B.04 Consolidation DF-25r4000 SDVOSB MATOC_[Redacted].pdf

CONSOLIDATION OF CONTRACT REQUIREMENTS DETERMINATION

FOR

W912HP25R4000

Multiple Award Task Order Contract for Service-Disabled Veteran Owned Small Business (SDVOSB) Design Build/Design Bid Build (DB/DBB)

(As prescribed by FAR 7.107-2 and AFARS 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: U.S. Army Corps of Engineers (USACE), Charleston District (SAC) plans to solicit offers for an Indefinite Delivery Indefinite Quantity (IDIQ) Multiple Award Task Order Contract (MATOC) with a total capacity of to meet the needs of SAC’s construction workload that will performed at two or more discrete sites (per 15 U.S.C. § 657q(a)(2)(B)) under North American Industry Classification System (NAICS) code 236220, Commercial and Institutional Building Construction.

The subject solicitation will cover the United States with a target of five (5) MATOC awards. SAC has set a target of five awards, to be reserved for Service-Disabled Veteran Owned Small Businesses (SDVOSB) IAW FAR 19.503 and section 1331 of the Small Business Jobs Act of 2010. SAC has conducted analysis and market research that demonstrates consolidation of requirements in this procurement is both necessary and justified.

3. Description of the Procurement Action:

a. Project Description:

The purpose of this acquisition is to provide readily available contract tools that will enable the SAC to proactively and responsively execute the design and construction, renovation and repair requirements identified by all SAC Customers, as needed. The Department of Veterans Affairs (VA) will be SAC’s primary customer for this tool as the VA has an agency-wide agreement with USACE to execute work on their behalf and that agreement requires that USACE prioritize contracts utilizing a SDVOSB set-aside whenever possible. This MATOC will enable SAC to proactively and responsively execute VA requirements. The scope of work for this MATOC will be general construction and may include both renovation and new construction. This contracting effort ensures that the SAC will be able to support the construction needs of all current stakeholders and other potential partners over the next five (5) years. The requested in total capacity would cover the anticipated capacity utilization rate and include a reasonable contingency in the event that the program shows unexpected growth or large obligations during the contract period.

The anticipated construction requirements will be predominantly under North American Industry Classification System (NAICS) code 236220 Commercial and Institutional Building Construction. Award will be made to a target of five (5) contractors. This procurement will be set-aside for Service-Disabled Veteran Owned Small Business (SDVOSB).

b. Acquisition Strategy/Procurement Summary: To meet the new construction, renovation, and repair requirements identified by SAC Customers at their various facilities over the next five (5) years, SAC intends to award a MATOC with in total capacity. This MATOC pool will support execution of firm-fixed-price (FFP) task orders for the missions entrusted to SAC. The scope and complexity will vary considerably between assigned projects. The period of performance will be a base period of three (3) years and a single option period for two (2) years.

Individual task orders will be competitively solicited within the MATOC pool and negotiated to award to a single MATOC contractor. The availability of the MATOC will efficiently and effectively meet many of SAC’s construction requirements and will also better position SAC to successfully meet short-fused, fiscal year-end acquisition requirements. Use of the MATOC is in the best interest of the Government with respect to timeliness, oversight, and administrative costs.

c. Applicability of Consolidation: As stated above, the definition of consolidation in accordance with 15 U.S.C. § 657q and as set forth in Sec 44 of the Small Business Act, “consolidation of contract requirements,” with respect to contract requirements of a Federal agency, means a use of a solicitation to obtain offers for a single contract or a multiple award contract - (A) to satisfy two (2) or more

FY24 Awards Reserved FY25

SAC has estimated an average burn rate of , with remaining in SDVOSB DB capacity, SAC lacks sufficient capacity to handle FY25+ projects. A new SDVOSB DB/DBB MATOC is required in order to be able to award future projects.

e. 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 in dollar amounts are considered substantial if they meet the dollar amounts set forth in FAR 7.107-2(d). If the quantifiable dollar amount benefits do not meet these thresholds, the approving authority may determine that consolidation is necessary and justified if critical to the agency’s mission success and the procurement strategy provides for maximum practicable participation by small business.

