timeline with a single solicitation that will cover MRDC which will ensure continuous coverage of MRDC facilities. A MATOC or SATOC are not a better option to the meet the needs of the MRDC O&M mission. O&M coverage for all MRDC sites will expire under the current Mobile contract at the same time, which means a new contracting vehicle would have to be established to simultaneously cover all O&M supported sites under the MRDC umbrella.

It would require significantly more labor and time which may result in a lapse of service, and significantly increase the costs of the program (administrative) to establish a MATOC or SATOC then proceed to award nine task orders under the IDIQ.

Notwithstanding, consolidating the effort under an IDIQ would require the same justification as the proposed “C” contract. Based on the above, a single stand-alone contract is the best choice to execute the O&M mission MRDC facilities.

3.Applicable Statutes/Regulations:15 U.S.C. § 657q, FAR 7.107-2, and AFARS 5107.170.

4. Results of Market Research:

a. To support the Mobile District’s determinations on where to place projects, market research was conducted that supplemented the Mobile District’s knowledge of capabilities based on prior similar acquisitions. A Sources Sought Notice was posted at System for Award Management (SAM.gov) website on 5 April 2023 requesting interested contractors to submit a statement of their capabilities, information regarding their business size and category, and their experience with military medical and laboratory facilities. The requirement was posted with NAICS code 236220 and size standard $45,000,000.00.

b. For FFP Stand-Alone “C” contract in support of MRDC, the following market research techniques were used to assess capabilities:

(1) Review and analysis of experience specified in company statement that indicated experience relevant to the type of projects anticipated under this contract, provide services for maintenance and repair of preventive, predictive, demand, and emergency

8(a) HubZone, Hawaiian Native x x x x x x

Large Business x x x x x x *X indicates applicable experience

5. Alternate Contracting Approaches Considered and Rationale for Rejection: If consolidation were precluded in the performance of the DHA mission, Mobile District would have to implement contractual mechanisms for each individual facility (discrete site). Consequently, in the analysis of the possible acquisition strategy alternatives, the Mobile District considered a task order under an existing MATOC and stand-alone “C” type contracts for each facility. The Mobile District Medical Support Team O&M and Construction Program has a single O&M and Construction MATOC. The current MATOC will expire in 2024; however, there is not enough capacity to support a six-month base and three one-year option year task order for MRDC. The analysis of the alternatives approaches is as follows:

a. Alternative 1: Stand-Alone “C” Type Contracts (each site): The Mobile District considered the award of multiple stand-alone “C” Type contracts to vendors to perform the work at each individual facility. While there are applications for the use of stand-alone “C” type contracts for individual sites, there must also be resources, both monetary and labor, available to 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 MRDC 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 MRDC facilities puts such contractors in a longer learning curve that would negatively impact the facilities, because of varied standards of contractor performance, resulting in increased oversight and administrative costs. It is necessary for only one contractor to have complete control over an individual server, to ensure information input and manipulation is maintained by the sole responsible party and to not inadvertently share one contractor's internal performance practices/plan with another. 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. As stated above in paragraph f(2), performing the decentralization of the current DMLSS server would take approximately 9 to 12 months. This encompasses the remaining three month “bridge” contract with JMLFDC staff (which they are not performing new server change orders), the three-month contract ramp up with the new contractor supporting JMLFDC, and the approximate three to six month performance to increase the number of servers and data transition. However, even without including the increased time to decentralize the current DMLSS server, a negotiated “C” type procurement takes approximately 140 days from scope development to award, as seen in Table 1 below. Of these 140 days, 100 equate to actual man hours worked. Accordingly if a “C” contract is required for each of the eight locations these requirements would require approximately five people full time between contracting, program management, and engineering division in order to move the requirements along at the same time or an additional 1,500 hours (approximately) if the same people worked all nine 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. MRDC has a centralized warehouse which contains specialize equipment to perform maintenance at various sites to support the O&M program. Additionally, as Government provided office and warehouse space is allocated to the contractor for the O&M, if multiple different contractors are awarded contracts to support the various medical treatment facilities, research facilities, and laboratories. Then the Government would either need to provide an excessive amount of contractor space or include a requirement for the contractor to lease local space, which would increase the contractors’ prices and reduce the quality of services as the office space may not be able to be as close to the facility. However, with the sensitive nature of the MRDC mission, it is not a sound decision to allow multiple prime contractors to execute the O&M mission at the MRDC facilities.

A single contract will also minimize acquisition time and performance and schedule risks. Additionally, Table 3-4 below reflect the estimated total pre-award/award costs required for one stand-alone "C" type contract in comparison to individual “C” contracts for each discrete site. The estimated hours are based on the complexity of the procurement and contract type. The estimated hours also include post award administration including; performance and payment bond review, review of monthly COR reports, review of site safety plans, review of service order packages, and contract closeout. Cost Engineering Division and Engineering Division costs are developed utilizing hourly rates for a GS-12 Engineer/Architect and a GS-13 Engineer/Architect.

restricting competition. All the acquisition approaches discussed above implicate CICA bundling, though in varying degrees.

d. Applicability of CICA Bundling Principle. Although this action constitutes CICA 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 MRDC 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: Although the quantifiable benefits do not meet the dollar threshold amounts set forth in FAR 7.107-2(d)(1), the other quantifiable benefits justify consolidation in accordance with FAR 7.107(d)(2). 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 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 MRDC Facilities.

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 the MRDC military community. 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 MRDC 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 MRDC facilities, and the consolidated approach provide advantages that substantially exceed the benefits of an approach that provides a lesser degree of consolidation.