W9127823R0056_Consolidation DF_ OM_Twentynine Palms_Redacted.pdf

DEPARTMENT OF THE ARMY

U.S. ARMY CORPS OF ENGINEERS (USACE)

MOBILE DISTRICT (CESAM)

DETERMINATION AND FINDINGS

REQUEST FOR CONSOLIDATION

W9127823R0056

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,

TWENTYNINE PALMS NAVAL HOSPITAL CAMPUS,

TWENTYNINE PALMS, CALIFORNIA

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 (one-year 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 Twentynine Palms Naval Hospital Campus. 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/healthcare and their support facilities in a continuous and satisfactory condition on a 24 hour a day basis, 7 days per week, 365 days per year, fully staffed around the clock. 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 Twentynine Palms Naval Hospital Campus is a single overarching command with multiple subordinating commands located at Marine Corps Air Ground Combat Center (MCAGCC also known as Twentynine Palms) which is located in the southern region of the Mojave Desert, California; covering approximately 596,288 acres. Though the mission is extensive, a single Contracting Officer’s Representative (COR) with assistants will support this O&M mission at Twentynine Palms. 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 Twentynine Palms Naval Hospital command. 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 Twentynine Palms. 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 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 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 Twentynine Palms Naval Hospital Campus, 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 a different contracting activity. This is a new requirement for the Mobile District Medical Support Branch. The single action covered all the facilities under the Twentynine Palms Naval Hospital command. The period of performance will be for a one year base and 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 requirement for CESAM Medical Support. This acquisition will serve as a new contracting vehicle to support the O&M and Repair mission at Twentynine Palms Naval Hospital Campus.

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 Twentynine Palms Naval Hospital Campus for construction at two or more discrete sites across the Twentynine Palms Naval Hospital command.

The proposed acquisition will require the submission of, and compliance with, a subcontracting plan for all large businesses, as well as a small business participation plan for all businesses.

Overall, this proposed acquisition will provide a positive impact to all business concerns with the ability to operate within the United States, specifically California. It was determined this procurement will be advertised as an unrestricted procurement, given the rule of two was not met.

Table 1-Business Concerns-Capabilities

*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 base and three option year task order for Twentynine Palms Facilities. 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

Twentynine Palms 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 Twentynine Palms medical small business concern due to: (i) The diversity, size, or specialized nature of the elements of the performance specified; (ii) The aggregate dollar value of the anticipated award; (iii) The geographical dispersion of the contract performance sites: or (iv) Any combination of the factors described in paragraphs (i) through (iii) of this definition.

b. Applicability of FAR Bundling Definition. This acquisition does not meet the definition of bundling since it is not an attempt to consolidate two or more requirements previously provided or performed under separate contracts into a single contract unsuitable for a small business.

c. Definition of the Competition in Contracting Act (CICA) Bundling Principle. This principle, as developed by the Government Accountability Office (GAO) case law, focuses on whether the combined requirement (new, old, or otherwise) restricts competition, and whether the agency is consolidating or bundling a new requirement unnecessarily. In order to justify CICA Bundling the agency must show "a reasonable basis for why the bundling is necessary to meet the agency need." (Vantex Serv., Inc., B-29041 5, Aug. 8, 2002 and Outdoor Venture Corp., B-299675; B-299676, Jul. 19, 2007).

CICA requires solicitations to provide for full and open competition except where restrictions on competition are necessary to satisfy the procuring agency’s needs. In such a case, restrictions on competition are allowed. Bundled procurements combining separate requirements into one contract have the potential to restrict competition by excluding firms that can provide only a portion of the bundled requirement. However, combining like and related efforts to achieve economies of scale and eliminate duplication of effort, consistent with industry practice and market research is reasonable basis for bundling requirements, though it may have the effect of 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 Twentynine Palms Naval Hospital Campus 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 Twentynine Palms Naval Hospital 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 Twentynine Palms 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 Twentynine Palms 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 Twentynine Palms Naval Hospital Facilities, and the consolidated approach provide advantages that substantially exceed the benefits of an approach that provides a lesser degree of consolidation.

DETERMINATION AND FINDINGS

REQUEST FOR CONSOLIDATION

W9127823R0056

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,

TWENTYNINE PALMS NAVAL HOSPITAL CAMPUS,

TWENTYNINE PALMS, CALIFORNIA

I hereby determine, pursuant to the FAR 7.107-2, AFARS 5107.107 and USACE Acquisition Instruction (UAI) 5107.107-2-100(b)(ii)(A)(2) that the consolidation of the requirements for O&M with incidental repair and minor construction in support of the DHA program for the Twentynine Palms Naval Hospital Facilities is both necessary and justified and will serve the best interests of the Government.