Redacted JA 29 July.pdf

Control Number: LRB-FY24-09

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity: U.S. Army Corps of Engineers (USACE) Buffalo District, 478 Main Street, Buffalo, New York, 14202.

2. Description of Action: This action will support a modification to increase the total contract capacity on contract W912P4-17-D-0001. USACE awarded contract W912P4-17-D-0001, a Single Award Task Order Contract (SATOC), to Jacobs Technology Inc. (Jacobs), on 26 April 2017. The contract is for environmental remediation services at the Shallow Land Disposal Area (SLDA) and the modification is needed to provide additional capacity and avoid an interruption in remediation work pending competition and award of a follow-on contract. There will be no funds obligated for this action to increase capacity; future task orders using the expanded capacity will be funded Civil Works appropriation funds (3130).

3. Description of Supplies/Services: These environmental remediation services support USACE remedial action at the SLDA site as part of the Formerly Utilized Sites Remedial Action Program (FUSRAP). Section 8143 of the Fiscal Year 2002 Defense Appropriations Act, Public Law 107-117, subject to subsections (b) through (e) of section 611 of Public Law 106-60 (113 Stat. 502; 10 U.S.C. 2701 note), directs the Secretary of the Army, acting through the Chief of Engineers, to clean up radioactive waste at the SLDA site under the FUSRAP. This law also directs the USACE to clean up radioactive waste at the SLDA site, consistent with the 5 July 2001 Memorandum of Understanding (MOU) between the Nuclear Regulatory Commission (NRC) and USACE, for the coordination of cleanup and decommissioning of FUSRAP sites with NRC-Licensed Facilities.

The original SATOC included the development of work plans and infrastructure, as well as the actual remediation. By the time the work plans are finalized and infrastructure is in place to begin remediation, it is anticipated the Government will have obligated $263,354,915.63 of the $350,000,000.00 in original capacity, leaving only $86,645,084.37 for the actual remediation, which is insufficient to complete the actual remediation.

This action will support a modification to increase the total contract capacity by $85M from the current capacity of $350M, for a new contract total value of $435M. Remediation of the SLDA site requires remediation of a total of 10 trenches. The infrastructure work that must be accomplished prior to the beginning of actual remediation has been more time consuming and costly than originally anticipated and once this work is complete, the remainder of the original $350M in capacity will cover remediation of only two or three trenches. This proposed modification for increased capacity is limited to the minimum needed to prevent an interruption in remediation work prior to the award of a new, competitive contract to complete the remediation effort. The additional $85 requested by this J&A will allow for remediation work to continue for an additional four to five trenches, while a follow-on contract is competed and award to complete the final two to three trenches. This modification will not extend the ordering period of the SATOC, which ends 26 April 2027.

4. Authority Cited: The statutory authority permitting sole sourcing for this acquisition is 10 U.S.C.

3204(b)(B)(ii), as implemented in Federal Acquisition Regulation 6.302-1(a)(2)(iii)(B), For DoD, NASA, and the Coast Guard, services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services when it is likely that award to any other source would re

5. Reason for Authority Cited: This follow-on contract action for highly specialized environmental remediation services The unacceptable delay would be, at minimum, 12-months, including a break in ongoing remediation efforts and prolonging a potential security threat. Further, there are costs associated with the delay which contribute to

Not adding capacity to the existing SATOC, which will be fully committed to projected requirements by December 2024 despite an ordering period through 26 April 2027, would require the current contractor to demobilize from the site in the middle of remediation activities, and would create a break in remediation efforts at the site while the Government issues a new procurement. This is an unacceptable delay in fulfilling agency requirements.

a. Background: Between 1961 and 1970, at what is now known as the SLDA site, radioactive waste materials were placed into a series of pits (underground), constructed adjacent to one another. In geophysical surveys performed at the site, these pits appear as linear trenches. There are ten trenches and localized soil areas that require remediation at SLDA.

By law, USACE is directed to clean up radioactive waste at the SLDA site under FUSRAP.

Excavation/environmental remediation initially started at SLDA in August 2011, under contract W912P4-07-D-0002-0001, with contractor Cabrera Services performing the work. During the 2011 remediation, the contractor encountered complex nuclear material. USACE obtained additional information from NRC historical and investigative documents which suggested wastes may be present at SLDA which USACE had not anticipated. Since handling of the material was not consistent with its approved work plans, the Contracting Officer suspended excavation activities in late September 2011 to give USACE, the contractor, and stakeholders an opportunity to reassess the material on-site. The Government determined in late 2011 that site conditions were not consistent with original assumptions. In February 2012, the Government and contractor mutual benefit to reduce the remaining scope of the contract. The Government has not performed remediation at the site since September 2011. Following termination of remedial activities in 2011, USACE decided a new procurement was needed to ensure security and safety protocols were in place to successfully remediate the site. The follow-on procurement was coordinated with Department of Energy (DOE), Nuclear Regulatory Commission (NRC), and the National Nuclear Security Administration (NNSA).

