W9127824R0033_Consolidation DF_ DHA DB Northern Region MATOC_99M_Redacted.pdf

CUI

CUI

Source Selection Information-See FAR 2.101 and 3.104

ATTENTION

ATTENTION

Use this space to indicate categories, limited dissemination controls, special instructions, points of contact, etc., if needed.

Controlled by: Army

Controlled by: USACE Mobile District

CUI Category: Source Selection Information

Distribution/Dissemination Control: FED ONLY

POC: LaNell Roberts; LaNell.A.Roberts@usace.army.mil/ 251.694.3859

All individuals handling this information are required to protect it from unauthorized disclosure.

Handling, storage, reproduction, and disposition of the attached document(s) must be in accordance with

32 CFR Part 2002 and applicable agency policy.

Access to and dissemination of Controlled Unclassified Information shall be allowed as necessary and permissible to any individual(s), organization(s), or grouping(s) of users, provided such access or dissemination is consistent with or in furtherance of a Lawful Government Purpose and in a manner consistent with applicable law, regulations, and Government-wide policies.

Standard Form 901 (11-18) Prescribed by GSA/ISOO | 32 CFR 2002

CUI

Source Selection Information-See FAR 2.101 and 3.104

DEPARTMENT OF THE ARMY

U.S. ARMY CORPS OF ENGINEERS, MOBILE DISTRICT

DETERMINATION AND FINDINGS REQUEST FOR CONSOLIDATION

(AMENDED)

W9127824R0033

INDEFINITE DELIVERY INDEFINITE QUANTITY (IDIQ)

MULTIPLE AWARD TASK ORDER CONTRACT (MATOC)

TWO PHASE DESIGN-BUILD FOR HEALTHCARE FACILITIES THROUGHOUT THE

NORTHERN REGION IN SUPPORT OF THE DEFENSE HEALTH AGENCY (DHA)

PROGRAM

Reason for Amendment: This Consolidation D&F is amended from the version that was signed on 9 May 2024, and posted to SAM.gov on 17 May 2024. The purpose of this amendment is to update the proposed maximum capacity from $49M to $99M. Table 2 portrays the known level of effort for the region over the first two years. Although not known, the out years are anticipated to have a similar level of effort. Over the five-year period, based on this effort, the IDIQ is justified to be increased to $99,000,000 from the previously expected $49,000,000.

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 $2,000,000 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

1. Introduction: Headquarters, U.S. Army Corps of Engineers, Mobile District, plans to solicit offers for a Multiple Award Task Order Contract (MATOC) with a total capacity of $99,000,000 to meet the DHA design-build 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

CUI

Source Selection Information-See FAR 2.101 and 3.104 the Northern Region of the United States with a target of six awards for this MATOC pool.

CESAM has set a target of three of the six awards to be reserved for Service Disable Veteran Owned Small businesses in accordance with FAR 19.503 and Section 1331 of the Small Business Jobs Act of 2010. Mobile District has conducted analysis and market research that demonstrates consolidation of requirements in this procurement is both necessary and justified.

The subject solicitation will cover the following Northern Region states and territories:

Connecticut, Delaware, Illinois, Indiana, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia, Wisconsin, and Washington DC.

2. Description of Procurement Action:

a. Project Description:

(1) Mobile District performs studies, investigations, designs, repairs, and construction in support of the Defense Health Agency (DHA) program. Each project is assigned a Project Delivery Team (PDT) 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; and administration of the resulting contracts, including award and administration of individual task orders.

(2) The purpose of this acquisition is to establish a highly responsive approach to meet the demanding project requirements of its DHA customer. The program constitutes a significant portion of the Mobile District’s total military program. Mobile District provides the following support to the DHA program: design, repair and construction, maintenance, renovation, restoration, minor construction, and facilities management. The specific portion of the facilities’ mission addressed by this acquisition consists of full-service, quick-response repair and minor construction relating, but not limited to, the architectural, mechanical, electrical, instrumentation, security and safety areas of military healthcare and research laboratory facilities in a cost-effective manner. Project sizes range from approximately $500,000 to approximately $5,000,000 with a wide variance in complexity.

