W9127825RA006_Consolidation DF (Redacted).pdf

DEPARTMENT OF THE ARMY

U.S. ARMY CORPS OF ENGINEERS, MOBILE DISTRICT

DETERMINATION AND FINDINGS

REQUEST FOR CONSOLIDATION

W9127825RA006

INDEFINITE DELIVERY INDEFINTE QUANTITY (IDIQ) SINGLE AWARD TASK

ORDER CONTRACT (SATOC) FOR RENTAL OF CONSTRUCTION EQUIPMENT

WITH OPERATORS FOR DISPOSAL AREA MANAGEMENT, LEVEE

CONSTRUCTION AND MAINTENANCE, AND FEDERAL FLOOD CONTROL

MAINTENANCE, TENNESSEE-TOMBIGBEE WATERWAY IN MISSISSIPPI AND

ALABAMA

FAR 2.101 defines consolidation or consolidated requirement as a solicitation for a single contract, a multiple-award contract, a task order, or a delivery order to satisfy— (i) Two or more requirements of the Federal agency for supplies or services that have been provided to or performed for the Federal agency under two or more separate contracts, each of which was lower in cost than the total cost of the contract for which offers are solicited; or (ii) Requirements of the Federal agency for construction projects to be performed at two or more discrete sites. FAR 7.107-2 requires that consolidation of requirements with an estimated total dollar value exceeding $2 million shall be supported by a written determination that consolidation is necessary and justified in accordance with 15 U.S.C. § 657q.

I have reviewed this requirement and associated market research and determined in accordance with 15 U.S.C. § 657q and FAR 7.107-2 that consolidation is both necessary and justified. This approval is made in accordance with the approval thresholds set forth in Army Federal Acquisition Regulation Supplement (AFARS) 5107.107-2(b)(ii), “Consolidation.” My review resulted in the following findings:

FINDINGS

1. Introduction: The Mobile District plans to solicit offers and award an IDIQ SATOC for the rental of construction equipment with operators for disposal area maintenance, levee construction and maintenance, and Federal flood control maintenance on the Tennessee- Tombigbee Waterway (TTWW) system including Okatibbee Lake and Wildlife Mitigation Lands, in Mississippi and Alabama. While the primary requirements are disposal area management, there are supporting elements that may be required on a less frequent basis that are considered “other marine related activities” such as excavation work or localized dredging. This SATOC will meet project requirements for the TTWW including Okatibbee Lake and Wildlife Mitigation Lands under North American Industry Classification System (NAICS) code 237990-Other Heavy and Civil Engineering Construction. The total capacity under this SATOC will be $24,000,000.00. The Mobile District has conducted a market research analysis that demonstrates the consolidation of this procurement is both necessary and justified.

2. Description of Procurement Action:

a. Project Description:

(1) The Mobile District is tasked with maintaining area harbors, rivers, waterways, channels and bays within Mississippi and Alabama. CESAM has utilized civil works funded, multi-year IDIQ SATOCs for over 15 years for the rental of construction equipment to provide flexible and effective management of disposal sites and levees on an as needed basis. This action gives CESAM the needed flexibility to maintain these projects based on current priorities and available funding. Each project is assigned a Project Delivery Team (PDT) comprised of various organizational elements within the District, including technical (Engineering and Operations Divisions), Contracting, Office of Counsel, Office of Small Business Programs, as well as the end user and facilities’ engineering organizations.

(2) The purpose of this acquisition is to provide a contracting tool to support the

Mobile District’s annual need for the maintenance and management of various disposal areas, levees, and marine related activities at locations primarily on the TTWW including Okatibbee Lake and Wildlife Mitigation Lands. The District intends to consolidate several disposal area/levee maintenance projects into one solicitation to be awarded to one contractor. The procurement will be advertised as a Small Business Set-Aside procurement with a total capacity of $24,000,000.00. The projects which CESAM maintains are funded on an annual or biannual basis. Due to the need to sustain existing civil works projects, we do not anticipate current or future budget limitations to impact this program.

b. Acquisition Strategy/Procurement Summary: To meet the demanding requirements for maintaining and managing the various disposal areas, levees, and flood control projects at locations on the TTWW including Okatibbee Lake and Wildlife Mitigation Lands, the District intends to award an IDIQ SATOC contract to a small business firm. The ordering period will be for 60 months. Individual task orders will be negotiated with the contractor and will be based on pre-established annual rates. An IDIQ SATOC is the most effective manner to meet the above requirements for several reasons. This acquisition approach supports the utilization of Small Business concerns within the Mobile District. Additionally, the SATOC will efficiently facilitate the District’s management of the disposal area, levee maintenance requirements, and will position the District to successfully meet urgent and end of fiscal year requirements or respond to emergent situations. While the funding for dredging and disposal area maintenance is typically “no-year” money, the CESAM Operations Division is allotted a specific amount per fiscal year and nearly all those funds are expended. 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 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 the TTWW including Okatibbee Lake and Wildlife Mitigation Lands. By consolidating these requirements, the Mobile District will be able to efficiently coordinate and respond to the dynamic requirements of these upland disposal maintenance projects at a significant savings of cost and time. This also allows equipment rental companies to more effectively organize their work, lowers unit costs due to economy of scale, and more efficiently schedule their equipment for the most efficient regional approach to meet the needs of the Corps of Engineers upland disposal maintenance program.