Contract W912P4-17-D-0001, a Single Award Task Order Contract (SATOC), was awarded on 26 April 2017, including a 5-year base ordering period and an optional additional 5-year ordering period. USACE exercised the option on 31 March 2022, and the ordering period ends 26 April 2027. The contract was competed using full and open competition and selection was made using FAR Part 15 best value source selection procedures. The SATOC permits both firm-fixed-price orders and cost-plus-fixed-fee orders.

subsequent corrective action, the Contracting Officer issued a Stop-Work Order on 12 May 2017.

Upon completion of the corrective action, the Stop-Work Order was cancelled on 25 Sep 2018.

The Notice to Proceed was not issued until 2019.

The first task order under the current SATOC required the contractor to develop work plans to successfully remediate the site. Due to the nature of the materials, this site is unique in FUSRAP, and the contractor means and methods were not known at time of contract award to estimate exactly what infrastructure, material control points, and safety protocols were required to safely remediate the site. The site is located adjacent to a small rural community and safety is the number one priority. Through the work plan and value engineering study process, the Government determined that construction of a significant amount of additional infrastructure is required to safely remediate the site, such as a new material processing building, , wastewater treatment plant, and numerous other security and safety measures. This infrastructure has been constructed under the scope of the current contract. USACE and NRC are involved in the ongoing work plan review. By the time the work plans are finalized and infrastructure is in place to begin remediation, it is anticipated the Government will have obligated $263,354,915.63 of the $350,000,000.00 in original capacity, leaving only $86,645,084.37 for the actual remediation.

b. Impacts: The current schedule is to begin excavation by July 2025. If the current contract capacity is not increased by $85M, it is anticipated Jacobs will only complete remediation of three trenches by October 2025 and then demobilize from the site. An additional $85M in capacity will allow for remediation of an additional 4-5 trenches, and for excavation to continue until approximately October 2026, including demobilization from the site. The follow-on contract is expected to be

12 months to update the work plans and be ready to start excavation.

Further delays in remediation present a potential security risk.

The Government and incumbent contractor have worked for over 6 years to develop work plans and put the necessary infrastructure in place to safely remediate the site. If this action is not approved, it is very likely remediation will not start under the current SATOC. It is not fiscally responsible to fully mobilize equipment and personnel to the site to only remediate for four months. The cost for the contractor to demobilize is approximately . The contractor has the institutional knowledge on how to safely remediate this site. It would be much more practical for another contractor (if selected for the follow-on contract) to remediate the site after the author of the work plans has the ability to implement them on site during active remediation.

USACE has publicly communicated that excavation will start in 2025 to local media, congressional members, and the public. The project has national visibility as well, with The Washington Post issuing a story on the site in 2014. If this action is approved and contract capacity is increased, remediation will begin in July 2025. If the contract capacity is not increased, it is likely remediation would not start until at least 2027, based on the need to award a new contract, update/finalize work plans, and mobilize to the site. Based on the size and complexity of the follow-on contract, it is not anticipated to be solicited until March 2025 and award is unlikely to occur prior to October

2025. The current work plans for the site have been in development for over 6 years. Once the follow-on contract is awarded, it is anticipated to take at least 12 months to update the work plans and coordinate them with the aforementioned government agencies (DOE, NRC, NNSA). Once the plans are approved, the contractor could then begin mobilizing to the site and that would be expected in early 2027. This significant delay is unacceptable to the local community and USACE.

Further, if contract capacity is not increased, there are significant cost impacts from delaying remediation which contribute to the unacceptable delay. Site operations and maintenance (O&M) and security need to continue regardless of whether or not remediation is occurring at the site due to the nature of materials expected to be present at the site. These guards and O&M activities are abeyance while USACE remediates the site. The current cost for security is per year. The current annual O&M cost is but is expected to significantly increase (upwards of per year) as improvements are made at the site and infrastructure/equipment is installed.

Additionally, USACE supervision and administration costs are approximately per year. If this action is not approved, the full remediation at the site will be delayed at least one year and cost the Government nearly $ .

c. Justification: This modification constitutes a follow-on contract action for highly specialized environmental remediation services requirements. Safely remediating the radioactive materials disposed of at the SLDA site is a highly specialized service. As previously stated, remediation was stopped in September 2011, under a separate contract with Cabrera Services. Another break in remediation under the current contract is an unacceptable delay in fulfilling the Gov at the site, and will result in significant cost increases associated with the delay. The proposed modification to increase the current contract capacity by $85M will allow remediation of 4-5 additional trenches and is the minimum needed to prevent an interruption in work. While only 2- 3 trenches will be remediated under the new follow-on contract, those trenches include nearly 70% of the waste at the site. If $85M increased capacity is not added to the current contract, Jacobs will not have enough funding to remediate trenches and soil at the site during the time it will take USACE to secure the new, follow on contract and update work plans. There will be a break in remediation at the site.

d. Alternatives: The alternative to the proposed modification for increased contract capacity is to not start remediation under the current contract and do all of the remediation under the follow-on contract. For the reasons stated above, this would cause an unacceptable delay to fulfilling the agency requirements.

