B.04 Consolidation Determination IWW_Crossroads and Jupiter Inlet Redacted.pdf

CUI

DEPARTMENT OF ARMY

U.S. ARMY CORPS OF ENGINEERS, JACKSONVILLE DISTRICT

CONSOLIDATION OF CONTRACT REQUIREMENTS DETERMINATION

FOR MAINTENANCE DREDGING INTRACOASTAL WATERWAY JACKSONVILLE

TO MIAMI DREDGING, 10 FOOT PROJECT, VICINITY OF ST. LUCIE INLET, AND 10

FOOT PROJECT VICINITY OF JUPITER INLET, MARTIN AND PALM BEACH

COUNTIES, FLORIDA

(As prescribed by FAR 7.107-2 and UAI 5107.107-2)

RATIONALE

1. Consolidation may provide substantial benefits to the Government. However, because of the potential impact on small business participation, before conducting an acquisition that is a consolidation of requirements with an estimated total dollar value exceeding $2 million, a written determination shall be made that the consolidation is necessary and justified in accordance with 15 U.S.C. 657q, after ensuring that--

(a) Market research has been conducted;

(b) Any alternative contracting approaches that would involve a lesser degree of consolidation have been identified;

(c) The determination is coordinated with the agency's Office of Small Disadvantaged Business Utilization or the Office of Small Business Programs;

(d) Any negative impact by the acquisition strategy on contracting with small business concerns has been identified; and

(e) Steps are taken to include small business concerns in the acquisition strategy.

2. Introduction: The U.S. Army Corps of Engineers (USACE), Jacksonville District plans to solicit maintenance dredging in the Intracoastal Waterway (IWW) Crossroads and in the vicinity of Jupiter Inlet, located within Martin and Palm Beach Counties, Florida. The North American Industry Classification System (NAICS) code assigned to this requirement is 237990, Dredging and Surface Cleanup Activities. The current estimated value of this requirement is approximately XXXXXXXXXXXXX with an estimated period of performance of 200 days. This procurement wil be Total Small Business Set-Aside. The Jacksonville Distict has conducted market research that demonstrates consolidation of this procurement is both necessary and justified. FAR

2.101 defines consolidation as

(1) 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.

(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.

3. Description of the Procurement Action:

Requirements Being Consolidated: A design-bid-build construction contract is needed to enable the Jacksonville District to most efficiently manage the fulfillment of contract requirements. The consolidation of these two requirements, which have been provided to or performed for the Federal agency under two or more separate contracts for the IWW Crossroads and Vicinity of Jupiter Inlet. These separate requirements are physically connected to each other.

Procurement History: Both IWW Crossroads and IWW Vicininty of Jupiter Inlet have consistently been performed by small businesses under the dredging NAICS Code 237990.

Dredging requirements for IWW Crossroads were procured and shown in the table below.

Year Contractor Contract No. Cost 2003 ChibboCo Enterprise DACW17-03-C-0011 xxxxxx 2005 Lake Michigan Contractors W912EP-05-C-0034 xxxxxx 2009 A&E General Contractor W912EP-09-C-0051 xxxxxx 2020 Coastal Dredging Company W912EP-19-D-0040 xxxxxx

Similarly, dredging requirements for IWW Jupiter were procured and shown in the table below.

Year Contractor Contract No. Cost 2004 Chibbo Co. DACW17-03-C-0011 xxxxxx 2013 Southwind Construction Corp W912EP-11-D-0014 xxxxxx 2020 Coastal Dredging Company W912EP-19-D-0040 xxxxxx

4. Results of Market Research: To accurately assess potential opportunities for small business suitors, market research was performed to promote competition using the following sources:

A Sources Sought Notice (SSN) was posted to SAM.gov via Sources Sought W912EP25Z0033, from 8 May 2025 to 23 May 2025. Four firms responded to the Sources Sought ( 3 Small Businesses and 1 Large Business) and their capability statements were reviewed to determine if the firms were capable of completing the work. Two of the small businesses and the one large business was determined to be capable of performing the work. (See Evaluation shown below).

Name of Firm Size Evaluation of Capabilities Southwind Construction Small Business Capable Atlantic & Gulf Dredging Small Business Capable C&T Excavating, Inc Small Business Not Capable Weeks Marine, Inc. Large Business Capable

It should also be noted that the contractors were asked the following questions listed below :

1. Do you see any negative impact to competition the consolidation of these two projects into one solicitation?

2. What impediments, if any, will prevent your firm to submit a bid if these projects are consolidated in one solicitation?

The Government analyzed responses to see if there would be any negative impact on competition if these two requirements were consolidated.

Market research demonstrated that combining both requirements will have no impact on competition. Each contractor stated that they do not see any negative impact on competition if requirements are being consolidated and they will submit a bid. Due to market research it has been determined in the best interest of the Government to solicit this requirement as Total Small Business Set-Aside.

