Attachment C _JA MVN-19-0016 (final signed)_Redacted.pdf

KORNICK.MICHELLE.S

PRAUL.1230840241

Digitally signed by

KORNICK.MICHELLE.SPRAUL.1230

840241 Date: 2019.09.25 09:52:17 -05'00'

WILLIS.DAVID.JAME

S.1057482555

Digitally signed by

WILLIS.DAVID.JAMES.1057482555

Date: 2019.09.25 15:43:34 -05'00'

MEINERS.WILLIAM.G

EORGE.1230849974

Digitally signed by

MEINERS.WILLIAM.GEORGE.1230

849974 Date: 2019.09.25 16:08:25 -05'00'

LOGAN.DEBORAH.L

YNN.1096439659

Digitally signed by

LOGAN.DEBORAH.LYNN.1096439659

Date: 2019.09.25 16:37:30 -05'00'

DENZEL.KATHERINE.

DANIELLE.125471046

Digitally signed by

DENZEL.KATHERINE.DANIELLE.1

254710462 Date: 2019.09.26 08:43:52 -05'00'

30 Sep 19Digitally signed by

EICHHORN.LAURA.J.1026254783

Date: 2019.09.30 10:45:59 -04'00'

Control No: MVN-19-0016

FAR Part 6 Justification and Approval for Other than

Full and Open Competition

1. Contracting Activity: U.S. Department of Army, Corps of Engineers, New Orleans District, Contracting Division (CEMVN-CT-E)

2. Description of Action: This Justification & Approval (J&A) for Other than Full and Open Competition proposes to award a new firm-fixed-price contract to Pine Bluff Sand and Gravel Company (PBS&G) for the lease and operation of a dustpan hydraulic pipeline dredge. MVN intends to make award in December 2019. The contract Base Period will be fully funded with fiscal year 2020 Civil Works funds. The subsequent Option Periods will be funded with fiscal year 2021 and 2022 Civil Works funds based on award. There will be no matching funds or contributions from third parties.

3. Description of Supplies/Services: The work will consist of furnishing one fully crewed and equipped self-propelled dustpan hydraulic pipeline dredge and attendant plant for the removal and satisfactory disposal of shoal material. Attendant plant shall be composed of fuel barge, supply barge, landing barge, survey boat, minimum of two tenders, 1000 feet of floating pontoon pipeline, and other attendant or auxiliary plant as may be required.

The primary dredging region will be any point on the Mississippi River between Mile 320 AHP (Black Hawk, LA) and Mile 103 AHP (New Orleans, LA). The secondary dredging regions will be any point on the Mississippi River, as directed by the government, between Mile 953.8 AHP (Cairo, IL) and Mile 320, as well as other waterways within the New Orleans District including: other reaches in the Mississippi River , Calcasieu River and Pass, Gulf Intracoastal Waterway, Chef Menteur Pass to Sabine River, Bayou Lafourche, Houma Navigational Canal, Atchafalaya Basin, Bayous Chene, Beouf and Black, and Mississippi River Outlets Vicinity of Venice.

The New Orleans District anticipates awarding a firm-fixed-price contract with a 13-month Base Period and two 12-month Option Periods.

Base Period: 12/23/2019 to 1/22/2021 Value: $ Option Period 1: 1/23/2021 to 1/22/2022 Value:

Option Period 2: 1/23/2022 to 1/22/2023 Value: $

Total: $

The area to be dredged is unique in that shoaling occurs at such a rapid pace that it is not practical to specify a number of cubic yards to be dredged, or to require the contractor to dredge to a specified depth. Rather, actual time of dredging, or “effective time” when the dredge is in operation, will be paid on an hourly basis at the contract unit price per hour.

