W9127824R0055_Consolidation DF - DHS MATOC 49M_Redacted.pdf

DEPARTMENT OF THE ARMY

U.S. ARMY CORPS OF ENGINEERS, MOBILE DISTRICT

DETERMINATION AND FINDINGS

REQUEST FOR CONSOLIDATION

W9127824R0055

INDEFINITE DELIVERY INDEFINITE QUANTITY (IDIQ)

MULTIPLE AWARD TASK ORDER CONTRACT (MATOC)

FOR DESIGN/BUILD AND CONSTRUCTION CONTACTS FOR THE DEPARTMENT OF

HOMELAND SECURITY (DHS) WITHIN MOBILE DISTRICT�S AREA OF

RESPONSIBILITY (AOR)

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 United States Code (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:

1. Introduction: Headquarters, U.S. Army Corps of Engineers, Mobile District, plans to solicit offers for an IDIQ MATOC pool with $49,000,000 in capacity following the selection procedures in FAR Subpart 36.3 for two phase design build construction. This MATOC will be solicited as a Total Small Business Set-Aside under North American Industry Classification System (NAICS) code 236220 Commercial and Institutional Building Construction with a Small Business Size Standard of $45 million. This procurement constitutes consolidation of requirements per 15 U.S.C. § 657q(a)(2)(B) in that it involves construction at numerous discrete sites. The MATOC will have a five-year ordering period with each task order having its own individual project specific duration.

The MATOC will be available to any projects funded by the Department of Homeland Security (DHS) within Mobile District�s AOR. Mobile District has conducted analysis and market research that demonstrates consolidation of requirements in this procurement is both necessary and justified.

2. Description of Procurement Action:

a. Project Description:

(1) Mobile District performs studies, investigations, designs, repairs, and construction requirements for DHS throughout the District AOR and has developed an acquisition approach to meet the demanding major design and construction project requirements of its customers. It is estimated that most of the projects will be performed at the DHS Center for Domestic Preparedness (CDP) at the Anniston Army Depot (ANAD). Each project is assigned a Project Delivery Team (PDT) comprised of various organizational elements within the District, including technical (Engineering and Construction Divisions), contracting, legal, project management (including the Deputy for Small Business), as well as the end user. The District's contracting responsibilities 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.

(2) The purpose of this acquisition is to establish a highly responsive repair and construction contracting tool to support DHS projects within the Mobile District's AOR.

The support to be provided is generally Design-Build (DB) Repair and New Construction, work, and may also include Design-Bid-Build (DBB) projects for repair and new construction. The specific portion of the mission addressed by this acquisition consists of full-service repair and construction of real property facilities and/or their systems and components. Task Orders for this acquisition generally will range from $1,000,000.00 to $15,000,000.00 with wide variance in complexity, however, this small business MATOC could be used for projects outside this range based on complexity, critical need, and/or availability of other contract vehicles. Projects between $10M and $15M would require review by the PDT to determine if small businesses in the small business MATOC possess the capability and experience with that project size, if not, those projects would be procured under a different method. Mobile District has an established construction acquisition planning process that requires every project to be presented at a meeting of senior District personnel from across every directorate to discuss how to procure both the design and the construction of a project in a manner that considers maintaining professional design proficiency within the District, by identifying project suitable for in-house design, and to also determine a construction acquisition method that provides the best opportunity for success while taking into account the small business goals of the District. For design, there is an Architect-Engineer versus in-house design determination made, and for construction, there is an evaluation of all available procurement options with a consensus agreement on the best method for a particular procurement. The projects considered for this consolidated MATOC will be of a size and complexity that are not appropriate for procurement using 8(a) sole source procurements methods. For example, many of the projects will require design and construction and would not be appropriate for 8(a) SATOC or sole source procurement methods. For procurement of projects within the range of $1-15M, a MATOC task order or individual �C� contract are typically the only viable options. See the discussion of alternative contracting approaches in section 5 below. 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.

b. Acquisition Strategy/Procurement Summary: To meet the demanding DHS repair and

e. Procurement History:

(1) Beginning each FY, the District�s Office of Small Business Programs, Programs and Project Management, Engineering, Construction and Office of Counsel conduct comprehensive acquisition strategy sessions for upcoming projects to determine those suitable for each socio-economic program. The team takes into consideration the District�s AOR, suitability of projects that match capabilities marketed by 8(a) firms, and recommendations made by the Small Business Administration (SBA) Procurement Center Representative reviewing the District�s requirements. Generally, larger, complex projects are procured through �C� contracts and occasionally negotiated with contractors. Less complex, smaller scale projects are reserved for 8(a) sole source awards.

(2) The District does not have any existing construction MATOCs in support of DHS construction services anticipated under this contract. This will be a new procurement, so no previous procurement history exists.

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 or improve or enhance performance or efficiency, reduction in acquisition cycle time, 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) which is $4.9M for this acquisition. 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. See Section 5 analysis below for the benefits of this proposed consolidated acquisition, which do not exceed the standard set forth in FAR 7.107-2(d). Although the quantitative benefits are not met, the qualitative 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.

