B.04 - DF Consolidation (redacted) - W912HN23R4002_Redacted.pdf

FOR OFFICIAL USE ONLY

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

DEPARTMENT OF THE ARMY

U.S. ARMY CORPS OF ENGINEERS, SAVANNAH DISTRICT

DETERMINATION AND FINDINGS FOR CONSOLIDATION

W912HN-23-R-4002

100% Total Small Business Set-Aside General and Design-Build Construction Small Project Multiple Award Task Order Contract (MATOC), Federal Acquisition Regulation (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 that consolidation, in accordance with 15 U.S.C. § 657q, (FAR) 7.107-2, 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, Consolidation.

My review resulted in the following:

FINDINGS

1. Introduction: The U.S. Army Corps of Engineers, Savannah District (SAS)plans to solicit offers for General and Design-Build Construction, Indefinite- Delivery, Indefinite - Quantity (IDIQ), Multiple Award Task Order Contract (MATOC) within the SAS Area of Responsibility (AOR) to provide rapid response for vertical and horizontal construction, rehabilitation, maintenance or repair and incidental work to include, site work, mechanical systems, plumbing, utility systems, structural, electrical, HVAC, instrumentation, security and safety areas of Government Facilities. This contract is being established primarily to support Sustainment, Restoration and Modernization (SRM) program for the Savannah District. The pool of contracts will include a single capacity not- to-exceed $99M. This procurement constitutes consolidation of requirements per 15 U.S.C. § 657q(a)(2)(B) and FAR 2.101 in that it involves construction at two (2) or more discrete sites. SAS is proposing the least amount of consolidation possible to satisfy the mission. The consolidation is proposed to aid SAS’s SRM requirements and will provide the maximum efficiency for the districts to achieve its mission and will have minimal impacts to small businesses.

CONSOLIDATION OF CONTRACT REQUIREMENTS DETERMINATION

FOR OFFICIAL USE ONLY

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

The anticipated construction requirements will be predominantly under North American Industry Classification System (NAICS) code 236220 Commercial and Institutional Building Construction, although the appropriate NAICS codes will be determined on a task order basis. Awards under the SAS umbrella contract should be made to a target of eight (8) contractors. The contract will have a five (5) years base with no option periods.

This Determination and Findings (D&F) is submitted to justify the consolidation of requirements for DB\DBB construction work under an approved Acquisition Plan to establish and delineate management procedures for the acquisition of Small Business MATOC for. SAS has conducted sufficient analysis and market research to demonstrate that consolidation is both necessary and justified.

2. Description of Procurement:

A. Project Description.

(1) The military mission in this region supports the Army and other Department of

Defense (DoD) and Federal Agencies located on DOD installations or in support of defense operations. The purpose of this acquisition is to establish a highly responsive Firm Fixed Price General and Design Build Construction, Indefinite- Delivery, Indefinite-Quantity (IDIQ), Multiple Award Task Order Contract (MATOC) toll support SAS’s requirements in the AOR.

(2) SAS’s mission involves major military construction and repair at DoD installations within this region. The MATOC will not have a nation-wide scope.

SAS mission is to deliver solutions and manage resources supporting regional requirements through an expert team of multidisciplinary professionals utilizing best engineering practices and strategic partnerships to reduce disaster risk, strengthen the economy and support national security. In order to effectively execute the mission requirements, having existing MATOCs in place plays an essential role due to having qualified contractors with proven past performance, technical knowledge, and capacity to accomplish each project on a task order by task order basis, as well as minimizing the procurement lead time of 90 calendar days or less from receiving the procurement package to task order award.

