gasmay-signed.pdf

UNITED STATES DEPARTMENT OF JUSTICE

FEDERAL BUREAU OF PRISONS

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

Natural Gas Utility Supply USP Canaan

Pursuant to the Federal Acquisition Regulation (FAR) Part 6.302-2, and the Bureau of Prisons Acquisition Policy (BPAP) Part 6.304(a), the Federal Bureau of Prisons (FBOP) has determined that the procurement of natural gas utility supply for the United States Penitentiary (USP) Canaan, meets the criteria established for other than full and open competition. It is further determined that an unusual and compelling urgency precludes full and open competition and delay in award of a contract would result in serious injury, financial or other, to the Government. 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 USP Canaan 3057 Eric J. Williams Memorial Drive Waymart, PA 18472

(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 supply provided to USP Canaan, from UGI Penn Natural Gas, Inc (UGI). USP Canaan has a present and continuing requirement for natural gas utility service for the proper operation of the facility. This justification is for the month of May 2018 or until a long-term contract is effective, whichever is sooner. USP Canaan’s natural gas requirement has been advertised at the Government Point of Entry and a contract for distribution only was awarded with an effective date of 12/1/17. This justification is for the commodity itself and is intended only to cover the time period it will take to acquire the appropriate data and allow adequate time for the U.S. General Services Administration (GSA) to award an utility area-wide contract for the supply portion of the gas utility service.

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

UGI shall provide to the government facility at USP Canaan, natural gas utility 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. Services shall be provided on an un-interruptible daily basis. UGI will be responsible to maintain and/or repair all associated natural gas lines and equipment, including associated costs for such repair, to the delivery point or meter of USP Canaan. Pursuant to FAR Part 41.202, UGI continues to provide the “entire gas utility service” (e.g., transmission, distribution, system operation and maintenance, metering, billing, etc.).

UGI shall provide natural gas supply service from May 1, 2018 through May 31, 2018, for a one-month period, subject to funds availability (FAR Clause 52.232-18). The total estimated amount for April is $31,600.00.

(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)(2), when the agency’s need for the supplies or services is of such an unusual and compelling urgency that the Government would be seriously injured unless the agency is permitted to limit the number of sources. The application which permits use of the cited statutory authority are stated at FAR Part 6.302-2(b)(1-2), where an unusual and compelling urgency precludes full and open competition and delay in award of a contract would result in serious injury, financial or other to the Government. Analysis of the market indicates there are several gas suppliers that may be able to supply gas on UGI’s newly installed pipeline, however, UGI is the only entity currently available to supply on an urgent short-term basis while GSA issues a solicitation by auction for a contract.

USP Canaan has an urgent and compelling need for natural gas utility service for the continuation of normal operations of the institution in order to provide a safe, secure environment to confine offenders and protect the public. USP Canaan is a high-security United States federal prison for male inmates, with an adjacent satellite prison camp for minimum-security male inmates. The facility is located in Waymart, Pennsylvania and houses over 1,500 offenders.

USP Canaan utilizes natural gas to prepare all meals, heat domestic water and to produce steam for other essential services. Equipment that can only be run on natural gas includes: hot water and steam boilers, industrial clothes dryers, domestic water heaters, griddles, ovens, skillets, deep fryers and ranges with ovens. There is no other alternative fuel source for these functions. USP Canaan also utilizes natural gas as primary source of fuel in the physical plant for heating purposes. USP Canaan has the ability to use #2 fuel oil as an alternative fuel source for boiler operations only.

It is imperative that USP Canaan continues to receive an uninterrupted supply of natural gas to maintain the orderly running of the institution. Without gas service, USP Canaan would no longer have access to hot water, laundry or cooked food. Given that USP Canaan is an institution with approximately 1,500 offenders in residence, loss of such basic and vital services would immediately result in catastrophic consequences for the health, safety, and wellbeing of both staff and inmates, causing irreparable harm to the institution.

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

On 8/25/17, UGI was awarded a ten-year natural gas distribution contract for USP Canaan. At the time of award, UGI estimated they would need approximately six months to get the infrastructure in place to begin performance. UGI was able install a pipeline ahead of their original timeline and was ready to start performance on December 1, 2017. USP Canaan initially understood that GSA would be able to award a supply contract with an effective date that falls in conjunction with the distribution effective date.

