W9127824R0121 DF Consolidation_Redacted.pdf

DEPARTMENT OF THE ARMY

U.S. ARMY CORPS OF ENGINEERS, MOBILE DISTRICT

DETERMINATION AND FINDINGS

REQUEST FOR CONSOLIDATION

W9127824R0121

INDEFINITE DELIVERY INDEFINITE QUANTITY (IDIQ)

SINGLE AWARD TASK ORDER CONTRACT (SATOC)

FOR GENERAL RENOVATION, REPAIR, AND CONSTRUCTION AT

TYNDALL AIR FORCE BASE, 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 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, proposes to award a sole-source 8(a) IDIQ SATOC in the amount of $4.5M to Southeastern Industrial Construction, LLC (SIC), 182 Commerce Dr, Pelham, Alabama 35124-1838. The SATOC will meet renovation, repair, and construction mission requirements under North American Industry Classification System (NAICS) code 236220 for Tyndall Air Force Base, Florida. This procurement constitutes consolidation of requirements per 15 U.S.C. § 657q(a)(2)(B) in that it involves construction at two or more discrete sites at Tyndall AFB. 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 for Tyndall AFB, FL. 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), and the end user and facilities’ engineering organizations. From internal elements, the District fields an in-house staff that provides project management, technical, contracting, legal, and resource management services to support facility life-cycle programs. The 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 renovation, repair, and construction contracting tool to support the District's facility mission at Tyndall AFB. The support to be provided for these facilities is generally Sustainment, Restoration, and Modernization (SRM) work, but could include new construction. The specific portion of the facilities’ mission addressed by this acquisition consists of full-service renovation, repair, and construction of real property facilities and/or their systems and components. Project sizes range from the simplified acquisition threshold to approximately $2.5M with a wide variance in complexity. This contracting effort, in conjunction with the installation’s facilities maintenance program, ensures the facilities meet established federal 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.

b. Acquisition Strategy/Procurement Summary: To meet the demanding renovation, repair, and construction project requirements of its customers at Tyndall AFB, the District intends to award a sole-source 8(a) IDIQ, Firm-Fixed-Price (FFP) construction contract 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 SATOC will be awarded in an amount not to exceed $4.5M to Southeastern Industrial Construction, LLC (SIC) for renovation, repair, and construction work at Tyndall AFB. The period of performance will be a three-year ordering period. Individual task orders will be negotiated with the contractor. The Mobile District determined that an 8(a) SATOC is the most effective manner of meeting Tyndall’s construction mission for several reasons. This acquisition approach supports the Small Business Administration’s (SBA) 8(a) Business Development Program for socio-economically disadvantaged concerns. Additionally, the SATOC will efficiently facilitate the District’s smaller renovation, repair, and construction programs and will position the District to successfully meet short-fused, end of fiscal year requirements. 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 (FY)13 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 a

SATOC will be used to perform multiple construction projects, awarded on individual task orders, at two or more discrete sites on Tyndall AFB.

d. Requirements Being Consolidated: The planned SATOC will provide full-service renovation, repair, and construction of real property facilities and/or their systems and components at Tyndall AFB. Almost all of the projects are unknown at this time. However Mobile District expects the vast majority of projects will all be maintenance and repair requirements from tenant organizations at Tyndall AFB.

e. Procurement History:

(1) Beginning each FY, the District’s Office of Small Business Programs, Contracting, Programs and Project Management, Engineering, Construction, and Office of Counsel conduct comprehensive acquisition strategy sessions for upcoming projects to determine those suitable for the 8(a) program. The team takes into consideration the District’s Area of Responsibility (AOR), suitability of projects that match capabilities marketed by 8(a) firms, and recommendations made by the SBA Procurement Center Representative (PCR) reviewing the District’s requirements.

Generally, larger, complex projects are procured through “C” contracts, placed in existing Multiple Award Task Order Contract (MATOC) pools, or occasionally negotiated with contractors awarded competitive SATOCs. Less complex, smaller scale projects are reserved for 8(a) sole source awards. For example, SRM projects have proven to be very good projects to help develop 8(a) construction contractors.

