B.04.21 CONSOLIDATION D&F RM 0-140_Redacted.pdf

DEPARTMENT OF THE ARMY

DETERMINATION AND FINDINGS

CONSOLIDATION MEMORANDUM

Fiscal Year 2019 Flood Damage Repair, Missouri River Navigation Channel Structures, Bank Stabilization and Navigation Program-River Mile (RM) 0-140 Infrastructure

Investment and Jobs Act Funding

The Federal Acquisition Regulation (FAR) 2.101 defines “Consolidation or consolidated requirement” as follows:

“Consolidation or consolidated requirement --

(1) Means a solicitation for a single contract, a multiple-award contract, a task order (TO), 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 (Services)

(ii)Requirements of the Federal agency for construction projects to be performed at two or more discrete sites. (Construction)

Consolidation of requirements with a total value exceeding $2 Million must be justified.

(2) “Separate contract” as used in this definition, means a contract that has been performed by any business, including small and other than small business concerns.”

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, FAR 2.101, 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(ii), USACE UAI 5107.107-2(b)(ii)), AFARS Appendix GG, and the USACE UDG Attachment 1 Approval Matrix. My review resulted in the following findings:

FINDINGS

1. Introduction: U.S. Army Corps of Engineers (USACE), Kansas City District (NWK) plans to solicit offers for a stand-alone C-type contract for Fiscal Year 2019 flood damage repair to the Missouri River Navigation channel between river miles (RM) 0-140 as part of the Bank Stabilization and Navigation Program (BSNP). Market research using NAICS code 237990-Other Heavy and Civil

Engineering Construction, has demonstrated that consolidation of this procurement is both necessary and justified.

2. Description of Procurement Action:

a. Project Description:

NWK has a need for construction services from contractors who can construct, modify, and/or repair stone dikes and revetments on the Missouri River in support of the BSNP, Missouri River Recovery Program (MRRP), and other miscellaneous Missouri River operations, maintenance, and repair projects from RM 0-140 due to damage caused by the 2019 Flood Event.

All work is typically to be performed by floating plant. Rock is typically placed or excavated by way of track-hoe from a work barge. Tonnage on each structure will range from 500 tons up to 30,000 tons with an average tonnage per structure of 2,500 tons.

Placement rates per foot will range from 3 tons per linear foot up to 40 tons per linear foot with an average placement rate per linear foot of 6 tons per foot.

b. Procurement History:

The damage being repaired under this requirement is unique due to extensive damage to structures that control the navigation channel of the Missouri River. This damage was done during the FY 19 Flooding and caused many navigation issues during FY 20,21 and 22. Work of this scale and urgency has not been completed before. Similar repairs on a smaller scale have been completed under small business MATOCs since approximately 2010. Those MATOCs typically have a 5-year period of performance with task orders done for various amounts for routine repairs or improvements to the navigation structures.

c. Requirements Being Consolidated:

This requirement addresses a variety of structures from multiple river miles. Table breaking down CLINs 0001-0004 is a synopsis of what the breakout will look like with current working estimates. The CLINS will cover the same reaches of the river, but each CLIN will have specific structures that are most in need of repair. The specific repairs will be identified by NWK personnel utilizing surveys and on-site measurements.

The base CLIN is the highest priority requirement, with each option decreasing in priority. The base CLIN has a unique workflow that will have the contractors do two passes over the same river miles. This was done to alleviate problems from previous contracts where the level of repair was affected by the water levels in the river. As the river waterlevels go up and down, some structures that will not be accessible due to low stages. In the past these structures were simply not repaired and thus were less effective at maintaining the navigation channel. This has been an ongoing problem and contributed to the increase in areas of concern for navigators. By allowing two passes over these reaches, the contractor can coordinate their access and repairs of hard-to-reach structures, as they monitor the projected river levels over the time they are working.

The workflow schedule is as follows: Once the contractor is prepared to mobilize, the contractor will notify NWK three weeks before beginning work on a specific 20-mile reach. During that three-week period, NWK personnel will stake out the structures in the specified reach that requires repair. The structures will be identified utilizing survey data and on-site measurements and observations. This cannot be done earlier as the changing flows of the river will damage some structures even while repairs are ongoing and possibly creating new priorities to perform repairs. Changing water levels could also damage structures previously repaired and would require new repairs to ensure the structure was performing correctly. The contractor will proceed with work at locations listed in items 1-7 of the below table titled “CLIN 0001-Standard Repairs”, moving down the river. Once items 1-7 have been completed, the contractor will notify NWK they are prepared to begin items 8-14. NWK personnel will survey the work done on items 1-7 and restake and reflag as needed to maintain the marking of the structures needing repair. The contractor will then repeat the process for the work listed in items 8-14. This two-pass method will ensure priority repairs are completed first and provide a robust structure system that will help keep the navigation channel open for the river. Work will be further detailed in supplemental bid schedules that break the work down into approximately 20 mile reaches with the number of structures identified in each reach.

