Inactive

1. Identification of the agency and the contracting activity, and specific identification of the document as a “Justification for Other than Full and Open Competition.” Agency: This is a Justification... 1. Identification of the agency and the contracting activity, and specific identification of the document as a “Justification for Other than Full and Open Competition.” Agency: This is a Justification for Other than Full and Open Competition for the National Energy Technology Laboratory (NETL) of the U.S. Department of Energy. NETL seeks award of a contract on an 8(a) sole source basis to North Wind General Contractors, LLC for Construction services related to the Albany, OR Building 34 Advanced Alloy Signature Center Facility project. 2. The nature and/or description of the action being approved, i.e. sole source, limited competition, establishment of a new source, etc. Nature of Action: 8(a) Sole-Source The construction of the B34 Advanced Alloy Signature Center at the NETL Albany, Oregon site. Requisition No. 24FE002887 NETL requests approval of this Justification for Other than Full and Open Competition (JOFOC) to authorize an 8(a) sole source contract for Construction services needed in support of the NETL Building 34 Advanced Alloy Signature Center Facility project. NETL based their Sole Source 8(a) determination off of a comparison of the capabilities of other identified 8(a) sources. The required expertise includes construction experience for laboratory and office spaces. North Wind was found to be the most capable of performing this requirement successfully. See Market Research section for more details. 3. A description of the supplies or services required to meet the agency’s needs. Services: Provide construction services, including demolition, remediation, and supervision, for the new B34 Advanced Alloy Signature Center at the NETL Albany, Oregon site. Building 34 currently comprises approximately 7,922 square feet and houses a high bay laboratory, an equipment room, a shop/work area, an electrical room, and a restroom. The high bay laboratory currently contains multiple furnaces for metals research with associated equipment. The equipment room currently houses an air pollution control system, and the electrical room house a large, outdated, oil-filled transformer with associated electrical equipment. Building 34 does not currently house any active research projects. NETL intends to revamp Building 34 to house an Advanced Alloy Signature Center. It is expected that this revamped facility will add approximately 2,778 square feet to the footprint of Building 34. This work will require the removal of existing equipment and infrastructure and then a significant demolition of existing structures, including portions under abatement conditions. The construction will include a renovated structure to meet specified conditions, as well as architectural, electrical, mechanical, and plumbing infrastructure to meet specified requirements. The facility must provide code compliant laboratory spaces, a material staging/storage area, a control room and other support areas to allow for the safe and effective conduct of the required research and support operations. 4. The statutory authority permitting other than full and open competition. Section 7(j)(10) and 8(a) of the Small Business Act (15 U.S.C. §§ 636(j)(10) and 637(a)) 13 CFR 124.506(b)(1) 5. A statement demonstrating the unique qualifications of the proposed contractor or the nature of the action requiring the use of the authority. NETL found that when compared to the other sources (see Acquisition Plan, Section B.1.1) North Wind was found to be the most capable of performing this requirement successfully, given North Wind’s experience in design-build, design-bid-build and laboratory and office space construction experience. The other sources identified (T1 Construction, Viking Engineering and Construction, and RJK Construction) didn’t have any laboratory construction experience listed in their capabilities packages. The above statutory authority authorized the U.S. Small Business Administration (SBA) to establish a business development program, which is known as the 8(a) Business Development program. The 8(a) program is a robust nine-year program created to help firms owned and controlled by socially and economically disadvantaged individuals. Businesses that participate in the program receive training and technical assistance designed to strengthen their ability to compete effectively in the American economy. Also eligible to participate in the 8(a) program are small businesses owned by Alaska Native Corporations (of which North Wind is), Community Development Corporations, Indian tribes, and Native Hawaiian organizations. Small business development is accomplished by providing various forms of management, technical, financial, and procurement assistance. SBA partners with federal agencies to promote maximum utilization of 8(a) program participants to ensure equitable access to contracting opportunities in the federal marketplace. Once certified, 8(a) program participants are eligible to receive federal contracting preferences and receive training and technical assistance designed to strengthen their ability to compete effectively in the American economy. Certified firms in the 8(a) program can receive set-aside and sole-source contracts. In accordance with 13 CFR 124.506(b)(1), the Government may directly award to an Alaska Native Corporation (ANC). A Participant owned and controlled by an Indian Tribe, or an ANC may be awarded a sole source 8(a) contract where the anticipated value of the procurement exceeds the applicable competitive threshold ($4,500,000) if the SBA has not accepted the requirement into the 8(a) Business Development program as a competitive procurement. 6. A description of efforts to ensure that offers were solicited from as many potential sources as is practicable. Include whether or not a FedBizOpps announcement was made and what response, if any, was received, and include the exception under FAR 5.202 when not synopsizing. Describe whether any additional or similar requirements are anticipated in the future. This requirement was not competed as it was executed under the SBA’s 8(a) program via sole source action. The decision to move forward with the 8(a) contract type was to allow NETL the ability to accelerate the contract award process due to the project being a high visibility/high priority for NETL. This project is being funded by Inflation Reduction Act (IRA) project funding which is also time-limited in nature. As such, the sole source 8(a) route was deemed to be the most appropriate contract type. 7. Cite the anticipated dollar value of the proposed acquisition including options if applicable and a determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable. Anticipated Cost: The proposal for this construction effort is $35,867,560. Construction cost escalations in 2023 were an average of 3.4% for labor and 19% for materials (Gordian.com). The original Government Cost Estimate (GCE) was based on 2022 pricing that was developed by the Architect and Engineering (A&E) Design Contractor, DRS Architects. Given this pricing was built on 2022 numbers, NETL adjusted the GCE pricing by increasing the base dollar estimates for Materials and Labor by 3.4%, as this represents the consumer price index increase for 2023 for all items.