5. Alternative Contracting Approaches and Rationale for Rejection:

a. Stand-alone Design-Bid-Build Contracts: The Jacksonville District considered issuance of separate IFBs, which would result in multiple design-bid-build construction cotracts. While issuance of separate IFBs is viable, this alternative would have tremendous impact on the schedule. Separate acquisitions add at least 135 days to the acquisition schedule per each contract accomplished beyond the first contract. This alternative also duplicates the acquisition process with regards to the development of a separate set of plans and technical specifications, IGEs, and requisite certification reviews, resulting in a large increase in administrative costs. Furthermore, the amount of in-house labor and associated costs would significantly increase during each acquisition phase.

b. Multiple/Single Award Task Order Contracts: The Jacksonville District considered utilization of the South Atlantic Division’s Regional Dredging MATOC, which is frequently used for maintenance dredging requirements, but the Government is unable to utilize it due to MATOC expiration on 4/30/2024.

6. Consolidation Benefit Analysis:

(i) Quality. USACE has a pool of dredging contractors with decades of successful dredging, including dredging of the exact locations under this requirement.

Jacksonville’s field team and construction branch have a long history of successfully monitoring and ensuring these type of dredging projects meet USACE, federal, state, and other standards governing dredging projects. It is anticipated consolidation will not negatively impact the required dredging work for this project.

Coordination of all of this work under a single contractor will help prevent/avoid any possible conflicts with the transport and disposal of dredge material. Not only is consolidating dredging requirements more efficient in scheduling, this exact efficiency allows contractors on consolidated requirements to have the flexibility to manage scheduling resulting in considerable reductions in mobilization and demobilization costs.

(ii) Reduction in acquisition cycle times. Consolidation will allow for a reduction in acquisition cycle costs while meeting the needs of the customer. This reduction in the acquisition cycle provides substantial cost saving benefits (Quantified below). Much of the work requires award in a short timeframe and construction must be completed within a specific schedule in order for a mission benefit to be realized.

A significant reduction in the acquisition cycle can be achieved by consolidating these projects under a single contract. The reduction is derived by only having one procurement lead-time for the projects versus separate, staggered acquisition cycles for individual projects. As discussed below, there would be approximately 135 day reduction of the acquisition cycle for one of the projects that can be achieved by consolidating under a single contract.

If the projects were procured separately based on the multiple sites, the Jacksonville District would be required to conduct multiple separate acquisitions, which would require separate: plans and specifications IGE’s, BCOES reviews, sadvertisements, and contract awards. The reduced acquisition life cycle results in a significant time and cost savings.

Table 1 reflects award time required to award one design-bid-build contract.

Considering this process would have to be accomplished 2 more times if individual contracts for each site were used there is a considerable lead time savings should this project be consolidated as proposed. These days are based on standard procurement timelines developed by Contracting for FY25 procurements.

Table 1 –Time Required for Design-Bid-Build Contract

Timeline-IFB Design-Bid-Build Procurement Package Received 1 Day Market Research report / Sources Sought 30 Calendar Days Small Business coordination 7 Business Days Solicitation package preparation 7 Business Days Legal Review Solicitation 5 Business Days BOB Review Solicitation 5 Business Days Issue Pre-solicitation Notice 15 Calendar Days Issue Solicitation 30 Calendar Days Pre-Award Survey/Responsibility Determination 25 Business Days BOB Review Award Package 5 Business Days Legal Review – Award 5 Business Days Total Lead Time 135 Days

(iii) Cost Savings. IAW FAR 7.107-2(d)(1) “Benefits that are quantifiable in dollar amounts are substantial if individually, in combination, or in the aggregate the anticipated financial benefits are equivalent to:

(i) Ten percent of the estimated contract or order value (including options) if value is $94 million or

(ii) Five percent of the estimated contract or order value (including options) or $9.4 million, whichever greater, if the value exceeds $94 million.

To meet the requirement of 10% of the xxxxxx Million-dollar combined project the Government will need to show xxxxxx cost in savings.

A large portion of the anticipated cost savings lies with the reduced mobilization and demobilization costs by consolidating each of the discrete work sites into one contract.

The estimated costs for each of the separate projects are based upon historic prices and estimates of past contracts for each of the single requirements and past projects with similar magnitude and scope. The amount also accounts for interim mobilization and/or movement and set-up in the work area, as cited below. Table data summarizes the mobilization cost savings:

Description (A) IWW Jupiter

Standalone Contract

(B) IWW

Crossroads Standalone

Contract

(C)IWW

Crossroads Standalone

(D) Combined Contract

(E) Cost

Difference Total of

(A+B+C)-D

(F) Savings

Mob/Demob $xxxxxx $xxxxxx $xxxxxx $xxxxxxx Interim Mob $xxxxx Dredging & Assoc. Costs

$xxxxxx $xxxxxx $xxxxxx $xxxxx

Total $xxxxxx $xxxxxx $xxxxxxx $xxxxxxxx $xxxxxxx xxxxxx

Mobilization / Demobilization are by industry standard high cost lines for dredging projects. By providing the contractor the flexibility to develop their own schedule (To be approved by the government) the estimated costs for this line is considerably lower for a consolidated contract compared to individual contracts. The reasoning for the higher estimated costs for (A), (B), and (C) is due to these features of work potentially being awarded to different contractors thus removing the benefit of flexibility to schedule work under a consolidated contract.

