Amendment 0013 Attachment 01 - RFI Letter.pdf

1 PARKVIEW PLAZA | SUITE 800

OAKBROOK TERRACE, IL 60181

630.574.3000

January 7, 2021 Rev 1 without Footer (original submission December 29, 2020)

VIA ELECTRONIC MAIL

Mr. Benjamin G. Hoell Contracting Officer U.S. Army Corps of Engineers, New England District 696 Virginia Road Concord, Massachusetts 01742-2751 Email: benjamin.g.hoell@usace.army.mil

Solicitation: W912WJ-21-B-0001 Agency: U.S. Army Corps of Engineers, New England District

Dear Contracting Officer Hoell:

Great Lakes Dredge & Dock Company (“GLDD”) is submitting this letter to address our concerns about the IFB’s current lack of clarity on potential schedule impacts when performing work in the FAA Zones. Although GLDD has submitted pre-bid questions about these terms, this letter details our concerns and proposes IFB revisions to allow bidders to accurately and aggressively price this work. In lieu of a protest, this letter is submitted pursuant to FAR 33.103’s direction that all parties should use their best efforts to resolve concerns “through open and frank discussions” and in the spirit of the IFB’s “partnering” clause.

As detailed below, the Corps’ responses to Q&As appear to have introduced substantial ambiguities into the IFB by seeking to impose on the contractor the full risk of any delays due to aviation operations, while – at the same time – failing to provide bidders any information on which to price this risk and undermining the regulatory purpose of the FAA “no hazard” determinations. Nor can the Corps reasonably expect that qualified dredging companies have meaningful business judgments to apply to aviation operations. As a result, the IFB deprives bidders of sufficient information on which to intelligently compete on a fair and equal basis and forces them to submit higher pricing with potentially unnecessary contingencies to account for unquantifiable daily construction delays due to aviation operations.

Given the scale of aviation operations, the Corps has a vested interest in maximizing the bidders’ ability to accurately bid. Boston Logan is the busiest airport in New England, with over 30,000 flights per month (pre-COVID) and the capacity to accommodate between 60 to 120 runway operations per hour.

The sheer volume of those daily aviation operations means that the Corps will be directly impacted by the information missing from this IFB. The Corps faces the risk of either substantial overpayments if the lowest bidder includes contingencies for delays that never occur or serious performance risks if the lowest bidder vastly underestimates the delays and is unable to cover its costs to continue performance.

After consideration of the information below, we strongly believe that the Corps will agree that it is neither fair nor in the Government’s interests to ask bidders to submit bid pricing until it has resolved

December 29, 2020 the uncertainties created by the current IFB. To remedy the issues detailed below, we request that the Corps (1) make available for bidders the historical data on the time associated with delays, disruptions, or stop work directions caused by aviation operations during performance of the Phase 2 Contract; (2) make available for bidders any data and information relating to differing site conditions encountered during the Phase 2 Contract (as reflected in a modification to that contract); and (3) consider amending the IFB as follows (with the Corps to insert a reasonable and appropriate number of work stoppage days in lieu of the bracketed text in paragraph c):

(a) delete the following sentence from the Corps’ response to Q&A No. 4 in Amendment 0004:

“There are no pre-determined allowable/approved timeframes and durations during which the contractor will be able to work uninterrupted within the Turning Basin and Massport Aviation zone”;

(b) delete the following sentence in Section 01 11 00, Paragraph 1.7.4 (“Restricted Operations Associated with Logan Airport”): “Additional compensation will not be due to the Contractor for impacts to the work caused by Massport Aviation Operations;” and

(c) replace that sentence by adding the following sentences in the same location in Section 01 11 00, Paragraph 1.7.4: “Additional compensation will not be due to the Contractor for impacts to the work caused by Massport Aviation Operations where such impacts result from the Contractor’s failure to comply with conditions, restrictions, or limitations in the applicable FAA Determinations. If the Contractor is required to stop work due to any directions resulting from Logan Airport or Massport Aviation Operations, including instructions from BOS ATCT, and the cumulative amount of stop work time exceeds [X (reasonable and appropriate number)] stoppage days per piece of plant during the performance period, then the Government will issue a modification pursuant to the Changes clause at FAR 52.243-4 and issue an equitable adjustment to the price and performance period for any such impacts exceeding [X (reasonable and appropriate number)] stoppage days per piece of plant.”