B. Acquisition Plan/Procurement Summary:

(1) To meet the demanding repair and construction project requirements, SAS intends to award to a target of eight (8) Small Business Firm-Fixed Price IDIQ General and Design-Build Construction MATOC from this solicitation for construction in accordance with FAR 16.504(b), as the Government anticipates recurring requirements but cannot predetermine with precision the exact quantity, funding level, or time-period of individual requirements. It is anticipated that a General and Design Build Construction MATOC will be awarded with a total capacity of $99M. In accordance with AFARS 5117.9004-

FOR OFFICIAL USE ONLY

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

2(c), the guaranteed minimum for the basic contract is a total of $2,500 in construction services. The period of performance for the MATOC pool will be a five (5) year ordering period with no option periods. During the acquisition phase, the district will identify a seed project for phase II of the source selection process that is representative of the work that has been accomplished within the region. Firm Fixed-Price task orders will be competed among the contractors within the MATOC. For each task order, SAS will consider the specifics of each project and select appropriate evaluation factors. This procurement approach is necessary to achieve timely acquisition support for SAS’s SRM program.

(2) Competition will be restricted to small business concerns. Given the volume of task orders anticipated under the SRM program, it is logical to assume that each awardee will be performing multiple task orders simultaneously, and in some cases, at multiple locations with a geographic area.

(3) To account for the fact that SRM projects are sometimes not received or approved for design/advertising in sufficient time to allow for full design followed by a stand-alone procurement action, this MATOC will include the capability to issue task orders for design-build construction projects. The design-build approach allows for a shorter acquisition time than would be possible if a project must be fully designed and ensures that the contractor completes a design that meets the requirements. The Two-Phase Design- Build Selection Procedures authorized at FAR 36.301, will be used to select contractors to be awarded a contract as part of the MATOC. The solicitation for award of this MATOC will, at a minimum, include Past Performance, a Design Element, Small Business Participation, and Price as criteria for evaluation. The MATOC pool will include qualified firms up to the maximum number specified in the Request for Proposals. A seed task order prices and binding rates to include Home Office Overhead (HOOH) for the Base period will be used to determine fair and reasonable pricing and in making the best value decision. A seed task order will be awarded to the successful offeror whose proposal represents the best overall value to the Government for the work in the task order and as defined in the solicitation. All other successful offerors will be awarded a contract for the minimum guarantee.

C. Applicability of Consolidation:

Section 1671 of the FY13 National Defense Authorization Act (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 –

FOR OFFICIAL USE ONLY

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

Corps of Engineers (SAD) area of responsibility (AOR). The contract vehicle proposed in the FY 23 Acquisition Plan provides for the establishment of this MATOC in support of the SRM program throughout the SAS AOR. SAS will solicit and award using a best value trade of process.

F. Rationale for Consolidation.

(1) 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 expected benefits of the consolidation approach is critical to the agency’s mission success and the procurement strategy provides for maximum practicable participation by small business. Due to unforeseen acquisitions, as well as the number of new procurements and modifications each FY, new MATOCs are needed to continue to meet the mission requirements and fulfill customer needs.

(2) Use of an IDIQ contract is appropriate IAW FAR 16.501-2(a), when exact times and/or exact quantities of future deliveries are not known at the time of award.

FAR 16.504(b) indicates that the Contracting Officer may use an indefinite-quantity contract when the Government cannot predetermine, above a specified minimum, the precise quantities of supplies and services that the Government will require during the contract period. It is inadvisable for the Government to commit itself for more than a minimum quantity. The Contracting Officer should use an indefinite quantity only when a recurring need is anticipated. Within SAS’s Area of Responsibility (AOR), it is anticipated that the MATOCs will be used to fulfil SRM requirements of military installations and other customers.

(3) FAR 16.504(c) indicates that the contracting officer must, to the maximum extent practicable, give preference to making multiple awards of indefinite-quantity contracts under a single solicitation for the same or similar supplies or services to two or more sources. The MATOC for the geographic area of the Savannah District was planned based on factors that include: the successful use in the past of geographic procurement vehicles, current market research establishing sufficient competition, historic project values, and providing opportunities for small business participation.