(2) The District currently administers a suite of IDIQ MATOCs and SATOCs for facilities renovation, repair, and construction performed by contractors from various socio-economic categories. In FY23, the District awarded , of its program to Small Disadvantaged Businesses (SDB). The majority of these awards were made through the 8(a) Program. The District’s FY24 SB goal is a very aggressive

. The District intends to achieve this goal, in part, by sole sourcing suitable projects to 8(a) SATOC contractors.

(3) This SATOC is for renovation, repair, and new construction requirements at Tyndall AFB. There is another SATOC in place, W9127822D0014. The remaining capacity of this SATOC is of $16,000,000 and it expires on 23 February 2025. In addition, contract W9127822D0014 is currently being used for soil management and construction of facilities at the Tyndall Ammo Gate Site C Area, with any additional capacity on the vehicle is being reserved for requirements in that area. Contract W9127822D0014 was primarily formed for these requirements and for that reason the IDC was larger than the current requirement. The proposed contract is planned for smaller minor repair and construction requirements, and therefore a reduced overall capacity at $4.5M is proposed. The following table illustrates other similar requirements recently performed by 8(a) small business contractors at the Anniston Army Depot located in Calhoun County, AL. None of these are available for use at Tyndall AFB, FL. In addition, there are no existing contracts for work at Tyndall AFB, FL for construction work of this size. There is an Unrestricted Construction MATOC administered by the USACE Savannah District. This contract is for large construction projects and would not be suitable for relatively small projects at Tyndall

AFB that should be set aside for small business Offerors. The contracts below were previously awarded SATOCs for work at Anniston Army Depot.

Table 1 – Recent Similar 8(a) IDIQs Awarded within Mobile Area of Responsibility

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). 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 analysis below for 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 an 8(a) SATOC in accordance with FAR 16.504 to consolidate the requirements for renovation, repair, and construction work at Tyndall AFB 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, assures operational continuity, and improves post security by minimizing the number of contractors accessing the post at any given time period. Use of an IDIQ contract is 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 16.504(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. It is anticipated that the SATOC will be used to fulfill customer requirements at Tyndall AFB, to include any tenant organizations.

(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

Contract / Solicitation Contractor

Name

IDIQ

Type

Award Capacity

Ordering Period

Award Date

Remaining Capacity

W9127820D0056 SIC SATOC $4,000,000 3 Years 9/24/20 CLOSED W9127818D0061 SIC SATOC $4,000,000 3 Years 6/22/18 CLOSED success and that the procurement strategy provides the maximum practicable participation by small business. The work required under the proposed solicitation involves SRM and new construction at Tyndall AFB. The consolidated approach is critical to the success of not only Tyndall AFB, but also the Mobile District. An IDIQ SATOC will provide a flexible and effective contract vehicle that can accommodate both the known and unknown repair and construction requirements of Tyndall AFB.

Further, in accordance with FAR 19.805-1, proposed 8(a) requirements that do not exceed the competitive thresholds at FAR 19.805-1(a) or meet the exceptions detailed at FAR 19.805-1(b) may be awarded on a non-competitive basis. The independent statute allows this procurement to be awarded on a sole source basis and there is no harm to competition. Therefore, this procurement is not subject to competition and there is no competitive harm to the selected 8(a) as a result of the consolidation because this company is capable of fulfilling all requirements under the SATOC.

Though it is feasible to fulfill the requirements by awarding multiple stand-alone 8(a) sole source “C” contracts, which could perhaps be awarded to multiple 8(a) contractors, the advantages of the SATOC tool fully support the intended approach.

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

4. Results of Market Research:

a. The Contracting Division’s Construction Section regularly meets with contractors throughout the year and industry events. Further, as prospective Offerors send marketing information, they are researched through FPDS, SBA DSBS Website, and CPARS to support the District’s determinations on potential 8(a) contractors. The purpose of this market research is to provide the District with the necessary information regarding the capabilities and limitations of 8(a) contractors needed to perform the work required. small business firms with the NAICS 236220 were identified within the District’s market research results. These small business firms have conducted market meetings with the district’s Small Business Office. The Small Business Office records show that those market meetings were conducted between Wednesday, October 25, 2023, and Monday, June 17, 2024. In addition, 8(a) small business firms with the NAICS 236220 were identified within the District’s market research. Finally, the Mobile District Small Business Office scheduled and held several marketing meetings with new entrants’ small business firms identified as meeting the required NAICS.

