20-37.pdf

DEPARTMENT OF THE NAVY

NAVAL FACILITIES ENGINEERING COMMAND SOUTHWEST

1220 PACIFIC HIGHWAY

SAN DIEGO CA 92132-5190

IN REPLY REFER TO:

J&A Number 20-37 N62473-18-G-5612

JUSTIFICATION AND APPROVAL (J&A)

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity.

The agency is the Department of the Navy. The contracting activity is the Naval Facilities Engineering Command Southwest (NAVFAC SW), San Diego, California.

2. Description of the Action Being Approved.

Approval is requested to negotiate and issue a task order for Port Hueneme and Point Mugu at Naval Base Ventura County, California (NBVC), for a Utility Energy Service Contract (UESC). The proposed task order falls under the terms and conditions of the Basic Ordering Agreement (BOA), N62473-18-G-5612 with Southern California Gas Company (SoCalGas), a public utility company regulated by the California Public Utilities Commission. The BOA allows for services without full and open competition pursuant to the statutory authorities of 10 United States Code (U.S.C.) § 2304(c)(5) and 10 U.S.C. § 2913(d).

3. Description of Supplies/Services.

Subject to the provisions of the BOA and the task order, SoCalGas will supply all labor, materials, transportation, supervision, testing and closeout documentation necessary to provide design-build services, including design and construction documents to implement the following Energy Conservation Measures (ECMs):

Replace aged and inefficient Heating, Ventilation, and Air Conditioning (HVAC) systems to provide cooling/air exchange requirements and improve direct digital controls (DDC) capabilities to maintain facilities operation

Replace aged backup Generators to keep critical facilities power resilient in an event of grid power loss

Install solar thermal systems to provide hot water at the Enlisted Galley in an event of a natural gas interruption

Retrofit energy inefficient lighting systems with light emitting diode to reduce electricity demand when there is insufficient grid capacity.

The implementation of this energy demand and conservation project allows the Government to monitor, manage and control its energy usage, resulting in significant reduction of energy costs. The current energy Return On Investment (eROI) is based on a preliminary energy assessment. The Government estimate to accomplish the work is $3,996,040 with a simple payback of 10.99 years and a savings-investment-ratio of 1.31. The estimated total annual cost savings is $354,010, which includes an estimated annual energy savings of 20,188 mmBtu. The eROI will follow all applicable Department of Defense and Department of Navy guidance, specifically 10 CFR Part 436 and the National Institute of Standards and Technology Handbook 135 with annual supplements.

This project will utilize third party financing through SoCalGas. The energy conservation projects will be amortized for a term to be negotiated and the payment will be included as a separate utility bill submitted annually based upon the proposed amortization schedule. The ECMs within the project will be required to demonstrate a net overall savings and thus the cost of the project will be covered by the utility savings. The task order will be negotiated and is scheduled for award by January 20, 2021.

4. Statutory Authority Permitting Other Than Full and Open Competition.

pamela.frank Highlight

10 U.S.C. § 2304(c)(5) and Federal Acquisition Regulations (FAR) 6.302-5, provide that full and open competition is not required where a statute, in this case 10 U.S.C. § 2913(d), expressly authorizes that an acquisition may be awarded to a specified source.

10 U.S.C. § 2913(d), authorizes military installations “to enter into agreements with gas or electric utilities to design and implement cost-effective demand and conservation programs (including energy management services, facilities alterations, and the installation and maintenance of energy saving devices and technologies by the utilities) to address the requirements and circumstances of the installation."

5. Rationale Justifying Use of Cited Statutory Authority.

A key objective of 10 U.S.C. § 2913(d) is to authorize and encourage military installations to take advantage of programs offered to customers of gas or electric utilities for reducing energy consumption.

SoCalGas is the servicing gas utility company capable of providing the required services. Pursuant to 10 U.S.C. § 2913(d) and as described below, SoCalGas meets the definition of a utility, and the proposed task order includes an incentive from SoCalGas, is for demand side management or conservation programs, and is cost effective.

A. The agreement must include an incentive from the Utility. Pursuant to an established California Public Utilities Commission approved energy conservation program, SoCalGas will provide financing and a no cost preliminary energy assessment for this project as an incentive for the installation to conserve energy. The Energy Independence and Security Act of 2007 allows federal entities to obtain private financing under a UESC. This is a unique incentive offered by the public utility company and enables the Government to pursue an energy conservation program without the upfront use of appropriated funds.

B. The agreement must be for demand side management or conservation programs. The energy conservation actions that SoCalGas may perform for this project includes energy savings implementation regarding retrofits to existing interior & exterior lighting systems and controls, replace aged backup Generators, replace aged and inefficient HVAC systems, replace inefficient chillers, improve DDCs, replace domestic hot water systems, replace heating hot water and steam boilers, retrofit solar thermal pool heating systems, and building envelope improvements. A preliminary eROI was prepared for this project and it confirms an estimated annual energy and utility cost savings of 20,188 mmBtu and $354,010, which demonstrates that this project will conserve energy and improve energy resilience.