d. Requirements Being Consolidated: CESAM intends to consolidate the maintenance of disposal areas, levees, and flood control projects on the TTWW, including Okatibbee Lake and Wildlife Mitigation Lands, projects into one solicitation for an IDIQ SATOC Rental of Construction Equipment contract. The work to be performed under this contract will be conducted at various locations on all 10 Lakes/Pools under the jurisdiction of the Tennessee Tombigbee Waterway, Okatibbee Lake, and Wildlife Mitigation Lands. The entire SATOC capacity is for $24,000,000.00 to perform the needed maintenance at these locations.

e. Procurement History: CESAM has procured these services through consolidated and non-consolidated means in the past; however, the data for non-consolidated contracts is not applicable because it is over two decades old and the costs involved would not be realistic to the current time. The two previous contracts for the same type of work were awarded to Small Business contractors. See Table 1 - Procurement History.

Table 1 – Procurement History

W91278-15-D-0063 Project Location Task Order Amount T.O. 0001 Sunflower Dredge Material Disposal $1.2M

T.O. 0002 TTWW, BWT, & AL RIVER $200K

T.O. 0003 Tenn-Tom Waterway $202K

T.O. 0004 Wildlife MGMT Access Road Repairs $130K T.O. 0005 Tenn-Tom Waterway $940K T.O. 0006 East Fork $204K

T.O. W9127818F0227 Tenn-Tom Waterway $1.0M T.O. W9127818F0303 East Fork and Mackey’s Creek $194K T.O. W9127819F0044 Tenn-Tom Waterway $825K T.O. W9127819F0232 East Fork and Mackey’s Creek $189K

T.O. W9127820F02185 East Fork $198K

TOTAL: $5.28M

W9127820D0076 Project Location Task Order Amount T.O. W9127821F0023 TTWW DA Maintenance $875K T.O. W9127821F0158 East Fork $251K T.O. W9127822F0066 Campground $500K

T.O. W9127822F0151 East Fork $241K

The scope of work for the previous contracts listed above were for rental of various construction equipment with operators to perform maintenance work on the disposal sites, levees, at the project sites as shown in the proposed procurement. Contract W91278-15-D-0063 was awarded with bid items for hourly rental rates for each piece of equipment that was included in the contract. Contract W9127820D0076 was awarded with a five year ordering period (no options).

The contractor was given the option to provide different rates for each year within the five-year contract; however, the rates proposed by the contractor remained the same for the entirety of the contract. Upon award of the contracts outlined above, individual task orders were issued for the specific work requirements, necessary equipment and estimated rental hours. These contracts enabled the Mobile District to successfully address and respond to the maintenance needs of the navigation projects and promptly fund the project sites as needed throughout the contract period.

The work tasks were scheduled within a given fiscal year based on available funds and critical needs precipitated by unknown/unplanned events. The awarded contractors were able to effectively respond to the task orders and specific requirements to accomplish the work.

The current contract, W9127820D0076, IDIQ Contract for Rental of Construction Equipment with Operators for Tennessee Tombigbee Waterway, Alabama and Mississippi, was issued in 2020 as a small business set-aside SATOC with a similar scope of work. This method was approved by the PDT and the Small Business Administration. The previous contract W91278-15- D-0063 was also advertised as a small business set-aside. Based on the procurement history provided above and results from the sources sought notice outlines in paragraph 4 below, the Mobile District considers it in the best interest of the Government to advertise this requirement as a small business set-aside.

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 qualitative or 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, and better terms or conditions. Benefits that are quantifiable are considered substantial if they meet the

T.O. W9127822F0168 Okatibbee $270K T.O. W9127822F0263 Pickensville $860K

T.O. W9127822F0302 Upland DA Maint TTWW $250K T.O. W9127823F0102 DA Maint AL $459K

T.O. W9127823F0181 Okatibbee $1.8M T.O. W9127823F0185 East Fork $250K T.O. W9127824F0036 TTWW DA Maint $1.68M T.O. W9127824F0132 East Fork $253K T.O. W9127824F0133 East Fork Mulching $1.0M T.O. W9127824F0199 Blue Buff $1.0M T.O. W9127825F0033 AB12 Haulout $3.04M

TOTAL: $12.73M

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 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)(i); however, the benefits of consolidation do meet the requirements of FAR 7.107-2(d)(2). See Section 5 analysis below for the benefits of this proposed consolidated acquisition.

