W9127826RA098 Consolidation DF Redacted.pdf

DEPARTMENT OF THE ARMY

U.S. ARMY CORPS OF ENGINEERS, MOBILE DISTRICT

DETERMINATION AND FINDINGS

REQUEST FOR CONSOLIDATION

W9127826RA098

INDEFINITE DELIVERY INDEFINITE QUANTITY (IDIQ)

SINGLE AWARD TASK ORDER CONTRACT (SATOC)

FOR GENERAL REPAIR AND CONSTRUCTION WITHIN THE FLORIDA AREA

OFFICE AREA OF RESPONSIBILITY (AOR)

Revolutionary Federal Acquisition Regulation Overhaul (RFO) 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. RFO 7.107-1(b)(1) requires a written determination for consolidation requirements above $2 million (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 RFO 7.107-1 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) and AFARS Appendix GG. 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 to Red Lake Frazier JV LLC, 6767 N Wickham Rd, Ste 304A, Melbourne, FL 32940. The SATOC will support repair and construction mission requirements under North American Industry Classification System (NAICS) code 236220 for Commercial and Institutional Building Construction. This contract will support the mission requirements of various Federal agencies within the Florida Area Office AOR. This procurement constitutes consolidation of requirements per 15 U.S.C. § 657q(a)(2)(B) because it involves construction at two or more discrete sites within the State of Florida. Mobile District's analysis and market research demonstrate the consolidation is both necessary and justified.

2. Description of Procurement Action:

a. Project Description:

(1) Mobile District performs studies, investigations, incidental design, repairs and construction within the Florida Area Office AOR. Each project is assigned a Project Delivery Team (PDT) comprising District elements: technical (Engineering and Construction Divisions), contracting, legal, project management (including the Deputy for Small Business), and the end user and facilities' engineering organizations. The District's contracting responsibilities include acquisition planning; procurement actions leading to contract award with associated documentation and approvals; and administration of 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 supporting Federal agencies within the Florida Area Office AORs.

This consolidated requirement also includes work assigned to the Mobile District within the Jacksonville District AOR. Work is generally Sustainment, Restoration, and Modernization (SRM) of real property facilities and their systems and components but may include new construction.

Project sizes range from with wide variance in complexity. This effort, with the facilities maintenance program, ensures compliance with Department of War (DoW) facilities standards. The enduring nature of this requirement means the necessity for the contract is not expected to be affected by current or future budget limitations.

b. Acquisition Strategy/Procurement Summary: To meet the repair and construction requirements of Federal agencies within the Florida Area Office’s AOR, Mobile District intends to award an IDIQ SATOC, Firm-Fixed-Price (FFP) construction contract in accordance with RFO

16.504. The Government anticipates recurring requirements but cannot predetermine the exact quantity or time period needed. The SATOC will be awarded with $35M in available capacity over a five-year ordering period. Individual task orders will be negotiated with the contractor.

Mobile District determined an 8(a) SATOC is the most effective vehicle for meeting the Florida

Area Office construction missions. This approach supports the Small Business Administration's (SBA) 8(a) Business Development Program for socio-economically disadvantaged concerns. The SATOC also facilitates the District's smaller repair and construction programs and positions the District to meet short-fused, end-of-fiscal-year requirements. Use of a SATOC is in the best interest of the Government with respect to timeliness, oversight, and administrative costs.

c. Applicability of Consolidation: As implemented in RFO 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 within the State of Florida.

d. Requirements Being Consolidated: This SATOC will provide full-service repair and construction of real property facilities, systems, and components, addressing both current known and anticipated future requirements from Federal agencies within the Florida Area Office. Task orders will be issued within the IDIQ scope of work and will reflect each customer's timing, 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 in dollar amounts are considered substantial when they meet the thresholds at RFO 7.107-2(c)(3). For this procurement, the benefits of the consolidated approach substantially exceed the alternatives considered, as documented in Section 5.

