Consolidation DF HH SATOC Memo for SAM.pdf

DEPARTMENT OF THE ARMY

U.S. ARMY CORPS OF ENGINEERS

SOUTHWESTERN DIVISION (SWD)

TULSA DISTRICT (SWT)

Determination and Findings Consolidation Memorandum

W912BV24R0003 Indefinite Delivery Contract (IDC) for Hydrologic and Hydraulic Engineering

Within US ARMY CORPS OF ENGINEERS SWD BOUNDARIES

29 November 2023

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) 5107.170-3, “Consolidation of Contract Requirements.” My review resulted in the following findings:

FINDINGS

Introduction: Headquarters, U.S. Army Corps of Engineers, Southwestern Division, Tulsa District, proposes to award a total small business set-aside Indefinite Delivery Contract (IDC) Single Award Task Order Contract (SATOC). This procurement constitutes consolidation of requirements per 15 U.S.C. § 657q(a)(2)(B) in that the geographic boundary will be within Southwest Division (SWD) with the primary intended usage within Tulsa District (SWT) area of responsibility. Contract capacity may be transferred to other districts within SWD. SWT plans a solicitation resulting in the award of one (1) IDC with a base ordering period of five (5) years.

Federal Government selection of Architect-Engineer (A-E) firms is governed by the Brooks Architect-Engineer Act (Public Law (PL) 92-582, as amended; 40 USC 1101 et seq), which declares it to be the policy of the Federal Government to publicly announce all requirements for architectural and engineering services on the basis of demonstrated competence and qualification for the type of professional services required and at fair and reasonable prices. In accordance with USACE Acquisition Instruction (UAI) 5136.601-3-100, professional A-E services acquisitions will be procured under the Brooks Act, the provisions outlined in FAR Subpart 36.6 and the procedures provided in Engineer Pamphlet (EP) 715-1-7 Architect-Engineer Contracting in USACE and Director’s Policy Memorandum dated Feb. 2020 (DPM 02-2020).

The IDC will be used to award task orders for A-E services under the North American Industry Classification System (NAICS) code 541330. IAW EP 715-1-7, paragraph 3- 10(c), there must be a sufficient number of firms recommended to ensure that at least two most highly qualified firms remain “in reserve” when negotiations commence on the final contract. SWT plans to select one Small Business awardee during the selection process with a total capacity of $5 Million.

1. Description of Procurement Action:

a. Project Description: The purpose of this acquisition is to replace a previous vehicle for Hydrologic and Hydraulic (H&H) engineering Water Control Manual (WCM) Updates. The requirements for H&H modeling and water control manual updates are expected to continue and a replacement IDC is necessary to meet mission needs.

b. Acquisition Strategy/Procurement Summary: To meet the demanding project requirements of its customers within SWD boundaries, the District intends to award Firm- Fixed-Price A-E Services contract in accordance with FAR Part 16.503(b)(1), as the Government anticipates recurring requirements but cannot predetermine with precision the exact quantity, nor exact time period needed. The action will be publicized in accordance with FAR 5.2. The SATOC will be awarded in an amount not to exceed $5M. The period of performance will be five (5) years. Individual task orders will be negotiated with the contractor. The SWT determined that a 100% small business set-aside SATOC is the most effective manner of meeting mission for several reasons. This acquisition approach supports the Small Business Administration’s (SBA) concerns.

Additionally, the SATOC will efficiently facilitate the Tulsa District’s mission to develop and/or update water control manuals 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.

SWT will manage all capacity acquired under this procurement. The Government will issue an initial task order to satisfy the minimum guaranteed requirement for the SATOC award with subsequent task orders also being funded by project funds. Award will be based upon a total small business set-aside solicitation using the Best Value Trade-Off Process.