b. Companies possessing the requisite capabilities are scheduled for face-to-face marketing meetings with District personnel where they consider whether the contractor’s experience demonstrates the capability and bonding capacity to perform multiple projects simultaneously. The Small Business Office verifies that small business owner requested a marketing meeting on 10 Jun 2024. The firm’s marketing meeting was conducted on Monday, June 17, 2024, from 10:00 to 10:30 am. The Small business firm chose MS Teams as the virtual market meeting method. The attendees were

. Mobile district small business office allows 182 business days to elapse before scheduling another market meeting with the same small business firm, which can occur after 16 December 2024.

was selected based on their capacity statement provided, on prior successful work history in Mobile District’s AOR, and upon customer satisfaction with previous and ongoing work performed.

c. For Tyndall AFB, the following market research techniques were used to assess capabilities:

(1) Individual marketing meetings held with in the last 18 months.

(2) Review and analysis of Capabilities and Surety Statements.

(3) Review and analysis of past experience specified in the company’s portfolio that indicated experience relevant to the type of projects anticipated under this SATOC.

(4) Communication with SBA Business Development Specialist as to status in 8(a) program.

(5) Review of company profile found in the Dynamic Small Business Search engine.

d. Following market research, an acquisition approach to utilize under the 8(a) program was appropriate. The determination is documented in the attached SBA Acceptance Letter and will be finalized in the DD 2579 after this determination is made. In its letter, the SBA also affirmed that the proposed procurement would have no adverse impact on small businesses. is fully capable of fulfilling all requirements that will be awarded under the SATOC and will not be negatively impacted by the consolidation.

5. Alternate Contracting Approaches Considered and Rationale for Rejection: Mobile District considered stand-alone 8(a) “C-type” contracts on a project-per-project basis. However, based on reasons described herein, it was determined that a sole-source 8(a) SATOC was the best solution for satisfying the renovation, repair, and construction requirements of Tyndall AFB. The intent of this analysis was to address all alternative contracting approaches that would involve a lesser degree of consolidation, or no consolidation. See analysis below for the benefits of this proposed consolidated acquisition, which do not meet the standard set forth in FAR 7.107-2(d).

a. Alternative 1: Stand-Alone 8(a) Sole-Source “C” Type Contracts: The District considered the award of multiple stand-alone sole source contracts to 8(a) vendors to perform the work at Tyndall AFB. 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 SATOC approach substantially exceed the disadvantages of consolidation for the reasons outlined below.

(1) Quality. The ability to work with a single contractor directly through a SATOC tool provides significant advantages in comparison to awarding multiple 8(a) sole-source contracts where various contractors may be utilized. It is the District’s experience that the iterative process of negotiating and executing repair and construction efforts with a single contractor generates greater understanding between contractor and Government, resulting in more thorough proposals and quality projects. While “C” contracts give the Government the opportunity to avail itself of a wider range of potential contractors for each project, the 8(a) vetting process discussed in paragraph 4, Market Research, achieves essentially the same result for task orders under the proposed SATOC – a high quality contractor that is suited for the requirements. 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 the installation's and facilities' procedures. While the potential exists for the 8(a) SATOC holder to end up being a poor performer, due diligence by the Government at the outset makes this risk highly unlikely, resulting in a “good to great” contractor for every project. Too, in the unlikely event that the 8(a) SATOC contractor does not perform well, the Government can quickly pursue another 8(a) SATOC contractor or avail itself of other contract vehicles.

(2) Acquisition Cycle. A complicating element of the installation’s SRM program is the difficulty in estimating future year 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 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 offer and acceptance to the SBA or voluminous solicitations and proposal submissions, as required for “C” contract procurements. As compared to awarding a stand-alone 8(a) contract, it is estimated that placing task orders under a SATOC reduces acquisition time from 60 to 30 days on average for each project, as shown in the table below.

(b) Historically, the funds for repair and construction requirements of the type contemplated at Tyndall AFB are funded by annual appropriations that expire at the end of the FY.