FOR OFFICIAL USE ONLY

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

(4) The expected benefits of consolidation through this procurement vehicle do not meet the threshold for substantial quantifiable benefits as defined by FAR 17.107-2(d). However, FAR 7.107-2(e) allows approval of consolidation when the quantifiable benefits do not meet the thresholds. There are benefits resulting from consolidation that are critical to SAS’ mission success for the SRM program. Utilizing a MATOC is necessary to meet SAS’ mission objectives. It provides a contracting vehicle that minimizes acquisition planning and contract execution costs, shortens contracting lead time, and assures operational continuity. The consolidation demonstrates quantifiable savings in the form of reduced administrative costs, and nonquantifiable benefits in the form of improved cycle times, and increased efficiency based on the contractor’s familiarity with SAS’s mission. This consolidation of construction services is critical to the agency's mission success by providing the right balance of qualified contractors and price competition at the best value for the American taxpayer.

(5) SRM workload may be considerably higher in any given fiscal year than anticipated. Most projects identified by installations for execution under the SRM program are submitted late in the third quarter and into the fourth quarter of the fiscal year, and many are subject to the availability of funds. More than 75% of SRM funded projects are negotiated and awarded in the fourth quarter of the fiscal year. Because the SRM funds are available for one year, SAS must have tools that allow for rapid scoping, pricing, negotiation and award. This procurement vehicle will fulfill the need for such a tool when the SRM project is larger and more complex than a typical project.

(6) A significant benefit of the IDIQ approach is that task orders need not be synopsized for a minimum of 15 days in accordance with FAR Part 5. In addition, if there is an urgent need, the Government may solicit for less than 30 days as long as the Government anticipates receiving more than 1 offer. This benefit contributes to an overall reduction in the Procurement Acquisition Lead Time (PALT) for projects. Steps are taken to ensure that the reduced time period does not adversely affect offerors. Further, procurement history on such acquisitions shows that more than two responses are usually received. The MATOC approach allows us to communicate upcoming requirements to a discrete pool of contractors simultaneously, before a project is advertised.

Acquisition streamlining techniques allow us to better communicate, update, and revise proposed requirements with the MATOC contractors. The reduced PALTs and advanced notification to contractors of upcoming requirements enhances the ability to execute a construction mission in an efficient manner. It is estimated that this contracting mechanism will save as much as 130 days in the procurement cycle for each project when compared to stand-alone contracts.

Another benefit of the MATOC is it provides versatility and the ability to issued various Task Orders for multiple projects supporting SRM program as well as other USACE customer programs simultaneously. This type of contract will best

FOR OFFICIAL USE ONLY

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

support the broad scope of work that will be executed during the contract period of performance.

(7) Consolidation of projects gives contractors an opportunity to execute projects more efficiently, which in turn enhances the Government’s ability to complete its mission successfully. Combining multiple projects allows for greater contractor efficiency with regards to economies of scale, because contractors can spread their fixed costs over a greater quantity of construction material and equipment when projects are combined.

(8) The SAS Contracting workforce faces a challenge to advertise, evaluate, award and manage the number of individual contract actions necessary to meet the needs of its customers, particularly when most of the requirements are received late in the fiscal year. While the manpower and time required to evaluate and award a MATOC is significant, once in place this tool provides a pool of highly qualified contractors and a streamlined process for advertising, evaluating and awarding contracts thereby making better use of in-house resources, and minimizing costs of competing for the contractors.

(9) All small business firms will be invited to compete and will receive fair consideration for a contract. Given the volume of task orders anticipated under the SRM program, it is logical to assume that each awardee will be performing multiple task orders simultaneously, and in some cases, at multiple locations within a geographic area. Therefore, subcontractors will play a major role in executing contracts. Small businesses will have opportunities to compete for subcontracts. In addition, business offerors will be required to submit an approved small business subcontracting plan prior to award showing a commitment to using small businesses to perform requirements. The impact to small business has been considered to the maximum extent practicable (FAR 7.107-2(e)(ii)).