The government specifies the number dredging hours based upon historical data. The dredge shall be designed to function such that it can meet or exceed the dredging requirements listed herein. The dredge shall be required to maintain a minimum production rate of 3200 cubic yards per pumping hour, as measured with the dustpan head at a depth of 35 to 75 feet, cutting a 6-foot face, discharging through 1,000 feet of floating pontoon pipeline, and pumping medium grained sand. The dredge shall have at least a 38 inch inside diameter discharge size, which will be considered to be the minimum inside diameter of either the pump discharge or discharge pipeline, whichever is the lesser. The dredge shall have a minimum of 2850 pump brake horsepower applied to the pump impeller, capable of continuous operation, and have a manufacture’s horsepower rating for continuous operation.

4. Authority Cited: 10 U.S.C. 2304(c)(1), as implemented by Federal Acquisition

Regulation (FAR) 6.302-1(a)(2), Only one responsible source and no other supplies or services will satisfy agency requirements.

5. Reason for Authority Cited: As described at FAR 6.302-1(a)(2), when the supplies or services required by the agency are available only from one responsible source, or for DoD, NASA and the Coast Guard, from only one or a limited number of responsible sources, and no other types of supplies or services will satisfy agency requirements, full and open competition need not be provided for.

a. Background. Historically, the Mississippi River high water season occurs during the spring time and marks the beginning of the dredging cycle on the Mississippi River.

Segments of the river contain 12 shallow areas, called ‘crossings’, that require annual maintenance dredging to remove shoaled sediment from the river bottom in order to maintain the authorized channel depth of 45 feet for deep draft vessels to safely navigate the river. Dustpan dredges have historically been used to dredge the crossings between Baton Rouge and New Orleans and remain the best technical solution as well as the most cost effective method for the removal of the shoaling at the 12 crossings. A dustpan dredge is the fastest, most efficient and cost effective method of meeting these needs. Based upon historical information, the dustpan is the only type of dredge that can meet the government’s needs during the dredging cycle each year. (See Attachment 1 – Facts About Dredging Plant and Equipment)

A dustpan dredge is a highly specialized system specifically developed for dredging river navigation channels. It uses a wide dredging head with a combination of high pressure water jets and hydraulic suction to essentially vacuum sediment and silt material from a river bed and simultaneously deposit it into open water outside of the dredged channel through an attached, extended pipe system. The high pressure water jets loosen the materials, which are then pulled into the dustpan head and pumped out as the dredge makes parallel passes through the channel prism. The leased dredge owned by PBS&G, which is named the Wallace McGeorge, was built in 1979 and is the only privately owned dustpan dredge in the United States.

Market research was conducted to determine whether there are any other dustpan dredges that can meet the requirements as specified in paragraph 3 above, “Description of Supplies & Services.” The market research confirmed that the only privately-owned dustpan dredge available in the United States is the Wallace McGeorge. MVM has been procuring the services of the Wallace McGeorge under unrestricted RFPs since 2000. In August of 2000, solicitation number DACW66-00-R-0005 was issued to request proposals to perform the dredging, and it allowed offerors to construct or to modify a vessel to operate as a dustpan dredge. PBS&G, with its existing dustpan dredge, was the lowest offeror of the proposals received and the unsuccessful offerors have not expressed further interest since that time. In the subsequent awards since that time that have been solicited competitively, to include a 2012 solicitation that again allowed the construction of a new dustpan dredge or conversion of an existing dredge into a dustpan dredge, PBS&G has been the only offeror. The Wallace McGeorge is currently under contract with MVM, Contract No. W912EQ-16-C-0008. This contract was solicited competitively as an unrestricted RFP (See Attachment 2 – Justification of Procurement Method and Attachment 3 – Source Selection Plan Dustpan Dredge) and was awarded to PBS&G on 25 July 2016 in the original amount of $13,878,152.00, with one base year and two option years. Both option years have been exercised and to date, the total cost of Contract No. W912EQ-16-C-0008 in FPDS-NG is $42,613,789.72 via Modification No. P00008. MVM issued a modification to extend the term for an additional period of six months beyond the second option year, which takes performance to 22 December 2019. Reference J&A Control Number MVM-JA-19-01 (see Attachment 4 – J&A MVM-JA-19-01).