The IFB Fails to Provide Sufficient Information for Bidders to Intelligently Compete

As you know, the Boston Harbor Deepening Project is a three-phase project calling for the deepening and strategic widening of the Boston Harbor Federal Navigation Project. This third and final phase requires the contractor to drill, blast, and dredge approximately 500,000 CY of material. See IFB § 00100. A significant portion of the blasting area includes “FAA zones” – the work area identified on the FAA Coordination Map surrounding Boston’s Logan International Airport.

The Corps has already provided the FAA advance notice of this construction project pursuant to 14 C.F.R. § 77.9 and the FAA has conducted aeronautical studies pursuant to 14 C.F.R. §§ 77.25 to 77.35.

The IFB explains that the Corps “initiated aeronautical studies with the [FAA] to determine if equipment to be used within the contract area would be considered a hazard to air navigation” and that “[t]he FAA issued determinations at the completion of these studies.” IFB § 01 11 000, ¶ 1.7.4.

On the basis of the FAA’s aeronautical studies, the FAA issued 26 determinations of “No Hazard to Air Navigation for Temporary Structure.” For 16 of those determinations, the FAA’s aeronautical study concluded that “the temporary structure” (construction equipment) with a height up to 150 feet MSL would not exceed obstruction standards and would not be a hazard to air navigation. In 10 determinations, the FAA concluded that the construction equipment would “exceed obstruction standards” but would still “not be a hazard to air navigation” (subject to some conditions listed in the determination).

In those cases, the FAA is authorized to issue a No Hazard determination when its aeronautical study “concludes that the proposed construction or alteration will exceed an obstruction standard but would not have a substantial aeronautical impact to air navigation.” 14 C.F.R. § 77.31(d).

Like many construction projects, both the FAA Determinations and the contract terms provide that the contractor must coordinate with other stakeholders and users of the contract work area, to include the FAA, prior to blasting work and must adhere to the conditions set forth in the “FAA Determination Letters.” See IFB, Amend 0004; IFB, Specifications ¶ 1.5.1. Because GLDD’s equipment will not exceed the studied height, most FAA Determinations call for simply providing advance notice prior to erecting the equipment in the FAA Zone. Although a few FAA Determinations provide that the tower at Logan Airport may instruct the lowering of equipment (crane), those determinations include alternatives for when the contractor’s equipment cannot be lowered.

GLDD also had a virtual meeting with the author of the FAA Determinations. The FAA representative confirmed that, because GLDD’s equipment would be below the obstruction height, the FAA Determinations would permit construction to proceed 24/7 and that lowering of the crane would be expected when GLDD is not working.

In response to questions about work in the FAA Zones, however, the Corps introduced significant ambiguity about the FAA Determinations. In Amendment 0004, for example, the Corps answered questions by including language that would contradict the purpose of those determinations:

There are no pre-determined allowable/approved timeframes and durations during which the contractor will be able to work uninterrupted within the Turning Basin and Massport Aviation zone.

IFB, Amend. 0004, Q&A No. 4 (emphasis added). The Corps also answered other questions by suggesting that any coordination with Massport would result in “schedule impacts” that must be incorporated into bid pricing. Id., Q&A Nos. 3 and 4.

The Corps’ responses to the FAA-related questions render the IFB fundamentally flawed by introducing uncertainty about the FAA Determinations. Although the Corps worked with the FAA to obtain these “no hazard” determinations for bidding, the Corps’ responses rendered questionable the impact of those determinations by asserting that “[t]here are no pre-determined allowable/approved timeframes and durations” during which work can proceed in the Turning Basin and Massport Aviation zone. The FAA Determinations did exactly that – they established the parameters under which the successful contractor can perform this construction work without disrupting daily aviation operations.