e. Definition of Consolidation:

§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 construction projects to be performed at two or more discrete sites.

f. Applicability of Consolidation Definition:

This requirement meets the definition of consolidation as stated above because there will be construction performed at two or more discrete sites on the Missouri River.

There will be multiple structures within each twenty-mile range, and there will be 7 ranges between RM 0-140.

g. Rationale for Consolidation:

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. See Section 5 analysis below for alternate contracting approaches.

For this procurement, the quantifiable benefits do meet the threshold set forth in FAR 7.107-2(d). The expected benefits of the consolidated approach are critical to the agency’s mission success and the procurement strategy provides maximum practicable participation by small business. Consolidation is necessary to meet mission objectives due to the current conditions of the Missouri River navigation control structures, as the self-scouring design of the channel is not functioning correctly. There is an urgent need to complete this work as quickly as possible and without delay to restore as many structures as needed to ensure navigation can continue with minimal risk and impedances. The current condition of the structures led to widespread shoaling and disruption of the navigation industry and the cargo shipments going up and down the river. It is crucial that this work be completed in a coordinated manner to ensure flood damage is repaired as quickly as possible. It is anticipated that small businesses will have opportunities to participate either as prime contractors or subcontractors. This is assuming they have the ability to bond to this level of effort.

Consolidating this workload will also mitigate in-house administration. The large amount of work being funded by the Infrastructure and Investment Job Act (IIJA) will require a much greater effort to administer than NWK has dealt with in over 15 years. NWK does not have enough personnel for USACE oversight needed if all these projects were to be awarded as multiple stand-alone contracts and were active at the same time. If these requirements were to be spread out to alleviate the oversight problem, the amount of administrative actions (post-award documents, scheduling, RFIs, modifications, etc.) to coordinate with multiple contractors would be overwhelming and would affect the necessary period of performance for this requirement.

i. Extent of Consolidation:

The proposed contract action will result in the consolidation of at least 4 requirements that would likely have been stand-alone contracts or task orders. This is geo-regional consolidation as all work under this analysis is from RM 0-140. The large amount of damage that needs to be repaired quickly has led to the decision to consolidate these requirements. This consolidation may limit the ability of some small businesses to bid for this work but will not exclude them from being awarded as a prime contractor or as a sub-contractor.

3. Applicable Statutes/Regulations: 15 U.S.C. § 657q, FAR 2.101, FAR 7.107-2, AFARS 5107.107-2, and UAI 5107.170.

d. Impacts of Consolidation on Small Business: This acquisition is planned as an unrestricted procurement. Therefore, any business with this capability, and who meets the solicitation requirements, can submit a bid for this requirement.

(i) Quality. There are minimal advantages and disadvantages in terms of quality

6. Bundling Analysis:

a. Definition. 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. The damage repair being completed under this requirement is unique and the result of the extreme flooding experienced in FY 2019. Therefore, the work being done for these repairs has not been previously performed under separate smaller contracts. It is a unique situation that has created unprecedented impacts to the navigation channel.

c. The Competition in Contracting Act (CICA) Bundling Principle.

i. Definition: Competition in Contract Act (CICA) Bundling. 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. 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).

ii. Applicability of CICA Bundling Principle. The combination of requirements into a single contract does not restrict competition under the CICA bundling principle. All the tasks involved are in support of NWK and can be performed by firms classified under the same NAICS codes.

7. Considerations, facts, and reasoning supporting the determination:

All facts, considerations and rationale have been covered previously in the findings.

The DD2579 draft has been reviewed by the Contracting Officer, Deputy for Small Business, and SBA Procurement Center Representative (PCR). The PCR has agreed to sign the DD2579 once this consolidation memorandum was complete and approved.

All concur that consolidation of this requirement is both necessary and justified.

8. Summary:

Consolidation of this portion of the FY 19 Flood damage repair, under an unrestricted, single stand-alone contract is in the best interest of the government with regard to mission, time, and cost. The findings of the market research and the documentation provided support the conclusion that consolidation of requirement is both necessary and justified, based on sound business judgement.