Multiple Award Task Order Contract (MATOC) for Puerto Rico Power System Stabilization, Power Generation Services   11

The approximate issue date is 20 June 2023, with an approximate proposal due date of 20 July 2023. The project is available by downloading from the Internet only. Telephone and fax requests for this solicitation will not be honored. The project specification files are Portable Document Format (PDF) and can be viewed, navigated, or printed using Adobe Acrobat Reader. To download the files for this project requires registration at the System for Award Management (SAM) database http://www.sam.gov. Downloads are available through the SAM website.

Prior to submission of proposals all contractors must have an active registration in the System for Award Management (SAM) database. To register or update information go to http://www.sam.gov. AMENDMENTS WILL BE AVAILABLE FROM THE ABOVE WEBSITE BY DOWNLOAD ONLY. THIS ANNOUNCEMENT SERVES AS THE ADVANCE NOTICE FOR THIS PROJECT.

The purpose of this acquisition is to establish a MATOC with a shared capacity of $5 billion, with a five-year ordering period, to accomplish power system stabilization and power generation services under North American Industry Classification System (NAICS) Code 221112 Fossil Fuel Electric Power Generation. The projects to be completed will be the responsibility of the USACE Savannah District. The primary contract focus is on temporary emergency power augmentation and on related repairs of generation facilities to stabilize the PR power system. The work will consist of providing land based temporary generating units (dual fuel LNG/diesel), temporary transformers, control cabling, and installation of equipment. In addition, the work will contain operation of the equipment, including maintenance, fuel, coordination with PREPA and LUMA on operation schedule and connections to their equipment.

The Savannah District (SAS) intends to solicit and award a MATOC on an unrestricted basis and in accordance with the procedures at FAR 15.304(c)(1)(ii) in which award will be made to all qualifying offerors. A qualifying offeror is defined in FAR 2.101 as: an offeror that is determined to be a responsible source, submits a technically acceptable proposal that conforms to the requirements of the solicitation, and the Contracting Officer has no reason to believe would be likely to offer other than fair and reasonable pricing. Price will be a selection factor for all orders placed under the awarded contracts. Under this MATOC, hybrid firm-fixed price (FFP) Task Orders with cost-plus fixed fee (CPFF) elements are anticipated due to the uncertainty and volatility surrounding the cost of the fuel required to power the generators. FAR 16.103(b) states a firm-fixed-price contract, which best utilizes the basic profit motive of business enterprise, shall be used when the risk involved is minimal or can be predicted with an acceptable degree of certainty. Due to the nature of well-defined performance-based objectives and standards which will be provided at the Task Order level for these services, the risk associated with this well-defined work is low and therefore, USACE will utilize a firm-fixed price contract type for that portion of the work. However, the total cost for the Task Order-level power generation requirements is also heavily dependent on fuel costs, therefore fuel costs are the highest cost risk. The petroleum market has been volatile, with large swings in cost in recent history. As a result, the use of both FFP and CPFF elements at the Task Order level aids in the reduction of cost risks to the Government and is further mitigated in two ways. First, procurements will be competed at the task order level among the MATOC pool under FAR 16.505 Fair Opportunity ordering procedures. An independent government estimate will be prepared for each task order requirement based upon the PWS for that task order. In addition to the expectation of adequate price competition at the task order level to support price analysis, offerors will be required to submit a detailed cost proposal for any included CPFF CLINs, which will be reviewed during the Fair Opportunity selection process. Cost risks will be mitigated by closely evaluating the cost proposal compared to the independent government estimate for these CLINs, performing cost analysis of proposed man-hours, materials, and subcontractors, and calculating the probable cost of performance or cost realism for these CLINs. This analysis will disclose whether offerors are proposing methods of performance that will unnecessarily increase the cost to the Government for these CLINs. This is information the Contracting Officer will consider in making a task order award decision under the FAR 16.505 Fair Opportunity procedures.

Second, while the competitive nature of the task order selections keeps the contractors from overinflating estimated costs to build higher fee pools, the contractors receiving task order awards will be incentivized to minimize fuel costs during performance. Since the fee for estimated costs will be fixed at the time of task order awards, by minimizing their costs, the contractors will increase their profit margins on the task orders. The greater the contractors underrun fuel costs, the higher the percentage of profit from the fixed fees. Higher profit margins on projects leads to greater company value, providing additional reduction in cost risk.