Table 1.1 – Proposed SATOC Vehicle

No. of Contracts Awarded: One (1)

Set-Aside: Total Small Business

Minimum Guarantee: $2,000.00

Total Capacity: $5,000,000.00

c. Applicability of Consolidation: As stated above, Sec 1671 of the FY13 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 AE Services 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 projects, awarded on individual task orders, at two or more discrete sites within SWD Boundaries.

d. Requirements Being Consolidated: The planned SATOC will be the only one of its kind in SWT and will utilize the same Statement of Work (SOW) as the previously awarded SATOC as it is set to expire in April 2024 after being extended six months beyond its period of performance. SWT Hydrologic and Hydraulic section has primarily used this SATOC for Water Control Manual (WCM) Updates within SWT boundaries.

Official Guidance recommends updating WCMs every two years. SWT anticipates 15 task orders over the course of the five-year period. A SATOC with $5 million in capacity will cover the projected requirements and allow for contingencies, inflation, etc.

The table below shows WCMs within SWT needing updated, in accordance with official guidance, over the period of performance of this SATOC.

Table 1.2 – Anticipated Water Control Manual Needs

Project Last Update Age Meredith (BOR) 1965 58 years old McGee Creek (BOR) 1989 34 years old Hudson (Markham-Ferry GRDA) 1992 31 years old Pensacola (GRDA) 1992 31 years old Tom Steed (BOR) 1993 30 years old Thunderbird (BOR) 1993 30 years old Altus (BOR) 1993 30 years old

Because the work is able to be completed by small businesses, the replacement vehicle will not include large business.

f. Rationale for Consolidation:

(1) Consolidation is necessary to meet the Hydrology and Hydraulic mission objectives by increasing efficiency, streamlining processes, decreasing costs, and providing faster response times while delivering quality performance.

(2) 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.

2. Applicable Statutes/Regulations: 15 U.S.C. § 657q, Consolidation of Contract Requirement, FAR 2.101, Definitions, FAR 7.107, Additional Requirements for Acquisitions Involving Consolidation, Bundling, or Substantial Bundling, AFARS 5107.107-2, Consolidation, and UAI 5107.107, Consolidation of Contract Requirements.

3. Results of Market Research:

a. A variety of market research methods were used to determine the number and capability of firms interested in competing for these contracts. Market research techniques included a Sources Sought Synopsis, an analysis of regional/national contracts via the Federal Procurement Data System (FPDS), and searches within the Small Business Administration Dynamic Small Business Search (DSBS) Engine.

(1) Sources Sought: The Sources Sought posted on 21 August 2023 received seven responses, four of which were small businesses.

(2) FPDS Search: The FPDS Search revealed 142 actions for Department of

Defense, with contracts involving the following Sources Sought respondents: 35 actions for West Consultants (a firm on the existing SATOC) and 9 actions for AECOM, as well as 4 actions for Halff Associates, a large business firm on the existing SATOC.

(3) DSBS Search: When searching under NAICS 541330, Engineering Services, with keyword “hydrologic”, 54 small businesses were identified across the United States.

b. Market research indicates small businesses in the USACE-SWD region can perform the consolidated work with high confidence adequate small businesses exist for this requirement, and it was determined that a total small business set aside acquisition approach is appropriate. This determination is documented on the DD 2579.

4. Alternate Contracting Approaches Considered and Rationale for Rejection: In coming to the conclusion that a sole-source small business SATOC was the best solution for satisfying the upcoming H&H requirements within SWD Boundaries, the District also considered MATOC and stand-alone “C-type” contracts. The intent of this analysis was to address all alternative contracting approaches that would involve a lesser degree of consolidation, or no consolidation.

a. Alternative 1: Multiple Award Task Order Contract (MATOC): The District determined that awarding a MATOC tool for the Engineering Services requirements within SWD Boundaries would not provide a lesser degree of consolidation, as all projected requirements would still be consolidated under the MATOC. This alternative results in one MATOC. Each task order will be competed amongst the firms included in the awarded MATOC pool.

Quality: The same pool of contractors may receive multiple task orders which will increase knowledge of USACE procedures and reduce quality errors over time.