The Mobile District’s decision to consolidate the requirements under this proposed solicitation is primarily based on the qualitative benefits including a significant increase in quality and a reduction in acquisition cycle times. Utilizing a single SATOC IDIQ will allow the Mobile District to obtain binding pricing on the required equipment rental services and will enable the district to engage the successful contractor in a timely manner to execute requirements for disposal area maintenance and other construction activities in Alabama and Mississippi. Consolidation allows the Government to realize greater savings by using a single contractor’s land construction equipment, which also reduces the cost of moving equipment unnecessarily in and out of these areas. If the contract administration costs are not consolidated, the overall price to perform the work will increase and the time required to complete the work will increase.

Consolidation of these disposal area maintenance activities under a single contract allows synchronization of operations by improving the coordination and collaboration required to efficiently schedule equipment, accommodate environmental challenges, respond to unforeseen emergencies, and perform routine maintenance activities in a timely and cost-effective manner.

3. Applicable Statutes/Regulations: 15 U.S.C. § 657q, FAR 7.107-2, and AFARS 5107.170.

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 District applied market knowledge obtained from experience within the Mobile District on prior similar acquisitions and engaged in collaborative discussions with the Small Business Administration (SBA) regarding this acquisition. The sources sought notice for solicitation W9127825RA006 was posted on 31 March 2025 and closed on 15 April 2025.

Based on this market research, a Small Business set-aside was recommended for this procurement. Thus, a determination was made that using a construction contractor under the small business set-aside program was appropriate and consistent with the controlling statute.

5. Alternate Contracting Approaches Considered and Rationale for Rejection: The Mobile District considered alternative contracting approaches including stand-alone contracts with lesser degrees of consolidation that were considered and rejected due to the significantly higher administration costs and scheduling impacts identified below. By consolidating these procurement requirements, the Mobile District will be able to increase efficiency in meeting its mission to maintain the disposal areas and levees as the need is identified. It is the District’s experience that the iterative process of negotiating and executing maintenance requirements with a single contractor ultimately generates thorough proposals and quality projects.

Additionally, because of the greater certainty of regular work, the SATOC contractor is able to stabilize relationships with bonding company(s) and subcontractors, thereby reducing risk and cost to the Government. Establishing the single SATOC will result in significant cost savings for the District over the life of the contract, as well as time savings, versus multiple SATOC contracts.

a. Alternative 1: Stand-Alone “C” Type Contracts: The District considered the award of multiple stand-alone “C” contracts to perform the work on the TTWW disposal areas.

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 “C” 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. As 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 procedures.

(2) Acquisition Cycle. Civil Works funds are not tied to a specific fiscal year appropriation is not a substantial factor in determining requirements; however, while the funding does not generally expire, if it is not generally expended, the following fiscal years may see a reduction in overall civil works funds available to the District. To this end, it is expedient that the District have a vehicle whereby funding is available within a short-term turn around for task order award. 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 expedient than a “C” contract scheme. Specifically, task orders under a SATOC do not require advance notice, voluminous solicitations and proposal submissions, in addition to the source selection boards, as required for “C” contract procurements. As compared to awarding a stand-alone “C” contract, it is estimated that placing task orders under a SATOC reduces acquisition time from 140 to 30 days on average for each project. This allows the district to respond quickly to requests and leaves the flexibility to administer the Civil Works program effectively for the district mission requirements.

(b) In addition to the quality benefits that result from the iterative process of negotiating and executing maintenance efforts with a single contractor, the greater certainty of regular work places the SATOC contractor in a stronger position to stabilize relationships with their bonding company(s) and subcontractors, thus reducing risk to the Government during execution. Contracts for dredging and disposal area maintenance have a unique advantage in that the proposed rates often remain constant through-out the life of the contract or increase every 12 months. The Government knows the exact cost of the level of effort and thus the negotiations are based upon level of effort and not a fluctuating cost for various labor rates.

Additionally, SATOC contracts have the unique advantage in that after receipt of proposals, the Government has the ability to virtually conduct continuous scope and cost negotiations to arrive at the best scope and cost for the work. In a formal acquisition process for “C” contracts, the ability to react quickly and as needed by mission requirements cannot be accomplished in the same expedited manner. Information flow is restricted to formal Requests for Information (RFI) with responses provided to all potential offerors. Answers to RFIs often times result in more RFIs and the process drags on. As a result of this rigid process for the advertisement of “C” contracts, it is much more time consuming than a SATOC task order advertisement.