(2) Utilizing a small business MATOC in accordance with FAR 16.504 to consolidate the requirements for design, repair, and construction work within Mobile District�s AOR is necessary to meet the mission objectives because it provides for a contracting vehicle that minimizes acquisition planning and contract execution costs, shortens contracting lead time, and assures operational continuity. Use of IDIQ contracts are appropriate in accordance with FAR 16.50l -2(a), when exact times and/or exact quantities of future deliveries are not known at the time of award. FAR l6.504(b) indicates that the Contracting Officer may use an indefinite-quantity contract when the Government cannot predetermine, above a specified 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 only when a recurring need is anticipated. Within Mobile District�s AOR, it is anticipated that this MATOC will be used to fulfill DHS facility repair work but could also include new construction requirements for the Interagency Support Services Program.

(3) In accordance with FAR 7.107-2(e)(1), when the benefits of consolidating 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 being critical to the agency�s mission success and that the procurement strategy provides the maximum practicable participation by small business. The consolidated approach is critical to the success of the Mobile District. IDIQ MATOCs provide a flexible and effective contract vehicle that can accommodate both the known and unknown repair and construction requirements within Mobile District�s AOR.

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

4. Results of Market Research: To ensure that small business concerns are given appropriate opportunities to participate as prime contractors and subcontractors in Federal procurements, the Mobile District conducted market research that supplemented the District�s knowledge of capabilities based on prior similar acquisitions. Sources Sought/Special Notice, W9127824R0055, was posted to sam.gov on 16 April 2024 requesting interested Small Business contractors to submit business size/classification to include any designations as Small Business (HUBZone, Service- Disabled Veteran Owned, Women Owned, or 8(a)), Bonding capability, Description of capability to perform projects as described in 2.a.(2) of this document, and Past Performance/Experience. The Special Notices were posted with a NAICS code of 236220 and size standard of $45M. 39 responses (38 Small Businesses; 1 Large Business) were received by 3 May 2024 in response to the Sources Sought, as detailed in the Sources Sought Analysis. The analysis conducted on the sources sought responses, indicates that the pool of small business contractors willing and capable to perform the construction and repair requirements of the Mobile District is substantial and supports the decision to advertise this MATOC as a total small business set-aside procurement.

5. Alternate Contracting Approaches Considered and Rationale for Rejection: In concluding that a small business MATOC is the best solution for satisfying the major repair and construction requirements of Mobile District, the District also considered stand-alone Design/Build �C� contracts. The intent of this analysis is to address viable alternative contracting approaches to include consideration for the degree of consolidation required.

a. Alternative 1: Stand-Alone Design-Build �C� Contracts: The District considered the award of multiple stand-alone Design/Build �C� contracts. While this approach could provide a lesser degree of consolidation, or no consolidation at all if individual contracts are awarded for each requirement, the benefits of the MATOC approach substantially exceeds the advantages of stand-alone Design/Build �C� contracts.

(1) Quality. Establishing a MATOC pool of experienced contractors to service the DHS program assures a higher degree of consistency in the quality of performance. MATOC pool contractors will be selected based on their experience performing repair and construction services similar to the project description shown in 2.a.(2) of this document. Over the course of the ordering period, the IDIQ MATOC contractors will gain further experience and understanding of the requirements of the program and projects through the iterative process of responding to Requests for Proposals (RFPs) and executing projects. While offerors on stand-alone Design/Build �C� contracts would be selected on similar past performance experience, a contractor has less certainty of being awarded multiple contracts and thus gaining a similar quantum of critical experience. This progression enabled through the MATOC Pool will allow the government and contractors to develop a cooperative relationship, through which the contractors have more candidness to provide the government information to better define requirements that results in higher quality. Also, during the MATOC procedures, one-on-one sessions may also be conducted during the RFP process to help the contractors better understand the expectations of the government. Though discussions may be conducted during a stand-alone Design/Build �C� contract, acquisition discussions do not permit or encourage as open of dialog as one-on-one sessions.

(2) Acquisition Cycle. The MATOC approach better accommodates the program, because of its streamlined nature. Stand-alone Design/Build �C� contract procurements require additional advertisement time, lengthy evaluation boards, and unknown number or proposals. Conversely, the task order procurement process under a MATOC eliminates the 15-day advance notice period, the preparation of voluminous stand-alone solicitations which must be created individually using the contract writing system, the burdensome submission requirements for contractors, the detailed evaluation criteria which is required when doing a Stand-Alone Design/Build �C� contracts to ensure which ever contract is selected is of low risk for failure and completely understands the contract requirements, the prolonged proposals submission periods due to contractor unfamiliarity with the work and facilities, and lengthy source selection boards. Each task order requires only the submission of limited technical requirements outlined in each RFP, minimal evaluation criteria, and 10 days or less to conduct informal source selection boards. It is estimated that the MATOC task order contracting mechanism saves as much as 161 days in the acquisition cycle of each project, which is critical in providing timely responses to emerging and urgent requirements. Given the volume of contracting requirements encountered each year, a time savings of 161 days can be pivotal in the District�s ability to meet the DHS program acquisition schedules.