(10) The primary benefits to the Government of this approach are: (1) shorter acquisition lead time which allows for the efficient and effective processing of actions to award when received by the Districts too late in the fiscal year to allow for a full and open competitive procedure; (2) reduced acquisition costs when compared to the alternative of issuing individual solicitations for each requirement; (3) efficient use of manpower where the available workforce could not possibly conduct the number of individual solicitations managed under these programs; (4) improved quality and cost effectiveness of construction since contractors will be able to establish long term relationships with subcontractors and installation users. These benefits are substantial and justify the consolidation of requirements.

3. Applicable Statutes/Regulations: 15 U.S.C. § 657q, FAR 7.107-2, and AFARS 5107.

107-2

FOR OFFICIAL USE ONLY

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

4. Results of Market Research:

Market research was performed on 12 December 2022 through a search of System Award Management (SAM) utilizing NAICS Code 236220 with an active registration to determine the magnitude of potential small business that are registered, which resulted in 451 Small business. A comparative search using the SBA Dynamic search tool was conducted to further understand potential small business magnitude.

Initially, utilizing only the NAICS code 236220, within the states of Georgia, North Carolina, and South Carolina, and General Nature of Business (Construction) to narrow the search to entities, geographically located within the region and whose nature of business is in line with the requirements of the Government, see Table1 under Number of Firms column for results. Then to further understand the market place an additional criterion was added to the search values to identify the bonding capability of entities within this region utilizing $10M per contract for bonding capability, Bonding $10M per Contract column for results, see Table 2. The results demonstrate the socio-economic entities within our area and utilize approaches such as this to impact locally from both an economic and employment standpoint directly.

Table 1

Table 2

The Small Business Administration, Small Business Dynamic Search, query of NAICS 236220 showed a total of 353 Small Businesses with an $100M aggregate and $10M single bonding capacity per contract, which is the minimum ordering limitation for this MATOC requirement. These firms would have the bonding capacity to perform required work under this MATOC, however, to ensure we are able to select 8 to 10 MATOC holders, the Government will seek approval to move twelve (12) of the most highly qualified offers to advance to Phase Two.

Economic Group Number of Firms Small Disadvantage Business (SDB) 2899 Certified 8(a) & Certified 8(a) JV 440 Historically Underutilized Business Zone (HUBZone) 313 Women-Owned (WOSB) 1072 Veteran Owned (VOSB) 1125 Service-Disabled Veteran Owned (SDVSB) 866

Economic Group Number of Firms Small Disadvantage Business (SDB) 8 Certified 8(a) & Certified 8(a) JV 140 Historically Underutilized Business Zone (HUBZone) 159 Women-Owned (WOSB) 438 Veteran Owned (VOSB) 427 Service-Disabled Veteran Owned (SDVSB) 336

FOR OFFICIAL USE ONLY

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

With the current and projected volume, size and complexity of projects anticipated for the current and future Fiscal Years, current market research indicates there is a sufficient number of small businesses capable of competing for this MATOC. A target of eight (8) contracts may be awarded as a result of this procurement.

5. Alternative Contracting Approaches and Rationale for Rejection: The following procurement approaches were considered: Stand-Alone Contracts and Single Award Task Order Contracts (SATOC); however, these were determined not to be the most beneficial. The discussion below explores each approach with the intent of identifying the solution which will involve the least possible level of consolidation while ensuring successful mission execution.

Alternative 1, Stand-Alone Contracts: This alternative would result in no consolidation of project requirements. The districts make every effort to conduct stand-alone procurements for MILCON/Large SRM projects. However, the volatility of the number of requirements, uncertainty of funding, uncertainty of when projects will be received, and compressed schedules for award and obligation of funds all limit the effectiveness of this approach. Many times, SAS receives additional MILCON/Large SRM funded projects for execution from existing customers and projects funded by other agencies (e.g.VA, DLA). If multiple large projects are advertised simultaneously and are not fully designed, a Design-Build procurement method must be used. This results in a need to stagger source selection boards to accommodate the limits on personnel available for the boards, thereby compressing the process for some procurements by moving it later in the fiscal year.