Utilizing an Indefinite Delivery Indefinite Quantity (IDIQ) MATOC to consolidate the requirements for all of SAC’s various customers and programs is necessary to meet SAC’s mission objectives. It provides a contracting vehicle that minimizes acquisition planning and contract execution costs, shortens contracting lead time, ensures operational continuity, and improves competition by competing procurements at the task order level versus relying on multiple individually competed actions with increased lead times. Use of an IDIQ is appropriate in accordance with 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 or services that the Government will require during the contract period, and 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. This new MATOC will provide SAC with an acquisition tool and capacity to support awards in a timely and responsive manner, especially during the 3rd and 4th quarter of each fiscal year when much of the work is received and executed.

In accordance with FAR 7.107-2(e)(1), when the benefits of consolidated requirements are not quantifiable as stated at FAR 7.107-2(d)(1), the consolidation must be determined to be necessary and justified based on the anticipated benefits of being critical to the agency’s mission success and that the contract document preparation, coordination with the Small Business Administration, and post-award plan review/acceptance.

b. Alternative 2: Lesser Degree of Consolidation – Awarding multiple Single Award

Task Order Contracts (SATOCs) that cover the entirety of the scope of the contract.

Cost Risk: The cost risk in utilizing this procurement type is Medium. This strategy would require more effort to award all of the required SATOCs to cover the entire area required. Further, there is a significant difference in administrative costs associated with executing and administering a single MATOC compared to multiple SATOCs that cover the same scope, in part. Multiple SATOCs are not advantageous to the Government due to the costs of procurement, implementation, administration, and oversight associated with each.

Performance Risk: Performance risk is High. SATOCs have inherent performance risk.

A contractor may demonstrate poor performance in the execution of its SATOC projects. If that risk were realized, there is very little remedy available for the Government to respond timely to other requirements. SATOCs provide limited parameters across the board and would require multiple SATOCs in order to meet the full scope mission requirements and leverage the marketplace’s capabilities to successfully complete complex projects.

Schedule Risk: The Schedule risk is Low. The schedule risk is much lower than Alternative 1. Awarding as multiple SATOCs would require the pre-award activities be completed only once for each IDIQ to cover the five (5) year performance period, rather than each time for a multiple number of individual standalone contracts. This decreases acquisition efforts.

SAC considered the award of multiple SATOCs to cover different scopes with an SDVOSB set-aside. These different scopes were considered to be general construction, new construction, renovation, and roofing. As previously noted, establishing a MATOC pool of experienced contractors provides the highest degree of consistency across the program in the quality of performance. The MATOC’s pool of contractors will be selected based on their past experience performing design build construction services in similar type healthcare facilities. The contractors will gain further experience through the iterative process of responding to RFPs and executing projects. It has been SAC’s experience that MATOC pool contractors develop into a cadre of more highly qualified and competitive offerors than is available in the general contractor community.

Contractors awarded individual SATOCs would be selected on similar past performance and experience factors as MATOC contractors and could increase their experience through the iterative task order process of negotiations and performance. The SATOC contracting approach, however, presents the risk that a contractor may demonstrate poor performance in the execution of its SATOC projects. If that risk were realized, there is very little remedy available for the Government to respond timely to other requirements. It is procedurally difficult to remove a contractor, and a new IDIQ contract would have to be put in place before any task orders could be utilized to award to any days of total acquisition cycle time over the course of the five-year MATOC period of performance.

The use of task orders under a MATOC streamlines the procurement process and is significantly more expeditious than a “C” contract strategy. Historically, the required Procurement Acquisition Lead Time (PALT) for a design-bid-build “C” contract takes a minimum of days and includes internal reviews (District Quality Control (DQC), Agency Technical Review (ATR), and Biddability, Constructability, Operability, Environmental, and Sustainability (BCOES)), procurement related activities, such as market research, coordination with SBA, creating solicitation, legal review, and administrative activities necessary for soliciting/awarding the contract. The PALT for a two-phase design-build with similar size and complexity is approximately days.