The contract award resulting from this current action will be a follow-on contract. As procurement history and current market research demonstrates that competition is not anticipated, this J&A is prepared to support the award of a new contract.

It is noted that responsibility for this procurement has been transferred from MVM to MVN, as MVN is the main user of this dredge.

b. Justification: USACE is mandated by Congress to maintain a 45’ deep draft navigation channel in the Mississippi River within the primary dredging region and a dustpan dredge is the most technically appropriate method of meeting this requirement which also meets the Federal Standard. The leased dredge, Wallace McGeorge, is the only privately owned and operated dustpan dredge in the United States since its construction in 1979. As explained in sub-paragraph c. and d. below, a dustpan dredge is the fastest, most efficient, most cost effective and engineering sound method of meeting these needs. The dustpan dredge meets the requirements of the Water Resources Development Act of 2007, P.L 101-114, 121 Stat. 1041 (WRDA of 2007) Section 2037(c)(A) which reaffirmed the long standing federal position that the costs associated with dredging for construction, operation, or maintenance of an authorized federal water resources project are limited to the most cost-effective means, consistent with economic, engineering, and environmental criteria.

MVM has awarded the dustpan dredge contracts since 2000 and at no time since then has there been any other offeror for a dustpan dredge in the Mississippi River other than PBS&G. As MVN conducted RFI’s and Small Business Market research, it confirmed that PBS&G continues to be the only current source.

c. Alternatives: There is no other contractor-owned dustpan dredge available in the

United States to provide this type of dredging. A new entrant to the competitive field would likely require the Government to pay another contractor to construct a new dustpan dredge which would take a minimum of three years to complete and a cost of approximately $100,000,000. The cost is an extrapolation based on the 2017 prices to build a 30-inch hydraulic cutter section dredge ($60M) and an 8500 cubic yard hopper dredge ($110M) in the New Orleans area (Mark Schleifstein, NOLA.com | The Times- Picayune Jul 20, 2017 - 4:22 am “Weeks Marine Building $60 Million Dredge for Coast Projects”), as well as industry input at dredging conferences. On 25 March 2019, the MVN Contracting Office posted a sources sought, W912P819SS0004, to the Federal Business Opportunities website with a response date of April 9, 2019 and received only one response from PBS&G. As noted previously by MVM, over the past 19 years, PBS&G, the owner of the Wallace McGeorge, has been the only contractor to propose on the work.

i. Procuring a New Dustpan Dredge: If another private company had interest in constructing a dustpan dredge then it would take a minimum of 3 years to design and construct and approximately $100,000,000. This dustpan dredge contract is necessary starting in December 2019 for dredging of the Mississippi River and to accomplish the mission of the highest navigation priority in the United States.

ii. Retro-fitting an Existing Ship to a Dustpan Dredge. This course of action has been tried in historic procurements at MVM. However, the cost of retrofitting is so prohibitive, even the prospect of a ten year contract is not sufficient to encourage entrance into the market. As there is no use for this specialty dredge outside of these 12 Mississippi crossings, the prospect of losing a bid opening would result in a $100,000,000 vessel sitting idle for up to 5 years. The Efforts to Obtain Competition section below provides a full discussion of the procurement.

iii. Self-Performing: USACE owns and operates three dustpan dredges, the dredges Jadwin, Hurley, and Potter. Of the three, only the dredge Jadwin and Hurley can perform the required work. The dredge Potter is only capable of shallow dredging and would not have the ability to reach the 45 foot depth. Both dredges Jadwin and Hurley are regularly scheduled to perform dredging in the deep draft channel of the Mississippi River. All three dredges (the USACE owned Jadwin and Hurley, along with the contracted Wallace McGeorge) are fully utilized and used concurrently and not in place of one another. There are 12 deep draft dredging reaches in the Mississippi River referred to as the Mississippi River Crossings. Each crossing is approximately 2-3 miles long, 500 ft wide and 45 ft deep and each takes 1-4 months of dredging annually after the high water season has caused sediment to accumulate in the channel prism. Dredging of these 12 crossings is required at the same time every year which requires simultaneous work of the 3 dustpan dredges. As such, the alternative to only use the government owned dredges, Jadwin and Hurley, would not meet the mission for the highest priority navigation channel in the United States.