The nature of the SRM program likewise does not lend itself to an acquisition approach which requires the advertising, negotiation, and award of individual actions as they are received. The large number of actions each year (over 200) submitted for execution by installations, primarily in the third and fourth quarters of the fiscal year, the unpredictability of funding for the actions submitted and prepared for award, the one-year availability of funds and the limited available workforce within the districts, demands a plan that allows for the placement of vehicles that are flexible, providing for rapid response and changing needs. Typically, installations do not identify or develop project scopes until late third quarter and early fourth quarter of the fiscal year. Historically the number of SRM funded projects submitted and awarded under the program each year averages .

. Notably, in excess of 75% of SRM funded projects are negotiated and awarded in the fourth quarter of the fiscal year. Customer requests for projects late in the fiscal year significantly limits the districts’ ability to process and execute the volume of actions under any vehicles other than MATOCs.

(1). Quality. Establishing a MATOC pool of experienced contractors to service the MILCON/Large SRM programs assures a higher degree of consistency in the quality of

FOR OFFICIAL USE ONLY

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

performance. MATOC pool contractors will be selected based on their experience performing repair and construction services on military facilities. Over the course of the ordering period of their IDIQ contracts, MATOC contractors will gain further experience and understanding of the requirements of the programs and projects through the repetitive process of responding to Requests for Proposals (RFPs) and executing projects. While offerors on “C” contracts would be selected on similar past performance, a contractor has less certainty of being awarded multiple contracts and does not gain a similar quantum of critical experience. The MATOC Pool will allow the government and contractors to develop a cooperative relationship, through which the contractors more candidly provide the government information to better define requirements, in turn resulting in higher quality. One-on-one sessions may also be conducted during the MATOC RFP process to help the contractors better understand the expectations of the government. Though discussions may be conducted during a “C” contract acquisition, discussions do not permit or encourage similarly frank and open dialogue. Additionally, MATOC task orders allow for better control of quality when award is made on the basis of price alone. While a sealed bid procurement method should be used wherever possible, frequently the need to evaluate past performance arises when the district requires more certainty that it will get a quality result, but a best-value tradeoff is too burdensome for the particular acquisition. In these situations, a MATOC task order awarded on the basis of price provides the needed assurance of a quality product, while still permitting a speedy, cost-efficient acquisition method.

(2) Acquisition Cycle. The primary justification for the need to consolidate requirements is the large volume of work and the need to reduce acquisition cycle time in order to meet aggressive schedules for award of projects once received at the district and thereby ensure successful mission execution. When conducting a standalone procurement, the acquisition lead time from receipt of a project and/or authority to advertise a Request for Proposal (RFP) for SRM projects is about 6 to 8 months. If the action is not fully designed and requires a design-build approach, the lead time is about 8 to 10 months. Most projects should be received at the beginning of the second quarter of the fiscal year which allows for a stand-alone procurement process using a small business set-aside or full and open competition. However, some projects are received later in the fiscal year and projects from other DoD programs which are typically received late in the second quarter and into the third quarter of the fiscal year. Receipt of requirements late in the second and third quarter does not leave sufficient time to conduct a standalone procurement and make award by the end of the fiscal year. The acquisition cycle time for award of a task order against a MATOC for a funded project is about 2.5 months and is considerably shorter than for a stand-alone action.

When a Design Build Construction Contract is awarded IAW FAR 36.3, executive agencies are required to use two phase design build construction procedures for projects over $4 million, with certain exceptions. The use of Two-Phase Design Build Construction Procedures increases the acquisition timeline as two source selection boards must be conducted.

Although the cost to put the initial MATOC in place is more than the cost for a standalone design build RFP, the savings over the five-year period are considerable. Comparing the tables above, the breakeven point is realized following the first task order being awarded, with minimal savings seen with the issuance of a second task order—two standalone contracts would cost approximately while a MATOC with seed task order plus an additional task order would cost Subsequent design-build actions result in a cost savings of $118,836 per action, the difference in cost between a standalone contract and a MATOC task order. Based on the known/anticipated projects listed above in Table 1, seven (7) task orders are currently anticipated to be placed against this MATOC—an administrative cost savings of $831,852.

