W9127824R0129_DF Consolidation - Redacted.pdf

DEPARTMENT OF THE ARMY

U.S. ARMY CORPS OF ENGINEERS, MOBILE DISTRICT

DETERMINATION AND FINDINGS

REQUEST FOR CONSOLIDATION

W9127824R0129

INDEFINITE DELIVERY INDEFINITE QUANTITY (IDIQ)

SINGLE AWARD TASK ORDER CONTRACT (SATOC)

FOR GENERAL REPAIR AND CONSTRUCTION

WITHIN THE BOUNDARIES OF THE SOUTH FLORIDA AREA OFFICE

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) 5107.170-2(b)(ii), AFARS Appendix GG, and USACE Acquisition Instruction 5107.107-2-100(b)(ii)(B). My review resulted in the following findings:

1. Introduction: Headquarters, U.S. Army Corps of Engineers, Mobile District, plans to solicit offers for a Two-Phase Design Build (DB) Woman Owned Small Business (WOSB) set aside IDIQ SATOC with a total capacity of to meet the general repair and construction requirements of the South Florida Area Office (Cape Canaveral Space Force Base, Homestead Air Reserve Base, MacDill Air Force Base, and Patrick Space Force Base) under North American Industry Classification System (NAICS) code 236220. 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. 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 at

Military Installations covered by the South Florida Area Office and has developed an acquisition approach to meet the demanding project requirements of the Department of Public Works (DPW) customers of the South Florida Area Office, whose funding for facility Sustainment, Restoration and Modernization (SRM) program requirements is generally from Operations & Maintenance Army (OMA) reimbursable programs. 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 Chief of the Office Small Business Programs), as well as 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; 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 the District's facility mission covered by the South Florida Area Office. 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 incidental design, repair, and construction of real property facilities and/or their systems and components. Project sizes for this SATOC will typically range from (and will be DB or design-bid-build (DBB)) with wide variance in complexity, however, this SATOC could be used for projects outside this range based on complexity, critical need, and/or availability of other contract vehicles. The Mobile District typically awards DBB new construction and repair projects with an estimated value of less than using 8(a) sole source contracts and task orders. New construction and repair projects with an estimated amount greater than

(DB or DBB) are typically procured using small business (SB) Set Asides or SB multiple award task order contracts (MATOCs). This SATOC will primarily be used for DB projects (new construction and repair) under that are not appropriate to sole source as 8(a). This SATOC is intended for projects that are not appropriate for competition among the existing MATOCs. This contracting effort, in conjunction with the installation�s facilities maintenance program, ensures the facilities meet established DoD facilities standards. This is not a new procurement method for supporting this program. Mobile District currently administers a suite of IDIQ MATOCs and SATOCs for operation, maintenance, and minor construction (O&M) consisting of various socio-economic pools. 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 repair and construction project requirements of its customer covered by the South Florida Area Office, Mobile District intends to award a Firm-Fixed-Price IDIQ construction SATOC in accordance with FAR Part 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 have a five year ordering period. Individual task orders will be negotiated with the contractor.

The Mobile District determined that a WOSB SATOC is the most effective manner of meeting the South Florida Area Office�s construction mission for several reasons. This acquisition approach supports the Small Business Administration�s (SBA) WOSB Business Development Program for socio-economically disadvantaged concerns. Additionally, the SATOC will efficiently facilitate the District�s 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 delivery order to satisfy -- (i) Two or more requirements of the Federal agency for supplies or services that have been provided to or performed for the Federal agency under two or more separate contracts, each of which was lower in cost than the total cost of the contract for which offers are solicited; or (ii) Requirements of the Federal agency for construction projects to be performed at two or more discrete sites. The definition applies to this procurement because a SATOC will be used to perform multiple construction projects, awarded on individual task orders, at two or more discrete sites within the boundaries of the South Florida Area Office.

(d) Requirements Being Consolidated: The planned SATOC will provide full service repair and construction of real property facilities and/or their systems and components, to include known requirements and requirements traditionally received from other customers of the South Florida Area Office. Specific requirements appropriate in scope and magnitude will be drafted in compliance with the scope of work of the IDIQ, taking into account timing, urgency, funding sources, and other requirements unique to the customer. Because these task orders will occur at multiple discrete sites, this is a consolidated acquisition.

(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 socioeconomic set asides. The team takes into consideration the District�s area or responsibility, suitability of projects that match capabilities marketed by Small Business 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 MATOC pools, or occasionally negotiated with contractors awarded competitive SATOCs. Less complex, smaller scale DBB and O&M projects are reserved for 8(a) sole source awards.

(2) The District currently administers a suite of IDIQ MATOCs and SATOCs for facilities repair and construction performed by contractors from various socio-economic categories. In FY24, the District awarded of its program to various socio-economic groups, including Small Disadvantaged Businesses (SDB). The majority of these awards were made through the 8(a) Program. The District�s FY25 SB goal is a very performing repair and construction services at DoD facilities. While offerors on �C� contracts would be selected on more project specific past performance experience, a contractor has less certainty of being awarded multiple contracts. 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. 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 WOSB SATOC holder to end up being a poor performer, due diligence by the Government at the outset makes this risk highly unlikely. In the unlikely event that the contractor does not perform well, the Government can pursue another SATOC contract, or avail itself of other contract vehicles/approaches.