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 design-build 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

CUI

Source Selection Information-See FAR 2.101 and 3.104 patients and their responsible staff members, and similar issues impact a contractor’s ability to perform the required work. In addition to patient care, some other requirements involve different complexities, such as Bio Safety Laboratories (BSL) and facilities governed by the Association for Assessment and Accreditation of Laboratory Animal Care (AAALAC).

b. Acquisition Strategy/Procurement Summary: To meet the demanding repair and construction project requirements of its customers, the Mobile District intends to award a Two- Phase IDIQ, Firm-Fixed-Price Design-Build MATOC in accordance with FAR 16.504(b), as the Government anticipates recurring requirements but cannot predetermine with precision the exact quantity, nor exact time period needed. The subject solicitation is a two-phase design-build requirement. The $230M DB MATOC expired 29 August 2024 without remaining capacity. See paragraph e.(2) for a breakdown of procurement history. This regional acquisition will support DHA construction projects located in the Northern Region. As defined in the introduction above, it is one of six regional MATOCs (Central, Western, Southern, Pacific, and MRDC) the Mobile District MST is seeking to establish covering CONUS and US Territories. It should be noted the Mobile District’s customer, the Army Medical Command (MEDCOM), has been absorbed into DHA. This change has increased the demands and end users supported by the Mobile District Medical Service Team (MST). The Mobile District MST has to be flexible and have the ability to anticipate the needs of the customer; and is working diligently with DHA to determine which new end users the Mobile District MST will acquire, and the contracting vehicles that can best support new and existing end users. The proposed DB IDIQ MATOC will provide the Mobile MST a tool to answer the DHA’s evolving requirements for the Northern Region in a timely and cost-efficient manner.

This acquisition will have a single ordering period of five years. Individual task orders will be solicited within the MATOC pool and negotiated with the contractor. CESAM intends to award a target of six awards for this MATOC pool with three of these awards reserved for Service- Disabled Veteran-Owned small business (SDVOSB) in accordance with FAR 19.503 and Section 1331 of the Small Business Jobs Act of 2010. This was determined to be the most effective manner of meeting DHA program mission for several reasons. This acquisition approach supports the Small Business Administration’s (SBA) concerns. Additionally, the MATOC will efficiently facilitate the Mobile District’s smaller repair and construction programs and will position the Mobile District to successfully meet short-fused, end of fiscal year requirements.

Also, because design, repairs, and construction must be provided on a consistent basis and at the highest standard to meet DHA’s health facilities accrediting benchmarks established by the Joint Commission, of key importance to DHA is that the quality of the level of work performed in its facilities is consistent throughout its inventory.

This is not a new procurement method for supporting this type of program. The Mobile District currently administers a suite of IDIQ MATOC, Single Award Task Order Contracts (SATOCs), and Stand Alone “C” type contracts for facilities operation and maintenance, and repair and construction performed by contractors from various socio-economic categories. Use of a MATOC tool provides more flexibility and is in the best interest of the Government with respect to timeliness, oversight, and administrative costs. Furthermore, a mixed approach (unrestricted with SDVOSB reserve) would ensure that we have adequate competition for all requirements.

The $230M Design Build MATOC, expired 29 August 2024, and also had a SDVOSB reserve.

Source Selection Information-See FAR 2.101 and 3.104

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 deliver 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 this MATOC will be used to perform multiple construction projects, awarded on individual task orders, at two or more discrete sites throughout the Northern Region.

d. Requirements Being Consolidated: The planned MATOC will provide full range of construction services to include renovation, repair and new construction services for DHA supported medical treatment facilities (MTF) and medical research laboratory facilities to provide quick, cost-effective responses to requirements located at military installations. Projects may include, but not limited, to work inside both permanent and temporary facilities some of which include the following types: medical centers, community hospitals, medical clinics, dental treatment facilities, veterinary treatment facilities, medical office buildings, medical research laboratory facilities, medical warehouses, and various other facility types in direct support of the DHA mission. Almost all of the projects are unknown at this time, however all of the projects will be for repair and minor construction requirements at healthcare facilities located at military installations throughout the Northern Region. It should be noted DHA’s program of repair and minor construction of healthcare facilities (medical, dental, veterinary, behavior, and laboratories) 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. Work will require extensive knowledge of the functional operation relating to the efficient use of the facility, equipment, facility support systems, and building structures associated with these facilities. Since the facilities will be in full operation, the contractor will be required to minimize interference with the daily operation of the MTFs and will be required to implement infection control processes, along with meeting Joint Commission Environment of Care requirements and other applicable requirements. Certain facilities may require compliance with American Association for Accreditation of Laboratory Animal Care

(AAALAC).

CUI

Source Selection Information-See FAR 2.101 and 3.104

Table 1 (see attachment): Northern Region Installations historical data of task orders awarded between 2018-2024 in support of the DHA program.