d. Impact: Over $400 Billion of the nation’s trade utilizes the Mississippi River and it is a vital conduit for transporting equipment, materials and commodities necessary to support Department of Defense missions. The Mississippi River is the highest priority navigation channel in the United States. The deep draft crossings between New Orleans and Baton Rouge provide access to the #1 and #8 highest tonnage US Ports (Port of South Louisiana and Port of Baton Rouge). Maintenance of this channel provides an 8:1 return on investment. The channel handles over 500 million tons of cargo annually and accounts for 18 percent of US waterborne commerce. The

Mississippi River carries an estimated 60% of US grain shipments, 22% of oil and gas shipments and 20% of the nation’s coal. ExxonMobile’s Baton Rouge Refinery, located at the northern most crossing, is the 4th largest oil refinery in the US and the 12th largest in the world and can process 13.7% of the country’s refining capacity. The Mississippi River, the largest river system in North America, is the main stem of a 12,350 mile long network of inland navigable waterways and links the heartland of the US to the coast.

Without dredging, the navigation channel will quickly become deficient and will result in navigation width and depth restrictions for vessels. The economic value of this maritime transportation system is measured in billions of dollars. Population affected could include the majority of the United States. Impacts will include light loading and or diversion of vessels to other world ports. A deteriorating channel increases the chances for vessel groundings or accidents that may include consequences such as environmental damage, bodily injury, complete closure of the Mississippi River and national economic loss.

6. Efforts to Obtain Competition: In accordance with Defense Federal Acquisition

Regulation Supplement (DFARS) 205.205-71, DFARS 206.302-1(d), and DFARS Procedures, Guidance and Information (PGI) 206.302-1(d), a sources sought, W912P819SS0004, was posted by MVN to Federal Business Opportunities website on 25 March 2019 to seek out interested firms for a new dustpan dredge contract. The sources sought had a response date of 9 April 2019. Only one source responded to the notice and that was Pine Bluff Sand and Gravel Company (PBS&G). On 13 May 2019, MVM posted a synopsis, W912EQ-19-M-0001, for the 6-month extension to the current contract and did not receive any responses to the posted synopsis, nor did any contractor other than PBS&G show any interest in this requirement. In accordance with FAR 5.203(a) an notice of intent to solicit and negotiate a sole source contract will be posted a minimum of fifteen (15) days before the issuance of the solicitation.

MVM solicited their FY16 requirement as an unrestricted RFP with HubZone Evaluation preference. The requirement was solicited and awarded on a competitive basis, in order to provide opportunities for small and disadvantaged firms. Only one proposal was received.

Although no known small businesses have expressed an interest in this project, PBS&G is required in their current contract to subcontract 30% of its work to a small business.

MVM advertised Solicitation DACW66-00-R-0005 on 16 Aug 2000, which allowed open competition whereby any contractor could construct a new dustpan dredge or modify an existing dredge so that it would conform to the requirements of a dustpan dredge set forth in the specifications. The specification was set up as two bid lots, such that it allowed for a contractor with an existing dustpan dredge to bid and it also allowed a contractor without an existing dustpan dredge a one year period to “construct, modify, improve, alter, or otherwise prepare a dredge for work under this contract.” The contract period spanned over an eleven year period and included a five-year base period with five one-year option periods to follow. There was more than one contractor who submitted proposals, but Pine Bluff Sand and Gravel was, ultimately, the low offeror for the 11-year project. It was awarded to them on 2 July 2001 (DACW66-01-C-0016). The 11-year solicitation proved that constructing a new dustpan dredge or modifying an existing dredge to conform to the requirements of a dustpan dredge cost substantially more than the existing dustpan dredge, namely, the Wallace McGeorge. One of the main detriments for any competing contractor is that the Corps has a need for just one private industry dustpan dredge to perform dustpan dredging within the primary dredging region. There are no other needs throughout the nation for this type of dredge, so contractors view it as highly risky to invest substantial sums of money in a piece of equipment that would require almost year round work for the next 20+ years in order to recoup their investment. Near the conclusion of the 11-year contract, MVM issued an unrestricted RFP, W912EQ-12-R-0005, with the option to build a dustpan dredge over a one-year period and then perform work over a one-year base period with three one-year option periods to follow. Pine Bluff Sand & Gravel was the successful offeror (and only offeror) to compete for this contract.