(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 advance notice, voluminous solicitations and proposal submissions, or source selection boards, as required for �C� contract procurements. As compared to awarding a stand-alone contract, it is estimated that placing task orders under a SATOC reduces acquisition time from 140 to 30 days on average for each project. This allows the district to respond quickly to requests and leaves the flexibility to administer the SRM program effectively for the mission requirements.

b. Historically, repair and construction requirements of the type contemplated at the South Florida Area Office, 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 advertise a project for 15 days, or to provide bidders 30 days to submit a proposal. A stand-alone �C� type procurement requires on average 140 days to award from project identification. Therefore, if the District is constrained to �C� contracts, any requirements that are presented in the third quarter would be at significant risk for award prior to year-end. Any requirement presented in the fourth quarter would be virtually impossible to accomplish using competitive procedures outside the IDIQ environment. By consolidating these requirements, both known and unknown, into a SATOC, the District will be able to execute projects in support of the South Florida Area Office well into the fourth quarter.

The consolidated SATOC will allow the District to issue RFPs and receive proposals quickly

Table 3 � Cost to Award an IDIQ Contract

ORGANIZATION LABOR TRAVEL

Contracting Cost Engineering Engineering Construction Project Management Subtotal Total Cost to Award IDIQ Contract

Table 4 � Cost to Award a SATOC Task Order

ORGANIZATION LABOR TRAVEL

Contracting Cost Engineering Engineering Construction Project Management

Total Cost to Award SATOC Task Order

Table 5 � Cost Analysis Summary

SATOC

Task Order Cost

Standalone �C� Contract Cost Acquisition Approach

Cost per Procurement

Anticipated Number of* Procurements*

Cost to award Basic IDIQ contract

Total Difference in Program costs to

Award SATOC Task Orders vice Stand-Alone �C� Contract

* Based on the current projections for FY25 and subsequent fiscal years. As demonstrated in Table 5, there is substantial increase in program costs to award a stand-alone �C� contract. A WOSB SATOC maximizes the opportunity to acquire high quality, professional services at competitive prices, while minimizing acquisition time, and performance and schedule risks. It also facilitates the

Government�s rapid response to emerging and unforeseen requirements that arrive at year end, which is impossible under individual, stand-alone �C� contracts.

Table 6 � Analysis Summary

Benefit Standalone �C� SATOC

Quality High High

Acquisition Cycle* 140 days 30 days or less

Terms and Conditions No Difference No Difference

Administrative Cost High Low

* Project Identification to Award

(4) Conclusion: Table 5 and Table 6 provides a summary of the analysis of the contracting alternatives to support the South Florida Area Office program. While stand-alone �C� contracts provide high quality output, it would increase the acquisition cycle per project by an average of 140 days with cumbersome administrative tasks which, in turn, would increase the cost of the acquisition. SATOCs decrease competition by allowing award to only one contractor, but offers the low acquisition time frame and cost with the high quality decreasing the risk of unsuccessful performance and mission failure. The estimated cost savings of consolidating contract requirements amounts to , of the proposed contract value and do not exceed the standard set forth in FAR 7.107-2(d)(1)(ii). Although cost savings do not amount to $9,400,000 in accordance with FAR 7.107-2(d)(1)(ii), a consolidated SATOC, as opposed to other procurement strategies, provides qualitative benefits including a significant increase in quality and acquisition cycle.

5. Bundling Analysis:

(a) Definition of Bundling. FAR 2.101 defines bundling as consolidating two or more requirements for supplies or services, previously provided or performed under separate smaller contracts, into a solicitation for a single contract that is likely to be unsuitable for award to a small business concern due to: (i) The diversity, size, or specialized nature of the elements of the performance specified; (ii) The aggregate dollar value of the anticipated award; (iii) The geographical dispersion of the contract performance sites: or (iv) Any combination of the factors described in paragraphs (i) through (iii) of this definition.

(b) Applicability of FAR Bundling Definition. This acquisition does not meet the definition of bundling since the Government will be procuring this requirement as a WOSB Set-Aside. The selected WOSB will be 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 general repair and construction 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 a WOSB SATOC with a responsive and responsible contractor to perform individual task orders as the need arises.

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

7. Summary: Though this WOSB Set-Aside 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 Military Installations covered by the South Florida Area Office. This approach also accrues to the benefit of the District�s aggressive small business goals. Stand alone �C� contracts were considered but were rejected as they either would result in significantly higher administrative costs and increased acquisition cycle time. Although cost savings do not amount to $9,400,000 in accordance with FAR 7.107-2(d)(1)(ii), 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 the South Florida Area Office, 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, the South Florida Area Office will be drastically impacted with mission readiness, which will negatively affect the ability of the Army to accomplish its mission on a state and national level. Therefore, the consolidated approach is critical to the success of not only the South Florida Area Office, but also the Mobile District. Additionally, it is significantly less burdensome for the District�s Contracting and Construction Divisions to administer one SATOC rather 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 a WOSB Set-Aside. 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 the South Florida Area Office, and the consolidated approach provide advantages that substantially exceed the benefits of an approach that provides a lesser degree of consolidation.

DETERMINATION AND FINDINGS

REQUEST FOR CONSOLIDATION

W9127824R0129

INDEFINITE DELIVERY INDEFINITE QUANTITY (IDIQ)

SINGLE AWARD TASK ORDER CONTRACT (SATOC)

FOR GENERAL REPAIR AND CONSTRUCTION AT

WITHIN THE BOUNDARIES OF THE SOUTH FLORIDA AREA OFFICE

Upon the basis of the findings above, 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.

Carl Wade Chief of Contracting Office, Contracting Division, Mobile District