Business Size Amount Awarded Percent of Similar Historical Actions

Total General Small Business $2,590,945.00 5.26%% Total Small Disadvantaged Business $0 0% Total SDVOSB $27,791,637.50 56.43%% Total 8(a) $0 $0 Total Small Businesses $26,254,547.50 53.31%% Total Large Business $18,869,782.72 38.31%

GRAND TOTAL $49,252,365.32

Note: The majority of the above task orders were awarded at Army Installations. However, since the DHA Program absorbed the MEDCOM requirement. Future awards will also support Navy/Marine, and Air Force installations since DHA has the authority to manage all defense agencies’ medical facilities (medical, dental, veterinary, laboratories).

Table 2: Northern Region projected projects for FY25 and FY26

Table 2 portrays the known level of effort for the Northern Region over the first two years.

Although not known, the out years are anticipated to have a similar level of effort. Over the five year period, based on this effort, the IDIQ is justified to be increased to $99,000,000 from the previously expected $49,000,000.

e. Procurement History:

(1) In FY 2024 the Mobile District awarded 2,664 contract actions valued at

$1,596,560,210.00. Of that total, approximately 36.87 (meeting the goal of 30%), was awarded to Small Businesses (SB, VOSB, SDB, SDVOSB, and HubZone small business concerns). Of

CUI

Source Selection Information-See FAR 2.101 and 3.104 that amount 18.62% was awarded to Small Disadvantaged Businesses (SDB), the goal of 15%, 4.31% to Services Disabled Veteran-Owned Small Business (SDVOSB), meeting the goal of 4%, 3.56% to Women-Owned Small Businesses (WOSB), just short of the goal of 4% and 3.19% to HubZone companies, not quite meeting the goal of 5.77%. Mobile Medical Support Team (MST) met the small business goal of 30% for FY2024, and all socio-economic categories were within 25-50% of SB goals. As of 27 November 2024, the FY25 small business goals have not been assigned and remains 30.00%, which is the same as FY24 goal. The Mobile District and the Mobile District Medical Support Team intend to achieve this goal, in part, with multiple Stand-Alone “C” type contracts, and MATOCs that include small business reserves. Attachment 1 demonstrates the variety of socio-economic categories of the contracts awarded in support of the DHA program. By awarding an unrestricted MATOC with a SDVOSB reserve, the Mobile District can meet and exceed the aggressive goals assigned to Mobile District by HQ USACE.

(2) This MATOC is for repair and new construction requirements for the United States Northern Region in support of the DHA program. The design-build MATOC methodology is not a new procurement method for supporting the DHA program. The Southern and Pacific regional MATOCs previously established expired in the Summer of 2022, the Western Region expired in December 2017, and the Northern Region MATOC expired in July 2023. Each regional MATOC had $49M capacity to be shared within its pool. Chart 1 shows the burn rate of the current DB MATOC’s for the Central, Pacific, Little Rock DB MATOC, and Little Rock Small Business set aside MATOC. The Central Region has a shared capacity of $249M, the Pacific region has a shared capacity of $99M. The MST has borrowed a total capacity of $60M from the Little Rock District.

Unforeseen delays awarding the $230M DB MATOC (Nationwide), organizational structure changes (MEDCOM to DHA), and staffing shortages within DHA and the Mobile District MST resulted in a domino effect necessitating increased usage of other contract capacity originally intended for future years and the use of borrowed capacity from the Huntsville Center MST. As previously stated, the Mobile MST borrowed capacity from the Huntsville MST, which resulted in using a portion of the $230M DB MATOC capacity provided to the Huntsville MST. Thus, the previous $230M DB (nationwide) MATOC which expired in August 2024 not only fulfilled the capacity obligation to Huntsville, but it also supported the program until the end of August 2024.

This allowed for two (Pacific and Central) out of the five regional MATOCs to be awarded at the end of fiscal year 2024. The goal is to award the remaining four regional two-phase DB construction MATOC in FY 2025. (See Chart 2)

It is imperative that the Mobile District establish regional MATOCs to support the growing