(2) Utilizing an 8(a) SATOC in accordance with RFO 16.504 to consolidate the requirements for repair and construction within the Florida Area Office 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, 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 RFO 16.504-2. The Contracting Officer may use an indefinite-quantity contract when the Government knows what kind of supplies and services required and a certain minimum amount needed, but does not know exactly how much will be needed or when during the effective period. The Contracting Officer should use an indefinite-quantity contract only when ongoing, repeated needs are anticipated. It is anticipated that the SATOC will be used to fulfill customer requirements within the Florida Area Office AOR, to include any tenant organizations.

(3) In accordance with RFO 7.107-2(e), when the benefits of consolidated requirements are not quantifiable as stated at RFO 7.107-2(c)(1), the consolidation must be determined to be necessary and justified based on the anticipated benefits of being critical to the agency’s mission success and that the procurement strategy provides for maximum practicable participation by small business. The work required under the proposed solicitation involves SRM and new construction at the Florida Area Office AOR. An IDIQ SATOC will provide a flexible and effective contract vehicle that can accommodate both the known and unknown repair and construction requirements of the Florida Area Office AOR. In accordance with RFO 19.108-7, proposed 8(a) requirements that do not exceed the competitive thresholds at RFO 19.108-7(a)(2) or meet the exceptions detailed at RFO 19.108-7(b) may be awarded on a non-competitive basis. The independent statute allows this procurement to be awarded on a sole source basis. Pursuant to the Small Business Act (15 U.S.C.

637(a)) and RFO 19.108, this requirement is authorized for a sole-source award to an 8(a) participant, exempting it from full and open competition. The acquisition strategy does not negatively impact contracting with small business concerns. Both the consolidated SATOC approach and the alternative of multiple stand-alone 8(a) sole source contracts direct the work to small business, satisfying the small business participation policy at 15 U.S.C. § 657q(b). Though it is feasible to fulfill the requirements by awarding multiple stand-alone 8(a) sole source "C" contracts, which could be awarded to multiple 8(a) contractors, the advantages of the SATOC support the intended approach.

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

4. Results of Market Research:

a. To support the District's determinations on where to place projects, market research regarding 8(a) sole source contractors is performed throughout the year. 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 at the dollar levels anticipated. To this end, the District reviews 8(a) contractor referrals from SBA district offices in Alabama, Tennessee, Mississippi, and Florida, as well as other SBA offices. Interested 8(a) firms are scheduled for marketing meetings with the District's Small and Disadvantaged Business Office Chief, who conducts interviews to assess the 8(a) company's bonding and technical capabilities and number of employees, and determines whether the 8(a) is a proper match for prospective projects. Companies possessing the requisite capabilities are scheduled for face-to-face marketing meetings with District technical personnel, who consider whether the contractor's experience demonstrates the capability and bonding capacity to perform multiple projects simultaneously. Red Lake Frazier JV, LLC was selected based on prior successful work history in Mobile District's AOR and customer satisfaction with previous and ongoing work performed within the customer's installation boundary. For the Florida Area Office, the following market research techniques were used to assess Red Lake Frazier’s capabilities:

(1) Individual marketing meetings held with Red Lake Frazier JV LLC in the last 18 months.

(2) Review and analysis of Red Lake Frazier JV LLC Capabilities and Surety Statements.

(3) Review and analysis of Red Lake Frazier JV LLC’s past performance portfolio for relevance to the projects anticipated under this SATOC.

(4) Communication with the SBA Business Development Specialist as to Red Lake Frazier JV LLC’s status in the 8(a) program.

(5) Review of Red Lake Frazier JV LLC’s company profile in the Small Business Search engine.

c. Following market research, it was determined that an acquisition approach to utilize Red Lake Frazier JV LLC under the 8(a) program was appropriate. The requirement was offered to and accepted by the SBA. In its acceptance letter, the SBA affirmed that the proposed procurement would have no adverse impact on small businesses. Red Lake Frazier JV LLC is fully capable of fulfilling all requirements that will be awarded under the SATOC.