7. Actions to Increase Competition: MVN will continue market research efforts for future follow-on contracts. MVM has previously discussed the Mississippi River crossings dredging requirement at industry-related conferences and Small Business Conferences, and MVN will continue to do the same. Prior to the next procurement, the Government intends to perform a cost benefit analysis to determine whether the costs associated with replacing a sole source solution would or would not outweigh the benefits of competition.

By continuing to advertise and publically discuss the requirement, and by continuing to consider terms to accommodate the construction of a vessel by potential offerors in order for them to be able to perform the work, the Government will continue to actively seek new entrants into the market.

8. Market Research: Market research was completed in August 2019 by the Contract Specialist, Kimberly Schneider, and dredging technical experts, Dave Vossen and Ashely Wainright, at MVN.

Based upon the response to the sources sought and procurement history, the recommended procurement method is to pursue a Sole Source contract to the large business Pine Bluff Sand & Gravel Company. There is not a reasonable expectation that anyone other than PBS&G can meet this requirement.

Listing of sources that responded to the market research.

Vendor Name Location CAGE Code Capability Pine Bluff Sand & Gravel Company

White Hall, AR 0CWV0 Pine Bluff Sand & Gravel Company (PBS&G) was incorporated in the State of Arkansas in 1913 and has been in the marine construction and dredging business for 102 years. For many decades, the Mississippi Valley Region has been Pine Bluff’s primary dredging and marine construction market.

Pine Bluff’s marine operations are coordinated from its Alexandria, Louisiana facility, a central location for work in the Corps of Engineers Memphis, Vicksburg, Little Rock, Galveston, and New Orleans Districts. This enables management to provide hands on assistance to its project supervisors as needed. Pine Bluff has a depth of management experience and employs two licensed Civil Engineers, one licensed surveyor and one Civil Engineer graduate. Additionally, Pine Bluff has four dredge superintendents with over 120 years of combined experience performing civil works projects in the Mississippi Valley Region. Pine Bluff is vertically integrated within its marine dredging and construction operations. Pine Bluff owns three 24” cutterhead pipeline dredges, three sand and gravel dredges and one 38” dustpan dredge. It has been in the dredging business since 1913 and has operated the Wallace McGeorge dustpan dredge since 1991.

PBS&G has been the only firm to propose on the subject project and based upon industry responses over the past decade, there are currently only three dustpan dredges in the US that have the technical capability to dredge the deep draft crossings between Baton Rouge and New Orleans. USACE owns two of the three and the third, the Wallace McGeorge, is owned by PBS&G. PBS&G has established a good record of past performance in fulfilling this requirement.

9. Interested Sources: See Paragraph 6 for the synopsis information. To date, the only source to express interest in the acquisition is Pine Bluff Sand & Gravel (PBS&G). No other sources have written to express interest in this acquisition.

10. Other Factors.

a. Procurement History: MVM has procured this requirement for the last 18 years.

PBS&G has been the only company to submit a bid for this requirement during that time. Reference Contract numberW912EQ-16-C-0008 and W912EQ-12-C- 0011 both full and open, no set aside used.

b. Previous Solicitations by MVM which have incorporated time for other bidders to convert their current dredge vessel to meet the Government requirement have been unsuccessful in attracting additional competition.