Because the task orders issued under each MATOC would include essentially the same scope of work as would otherwise be solicited as a C contract, it is difficult to determine with any accuracy the extent of savings (at least $9.4M) pursuant to FAR 7.107-2(d)(1)(ii) (aggregate financial benefits below 5%).

Per FAR 7.107-2(d)(3), quantifiable benefits of administrative/personnel cost savings for this $ 9 Million procurement must exceed the 10% threshold, or .9 million, to clearly justify a financial benefit of consolidation. Although the savings demonstrated above do not meet this threshold when comparing a MATOC and stand-alone procurements, other benefits are clearly demonstrated. The consolidation of requirements under this MATOC is critical to the district’s success in meeting DoD requirements to ensure readiness and training schedules can be met when projects are not received in sufficient time to compete as full and open standalone requirements.

While this approach could provide a lesser degree of consolidation, or no consolidation at all if individual contracts are awarded for every requirement, the benefits of the MATOC approach substantially exceeds the advantages of “C” contracts. Therefore, Alternative 1, Stand-Alone Contracts, is not in the best interest of the Government and is rejected.

FOR OFFICIAL USE ONLY

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

Alternative 2, Three Single Award Task Order Contracts (SATOCs):

This alternative would result in a lesser degree of consolidation of project requirements, since each SATOC would cover only a portion of the geographic region rather than the entire region covered by the MATOC. As with MATOCs, all projected requirements would still be consolidated under an IDIQ procurement mechanism. However, the SATOC approach does not provide any of the benefits of competition at the task order level. The MATOC approach overall is the better approach, considering the complexity and size of the SRM requirements.

(1) Quality. The SATOC approach has a similar potential for establishing experienced contractor and consistent results at each installation, resulting from the repetitive process of responding to RFPs and executing projects. This may prove beneficial where the contractor is a high performer. However, as with a C-type contract, a poor performer may put an installation at risk of mission failure. Replacing such a performer under a SATOC would be difficult, requiring lengthy termination and re-procurement actions, just as with a C-type contract. In a MATOC context, however, replacing a failed contractor is much easier, involving only termination of the task order and issuance of a new task order through re-competition, a process that is significantly simpler, quicker, and less expensive. Also, a SATOC does not provide any of the benefits of competition at the task order level. Both MATOCs and SATOCs are initially procured through competition, but only the MATOC also provides for competition at the Task Order level. First, under the proposed approach, task orders may be awarded on a best value basis, which would not be possible under a SATOC. Additionally, even with respect to award based on low price, the MATOC process ensures that each task order will be performed by a pre-qualified contractor with greater likelihood of successful performance at the lowest cost.

Under a SATOC, even though the contractor is also pre-qualified and likely to succeed, the cost for this enhanced quality is generally higher in the absence of competition.

Providing an additional layer of competition at the Task Order level is an important consideration in major procurement actions.

(2). Acquisition Cycle. Compared to “C” contracts, SATOCs, like MATOCs provide a more streamlined acquisition approach. In this regard, the SATOCs approach only advantage is, with a MATOC, competition will require some form of evaluation that would typically take longer than sole-source negotiations under a SATOC. The difference in time is, however, not significant, as many MATOC selections are based on minimal technical evaluations and price. Moreover, while timeliness is an important consideration for the SRM programs, it is to be balanced by competition to ensure the highest quality performance at fair and reasonable prices.

(3). Cost Savings. Because the task orders issued under each MATOC would also include essentially the same scope of work as would otherwise be solicited as SATOC task orders, it is difficult to determine with any accuracy the extent of savings pursuant to FAR 7.107-2(d)(1)(ii) (aggregate financial benefits exceeding 5% or $9.4M).

In comparing administrative costs, there is a difference between MATOCs and SATOCs.