DHA mission to achieve medical readiness for U.S. military facilities across the United States and its territories. The only nationwide DB IDIQ MATOC (contracting vehicle) for the Mobile MST expired on 29 August 2024. A new regional (Pacific) DB IDIQ MATOC was established on 30 August 2024. The Pacific region has obligated $2,982,858 of $99M MATOC. Currently, there is a Central Region DB IDIQ MATOC awarded in late September 2024. The Central region has obligated $9,994,297.00 of its $249M capacity. The Mobile MST has borrowed a total of $60,000,000.00 in capacity from the Little Rock MST to support end of fiscal year actions, and until all the regional MATOCs are in place to support the entire Mobile MST DB Repair program. The borrowed capacity is an even split between two Little Rock MST MATOCs ($30M each). The Little Rock DB MATOC has obligated $450,547,765.00 of the $900M MATOC and $48, 807,342.00 of the $240M Little Rock Small business set aside MATOC. (See Chart 1) Even

CUI

Source Selection Information-See FAR 2.101 and 3.104 though, there’s a lot of capacity on the Little Rock MATOC, its capacity is not solely for Mobile District’s MST. Little Rock capacity is predetermined, and Mobile District MST will not be able to borrow any additional capacity outside of the $60M. The establishment of new Two-Phase DB Repair Regional MATOCs is a lengthy process, and it is imperative to award the Northern Region MATOC in FY 2025 to ensure the continued support of DHA facilities in that region.

Chart 1 – Current Capacity Obligated for DB Construction MATOCs

*Chart one shows the current capacity obligated for the DB Construction MATOCs that are currently in place while we establish new MATOCs. We are currently borrowing capacity from the Little Rock District to support Mobile District MST.

The MST Pacific region has a capacity of $99M and the Central Region has a capacity of $249M.

CUI

Chart 2 – Future DB Construction MATOCs – Mobile MST

Note: See Attachment 1 for DHA’s Small Business awards for the Northern Region since FY 2018-2024.

f. Rationale for Consolidation:

(1) In order to be determined necessary and justified, the benefits of the consolidated acquisition must substantially exceed the benefits that would be derived from alternative contracting approaches that involve a lesser degree of consolidation. Such benefits may include quantifiable cost savings or price reductions as well as other benefits, regardless of whether quantifiable in dollar amounts, to include quality improvements that will save time, improve or enhance performance or efficiency, reduce acquisition cycle time, offer better terms or conditions, or any other supportable benefit. Benefits that are quantifiable are considered substantial if they meet the dollar amounts set forth in FAR 7.107-2(d). If the quantifiable benefits do not meet these thresholds, the approving authority may determine that consolidation is necessary and justified if the expected benefits of the consolidated approach are critical to the agency’s mission success and the procurement strategy provides for maximum practicable participation by small business. For this procurement, the quantifiable benefits of consolidation do not meet the threshold set forth in FAR 7.107-2(d). See Section 5 below for the analysis of the benefits of this proposed consolidated acquisition. Although the quantitative benefits are not met, the qualitative benefits of the consolidated approach are critical to the success of the Mobile District.

(2) Utilizing a MATOC in accordance with FAR 16.504 to consolidate the requirements for repair and construction work in support of DHA’s Northern Region is necessary to meet the mission objectives because it provides for a contracting vehicle that shortens contracting lead time, assures operational continuity, and improves post security by minimizing the number of contractors accessing the post at any given time. Use of an IDIQ contract is appropriate in accordance with FAR 16.501-2(a), when exact times and/or exact quantities of future deliveries are not known at the time of award. FAR 16.504(b) indicates that the Contracting Officer may use an indefinite-quantity contract when the Government cannot predetermine, above a specified

CUI

Source Selection Information-See FAR 2.101 and 3.104 minimum, the precise quantities of supplies and services that the Government will require during the contract period, and it is inadvisable for the Government to commit itself for more than a minimum quantity. The Contracting Officer should use an indefinite-quantity contract only when a recurring need is anticipated. It is anticipated that the MATOC will be used to fulfill customer requirements to support active medical facilities located at military installations throughout the Northern Region.

(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 architectural, mechanical, electrical, instrumentation, security and safety areas of military healthcare and research laboratory facilities at various DHA supported healthcare facilities throughout the Northern Region. The consolidated approach is critical to the success of not only the Mobile District but the DHA program. An IDIQ MATOC will provide a flexible and effective contract vehicle that can accommodate DHA’s anticipated but unknown repair and construction requirements and provides maximum practicable participation by small business concerns.