In November of 2017, USP Canaan was informed that GSA will not begin the auction process for the supply until it is confirmed that the new pipeline is up and running and usage numbers are verified. In order to provide this affirmation, USP Canaan has an urgent and immediate need for the short-term supply of gas.

(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:

The ten-year requirement for natural gas at USP Canaan was posted to the Government Point of Entry and an award for distribution was made to UGI effective 12/1/17. The solicitation process with GSA has been initiated for the supply portion of the gas. This justification notice will be publicized for 30 days at the Government Point of Entry in accordance with FAR Subpart 5.2.

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

The estimated average monthly cost, which was based on invoice history (MCF used) and current market prices, for the natural gas supply is $31,600.00. A Rate Service Agreement will be used to determine the actual monthly rates based on the Midpoint index price for Tennessee Zone 4 300 leg as published by Platts’ Gas Daily. UGI is a regulated utility company and this rate methodology is determined to be fair and reasonable.

(8) A description of the market research conducted:

Market research revealed that the GSA will be able to compete the gas supply via an auction style solicitation. Historically, the GSA auctions have resulted in very competitive rates for the geographic area, as there are several available suppliers. UGI is the only available vendor to supply on their new pipeline on an immediate and urgent basis without a contract commitment beyond a month’s time. UGI shall provide to the government facility at USP Canaan, natural gas utility 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. UGI shall provide services on an un-interruptible daily basis. UGI will be responsible to maintain and/or repair all associated pipelines and equipment, including associated costs for such repair, to the delivery point or meter of USP Canaan. Pursuant to FAR Part 41.202, UGI continues to provide the “entire Natural Gas utility service” (i.e., transmission, distribution, system operation and maintenance, metering, billing, etc.).

I. RECOMMENDATION:

1. It is this Contracting Officers determination there is a source available that is capable of providing the required services.

The requirement will be awarded to UGI as a single award of a firm-fixed price requirements type natural gas utility purchase order utilizing FAR Part 6, 12, 13, and 41. A Performance-Based Acquisition 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.

2. One potential source is UGI, which appears able to satisfy the requirement. The provision of natural gas service is essential for the orderly operation of USP Canaan. UGI is a regulated utility.

3. This requirement for May will not be posted to Fedbizopps as a combined synopsis solicitation to promote competition, broaden industry participation, and assist small business concerns in obtaining contracts for USP Canaan, Pennsylvania.

This requirement meets the exemption at FAR 5.202(a)(2) the proposed contract action is being made under FAR 6.302-2 and the Government would be seriously injured if the agency complies with the time periods specified in FAR 5.203.

4. The U.S. General Services Administration has issued a Delegation of Contracting Authority to the U.S. Department of Justice, Federal Bureau of Prisons to negotiate and execute utility service contracts. This includes the provision of natural gas supply service for USP Canaan.

II. COMMENTS: Based on the results of the above research, it is determined that this requirement can be met by a commercial item. Natural gas 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. This Contracting Officer, as the awarding official, has determined that the award of the natural gas utility service purchase order will be performed by UGI. The FBOP, as the requiring agency, must make a determination of the best procurement approach that satisfies USP Canaan’s schedule, performance, and delivery requirements.

No other source could be expected to provide gas on UGI’s pipeline on a short-term urgent basis while GSA works to award the supply contract.

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

None.

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

There were no additional sources, other than UGI, that responded to the natural gas solicitation posted to the Government Point of Entry. The previous gas service provider has indicated that they are not interested in a short-term agreement with USP Canaan.

(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:

USP Canaan will continue to work with GSA to expedite an award for a long-term contract for natural gas supply in the short term via a competitive auction. The BOP has begun to remove barriers to competition; however, a short-term purchase order is needed with the current distributor to allow GSA to conduct the auction.

(12) Contracting Officer’s Certification:

I hereby certify that this request for Justification and Approval of Other Than Full and Open Competition is made in good faith, that the supporting data and information are accurate and complete to the best of my knowledge and belief, and that I would not be making this request if it were feasible to fully compete this requirement. I further certify that this request is not the result of lack of advance planning or a desire to expend funds while those funds are still available.

Kathleen Churchill, Supervisory Contract Specialist USP Canaan

Kathleen Churchill