[1] Then, the GCE was revised to account for the 19% in Materials escalation between 2024-2026, which added $5,035,501 to the GCE. Next, the 3.4% Labor escalation (based on Gordian.com labor increases for 2023) for this time period was added, which added $789,088 to the GCE. These escalations were carried through 2026, as these increases are expected to continue through then. These revisions result in a $20,652,971 base GCE price, or rather a sub-total. Field Supervision (15%) and Project Management (10%) costs were added to this subtotal, this increased the sub-total to $26,126,009. Lastly, G&A, Overhead, and Profit[2] are added which results in a final GCE price of $32,851,471 or approximately 8.4% lower than the final revised proposal price of $34,776,938.01, a reduction of $1,517, 559.37 from North Wind’s initial proposal. This roughly ~ $1.5M in reductions results from some Value Engineering initiatives that were identified, proposed and found to be acceptable. The remaining 8.4% is primarily due to variations in localized construction and material costs vs. average nationwide costs, which the cost estimate is based on. This is supported by the fact that the General Contractor proposing on the project confirmed full competition of all subcontractors on this project, with these subcontractors being drawn from within approximately 60 miles of the job location. The low bids for all subcontractors were taken for this project. The G&A, Overhead and Profit costs for the General Contractor (North Wind General Contractors, LLC) were reasonable. This being the case, the proposal price for this project of $34,776,938.01 is reasonable when the 19% Materials and 3.4% Labor percentage annual construction cost escalations for 2024-2026 and the localized contractor costs are taken into account. 8. A description of the market research conducted and the results or a statement of the reason market research was not conducted. Do not simply refer to the sources sought synopsis. The Contract Specialist reached out to the SBA’s Portland (OR) District Office for a listing of their 8(a) vendor portfolio and asked them to provide a few capability statements from the vendors within that portfolio who might be capable. NETL personnel identified an 8(a) Alaska Native Corporation (ANC) from the SBA’s Boise (ID) District Office (North Wind). As discussed within the Acquisition Plan for this requirement, NETL found that when compared to the other sources (see Acquisition Plan, Section B.1.1) North Wind was found to be the most capable of performing this requirement successfully, given North Wind’s experience in design-build, design-bid-build and laboratory and office space construction experience. The other sources identified (T1 Construction, Viking Engineering and Construction, and RJK Construction) didn’t have any laboratory construction experience listed in their capabilities packages. Additionally, Market Research was conducted for construction costs. For instance, from the website 2023 Construction Cost Trends By the Numbers | Gordian , construction cost trends for 2023 were as follows on average: Labor: 46% of labor wages increased over 4%. On Average, labor wages increased by 3.4%. Material: 82.5% of construction materials in the RS Means database experienced a significant cost increase with an average increase of 19%. Average Unit Cost Increases: Wood: 16% Steel: 22% Concrete/Masonry: 15% Electrical Conduit: 12% Insulation: 11% For this project, a 19% increase in cost for material and a 3.4% increase in labor costs come to an average increase of 11%. Assuming this trend continues through 2024 - 2026, this would mean an average escalation cost of 11% per year in overall material and labor costs. The higher than anticipated material costs were also confirmed in discussions with another construction manager with a major General Contractor in the area. This construction manager works primarily for a general contractor that does projects funded by the State of Oregon (i.e. for state universities and colleges). He indicated that he has also seen sharp increases in material costs on their projects in the last 1-2 years with both sourcing and lead time challenges and he expects this trend to continue. 9. Any other facts supporting the use of other than full and open competition, such as: Explanation of why technical data packages, specifications, engineering descriptions, statements of work or purchase descriptions suitable for full and open competition have not been developed or are not available. The requirement was offered and accepted into the 8(a) program, see statutory authority listed above. When FAR Subpart 6.302-1 is cited for follow on acquisition as described in FAR 6.302-1(a)(2)(ii), an estimate of cost to the Government that would be duplicated and how the estimate was derived. N/A When FAR 6.302-2 is cited, data, estimated cost, or other rationale as to the extent and nature of the harm to the Government. N/A 10. A listing of the sources, if any, that expressed a written interest in the acquisition. No Notice of Intent or Sources Sought was issued; however, the Contract Specialist reached out to the SBA’s Portland (OR) District Office for a listing of their 8(a) vendor portfolio and asked them to provide a few capability statements from the vendors within that portfolio who might be capable. NETL personnel identified an 8(a) ANC from the SBA’s Boise (ID) District Office (North Wind). See Market Research discussion above for more details. NETL also performed an SBA dynamic small business search (DSBS) to determine if any other Albany, OR regionally based 8(a) Tribally Owned, ANC, or Native Hawaiian organization vendors had local business knowledge and/or other similar construction expertise to offer. The DSBS search resulted in 0 vendors being identified that are potentially capable of performing the construction services that NETL required. 11. A statement of actions the agency may take to remove or overcome any barriers to competition if subsequent acquisitions are anticipated. This is the only action to be executed for the construction of the B34 Advanced Alloy Signature Center project. No further subsequent acquisitions for construction are anticipated. [1] Bureau of Labor Statistics, Consumer Price Index: 2023 in review [2] General Conditions 9%; Overhead and Conditions (12%); and Bonds 3%