3. Applicable Statutes/Regulations:15 U.S.C. § 657q, FAR 7.107-2, and AFARS 5107.107-2.

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 (ID W9127824R0033) was posted on the System for Award Management (SAM.gov) website on 26 February 2024, and the notice closed on 26 March 2024.The notice directed 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 $45M. The Sources Sought Notice stated the contract is intended to provide design-build, major repair, and construction projects at active military healthcare facilities and laboratories. The contractor shall have a thorough understanding of and experience in complying with the current codes and standards established by applicable accrediting Authorities Having Jurisdiction (AHJ) and The Joint Commission (TJC), The Association for Assessment and AAALAC, as well as other applicable industry medical codes and standards governing the operation of a medical facilities and laboratories published by the National Fire Protection Association (NFPA). Offerors were required to include the following in their capability statement

(1) Name, address, points of contact, telephone numbers, and e-mail addresses; (2) Capability to perform, to include geographic span, logistics complexity and project size to include in-house capability to execute design and construction; (3) Business size to include designation as a small business, 8(a), HUBZone, SDVOSB, etc.; (4) Bonding capability; (5) Projects that are at least 50% complete, recent (within the past five years) and relevant (demonstrates their capability to perform the type of work described in the notice at active military medical facilities, lab experience, and military projects); and (6) Offeror shall indicate their capability to perform in multiple locations in the U.S.

b. For the Northern Region, 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 MATOC (design-build in active medical treatment facilities, and military projects/sites). The Sources Sought Notice asked interested contractors to indicate their capability to perform the work based on similar projects on military installations; design-build of active/occupied military medical treatment facilities within the geographic region of the subject requirement; ranging between $500K - $5M., and Joint Commission is required. The typical project size stated in the notice is considered small in terms of new construction and is within a range small businesses would be expected to perform.

In terms of repair projects in an active military medical treatment facility, a project in that dollar value range ($500K - $5M) is considered a large effort, but still would be within a range that small businesses would be expected to perform.

(2) Review and analysis of contractor’s ability to secure adequate bonding for multiple task orders.

(3) Communication with SBA Business Development Specialist.

c. The Government received seventeen responses to the Sources Sought Notice. The respondents included: three large business (LB) concerns; five Service-Disabled Veteran Owned Small Business (SDVOSB) concerns; and thirteen small business concerns which included six 8(a), two HUBZone, three Alaskan-Native 8(a), four women-owned, and three small disadvantaged small businesses. The panel determined which contractors would be considered fully capable to support the program requirements, limited capability to complete the program requirements, or not capable of completing the program requirements. Successful/fully capable contractors must have the capability and experience in the following areas (1) design build and construction services at an active/occupied military treatment facility; (2) design build and construction services at an active/occupied non-military treatment facility; (3) Military project (non-medical); (4) projects within the geographic region of the subject project (Northern) or stated the ability to work within the geographic region; (4) performed projects of similar scope ranging in the dollar value of $500K to $5M; (5) projects within an active (direct patient environment) minimizing interference of operations; and (6) demonstrated laboratory experience, specifically AAALAC experience. The analysis considered those contractors that only met some of the aforementioned requirements to have limited capabilities to support the Northern Region requirements. If a contractor did not, at a minimum, demonstrate design build construction experience (similar in scope to DHA supported USACE projects) and/or experience working in a health care facility, then they were not considered capable on any scale (limited or fully).

The panel determined five contractors, Valiant Construction LLC.,(SB, SDVOSB), Valiant

Government Services LLC., (Large), Facility Services Management, Inc., (Large), Royce Construction Services, LLC., (SB, SDVOSB), and J&J Maintenance dba J&J Worldwide Services (J&J) (Large) exhibited the experience to be considered fully capable of performing the design build and construction requirements in the Northern Region. The five contractors’ past

CUI

Source Selection Information-See FAR 2.101 and 3.104 performance projects showed design build and construction services at an active/occupied military treatment facility with experience at the Northern Region locations along with project dollar value requirements which is a determining factor to have a SDVOSB reserve. Six of the contractors were determined to have limited capabilities to support the scope requirements for the Northern Region MATOC: SES Electrical LLC., (SB), Greenway USA, LLC., (SDVOSB), Imperial Construction & Electric, Inc., (SB), RLS Construction Group (SB & SDVOSB), Procon, LLC., DBA: ProCon International) (SB& WOSB), 2A LLC (JV) (SB, 8a WOSB SDB).

The other contractors did not present any relevant projects (similar in scope and magnitude to the subject project) so they were not considered capable (limited nor fully). The minimal past performance history provided by majority of the small businesses did not give the panel confidence in setting this procurement aside 100% for small businesses. Additionally, there is no confidence that an adequate number of fully capable small businesses will compete for this requirement based on the sources sought. Given all market research, including the results of the sources sought notice and historical data, it was determined it is in the best interest of the Government that the solicitation will be Unrestricted with a Service-Disable Veteran Owned (SDVOSB) Reserve.