Acquisition Cycle: According to the SWD PALT model, the average time to put a MATOC in place is 270 calendar days. Each MATOC task order takes 60 calendar days to award. Assuming the first task order is awarded with the base MATOC at 270 calendar days and the remaining 15 task orders take 60 calendar days each, the total amount of time associated with this alternative is 1,170 days.

Cost: For estimating the costs for an individual contract, the following assumptions were used:

A total of 15 task orders would be executed. The first task order would be executed with the base MATOC

The “CECT-SWD” Consolidated Rate Card” updated to FY22 values was used as a basis for Contracting Division costs, the baseline for cost comparison. The total amount of cost savings, including the benefits of a Single Award IDC (Alternative 3) when compared to individual AE Contracts (Alternative 1) is or 40.7% of the $5M contract. Cost savings for Alternative 1 compared to Alternative 2 also exceed the 10% threshold. However, Alternative 3 is the most cost effective and most desirable for execution efficiency as outlined in the sections above. Alternative 3, a single IDC, is the recommended alternative and the quantifiable benefits of consolidation for this solicitation exceed the 10% threshold set forth in FAR 7.107-2(d)(1)(i).

7. Bundling: 15 U.S.C. 631(j) & 644(e) and FAR 7.107-3 requires a determination as to whether bundling is applicable to the procurement, any implications, and a bundling determination based on the definition.

a. Definition of Bundling (FAR 2.101)

(1) 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 (1), (2), and ( 3 ) of this definition.

(2) “Separate smaller contract” as used in this definition, 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.

(3) This definition does not apply to a contract that will be awarded and performed entirely outside of the United States.

b. Competition in Contracting Act (CICA): The CICA Bundling 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. To justify CICA Bundling the agency must show a reasonable basis for why the bundling is necessary to meet the agency need. The 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.

This proposed procurement provides opportunities for small businesses and does not restrict competition when compared to historical obligations for similar requirements.

Cost savings through the reduction of duplicative efforts and operational efficiency is the basis for awarding an IDC vice individual contracts. Additionally, savings achieved through the reduction of duplicative efforts and operational efficiency can be a reasonable basis for restricting competition where requirements are bundled. As this procurement does not meet the definition of bundling as defined in FAR 2.101, it also does not qualify as bundling per the CICA Bundling Principle.

8. Considerations, facts, and reasoning supporting the determination: All facts, considerations and rationale have been covered previously in the findings. The DD2579 has been signed by the Contracting Officer, Deputy for Small Business and SBA Procurement Center Representative. All concur that consolidation of this requirement is both necessary and justified.

9. Summary: The quantifiable benefits of consolidation in the form of a SATOC is 40.7% of the estimated contract value. It exceeds the substantial benefit threshold of 10% IAW FAR 7.107-2(d)(1)(i).

Additionally, utilizing a SATOC to consolidate H&H requirements is critical to the agency’s mission success. As shown in this document, a SATOC provides the most time and cost efficient contracting tool to award timely task orders for critical upgrades to Water Control Manuals which provides for protection of life, property, and economic assets in the region IAW FAR 7.107-(2)(e)(1)(ii). Therefore, consolidation is necessary and justified.

Within US ARMY CORPS OF ENGINEERS SWD BOUNDARIES

29 November 2023

Signatures indicate concurrence or approval of the contents of this Consolidation Memo, including minor changes resulting from subsequent reviews.

Prepared by:

Contract Specialist

Reviewed by:

Contracting Officer

Business Oversight Branch

Deputy for Small Business Programs

Submitted: November 2023

Office of Counsel Coordination

Office of Counsel

Submitted: November 2023

Upon the basis of the findings above, I hereby determine, pursuant to the authority of 15 USC 657q, the Federal Acquisition Regulation 2.101 and 7.107-2, the Defense Federal Acquisition Regulation Supplement 207.107, and the Army Federal Acquisition Regulation Supplement 5107.1-7.2 “Consolidation of Contract Requirements,” that the proposed consolidation of the requirements for a SATOC is both necessary and justified; and I certify that small business concerns have been taken into consideration in accordance with 15 USC 657q(c)(1)(E).

District Chief of Contracting