6. Efforts to Obtain Competition: As outlined above, competition is not appropriate for this action. The

Government would not solicit a separate $85M contract for remediation of 4-5 trenches; rather, it would pause remediation until a new contract including all remaining work is completed and awarded. USACE issued a notice of intent to sole source on SAM.Gov on 05 March 2024, and requested feedback from industry by 19 March 2024, with no responses received. Acquisition activities for a follow-on contract to complete remediation at the SLDA site are currently underway and a new contract is expected to be in place by October 2025. This action was initially competed under W912P415R0001. Four offers were received under the solicitation. In accordance with FAR 5.202(a)(11), the proposed contract action is made under the terms of an existing contract that was previously synopsized in sufficient detail to comply with the requirements of

5.207 and advance notice is not appropriate or reasonable.

7. Actions to Increase Competition: Buffalo District is currently in the process of procuring the follow-on contract to complete remediation at the SLDA site. The District intends to issue a solicitation under Full and Open competition using FAR Part 15 procedures to be awarded by October 2025. The replacement contract will be valued between $250M and $500M. While only 2-3 trenches will be remediated under the follow-on contract, those trenches include nearly 70% of the waste at the site. This $85M increase in capacity on the current contract is the minimum needed to continue forward with trench and soil remediation to meet requirements on the project, and future work, to include removal of the majority of waste at the site, will be competed.

8. Market Research: In September 2023, it was apparent that all the required remediation at the SLDA site could not be accomplished under the $350M SATOC. As a result, on 01 December 2023, the Buffalo District released a sources sought notice to facilitate the acquisition strategy for the follow-on contract action.

Interested sources were requested to provide the following information:

i) Provide descriptions/references for up to three projects similar in nature to SLDA (see below) where your company was the prime contractor.

ii) Provide descriptions/references for up to three projects where your company took over for an incumbent contractor during active remediation. Describe how the transition was facilitated and how long it took to resume remediation after contract award. Highlight any successes and challenges.

iii) Interested contractors shall include names of key potential subcontractors.

iv) Describe what type of insurance your company has for pollution, transportation of contaminated waste (nuclear and otherwise), and property damage and personal injury arising from, or related directly or indirectly to, exposure to hazardous our toxic substances. Include policy amounts and expiration dates of such policies. Provide confirmation that this insurance is sufficient to perform remediation services at SLDA. If it is not sufficient, indicate the policy amount that would be sufficient and the timeframe to obtain after award.

v) Any additional information the Government should consider in developing the acquisition strategy for this follow-on procurement.

Seven responses were received from the sources sought. Two of the responses did not address the questions above. One was a one-page capability statement and the other was 64 pages of information that included qualifications, capabilities, and projects not related to SLDA. A third respondent did not provide past experience that demonstrated an ability to complete the SLDA project successfully. The four remaining respondents were determined highly qualified and capable to do the work. However, two of them recommended USACE pursue Nuclear Hazard Indemnity coverage for this work. The sources sought clearly stated that USACE will not provide indemnification for this work. DOE provides indemnification under their contracts; however, this authority is not available for USACE.

Under the current contract with Jacobs request for indemnification and insurance was ultimately purchased by the contractor. Indemnification was denied since it was not necessary to facilitate national defense. Jacobs would not remediate without insurance, and the process for Jacobs to acquire insurance took nearly two years to complete. As such, the Government has significant doubts the two respondents who recommended indemnification and provided no additional information on insurance would quirements. The remaining two respondents were the incumbent and another contractor performing on another significant FUSRAP project for the District. USACE is confident the incumbent can perform the follow-on contract action. While the other respondent could perform the project, the Government questions its ability to facilitate a timely contractor transition. The other respondent plans to hire all the current subcontractors at the site, but this is unlikely based on the expectation that the current subcontractors will have exclusive agreements with the incumbent. The respondent acknowledged this was a risk during a follow up conversation with the Contracting Officer.

9. Interested Sources: sole source this contract action. The respondents to the 01 December 2023 sources sought notice were as follows:

i.

ii.

iii.

iv.

v.

vi.

vii.

To date, no other sources have written to express an interest.

10. Other Factors: Prior to contract W912P4-17-D-001, remediation started under W912P4-07-D-0002-0001 with Cabrera Services. That contract (MARC). The task order was awarded on 25 September 2007. As stated above, work was stopped shortly after excavation commenced and ultimately descoped.

Approval

Based on the foregoing justification, I hereby approve this procurement to increase the capacity on the Shallow Land Disposal Area IDIQ by $85.0M on an other than full and open competition basis pursuant to the authority of 10 U.S.C. 3204(b)(B)(ii), as implemented in Federal Acquisition Regulation 6.302-1(a)(2)(iii)(B), For DoD, NASA, and the Coast Guard, services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services when it is likely that award to any other sou ," subject to the availability of funds, and provided that the services and property herein described have otherwise been authorized for acquisition.

Denver S. Heath Head of the Contracting Activity