The estimated cost to award the basic IDIQ is the same for a D-B SATOC and D-B

FOR OFFICIAL USE ONLY

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

MATOC. The estimated cost to award a task order under the MATOC is approximately as compared to for award of a task order under a SATOC. Initial cost savings are greater as indicated; however, if risk associated with having a nonperforming contractor result in the re-procurement of a SATOC, it would tip the scales in favor of a MATOC. This is due to the associated re-procurement costs. Any cost benefits of a SATOC are outweighed by the risk associated with having to terminate and replace a nonperforming contractor and the loss in delivery time of the project. In addition, the MATOC approach provides the significant added benefit of competition, facilitating potential further savings to the Government in project costs. The administrative cost savings are anticipated to be $137,420.

While this approach could provide a lesser degree of consolidation, the benefits of the MATOC approach substantially exceeds the advantages of “SATOC” contracts.

Therefore, Alternative 2, SATOC Contracts, is not in the best interest of the Government and is rejected.

6. Bundling Analysis:

a. Definition of Bundling. 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 in that the proposed construction services contemplated have not previously been performed under separate smaller (i.e., individual) contracts. The projects proposed to be issued under this MATOC are those that, even if they were to be competed on a stand-alone basis, have not previously been suitable for competition among small business firms due to the size and/or complexity of the individual projects.

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).

d. Applicability of CICA Bundling Principle. CICA Bundling is applicable to this procurement. The CICA requires solicitations to provide for full and open

FOR OFFICIAL USE ONLY

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

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. SAS will first screen proposed projects for appropriateness as a stand-alone procurement, the least amount of consolidation, before making the decision to use this MATOC. As confirmed in the Savannah District Regional Acquisition Plan, this level of bundling does not unnecessarily combine requirements and is necessary to satisfy SAS’s needs as it will result in substantial cost savings and improve operational efficiency.

The level of restriction proposed multiple award contracts for a specific geographic area and for specific dollar values vs. single award contracts represents the least level of bundling necessary to meet SAS’s needs.

7. Considerations, Facts, Reasoning Supporting the Determination:

a. Solicitation Method (Negotiation versus Sealed Bidding). A negotiated

(“Request for Proposal”) procurement is recommended as it allows the Government to base the award decision on other than the lowest evaluated price.

The solicitation will require the evaluation of technical factors and management approach. There is a need to ensure that the offerors have the capability to perform large scale, complex SRM construction projects. Additionally, using a negotiated procurement also allows the use of discussions.

Sealed bidding is not allowed for design build requirements thereby creating increased timelines for any design build requirement. When using the sealed bid process, awards must be made to the responsive, responsible bidder submitting the lowest evaluated price without consideration of the relative technical merits of the prospective contractors. In addition, this process does not allow for discussions. Procurement using the sealed bidding process is not recommended for this action. Therefore, the Contracting Officer has determined, in accordance with FAR 6.401(b), that the use of competitive proposals is justified.

b. Trade-Off Method: Lowest Price Technically Acceptable (LPTA) “pass/fail” process is not recommended for an action of this size and complexity. It does not permit the Government to award the contract to the offeror with the best combination of technical merit and price. Although discussions are permitted, tradeoffs between quality (e.g., technical merit) and price are not allowed under the LPTA process. The trade-off method is the most appropriate negotiated process as it allows the Government to award to the offeror with the best combination of price and technical merit.

c. Two Phase Design Build Procedures: In accordance with FAR 36.301, an affirmative determination has been made by the Contracting Officer to use Two

FOR OFFICIAL USE ONLY

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

Phase Design Build Selection Procedures for this acquisition. The Contracting Officer has considered criteria for making this decision in accordance with FAR Subpart 36.3 and 10 U.S.C 2305a below:

(1) Three or more offers are anticipated.

(2) Design work must be performed by offerors before developing price or cost proposals, and offerors will incur a substantial amount of expense in preparing offers.