These projects are typically not identified, defined, and provided to the District for execution until the third and fourth quarters. The customer’s process of prioritizing and funding mission essential projects 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. As opposed to stand-alone contracts, the intended SATOC will not impose a requirement to offer each project to the SBA or require voluminous solicitations and proposals. A stand-alone “C” type procurement requires upwards of 60 days to award from project identification. Therefore, if the District is constrained to “C” contracts, any requirements that are presented in the fourth quarter would be at significant risk for award prior to year-end. Any requirement presented in the latter part of the fourth quarter would be virtually impossible to accomplish using procedures outside the SATOC IDIQ environment. By consolidating these requirements into a SATOC, the District will be able to execute projects in support of Tyndall AFB well into the fourth quarter. The consolidated SATOC will allow the District to issue Requests for Proposals (RFPs) and receive proposals quickly from the SATOC contractor. As stated above, there is no requirement to offer the project to the SBA or have voluminous solicitations and proposals. The District will be able to negotiate directly with the SATOC contractor to arrive at a fair and reasonable price on short notice and award projects prior to the fiscal year end. Therefore, consolidating these requirements into a SATOC tool is critical to the operation of Tyndall AFB in order to perform renovation, repair, and construction requirements that are necessary to keep facilities fully functional.

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 the Government will be procuring this requirement via a sole source procurement to an 8(a) small business concern. In accordance with FAR 19.805-1, proposed 8(a) requirements that do not exceed the $4.5M competitive threshold for non-manufacturing NAICS are awarded on a non-competitive basis unless a waiver is approved. The selected 8(a) is capable of fulfilling all requirements under the SATOC.

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 construction and MILCON support with 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 an 8(a) SATOC with a responsive and responsible contractor to perform individual task orders as the need arises. Additionally, the Government has independent statutory authority to proceed as proposed - to fulfil these requirements via a sole source procurement to an 8(a) small business concern.

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

8. Summary: Though this sole-source 8(a) 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 repair and construction requirements at Tyndall AFB. This approach also accrues to the benefit of the District’s aggressive small business goals. Standalone “C” contracts were considered but rejected as they would result in significantly higher administrative costs and increased acquisition cycle time. Although cost savings do not amount to 10% of the contract value, a consolidated SATOC, as opposed to using a stand-alone contract or other procurement strategies provides qualitative benefits including a significant increase in quality and acquisition cycle. Consolidating these requirements also provides significant cost savings up to in administration costs and additional cost savings during task order negotiations, as previously discussed.

If these benefits are not leveraged, the District will not be able to fully execute the SRM requirements of Tyndall AFB, particularly in the fourth quarter, which constitutes the largest portion of the District’s SRM construction program. Failure to award these SRM projects will result in the loss of critical District S&A income, which could negatively impact the District.

Additionally, Tyndall AFB will be drastically impacted with mission readiness, which will negatively affect the ability of the Army 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 Tyndall AFB, but also the Mobile District. Additionally, it is significantly less burdensome for the District’s Contracting and Construction Divisions to administer one SATOC than numerous “C” contracts. Moreover, the planned approach meets the intent of the statute to protect small business, in that it is the Government’s intent to make an award using an 8(a) sole source. 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 Tyndall AFB, and the consolidated approach provide advantages that substantially exceed the benefits of an approach that provides a lesser degree of consolidation.

DETERMINATION REQUEST FOR CONSOLIDATION

W9127824R0121

IDIQ SATOC FOR GENERAL RENOVATION, REPAIR, AND CONSTRUCTION

AT TYNDALL AIR FORCE BASE, FLORIDA.

The following signatures indicate concurrence with the contents of this document.

DETERMINATION REQUEST FOR CONSOLIDATION

W9127824R0121

IDIQ SATOC FOR GENERAL RENOVATION, REPAIR, AND CONSTRUCTION

AT TYNDALL AIR FORCE BASE, FLORIDA

Upon the basis of the findings above and with the concurrence of the SBA, I hereby determine, pursuant to the authority of FAR 7.107-2, 15 U.S.C. § 657q, and Army Federal Acquisition Regulation Supplement 5107.107-2(b)(ii) “Consolidation,” that the proposed consolidation of two or more discrete construction projects for the Department of Defense and other Federal Agencies within the Mobile District is both necessary and justified.