(3) Terms and Conditions. Other than request for proposal (RFP) requirements and proposal submissions, there is essentially no difference between the contractual terms and conditions for similar construction type projects executed under a SATOC or a “C” contract.

However, in accordance with FAR 16.505(a)(10)(i), SATOC task orders, are not subject to Agency or Government Accountability Office (GAO) protests under $25M. Conversely, all “C” contracts, regardless of value, are subject to protest for any number of reasons. “C” contracts thus put procurement and award schedules at greater risk of delay than task orders under SATOCs.

(4) Time Benefits. The time period required to award a “C” contract is typically three months. Afterwards, a contractor may require approximately one month to mobilize to the project site after processing the contract award documents, and the issuance of the Notice to Proceed. As a result, roughly four months may be expended for a single “C” contract acquisition. With each additional “C” contract, this time requirement is magnified. In contrast, under the desired consolidated approach for this project, after the initial consolidated SATOC is awarded and the first assignment is underway, each subsequent assignment can be scheduled and issued by a task order to the contractor allowing the contractor to mobilize on an average of roughly two weeks. This approach greatly benefits the Government in timely response to unforeseen work, allows for adequate scheduling of regular and recurring work, and permits the contractor to manage their assets and manpower throughout the contract in an efficient manner.

(5) Administration Costs. The below charts represent the average administrative costs for the District to award a SATOC and 15 task orders versus awarding 15 stand-alone “C” contracts. The estimate of 15 task orders is based on the number of task orders that have been issued under the current contract, W9127820D0076. The applicable task order cost for SATOCs and “C” contracts are included.

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 Bundling Principle: This acquisition does not meet the definition of bundling, as it does not attempt to consolidate “two or more requirements for supplies or services, previously provided or performed under separate smaller contracts that are likely to be unsuitable for award to a small business concern”. The requirements being consolidated have all been previously advertised as small business set-asides for consolidated or non-consolidated contracts and performed by small businesses.

c. Definition of the Competition in Contracting Act (CICA) Bundling Principle.

This principle, as developed by the Government Accountability Office (GAO) case law, focuses on whether the combined requirement (new, old, or otherwise) restricts competition, and whether the agency is consolidating or bundling a new requirement unnecessarily. 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 but only to the extent necessary to satisfy the agency's needs. Bundled procurements combine separate requirements into one contract; thus, they have the potential to restrict competition in violation of CICA by excluding firms that can provide only a portion of the bundled requirement. However, substantial cost savings achieved through the reduction of duplicative efforts and operational efficiency can be a reasonable basis for restricting competition where requirements are bundled.

d. Applicability of CICA Bundling Principle. Although this action constitutes CICA bundling, 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 SATOC with a responsive and responsible contractor to perform individual task orders as the need arises.

7. Considerations, facts, and reasoning supporting the determination: All facts, considerations and rationale have been covered previously in the findings. The Small Business Coordination Record (DD Form 2579) will be coordinated with the Contracting Officer and Chief, Office of Small Business Programs once this document is finalized.

8. Summary: Though this competitive, small business 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 the TTWW, including Okatibbee Lake and Wildlife Mitigation Lands disposal area management and maintenance requirements. Stand-alone “C” contracts were analyzed as an alternative approach; however, as noted above, this would result in significantly higher costs and increased acquisition cycle time. FAR 7.107-2(d)(1)(i) stipulates that quantifiable benefits exceeding 10% are considered substantial, it is evident that consolidation is both necessary and justified. While the quantifiable benefits have not been met, the qualitative benefits outlined above 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 on the TTWW, Okatibbee Lake, and Wildlife Mitigation Lands.

Attachment 1

DEPARTMENT OF THE ARMY

U.S. ARMY CORPS OF ENGINEERS, MOBILE DISTRICT

DETERMINATION AND FINDINGS

REQUEST FOR CONSOLIDATION

W9127825RA006

INDEFINITE DELIVERY INDEFINTE QUANTITY (IDIQ) SINGLE AWARD TASK

ORDER CONTRACT (SATOC) FOR RENTAL OF CONSTRUCTION EQUIPMENT

WITH OPERATORS FOR DISPOSAL AREA MANAGEMENT, LEVEE

CONSTRUCTION AND MAINTENANCE, AND FEDERAL FLOOD CONTROL

MAINTENANCE, TENNESSEE TOMBIGBEE WATERWAY IN MISSISSIPPI AND

ALABAMA

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.

Date:

Carl Wade Chief of Contracting Office, Contracting Division

CESAM-CT