(3) Terms and Conditions. Other than RFP requirements and proposal submissions, there is essentially no difference between the contractual terms and conditions for design, construction, or repair projects executed under a stand-alone Design/Build �C� contract or a task order because the lead design firms will be assessed during Phase I of the MATOC solicitation.

(4) 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. Benefits that are quantifiable are considered substantial if they meet the dollar amounts set forth in FAR 7.107-2(d).

(A) The MATOC approach not only maximizes competition for the base contract, by review of past performance, bonding, and technical capabilities, but also relies on competition for award of each Task Order. Responsive and efficient use of the small allocations afforded by Congress supporting small procurements for the Environmental Infrastructure Assistance program, coastal and environmental restoration projects, as well as non-routine procurements for Operations and Maintenance program, magnify the importance to have pre-vetted, capable contractors ready to support as the tasks are appropriated. Lengthy procurement timelines leveraged with minimal response from typical small business pool in the past few years for these small in value, yet critical program needs, result in protracted schedules and often the need for at least two procurement cycles to be successfully achieve contract award. In this difficult competitive environment, funding is often scrutinized for potential reprogramming due to the inability to execute efficiently and timely, potentially further delaying the projects. Additionally, Tables 1 and 2 below reflect the estimated total pre-award/award costs required for one stand-alone Design/Build �C� type contract in comparison to a MATOC task order. These costs are based on standard labor costs developed by Contracting for FY24 procurements, along with historical average procurement support costs for Cost Engineering Division, Programs and Project Management Division, and Engineering Division, for acquisition coordination, document review, Independent Government Estimate (IGE) development, site visit attendance, Source Selection Evaluation Board labor, and related document preparation, travel, and administration.

(B) Additional hours/costs are required for stand-alone Design/Build �C� and basic IDIQ contracts due to the selection of contract clauses, preparation of applicable Determinations and Findings, participation in source selection evaluation boards, and preparation of source selection decision documents. MATOC Task Orders do not require contract clauses or the issuance of advance notices and can therefore be accomplished in fewer hours and 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, project plan and specifications processing, and source selection evaluation board participation and documentation (if applicable).

Construction Division costs are developed utilizing hourly rates for a GS-13 Engineer and GS-12 Engineer or GS-12 Construction Control Representative. The cost is based on the complexity of the Scope of Work and assistance in development of the IGE. Construction Division efforts include District Office and Resident Office support. Project Management costs are developed utilizing hourly rates for a GS-13 Engineer and a GS-9 Budget Analyst. The cost is based on a historical average of the separate contracts into a single contract unsuitable for a small business.

b. 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 by combining separate requirements into one contract has 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 to varying degrees.

c. Applicability of CICA Bundling Principle. Although this action constitutes CICA bundling by combining like and related construction and design capabilities, it is consistent with industry practice and necessary to satisfy the customers� needs. This procurement will allow the District to leverage economies of scale, streamline acquisition cycles, and eliminate duplication of efforts by establishing a MATOC pool of responsive and responsible contractors to perform individual task orders as the needs arise. Additionally, the MATOC approach, though consolidating requirements at several facilities into one contract, provides the best aspect of stand-alone Design/Build �C� contracting, that is competition, with the best aspect of IDIQs, that is streamlined acquisition cycles, low risk for overall mission failure, and high-quality contractor performance, to satisfy Mobile District�s need for a responsive, yet cost-effective approach to meeting its mission requirements.

7. Considerations, facts, and reasoning supporting the determination: All facts, considerations, and rationale have been covered previously in the findings.

8. Summary: Though this MATOC constitutes consolidation in that it combines design/build and construction at numerous 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 DHS repair and construction requirements in Mobile District�s AOR. Stand-alone Design/Build �C� contracts were considered, but would result in significantly higher costs and increased acquisition cycle. Although cost savings do not amount of the contract value set forth in FAR 7.107-2(d), consolidation is necessary and justified as it is critical to the agency�s mission success.

If these benefits are not leveraged, the District will not be able to fully execute the DHS program within Mobile District�s AOR. In the past a Small Business MATOC was successfully utilized in the Small Business program to execute task orders for similar work in this cost range, but no previous DHS MATOC has been awarded. The DHS program has awarded 8 separate projects in the FY 21-FY3 timeframe, all between The size of these individual projects is not likely to increase in foreseeable future and any efficiencies that can be achieved in procurement will be needed to meet the mission requirements. Therefore, the consolidated approach is critical to the success of Mobile District�s DHS program. Additionally, it is significantly less burdensome for the District�s Contracting and Construction Divisions to administer a MATOC than numerous stand-alone Design/Build �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 number of efforts to be executed within Mobile District�s AOR, and the consolidated approach provide advantages that substantially exceed the benefits of an approach that provides a lesser degree of consolidation.

Enclosures:

Market Research Report with Sources Sought/Market Research Table