In addition to savings on mobilization and demobilization, the result of consolidating these projects may result in lower unit pricing for material to be dredged at each project channel. Increased quantities historically lead to a lower unit price as fixed costs are spread out over an increased amount. It is difficult to calculate exactly how much savings this should provide however it’s known within the dredging industry that more cubic yards typically equate to a lower unit cost and higher efficiency. By increasing the quantity of material to be dredged the average unit prices could drop approximately $0.50 - $1 per cubic yard.

It should be noted that the administrative costs are recognizes a potential estimated pre-award savings of an additional $113,000 in labor for costs associated with repeating the BCOES review process, solicitation, bid analysis, and other requisite reviews required for procuring these requirements separately. Additional savings will be present in the post-award administration.

Approval of consolidation into a design-bid-build general construction contract will provide significant cost savings compared to individual procurements and drastically reduce risks related to performance, scheduling, and logistics. One consolidated contract affords the contractor maximum flexibility in managing their schedule. Said flexibility usually results in lower costs due the contractor having more control over mobilization and demobilization, which is a major cost associated with dredging contracts as it tends to range from 5-10%, or more, of the total contract cost.

Consolidation of this requirement is necessary and in the Government’s best interest and will result in the best value for the government.

7. Bundling: In accordance with FAR 2.101, “bundling” is defined 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 due to the diversity, size, or specialized nature of the elements of the performance specified;the aggregate dollar value of the anticipated award; the geographical dispersion of the contract performance sites; or any combination thereof. Bundling will not exist for this requirement because;

the consolidation of the requirements will still enable it to be suitable for award to a small business. Therefore, this acquisition does not constitute bundling.

Applicability of FAR Bundling Definition, this acquisition does not meet the definition of bundling since the projects that are combined were performed by small businesses and the consolidated projects will continue to be performed by small businesses. In other words, if two or more projects currently performed by small business are combined, the combined project must still be able to be completed by small businesses in order for the consolidation to be allowed. The results of market research supports the position that the approach for this acquisition does not have any impact on competition or on execution by small business concerns; therefore, the bundling principle is not applicable to this strategy.

8.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). 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.

Applicability of CICA Bundling Principle. Competition is not being restricted unnecessarily by this procurement being advertised; the consolidation of this action is necessary to provide the best value to the Government and the requirements being consolidated are no more than what is required. Substantial cost savings achieved through the reduction of duplicative efforts and operational efficiency, as discussed above in the Benefit Analysis paragraph, can be a reasonable basis for restricting competition where requirements are bundled. For this procurement, the quantifiable benefits of consolidation, as required by FAR 7.107-2, meets the requirement of substantial benefits that exceed 10% of the estimated contract value. Though it may be feasible to award multiple individual “C” type contracts, the savings and efficiencies that are anticipated to be achieved through this acquisition justify the use of a single consolidated “C” contract, which involves the least amount of consolidation necessary to execute the mission. This acquisition does not meet the definition of bundling since the requirements are suitable for small business concerns and procurement will be advertise as Total Small Business Set-Aside.

9. Considerations, Facts, Reasoning Supporting the Determination: All facts, considerations and rationale have been covered previously in the findings. This determination was coordinated with the Jacksonville District Small Business Office and DD Form 2579 has been signed by the Contracting Officer, Deputy for Small Business and the SBA Procurement Center Representative. All concur that consolidation of this requirement is both necessary and justified.

10. Summary: Consolidation of these dreging maintenance projects under a single contract will allow the Jacksonville District the maximum flexibility to respond in a timely, efficient, and cost-effective manner to our customers’ needs. This strategy postures the Jacksonville District with the most efficient contracting approach to meet mission needs while promoting competition and Small Business opportunities to the maximum extent practical. This decision is based on sound business judgment in view of the location and number of efforts to be executed and the consolidated approach advantages that substantially exceed the benefits of a lesser degree of consolidation.

DETERMINATION

Based on the foregoing rationale, I hereby determine, pursuant to the authority of FAR 7.107-2(b), 15 USC § 657q, AFARS 5107.107-2, and UAI 5107.107-2-100, that the consolidation of the requirements for Intracoastal Waterway (IWW) Crossroads and in the vicinity of Jupiter Inlet, located within Martin and Palm Beach Counties, Florida is both necessary and justified and will serve the best interests of the Government.

SIGNATURE:

Aldone R. Graham District Contracting Chief