Having multiple projects under development at the same time for similar work would result in overlapping reviews, tie up labor resources, and decreased administrative efficiencies. In addition, the likelihood exists that the same SAC personnel would be working on multiple projects, increasing the time required from project start to contract award for the individual projects. In contrast, task orders under a MATOC do not require significant advance notice, voluminous solicitations and proposal reviews. The historical PALT, i.e., the time it takes from Contracting receiving all the necessary documents until contract award for Design-Build MATOC Task Orders procedures is days. This reduced lead time allows SAC to respond faster, increasing the success of the overall mission.

Very often, requests for execution of work are not received by SAC until the third and fourth quarters of the fiscal year. The late project priority determinations by customers and corresponding late delivery of funding necessitates that SAC utilize flexible and efficient procurement strategies. These externally imposed end-of-year procurement requirements are most successfully addressed by the streamlined acquisition procedures provided under FAR Part 16, where there is no requirement to advertise a project for 15 days, or to provide prospective contractors 30 days to submit a proposal.

Accordingly, if SAC is constrained to “C” contracts for each project, any requirements that are presented in the fourth quarter would be at significant risk, or impossible, to award before funds cease to be available for obligation within the corresponding fiscal year.

Other considerations and limitations: The Government also considered the use of 8(a) sole source contracts for actions to fulfill the needs of this program. However, that strategy would only apply to those procurements not using the two-phase design-build procedures at FAR 36.3. It is important to note that many procurements under this planned contract will be design-build construction projects that are required to use two-phase selection procedures.

CUI//SP-SSEL

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 one portion of the bundled requirement.

d. Applicability of CICA Bundling Principle: Although this action constitutes

CICA bundling by combining like and related construction and MILCON support with design capabilities, it is consistent with industry practice and necessary to satisfy the customers’ needs. This procurement will allow SAC to leverage economies of scale, streamline acquisition cycles, and eliminate duplication of efforts by establishing a MATOC with responsive and responsible contractors to perform individual task orders as the need arises. This is critical given SAC’s mission to support a variety of different customers (VA, DLA, MFR, Army, and 81st RD) across the United States.

8. Considerations, Facts, Reasoning Supporting the Determination: All facts, considerations and rationale have been covered previously in the findings. The DD 2579 is being prepared and will be reviewed and signed by the Contracting Officer, Deputy for Small Business, and the Small Business Administration (SBA) Procurement Center Representative (PCR).

9. Summary:

Though the MATOC constitutes consolidation in that it combines construction at two (2) or more discrete sites, this approach provides the best combination of competitive procedures, timely acquisition, cost efficiency, quality, and capable prime contractors to execute the requirements. The quantifiable benefits of consolidation are or of the estimated MATOC value, which does not exceed the minimum standard of 5% applicable to this acquisition (FAR 7.107-2(d)(1)(ii)). However, this savings is significantly supplemented by decreased acquisition cycle times, increased efficiencies in the post award process, and increased quality improvements that will save time or improve or enhance performance and/or efficiency. Other acquisition alternatives were considered but would result in higher costs and increased acquisition cycle time that would be detrimental to the missions entrusted to SAC.

The consolidated approach provides advantages that substantially exceed the benefits of alternate approaches. Based on sound business judgment in view of the size, complexity, and number of efforts to be executed for SAC customers, the findings of the market research, and the documentation provided herein, consolidation of requirements is both necessary and justified.

CONSOLIDATION OF CONTRACT REQUIREMENTS DETERMINATION

for

W912HP25R4000

Multiple Award Task Order Contract for Design Build/Design Bid Build (DB/DBB)

The following signatures indicate concurrence with the contents of this document:

Program Manager, Charleston District

Assistant District Counsel, Charleston District

Deputy for Small Business Programs, Charleston District

Contract Specialist, Charleston District

Contracting Officer, Charleston District