(3) The following criteria have been considered:

(i) The extent to which the project requirements have been adequately defined.

(ii) The time constraints for delivery of the project.

(iii) The capability and experience of potential contractors.

(iv) The suitability of the project for use of the two-phase selection method.

(v) The capability of the agency to manage the two-phase selection process.

(vi) Other criteria established by the head of the contracting activity.

d. The Small Business Administration (SBA) Procurement Center Representatives (PCR) and District Deputy for Small Business both concur and support the proposed approach. DD Forms 2579 will be developed, processed, and signed for each task order.

e. Based on the above, all concur that consolidation of the requirement is both necessary and justified.

8. Summary: Although this MATOC constitutes consolidation in that it combines construction projects at multiple discrete sites into one contract, this approach provides the best combination of competitive procedures, streamlined acquisition, qualified prime contractors, efficient use of manpower, and some cost efficiency—thereby providing the best way to support SAS’s MILCON/Large SRM program. Per FAR 7.107-2(d)(3), quantifiable benefits of administrative/personnel cost savings for this $99 Million procurement must exceed the 10% threshold, or $9 Million, to clearly justify a financial benefit of consolidation. Although the savings demonstrated above do not meet the threshold in FAR 7.107-2(d)(3), when comparing a MATOC and other procurement methods, other benefits are clearly demonstrated. The consolidation of requirements under this MATOC is critical to SAS’s success in meeting DoD requirements can be met when projects are not received in sufficient time to compete as full and open standalone requirements.

Although this procurement will be set aside for small businesses, all firms will be invited to compete and will receive fair consideration for a contract under this MATOC.

Considering the discussion provided above, consolidation is necessary and justified as

FOR OFFICIAL USE ONLY

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

the benefits of consolidation substantially exceed the benefits of the alternative contracting approaches.

Fulfilling this requirement through separate, stand-alone contracts would result in considerable risk of higher costs and scheduling constraints to the Government.

Consolidation of the requirements promotes flexibility to complete the work in the time frame required due to funding constraints. Consolidation will not negatively impact small business participation in these programs but will promote competition and motivate both lower costs to the contractor and overall better pricing for the Government.

Attachments (Located in Paperless Contract File):

1. W912HN23R4002 Market Research

2. DD Form 2579

FOR OFFICIAL USE ONLY

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

DEPARTMENT OF THE ARMY

DETERMINATION AND FINDINGS REQUEST FOR CONSOLIDATION

W912HN-23-R-4002 Small Business set aside GENERAL AND DESIGN-BUILD

CONSTRUCTION, MULTIPLE AWARD TASK ORDER CONTRACT (MATOC), WITHIN

SAS AOR

The following signatures indicate concurrence within the Savannah District with the contents of this document for the consolidation of the General and Design-Build Construction, MATOC within the Savannah District Area of Responsibility

Anthony E. Cady Chief, Programs and Project Management Division

Nelson Vaneck Office of Counsel

Jennifer S. Cavanagh Deputy of Small Business Programs

Gregory M. Graham Contracting Officer

Jennifer L. Murphy Execution Branch Contracting Chief

FOR OFFICIAL USE ONLY

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

DEPARTMENT OF THE ARMY

DETERMINATION AND FINDINGS REQUEST FOR CONSOLIDATION

W912HN-23-R-4002 Small Business GENERAL AND DESIGN-BUILD

CONSTRUCTION, MULTIPLE AWARD TASK ORDER CONTRACT (MATOC), WITHIN

NORTH CAROLINA

Upon the basis of the findings above and with the concurrence of the SBA, I hereby determine, pursuant to the authority of FAR 7.107-2, 15 USC § 657q, and Army Federal Acquisition Regulation Supplement 5107.170-3 “Consolidation of Contract Requirements,” that the proposed consolidation of two o r m o r e discrete construction projects for the Department of Defense and other Federal Agencies within the Savanah District is both necessary and justified.

Date:

Paige H. Blechinger Chief of the Contracting Office U.S. Army Corps of Engineers