FAQs issued by the FAA explain that “[w]hen a no hazard determination is issued, the airspace for that structure is released.”1 As a result, the Corps’ responses appear to doubt the accuracy of the information provided in the FAA determinations and call into question using the “no hazard” determinations to estimate pricing, even if the contractor meets the conditions of the determination.

1 See FAQ No. 20 at https://oeaaa.faa.gov/oeaaa/external/searchAction.jsp?action=generalFAQs (last visited on Dec. 21, 2020);

see also 14 C.F.R. § 77.25(b) (“The purpose of an aeronautical study is to determine whether the aeronautical effects of the specific proposal and, where appropriate, the cumulative impact resulting from the proposed construction or alteration when combined with the effects of other existing or proposed structures, would constitute a hazard to air navigation.”).

At the same time, the Corps’ Q&As suggested that the contractor would carry the full risk of any delays caused by aviation operations. Those Q&As indicated a possible expansive scope of the last sentence of the following clause, which is addressing limited impacts on operations:

Within the areas affected by the Boston Logan International Airport and Massport Aviation Operations, the Contractor may be required to stop work or move position in the event of declining weather conditions that hinder visibility to the extent that the Contractor's plant becomes a hazard to flying aircraft, or any other unforeseen conditions.

Close coordination with Logan Operations will be required. Additional compensation will not be due to the Contractor for impacts to the work caused by Massport Aviation Operations.

IFB, Specs, § 01 11 00, ¶ 1.7.4. This provision is limited to two potential conditions unrelated to the FAA Determinations: (1) “weather conditions that hinder visibility” but only “to the extent that the Contractor's plant becomes a hazard to flying aircraft” or (2) “any other unforeseen conditions.” In fact, the FAA has already determined that there is no hazard to air navigation if a contractor can meet the conditions in the FAA Determinations.

The Corps’ responses to Q&As, however, appear to suggest that this clause would apply more broadly and that bidders should incorporate into their bid “any potential schedule impacts” caused by the aviation operations – apparently including any delays caused by Massport despite a contractor’s full compliance with the conditions of the FAA Determinations. To the extent that the Corps is seeking to disclaim any liability for delays caused by Massport, then this would render the IFB fundamentally flawed because it fails to provide bidders any basis on which to calculate or price those delays.

Moreover, any such interpretation would be inconsistent with the well-established policy of attempting to avoid unnecessary contingencies in a bid. For example, in the context of encountering unforeseen hazardous material, the IFB is consistent with this policy, providing in the “Unforeseen Hazardous Material” clause that “[i]f material is hazardous and handling of the material is necessary to accomplish the work, the Government will issue a modification pursuant to FAR 52.243-4, ‘Changes’ and FAR 52.236-2, ‘Differing Site Conditions.’” IFB, Specs 01 35 26 ¶ 3.13.

Impact – the Current IFB Prevents Full and Open Competition and Will Not Result in the Best Pricing for the Corps

Unless remedied, the above provisions are preventing the Corps from obtaining the most competitive bid pricing for this Contract. As it stands, the IFB appears to be asking the contractor to assume the full risk of any delays whatsoever caused by aviation operations – without providing bidders any information on which it could reasonably evaluate and price this risk. The IFB Q&As also have resulted in questioning a bidder’s ability to rely on the FAA Determinations in formulating their bids, leaving bidders with no basis on which to prepare its anticipated construction schedule.

To account for these irreconcilable obligations, the current IFB will result in higher pricing from bidders to cover contingencies for unpredictable and unquantifiable disruptions and delays arising from every-day aviation operations – despite full compliance with the FAA Determinations. For this work, a contractor’s performance costs and, thus bid prices, are dependent on time because dredging companies incur significant daily costs just from owning, maintaining, and operating large dredging equipment, drilling, and other plant necessary to perform this work. Those contingencies would be necessary to cover additional time-based performance costs caused by unquantifiable aviation-related delays, such as costs associated with extended standby time, the extended deployment of equipment, multiple mobilizations and demobilizations, and potential overtime compensation.