C. The agreement must be “cost effective”. The project will focus on reducing the overall energy consumption at NBVC through various base wide/facilities specific energy improvement measures. This task order will result in 20,188 mmBtu of annual energy savings totaling $354,010 of annual cost savings with a simple payback of 10.99 years, further demonstrating the cost effectiveness of this project. The payments are to be structured such that the loan payments are the same or less than the amount saved by the ECMs. If this goal cannot be attained because of a too-high installation cost or financing cost, the action will not proceed. In addition, pursuant to FAR Part 6, the Contracting Officer has determined that the anticipated cost to the Government of the supplies/services covered by this J&A will be fair and reasonable.

D. The agreement must be entered into with a “Utility”. SoCalGas is a servicing gas utility company with whom NAVFAC SW has a current utility service contract to acquire gas for NBVC. Additionally, NAVFAC SW and SoCalGas have entered into a UESC BOA to set forth standardized terms for UESC contracting.

6. Description of Efforts Made to Solicit Offers from as Many Offerors as Practicable.

Pursuant to FAR 5.203, a Notice of Intent (NOI) was posted for 15 days on Contract Opportunities via the beta.SAM.gov website from August 6, 2020 to August 20, 2020. No qualified responses received. SoCalGas is the regulated public gas utility company authorized under 10 U.S.C. § 2913(d) to provide services at NBVC , and is currently the only utility company willing and able to provide UESC services there.

SoCalGas can provide comprehensive energy demand and conservation incentive services and the type of financing, rebates and other financial incentives (i.e. free preliminary energy assessment and measurement and verification – if applicable). In accordance with Section 844, “Public Disclosure of Justification and Approval Documents for Noncompetitive Contracts,” of the Fiscal Year 2008 National Defense Authorization Act and FAR 6.305, this J&A will be published on Contract Opportunities via the beta.SAM.gov website within fourteen (14) days after contract award.

7. Determination of Fair and Reasonable Cost.

The Contracting Officer has determined the anticipated cost to the Government of the supplies/services covered by this J&A will be fair and reasonable.

8. Actions to Remove Barriers to Future Competition.

A NOI will be issued for all future BOA UESC task orders. To maximize the use of competitive procedures where possible, SoCalGas will compete all subcontractor work associated with the contemplated task order utilizing a procurement process that meets the requirements of the California Public Utilities Commission.

In accordance with FAR 44.204(c), all BOA UESC task orders shall incorporate the requirement to comply with FAR 52.244-5, Competition in Subcontracting.

CERTIFICATIONS AND APPROVAL

TECHNICAL/REQUIREMENTS CERTIFICATION

I certify that the facts and representations under my cognizance which are included in this justification and supporting acquisition planning documents, except as noted herein, are complete and accurate to the best of my knowledge and belief.

__________________________ (619) 532-4988 CHAU VU Phone Date Project Manager

NAVFAC SW

LEGAL SUFFICIENCY REVIEW

I have determined this justification is legally sufficient.

__________________________ (619) 532-4081 SCOTT W. JOHANSEN Phone Date Counsel

NAVFAC SW

CONTRACTING OFFICER CERTIFICATION

I certify that this justification is accurate and complete to the best of my knowledge and belief.

__________________________ (619) 532-2077 LISA M. YOUNG Phone Date Supervisory Contracting Officer, UEM

NAVFAC SW

ECHELON IV CHIEF OF THE CONTRACTING OFFICE CERTIFICATION

Upon the basis of the information contained in this request, I hereby endorse, as the Echelon IV Acting Chief of the Contracting Office, the issuance of the Justification action as described.

__________________________ (619) 532-3454 EDWARD C. CHEVALIER Phone Date Acting Chief of the Contracting Office

NAVFAC SW

ECHELON IV COMMANDING OFFICER CERTIFICATION

Upon the basis of the above Justification, I hereby approve, the solicitation of the proposed procurement described herein using other than full and open competition, pursuant to the authority of 10 U.S.C. Section 2304(c)(5) and

FAR 6.302-5.

__________________________ (619) 532-2317 M. P. OESTEREICHER Phone Date Commanding Officer

NAVFAC SW

VU.CHAU.M.1232

213848

Digitally signed by

VU.CHAU.M.1232213848

Date: 2020.10.06 11:00:46 -07'00'

JOHANSEN.SCO

TT.W.12414187

Digitally signed by

JOHANSEN.SCOTT.W.1241

418711 Date: 2020.10.06 11:52:28 -07'00'

YOUNG.LISA.MARIE

.1092851008

Digitally signed by

YOUNG.LISA.MARIE.1092851008

Date: 2020.10.06 13:10:17 -07'00'

Digitally signed by

CHEVALIER.EDWARD.CHARLES.1

173854699 Date: 2020.10.07 10:29:14 -07'00'

OESTEREICHER.MIC

HAEL.P.1154718474

Digitally signed by

OESTEREICHER.MICHAEL.P.1154

718474 Date: 2020.10.07 10:57:17 -07'00'