*See Table 3-Business Concerns-Capabilities

The MST decided a SDVOSB reserve would be most effective given the response to the market research and the varying project requirements consisting of both extremely large and small complexity DB projects such as work consisting of Direct Patient Care or Complex Laboratories (BSL and AAALAC) and smaller and non-complex projects such as general renovation, construction, or paving. This determination is supported by the results of the market research, see Table 3. Two SDVOSB contractors past performance projects showed design build and construction services at an active/occupied military treatment facility. The rule of two per FAR 19.504(c) will be used to determine the method to determine which requirements are appropriate to limit task orders to the small businesses awarded under the Northern Region

MATOC.

d. The approach of including large businesses with a SDVOSB reserve ensures that there will be competition for all of the projects regardless of the projects’ size, location, or complexity. The District’s Small Business Office was actively involved in the market research process and concurred with the decision to compete this procurement as unrestricted with a SDVOSB business reserve. Establishing an unrestricted MATOC with a SDVOSB reserve gives as much opportunity to small business concerns as a smaller, regional set-aside MATOC, however, with the better ability to support the customer’s complex projects. Historically, the MST’s smaller regional MATOCs have had a capacity of $49M, along with a CONUS unrestricted MATOC to support complex actions; this MATOC is proposing a Services Disabled Veteran-Owned Small Business reserve. Essentially, an unrestricted MATOC with a SDVOSB reserve increases competition at task order level, competitive price proposals, reduces risk of un-awardable projects, and boosts Small Business opportunities throughout the Northern Region, which covers States of Connecticut, Delaware, Illinois, Indiana, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, CUI

West Virginia, Wisconsin, and Washington DC.

The record of the Mobile District’s DHA program demonstrates support to veteran owned small business concerns that will be continued under this MATOC; the use of the veteran owned small business reserve will be based on FAR Clause 52.219-32 or FAR 19.504-1(c). The proposed MATOC will ensure the District continues to meet its small business goals. Therefore, the Mobile District MST determined that Veteran-Owned Small business concerns are fully capable of fulfilling the requirements that will be awarded under the MATOC and will not be negatively impacted by the consolidation.

As noted in Table 3, there were many small business submissions but their experience with both laboratories and experience with construction around direct patient care was limited, in which the MST believes would significantly raise the risk of poor performance and/or lack of competition if a total small business set-aside were used for this MATOC. The small business also did not meet design build and construction requirements in complexity, scope or magnitude.

The market research determined two SDVOSBs displayed design build services experience at an active/occupied military treatment facility and provided projects with similar scope and magnitude as well as joint commission requirements.

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 small businesses with the ability to operate within the Northern Region, as the MATOC will allow veteran-owned small businesses to compete on all actions solicited under this IDIQ.

CUI

Table 3-Business Concerns-Capabilities

Business Concern

Military Projects

(Non- Medical)

DB at Active Medical Facility (Non-

Military)

DB at Active / Occupied Military

Treatment Facilities

BSL and

AAALAC

Experience

Joint Commission

Projects located in Northern

Region

Projects between $500K to

$5M

SB,8(a), Hubzone, SDVOSB, SDB/WOSB **

SB, 8(a) **

Contractor Did not Provide Info ** X X

SB, SDVOSB X X X

Large X X X X X X

Large X X X X X X X

SB, 8(a), Alaskan Native * X X X X

SDVOSB * X X

SB * X X X X

SB, 8(a), Alaskan Native, SDB** X X

SB,SDVOSB X X X

SB,SDVOSB * X X X X

Large X X X X X

SB,WOSB * X X X

SB, Alaskan Native** X X

SB,8(a), WOSB, SDB* X X X X

SB,8(a), Hubzone, WOSB ** X

Note: Each row in the Business Concern column represents an offeror. Each column represents the past performance experience provided by each contractor in the Market Research Report. For each Business Concern, please note: a double asterisk (**) indicates the panel assessed the offeror as not capable; a single asterisk (*) indicates the panel assessed the offeror as having limited capability; and no asterisk indicates the panel assessed the offeror to be fully capable.

