JOFOC19-78_MAN_Natural_Gas_Utility_FY-20_Redacted.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

FCI Manchester Natural Gas Utility Service

Pursuant to the Federal Acquisition Regulation (FAR) Part 6.302-1(b)(3), and the Bureau of Prisons Acquisition Policy (BPAP) Part 6.304(b), the Federal Bureau of Prisons (FBOP) has determined that the procurement of Natural Gas utility service for the Federal Correctional Institute (FCI) Manchester located in Manchester, Kentucky, meets the criteria established for other than full and open competition. It is further determined that only one responsible source and no other supplies and/or services will satisfy agency requirements. This limitation on competition is justified as supported by the following information in accordance with FAR Part 6.303-2:

1. Identification of the Agency:

U.S. Department of Justice Federal Bureau of Prisons FCI Manchester 805 Fox Hollow Road Manchester, KY 40962

2. Nature and/or description of action being approved:

This justification for other than full and open competition is for the acquisition of Natural Gas utility services supplied to FCI Manchester, from the original and sole provider of such services. FCI Manchester has a present and continuing requirement for Natural Gas service for the proper operation of the facility.

3. Description of supplies or services required to meet the agency needs:

Pursuant to FAR Part 41.202, Delta Natural Gas continues to provide the “entire Natural Gas utility service” (i.e., production, distribution, system operation and maintenance, metering, billing, etc.). Delta shall provide to the government facility at FCI Manchester, Natural Gas services in a manner and form that is consistent with all applicable laws, rules, codes, industry standards, permits, and regulations, promulgated by any and all governmental authorities having jurisdiction. Delta shall provide services on an uninterruptible daily basis 365 days per year. Delta will be responsible to maintain and/or repair all associated equipment, including associated costs for such repair, up to the delivery point or meter of FCI Manchester. Delta will be responsible to ensure that the equipment, utilized to provide natural gas services will be maintained and operated in compliance with all rules and regulations set by the Public Service Commission of Kentucky, in accordance with all Federal, State, County, and local government for a safe natural gas service.

Delta shall provide Natural Gas utility services for the period from October 1, 2019, through September 30, 2020, for a twelve-month period, subject to funds availability (FAR Clause

52.232-18). The total estimated annual amount for Natural Gas utility service is $498,058.59.

4. An identification of the statutory authority permitting other than full and open competition:

This justification to award as a sole source is prepared pursuant to the exception to full and open competition requirements in accordance with the statutory authority for these services that is found at 41 USC § 3304 (a)(1), when the supplies or services required by the agency are available from only one responsible source. The application which permits use of the cited statutory authority are stated at FAR Part 6.302-1(b)(3), “When acquiring utility services (see 41.101), circumstances may dictate that only one supplier can furnish the service (see 41.202). When a public utility supplier refuses to execute a tendered contract the agency may proceed with the acquisition and pay for the utility service under the provisions of 31 USC § 1501(a)(8). Analysis of the market indicates that Delta has proprietary rights up to the meter at FCI Manchester. In order for another provider to be capable of providing the service, significant capital improvements would be needed. The Bureau would be required to pay for the capital improvements, but it would not recover the costs of duplication of services, connection fees and infrastructure installation costs through competition. The current requirement is for follow-on services and does not include funding for capital improvements.

5. A demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited:

Delta is the private-owned sole provider of Natural Gas utility service in the Clay County service area. The Public Service Commission of Kentucky is the governing body that sets all rates and tariffs with the responsibility of Natural Gas utility service for the locale in which FCI Manchester resides. Delta is an entity in the Public Service Commission of Kentucky jurisdiction and the only agent authorized by rules and regulations to provide these services within the service area. Having a single supplier of Natural Gas for this area is the most efficient method of providing these services. This requirement cannot be conveniently or economically obtained by contracting directly with a private source because building multiple distribution and removal systems would be costly and inefficient.

6. A description of efforts made to ensure that offers are solicited from as many potential sources as is practicable including whether or not a notice was or will be publicized as required by FAR Subpart. 5.2:

As stated in FAR Part 5.202(a)(5), exceptions to transmitting a notice to the Government Point of Entry (GPE), the contracting officer need not submit a notice when ‘the proposed contract action is for utility services other than telecommunications services and only one source is available.’ A General Services Administration (GSA) area-wide nor a single point contract for Natural Gas utility services in the FCI Manchester area is not available at this time.

