W9127824B0006 Consolidation DF - FY24 Hopper (FINAL)_Redacted.pdf

DEPARTMENT OF THE ARMY

U.S. ARMY CORPS OF ENGINEERS, MOBILE DISTRICT

DETERMINATION AND FINDINGS

REQUEST FOR CONSOLIDATION

W9127824B0006

INDEFINITE DELIVERY INDEFINITE QUANTITY (IDIQ) SINGLE AWARD TASK

ORDER CONTRACT (SATOC) FOR MAINTENANCE DREDGING, HOPPER DREDGE

AND ATTENDANT PLANT FOR DREDGING IN ALABAMA, MISSISSIPPI, AND

FLORIDA

Federal Acquisition Regulation (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) 5107.170, “Consolidation of Contract Requirements.” My review resulted in the following findings:

FINDINGS

1. Introduction: Mobile District plans to solicit offers and award an Indefinite Delivery Indefinite Quantity (IDIQ) Single Award Task Order Contract (SATOC) for a hopper dredge and attendant plant for dredging in Alabama, Mississippi, and Florida. The primary requirements are several deep draft Federal navigation channel dredging projects. The SATOC will meet dredging requirements under North American Industry Classification System (NAICS) code 237990 and with a contract capacity of $30,000,000.00. The Mobile District has conducted market research that demonstrates the consolidation of this procurement is both necessary and justified.

2. Description of Procurement Action:

a. Project Description:

(1) The Mobile District is tasked with maintaining area harbors, rivers, waterways, channels, and bays within Alabama, Mississippi, and Florida. Among these are requirements for deep draft dredging of Federal navigation channels. The Mobile District has utilized civil works funded, multi-year IDIQ SATOCs for over ten years to provide flexible and effective management of deep channel dredging requirements on both a scheduled and an as needed basis. Each project is assigned a Project Delivery Team (PDT) comprised of various organizational elements within the

District that provides operations support, technical, contracting, legal, and resource management services to support the project.

(2) The purpose of this acquisition is to provide a contracting tool to support the Mobile District’s need to perform annual maintenance dredging at various shoaling locations of the Federal navigation projects of Mobile, Pascagoula, Gulfport, Pensacola, and Panama City Harbors. These dredging locations will be identified based on channel conditions and the need to restore specific reaches to their project depth. Some of the shoals may include toe shoaling, bar channel shoaling, and shoals with disposal restrictions. The types of work will be those which are generally more cost efficient to perform utilizing a hopper dredge. The solicitation will be advertised as unrestricted, and the contract duration will be fourteen months with a maximum capacity of $30,000,000.00.

Mobile District intends to consolidate these dredging requirements into one solicitation to be awarded to one contractor. The projects which Mobile District maintains are funded on an annual or biannual basis. Due to the need to sustain existing civil works projects, the Mobile District does not anticipate current or future budget limitations to impact this program.

b. Acquisition Strategy/Procurement Summary: To meet the demanding requirements for maintenance dredging at various shoaling locations of the Federal navigation projects of Mobile, Pascagoula, Gulfport, Pensacola, and Panama City Harbors, the District intends to award an unrestricted IDIQ SATOC. This consolidated procurement will be advertised as an unrestricted, Firm Fixed Price, Invitation for Bid (IFB) with a maximum contract capacity of $30,000,000.00.

The construction duration will be fourteen months and no options are anticipated. An IDIQ SATOC is the most effective manner to meet the above requirements for several reasons including that this acquisition approach will efficiently facilitate the District’s management of maintenance dredging in the prescribed Federal navigation projects, and that it will position the District to successfully meet urgent, end of fiscal year requirements, and respond to emergency situations. While the funding for dredging is “no-year” money, the Mobile District Operations Division is allotted a specific amount per fiscal year (FY) and nearly all those funds are expended. The use of a SATOC tool is in the best interest of the Government with respect to timeliness, oversight, and administrative costs.

c. Applicability of Consolidation: As stated above, Sec 1671 of the fiscal year 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., and as implemented in FAR 2.101, “consolidation or consolidation requirements” means a use of 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 SATOC will be used to perform multiple construction projects, awarded on individual task orders, at two or more discrete dredging sites in Alabama, Mississippi, and Florida.

The Mobile District intends to consolidate the maintenance dredging of deep draft navigation projects for Mobile, Pascagoula, Gulfport, Pensacola, and Panama City Harbors into one solicitation for an IDIQ Dredging contract. By consolidating these requirements, the Mobile District will be able to efficiently coordinate and respond to the dynamic requirements of these dredging projects at a significant savings of cost and time, as well as accommodate the dredging extensive knowledge of the major players within this industry, the Mobile District is confident that no small businesses exist that can perform the requirement whether it is consolidated or not.

Therefore, given the magnitude of the project and the limited pool of contractors, the benefits of consolidation outweigh any negative impact to small businesses and enhances competition.