The DHA program includes complex projects at active military treatment facilities to include research laboratories and veterinary clinics. These projects have historically been awarded to large business concerns; in most cases, the awardee was the most highly qualified with competitive price proposals. Additionally, the contractor must have the capability to propose, bid, and mobilize at any location within the Northern Region. This aspect of the DHA program may

CUI

Source Selection Information-See FAR 2.101 and 3.104 sometimes pose a challenge for the smaller businesses. Table 3 demonstrates two small business concerns (both Service-Disabled Veteran-Owned Small Businesses) and three Large businesses with full capabilities and experience with all requirements detailed in the sources sought notice.

The other small business concerns displayed limited capability to perform the requirement.

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 stand-alone “C” type contracts and Single Award Task Order Contract (SATOCs) for each facility. The Mobile District also considered multiple smaller regional MATOCs/SATOCs.

Historically, with the Mobile MST program, smaller regional MATOCs or SATOCs have not garnered sufficient interest from qualified contractors to ensure adequate competition. The Northern Region includes Connecticut, Delaware, Illinois, Indiana, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia, Wisconsin, and Washington DC. If the MST elected to reduce the size of the proposed MATOC and create smaller regional MATOCs, then the Government risks lower competition and higher prices. The PDT determined in consultation with DHA leadership that the most effective approach to meet the mission requirements is to utilize this proposed MATOC pool and compete each project within the applicable MATOC. It was determined that “C” type contracts did not provide the flexibility required to quickly respond to changes, emergencies, and year-end requirements. SATOCs did not offer sufficient competition and create a higher risk that a facility could be subject to a poor performing contractor that would be difficult and costly to replace. The analysis of the alternative approaches is as follows:

a. Alternative 1: Stand-Alone “C” Type Contracts: The Mobile District considered the award of multiple stand-alone “C” Type contracts to vendors to perform the work for the Northern Region. 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 chosen alternative substantially exceed the benefits of a C-type approach for the reasons outlined below.

(1) Acquisition Cycle. A complicating element of the DHA program is the difficulty in estimating future annual funding levels. The program is subject to significant annual fluctuations in funding, and to impacts on funding priorities by emerging DoD, using agency, and installation-level issues and priorities. The Mobile District addresses this budgetary uncertainty by remaining in constant communication with DHA leadership and maintaining adequate contract capacity to respond to unanticipated requirements.

(a) In addition to building capacity, the use of task orders under a MATOC streamlines the procurement process under a regimen that is significantly more expeditious than a “C” contract scheme. Task Order RFPs are sent to the MATOC pool, and technical proposals are evaluated by an informal board which consists of the Technical Manager, Facility Manger and/or COR, depending on the complexity of the project and the number of offers, the board can last from one to four hours. It is estimated that placing task orders under a MATOC, once it has been awarded, reduces acquisition time from 140 to 35 days on average for each project, as

CUI

Source Selection Information-See FAR 2.101 and 3.104 shown in Table 4. Based on historical data, and the current projection for future DHA projects, the Program Manager estimates the Northern Region MATOC will cover 50 projects over the next five years, with an estimated capacity of $99M as a realistic estimation for the proposed Northern Region MATOC.

(b) Historically, the funds for repair and construction requirements of the type contemplated for potential projects in the Northern Region, are funded by annual appropriations that expire at the end of the FY. These projects are typically not identified, defined, and provided to the Mobile District for execution until the third and fourth quarters. The customer’s process of prioritizing and funding mission essential projects as well as requirements which do not arise until the end of the fiscal year requires expedited time frames to meet mission needs and leaves little time for contract execution and therefore necessitates procurement strategies that facilitate rapid pre-award processes and award of contract actions. Use of an IDIQ contract under FAR Part 16 provides streamlined acquisition procedures that allow rapid execution of individual projects via task orders. A stand-alone “C” type procurement requires upwards of 140 days to award from project identification. Therefore, if the Mobile District is constrained to “C” contracts, requirements that are presented in the fourth quarter would be highly unlikely to award prior to year-end in comparison to the estimated 35 days for a task order award. For example:

Attachment 1 has approximately 50 task orders awarded at the Northern Region sites in FY2018

– FY2024. Currently, 40 projects are estimated over the next five years. Soliciting 40 stand-alone C-type repair and construction type contracts would be challenging, if not impossible, within the short time constraints associated with end of fiscal year projects.