Although bidders will have no choice but to include some price contingencies, bidders will invariably make wildly different assumptions about the impact of regular aviation operations and uninterrupted dredging time. Without any guidance from the Corps and without the ability to rely on the FAA Determinations for estimating, bidders’ pricing will be based on different assumptions about the potential for interruptions, delays, and the construction schedule. Due to these varying assumptions, the Corps will have no assurance that the lowest bid will reflect the lowest price that the Government could have obtained for performing the work actually required by a non-defective IFB.

Under Federal law, such ambiguities in solicitations fail to achieve fair and open competition because they create so much uncertainty that bidders are not competing on a level playing field. See Global Tech. Sys., B-411230.2, Sept. 9. 2015, 2015 CPD ¶ 335 at 19-20; Univ. Research Corp., B- 216461, Feb. 19, 1985, 85-1 CPD ¶ 210 at 3. In Global Technical Systems, for example, GAO held that the vague specifications were defective where the lack of detail prevented offerors from formulating prices on a common basis. Likewise, here, the defective IFB is denying bidders a common basis on which to estimate the actual duration of the contractor’s work to establish the most accurate pricing consistent with the actual cost of the work.2

In contrast, the Corps will receive competitive pricing where bidders have sufficient information to reasonably and intelligently compete based on their assessment of the time it will take to perform, to include reduced costs where efficiencies can be achieved. Similarly, placing risk on the contractor for delays despite compliance with the FAA Determinations contradicts the well-established principle that bidders can rely on bidding documents to establish its method of performance. If the government changes or later restricts the contractor’s method of performance, the contractor is entitled to an equitable adjustment. See Otto Randolph, Inc., ASBCA No. 11539, 66-2 BCA ¶ 5928 (Oct. 25, 1966); Valerie Lewis Janitorial v. Dep’t of Veterans Affairs, CBCA 4026, 2020 WL 2507940 (May 5, 2020) (holding that contractor was entitled to an equitable adjustment when agency later required the contractor to employ a two-step cleaning method). Under this approach, the Government directly benefits from more accurate bidding and substantially lower pricing, without inflation for risks which may not eventuate, and it only pays for changes in performance that result in increasing the Contractor’s costs of performance.

Therefore, because the Corps’ IFB fails to provide any assurance that bidders will compete on an equal basis or that the lowest priced bid will reflect the lowest cost to the Government if the Corps had resolved these uncertainties, the current IFB should be amended.

2 See Coastal Int'l Sec., Inc., B-411756, Oct. 19, 2015, 2015 CPD ¶ 340 (finding that “RFP did not contain sufficient information to enable offerors to compete intelligently and on a relatively equal basis because it contained a latent ambiguity”);

Sea-Land Service, Inc., B-246784.2, Aug. 24, 1992, 92-2 CPD ¶ 122 at 10 (“A solicitation must contain sufficient information to allow offerors to compete intelligently and on an equal basis”); University Research Corp., 85-1 CPD ¶ 210 at 3 (“As a general rule, offerors must be given sufficient detail in an RFP to enable them to compete intelligently and on a relatively equal basis. Specifications must be free from ambiguity, and must describe the agency’s minimum needs accurately.”).

Conclusion

GLDD appreciates the Corps’ consideration of this letter. For the reasons explained, we request that the Corps (1) make available for bidders the historical data on the time associated with delays, disruptions, or stop work directions caused by aviation operations during performance of the Phase 2 Contract; (2) make available for bidders any data and information relating to differing site conditions encountered during the Phase 2 Contract (as reflected in a modification to that contract); and (3) amend the IFB to incorporate the amendments proposed above.

Please let us know if you would like to further discuss our concerns about the IFB.

Sincerely, GREAT LAKES DREDGE & DOCK

COMPANY, LLC

Mark Reid

Vice President, Northeast Regional Manager cc: Erin E. Bradley, Contracting Officer, US Army Corps of Engineers (via email erin.e.bradley@usace.army.mil)

Ms. Elizabeth Glasgow, Contract Specialist, US Army Corps of Engineers (via email elizabeth.k.glasgow@usace.army.mil)