7. A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable:

The current rates offered by Delta are equal to the market price levied other commercial and industrial users in the FCI Manchester area. Delta published tariff has provided sufficient data to the FBOP contracting officer, pursuant to FAR 15.402, Pricing Policy, allowing the ability to make a preliminary determination that such anticipated costs appear to be fair and reasonable. Delta is a for-profit corporation operating pursuant to the right and power granted by Chapter 278, Section .040 of the Kentucky Code. Utility rates are enacted by tariffs set by the Public Service Commission of Kentucky, which is charged under Kentucky law to ensure that rates be just and reasonable. As regulated by the Public Service Commission of Kentucky, Delta is authorized to provide (i) production, treatment, and distribution of natural gas; and (ii) for such utility services as the area may now or hereafter have the power to provide. Natural Gas rates established by the Public Service Commission of Kentucky shall be adjusted as necessary by the Commission to compensate proportionately for any increase in the cost of energy purchased by Delta. A formal decision in the form of periodic rulings, reviews, or similar actions of a governmental body, or embodied in the laws, are sufficient to set pricing (see FAR 15.403-1[c][2]) and the purchasing of supplies and services from a responsible source is determined fair and reasonable. The establishment of the current supply and delivery of services began when the original service connections were installed and the meters set in 2002.

8. A description of the market research conducted:

This documentation is in accordance with FAR Part 10, which describes the policies and procedures for conducting market research in a process of finding viable sources of goods and services to meet government requirements and to find the most suitable approach to acquiring, distributing, and supporting supplies and services. This report is submitted in support of an acquisition with an estimated value in excess of the simplified acquisition threshold. Below are the findings of the market research for the above referenced requirement.

Product Service Code: S- Utilities and Housekeeping Services – S111 Gas Services.

North American Industry Classification System (NAICS): 221210 Natural Gas Distribution = this industry comprises establishments primarily engaged in the distribution of Natural Gas.

Standard Industrial Classification (SIC) Code: 4924 Natural Gas Services.

Estimated Contract Value (including options): $498,058.59 for one year

Commercial Item Determination: Natural Gas utility service is an item that is of a type customarily used by the general public and by non-governmental entities for purposes other than governmental purposes.

Market Analysis: The results of market research have determined that the government’s needs can be met by items customarily available in the commercial marketplace.

The market research conducted by the contracting office and the Facilities Department personnel determined that a GSA area-wide or single point contract is not available in accordance with Title 31 USC § 1535. No Interagency Agreement is available for use either. GSA is specifically authorized by law and regulation to purchase utility services on behalf of other agencies by providing an Assisted Acquisition. In August 2010, in accordance with 40 USC 121 § (d), GSA issued the FBOP a Delegation of Authority for nationwide authority to negotiate and execute utility service contracts at Federal facilities under the control and direction of the FBOP in accordance with 40 USC 501 § (b)(1)(B)for a 10 year period. The FBOP, as the requiring agency, must make a determination of the best procurement approach that satisfies FCI Manchester’s schedule, performance, and delivery requirements. Delta is the current Natural Gas utility service provider for FCI Manchester and has serviced the facility since 1992. No other source could be expected to make the capital investments for the infrastructure required to provide Natural Gas service to meet FCI Manchester’s requirements. FCI Manchester has no reasonable expectation(s) that Delta would entertain entering into a contractual relationship at this time.

It is this Contracting Officers determination there is a source available that is capable of providing the required services. The procurement will be conducted in accordance with the procedures as outlined in FAR Part 12, 13, and 41. A Performance-Based Acquisition (PBA) method will not be used for this procurement as it is determined not applicable. A PBA relies on the use of measurable performance standards and financial incentives in a competitive environment to encourage competitors to develop and institute innovative and cost-effective methods of performing the work.

9. Any other facts supporting the use of other than full and open competition:

The provision of Natural Gas utility services is essential for the orderly operation of FCI Manchester, which was designed with a rated capacity to collectively house approximately 1272 inmates. The facility houses male inmates of all security levels who are in in-custody and out-custody status. State regulations and local ordinances limit the providers of this service to only one.

10. A listing of the sources, if any, that expressed, in writing, an interest in the acquisition:

There were no other sources which expressed an interest in this acquisition.

11. A statement of the actions, if any, the agency may take to remove or overcome barriers to competition before any subsequent acquisition for the supplies or services required:

Contracting and requirements staff continue to conduct appropriate market research to determine if sources capable of satisfying the agency’s requirement exist and to overcome competition barriers. Deregulation laws are presently nonexistent and no alternative source

06/18/2019

Digitally signed by CHARLES DOGGETT DN: c=US, o=U.S. Government, ou=Dept of Justice, ou=BOP, cn=CHARLES DOGGETT, 0.9.2342.19200300.100.1.1=15001000663439 Date: 2019.06.19 12:28:22 -05'00'

BONNIE

BUETER

Digitally signed by BONNIE BUETER DN: c=US, o=U.S. Government, ou=Dept of Justice, ou=BOP, cn=BONNIE BUETER, 0.9.2342.19200300.100.1.1=15001000821828 Date: 2019.06.18 15:23:14 -05'00'