The Mobile District MST needs a tool capable of executing these year-end requirements to support the customer’s mission, executing contracts to ensure the continued and responsive support of active military facilities supported by DHA. The extra 105 days in procurement time necessary for each stand-alone C-type contracts in comparison to the chosen alternative, make C-type contracts less feasible as contracting vehicles to support the Northern Region’s construction requirements at year-end. Any requirement presented in the latter part of the fourth quarter would be virtually impossible to accomplish using procedures outside the IDIQ environment. By consolidating these requirements into a MATOC, the Mobile District will be able to execute projects in support of the Northern Region well into the fourth quarter, which is necessary to meet mission requirements. The consolidated MATOC will allow the Mobile District to issue RFPs and receive proposals quickly from the MATOC contractors. The Mobile District will be able to solicit and negotiate (if necessary) directly with the MATOC contractors to arrive at fair and reasonable prices on short notice and award projects prior to the end of the fiscal year.

Therefore, consolidating these requirements into a MATOC tool is critical to the support the DHA Northern Region program to perform design, repair, and construction requirements that are necessary to keep facilities fully functional. Mobile MST requires expedited time frames to meet DHA mission needs.

CUI

Source Selection Information-See FAR 2.101 and 3.104

Table 4 - MATOC Task Order Award Approach Stand-Alone “C” Contract Approach Versus MATOC Task Order Approach (Estimated Time to Award)

(c) The award of “C” contracts each fiscal year for each location at which the

Northern Region has requirements, while limiting schedule and workload impacts, was thoroughly considered. The nature of the DB work is such that many requirements are unanticipated, and urgent needs arise in response to system failures or mission changes. This makes early definition of all requirements at a given site impossible. Even anticipated projects are typically not approved and released for project development until late in the third quarter or fourth quarter of the fiscal year in which they are to be awarded and the funding available for these projects is variable, and subject to other competing requirements for DHA funding.

(d) The qualitative benefits of the chosen alternative MATOC approach substantially exceed those expected for the alternative “C” type contract given the time savings of 105 days for each requirement which is critical to the agency’s mission success and necessary to meet mission requirements. Since the transition from MEDCOM to DHA, there has been a push to have uniformity not only among the three MSTs (Mobile, Huntsville, and Little Rock), but also to have uniformity among the military facilities. Given DHA’s interest in consistency, the urgency and uncertainty of DHA requirements, and the unpredictability of DHA funding, it is impossible to successfully execute DHA’S DB Northern Region work under single “C” type contracts at individual sites. DHA’s mission is to provide healthcare to Servicemembers, retirees, and their families 24 hours a day, 365 days a year. Any delay in building the facilities that are necessary to provide medical care would not only impede DHA’s mission but would also have a significant impact on the readiness of our nation’s armed forces. The chosen MATOC approach will address the program's mission needs, guarantee mission success, and allow the MST to onboard new sites/facilities/end users in an expeditious manner with the least amount of cost to the Government in comparison to “C” type contracts. This approach will also lower risk with more competition (competitive pricing) when compared to “C” type contracts and ultimately ensure that DHA will expeditiously have the facilities necessary to successfully continue their mission. These qualitative benefits justify the chosen alternative over C-type contracts.

(2) Cost Savings. Per 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.

(a) This proposed acquisition will support active military medical facilities and

Stand-Alone “C” Contracts # Hours Avg Days 1 480 140

MATOC Task Orders # Hours Avg Days 1 240 35

CUI

Source Selection Information-See FAR 2.101 and 3.104 laboratories; some operate 24 hours per day, 365 days per year. There are times projects may have to be completed at unusual times to lower the impact to patient care, which results in increased costs to projects. While minimizing acquisition time, and performance and schedule risks, cost risks are minimized through open and thorough discussions of the description of work for each task order, resulting in a stronger mutual understanding of requirements. Additionally, Table 5 reflects the estimated total pre-award/award costs required for one stand-alone "C" type contract in comparison to a MATOC. These costs are based on standard regional labor costs developed by Mobile District Contracting for all procurements, along with historical average procurement support costs for Cost Engineering Division, Engineering Division, Construction Division, and Programs and Project Management Division (PPMD).

(b) Additional hours/costs are required for “C” and IDIQ type contracts due to the selection of contract clauses and preparation of applicable Determinations and Findings.

MATOC Task Orders do not require contract clauses or the same Pre-Award documents and can therefore be accomplished in fewer hours and at a lower cost. Contracting Division costs are developed utilizing hourly rates for a GS-12 Contract Specialist and a GS-13 Contracting Officer. 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, issuance of Notice to Proceed, review of monthly COR reports, 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. The cost is developed per project, and includes development, review and approval of Independent Government Estimates and project plan and specifications processing. Construction Division costs are developed utilizing hourly rates for a GS-13 Engineer and GS-12 Engineer or GS-12 Construction Control Representative.