5. Alternate Contracting Approaches Considered and Rationale for Rejection: Mobile District considered stand-alone 8(a) "C-type" contracts on a project-by-project basis. The District determined that a sole-source 8(a) SATOC was the most effective approach for satisfying the repair and construction requirements for Federal customers in Florida Area Office AOR. The intent of this analysis is to address alternative contracting approaches involving a lesser degree of consolidation, or no consolidation. See analysis below for the benefits of this proposed consolidated acquisition.

Consistent with RFO 7.107-2(d), the justification does not rely on the reduction of administrative or personnel costs alone.

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 within the Florida Area Office AOR. 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 those of the stand-alone alternative for the reasons outlined below.

(1) Quality. The ability to work directly with a single contractor through a SATOC provides significant advantages compared to awarding multiple 8(a) sole-source contracts to different contractors. The District's experience is that working with a single contractor on repair and construction efforts 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 described in paragraph 4, Market Research, achieves a comparable result for task orders under the proposed SATOC: a high-quality contractor suited to the requirements. Working with one contractor under the SATOC also generates a more thorough shared understanding of Government requirements and installation and facility procedures. While the potential exists for the SATOC contractor to perform poorly, due diligence by the Government at the outset makes this risk highly unlikely. In the unlikely event that the SATOC contractor does not perform well, the Government can quickly pursue another 8(a) SATOC or other contract vehicle.

(2) Acquisition Cycle. A complicating element of the Florida Area Office’s SRM program is the difficulty of estimating future-year annual funding levels. The program is subject to significant annual fluctuations in funding and to shifts in funding priorities driven by emerging DoW, using-agency, and installation-level issues. The District addresses this budgetary uncertainty through regular IDIQ acquisitions that build capacity for known requirements and for those that arrive on short notice.

(a) In addition to building capacity, task orders under a SATOC streamline the procurement process compared to a "C" contract approach. Task orders under a SATOC do not require offer and acceptance to the SBA or the voluminous solicitations and proposal submissions required for "C" contract procurements. Compared to awarding a stand-alone 8(a) contract, placing task orders under a SATOC reduces acquisition time from days on average for each project, as shown in the table below.

(b) Historically, repair and construction requirements of the type contemplated within the Florida Area Office AORs 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 necessitates procurement strategies that facilitate rapid pre-award processes and contract action. Use of an IDIQ contract under RFO Part 16 provides streamlined acquisition procedures that allow rapid execution of individual projects via task order. As opposed to stand-alone contracts, the intended SATOC will not impose a requirement

Terms and Conditions No Difference No Difference

Administrative Cost Lowest Highest

* Project Identification to Award

6. Bundling Analysis:

a. Definition of Bundling. RFO 2.101 defines bundling as a subset of consolidation that combines two or more requirements for supplies or services, previously provided or performed under separate smaller contracts, into a solicitation for a single contract, a multiple-award contract, or a task or delivery order that is likely to be unsuitable for award to a small business concern (even if it is suitable for award to a small business with a Small Business Teaming Arrangement) 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), (ii), and (iii) of this definition. Under RFO 2.101, "separate smaller contract" means a contract that has been performed by one or more small business concerns or that was suitable for award to one or more small business concerns.

b. Applicability of RFO Bundling Definition. This acquisition does not meet the definition of bundling since the Government will procure this requirement via a sole source procurement to an 8(a) small business concern. 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-290415, 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 repair, construction work, and incidental 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

DETERMINATION REQUEST FOR CONSOLIDATION

W9127826RA098

IDIQ SATOC FOR GENERAL REPAIRS AND CONSTRUCTION

WITHIN THE FLORIDA AREA OFFICE

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

Chief of Contracting Office, Contracting Division, Mobile District