5. Alternate Contracting Approaches Considered and Rationale for Rejection: The Mobile District considered alternative contracting approaches, including multiple consolidated SATOCs (one per harbor), and to a lesser degree, multiple stand-alone “C” type contracts. Multiple SATOCs would be nearly equivalent to using a “C” type contract for each harbor, given that the scope of this award would cover five harbors: (1) Gulfport, MS; (2) Pascagoula, MS; (3) Mobile, AL; (4) Pensacola, FL; (5) Panama City. The stand-alone contracts, one for each harbor, is rejected due to the mobilization/demobilization and scheduling impacts identified below. A Multiple Award Task Order Contract (MATOC) approach is not considered as a viable alternative because it would not represent a lesser degree of consolidation and would not achieve the mobilization/demobilization savings possible with a single contractor.

a. Alternative: Stand-Alone “C” Type Contracts: The District considered the award of multiple stand-alone “C” type contracts to perform the required maintenance dredging work. While this approach could provide a lesser degree of consolidation, or no consolidation at all if individual contracts are awarded for single requirements, the disadvantages of the “C” type contracts substantially exceed the advantages of consolidation for the reasons outlined below. As discussed in Section 4 – Results of Market Research, there is a very limited known pool of contractors who are capable of performing the required scope of work, and most of those contractors are engaged in other maintenance dredging operations nationally, so competition can be very limited.

(1) Quality: While “C” contract competitions generally give the Government the opportunity to avail itself of a wider range of potential contractors for each project, that does not necessarily hold true for dredging because of the limited contractor base and capacity from which to pull. As indicated earlier, only three to four contractors have responded to IFBs historically.

Moreover, as also noted above, the iterative process of working with one contractor under a SATOC tends to generate a more thorough shared understanding between the contractor and Government for the Government's requirements and procedures.

(2) Acquisition Cycle: Civil works funds are not tied to a specific fiscal year appropriation and is not a substantial factor in determining requirements; however, while the funding does not generally expire, if they are not generally expended, the following fiscal years may see a reduction in overall civil works funds available to the district. It is beneficial for the district to have a contract vehicle that allows expedient funding for task order awards. The District addresses this budgetary uncertainty with regular IDIQ acquisition actions to create capacity to accomplish a customer’s known requirements, and to respond to those that arrive on short-notice.

(a) In addition to building capacity, the use of task orders under a SATOC streamlines the procurement process under a regimen that is significantly more expeditious than a “C” contract scheme. Specifically, task orders under a SATOC do not require advance notice, voluminous solicitations and proposal submissions, and the evaluations can be streamlined. As compared to awarding a stand-alone “C” contract, it is estimated that placing task orders under a SATOC reduces acquisition time from 140 to 30 days on average for each project.

timeline and increase administration time. A consolidated SATOC provides the best combination of competitive procedures, timely acquisition, cost efficiency, quality, and capable prime contractors to execute maintenance dredging.

6. Bundling Analysis:

a. Definition of Bundling. FAR 2.101 defines bundling as consolidating two or more requirements for supplies or services, previously provided or performed under separate smaller contracts, into a solicitation for a single contract that is likely to be unsuitable for award to a 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. "Separate smaller contract" as used in this definition, means a contract that has been performed by one or more small business concerns or that was suitable for award to one or more small business concerns.

b. Applicability of Bundling Principle. This acquisition does not meet the definition of bundling because it does not attempt to consolidate “two or more requirements for supplies or services, previously provided or performed under separate smaller contracts, that are likely to be unsuitable for award to a small business concern”. The requirements being consolidated have all been previously advertised as an Unrestricted IFB for consolidated or unconsolidated SATOCs and performed by large businesses.

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. 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.)

d. Applicability of CICA Bundling Principle: This procurement is intended to be a full and open, unrestricted IFB. Bundled procurements combine separate requirements into one contract;

thus, they have the potential to restrict competition in violation of CICA by excluding firms that can provide only a portion of the bundled requirement. However, substantial cost savings achieved through the reduction of duplicative efforts and operational efficiency can be a reasonable basis for restricting competition where requirements are bundled. As demonstrated in the previous sections, substantial cost savings will be accomplished through consolidation of these requirements. These projects have been consolidated in the past into an IDIQ contract. This action does not unreasonably restrict competition to small businesses. As stated above, no small businesses responded to the Market Research, or are currently known, that are capable of performing this work. There are four known dredging contractors with the ability and equipment to perform this work, all of which are large businesses and who historically bid on contracts for work within Mobile District. These contractors are The Dutra Group, Great Lakes Dredge and Dock Co., Weeks Marine and Manson Construction Co. The District fully expects these contractors to bid on this contract because the scope of work is the same as it has been in past years. Additionally, the District has no information nor has received any comments from the dredging community to suggest that placing each navigation project under separate contracts, or regrouping them in some other manner, would create interest and allow other contractors to perform this work.

7. Considerations, facts, and reasoning supporting the determination: All facts, considerations and rationale have been covered previously in the findings. This D&F will be included with the Small Business Coordination Record (DD Form 2579) for the approval of the Deputy for Small Business and SBA Procurement Center Representative.

Summary: Although this unrestricted IDIQ SATOC constitutes consolidation in that it combines 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 prime contractors to execute maintenance dredging for the Mobile District’s deep draft navigation channel requirements. The quantifiable benefits of consolidation, or % of the estimated contract value, exceed the standard in FAR 7.107-2(d)(1)(i) and are further supplemented by the qualitative benefits. Stand-alone “C” type contracts were considered but would result in significantly higher costs and increased acquisition cycle times. Additionally, it is significantly less burdensome for the District’s Contracting and Operations Divisions to administer one SATOC versus numerous “C” contracts. 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 potential number of efforts to be executed. The consolidated approach provides substantial quantitative and qualitative advantages that far outweigh those of an approach that utilizes a lesser degree of consolidation.

Attachment 1 – Deep Draft Navigation Project Locations