A.02.05 Signed Justification and Approval (JA) W912HN20Q5014.pdf

Control No: SAS20-03

JUSTIFICATION REVIEW DOCUMENT

FAR PART 6 JUSTIFICATION AND APPROVAL FOR OTHER THAN

FULL AND OPEN COMPETITION

Request for Quote# W912HN20Q5014 Dissolved Oxygen Generator Spare Parts and First Year Maintenance

Chatham and Effingham Cos., Georgia

1. Contracting Activity: U.S. Army Corps of Engineers, Savannah District, Contracting Division, Supplies and Services Section, 100 West Oglethorpe Avenue, Savannah, GA 31401.

2. Description of Action: Approval is requested for the sole source procurement of critical spare parts and the first-year maintenance of the oxygen generator systems at the up-river and down-river dissolved oxygen plants located on the Savannah River. The oxygenation systems are an environmental mitigation requirement whose operation allows continued maintenance of the harbor. The oxygen generators, installed as part of the Savannah Harbor Expansion Project (SHEP), are a critical feature of SHEP because the harbor deepening may decrease dissolved oxygen levels within the harbor and negatively impact the delicate ecosystem. The Dissolved Oxygen (DO) systems mitigate the impact of decreased oxygen by improving dissolved oxygen levels. Failure to maintain the oxygen generator equipment or have the critical spare parts on hand may result in a shutdown of the facility and delay in the start of Inner Harbor dredging.

3. Description of Supplies/Services: This Justification and Approval (J&A) is for the preventative maintenance of ten oxygen generators manufactured by Pacific Consolidated Industries (PCI) which, combined, are a component of the DO Injection Facilities constructed as part of SHEP. The system includes two facilities along the Savannah River. One facility is located on Hutchinson Island in Chatham County, Georgia and has three oxygen generators. The other facility is located approximately ten river miles upstream in Effingham County, Georgia and includes seven oxygen generators. PCI is the intended sole source for the maintenance because this company is the original manufacturer and is the sole provider of the required components and service for the system. PCI is to provide the two-thousand (6,000) hour maintenance service in a one-time contract and repair parts for the ten (10) oxygen generators.

The oxygenation system maintenance and repair parts have an estimated cost of $169,570.21 and will be procured with Civil Works O&M funding.

4. Authority Cited: 10 U.S.C. 2304(c)(1) as implemented by FAR Part 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

5. Reason for Authority Cited: The proposed sole source requirement involves the use of unique brand name technology by PCI, who also owns the patent rights to the technology. The oxygen generators are integral components of the DO Injection System installed as part of the SHEP that are a critical environmental mitigation requirement whose operation allows continued maintenance of Savannah Harbor.

A. Background:

(1) The Savannah Harbor in Georgia is currently the second largest container port on the East Coast and fourth largest in the nation. The harbor was deepened from -38 feet to -42 feet MLLW (mean lower low water) in 1994, with the size and drafts of vessels constantly increasing from that time period. As a result of the Panama Canal expansion newer and larger vessels are currently calling on the port. To meet the new larger vessel draft requirements, SHEP consists primarily of deepening of the existing deep-draft navigation channel in Savannah Harbor, Georgia and South Carolina from -42 feet to -47 feet with an estimated benefit to cost ratio of 5.5 to 1.

(2) SHEP supports protecting the environment, improving the Nation’s infrastructure, creating jobs, and maintaining global competitiveness. The project includes several mitigation features, one of which is dissolved oxygen injection.

(3) The SHEP project was authorized in the Water Resources Development Act (WRDA) of

1999 subject to conditions which stipulated that construction could not occur until formal approval of the project, including the mitigation plan, was received from four Federal Agencies consisting of the Secretary of the Army, Secretary of Commerce, Secretary of the Interior and the Administrator of the Environmental Protection Agency (EPA). The requirement to obtain specific approval from those Federal Agencies provided them with an unprecedented level of influence on whether and how the project would proceed to construction. As a result, the Corps conducted intensive collaboration with the Federal Agencies that resulted in a twelve-year study and evaluation process. That process was completed when the Federal Agencies gave their final approval of the project on 11 July 2012, satisfying the conditions of the authorization. The Corps’ Chief of Engineers signed his Report on 17 Aug 2012 and the Assistant Secretary of the Army (Civil Works) signed the Record of Decision on 26 Oct 2012.

(4) Early in the study process, the Federal Agencies and the state natural resource agencies identified concerns with the potential decrease of dissolved oxygen levels as a result harbor deepening efforts. The Savannah District was already conducting a study, the Savannah Harbor Ecosystem Restoration Study, to identify ways to improve dissolved oxygen levels in the harbor. The government performed an evaluation of over 20 methods identified through broad market research conducted at the time. The various methods were evaluated based on criteria such as performance, reliability, efficiency, cost and likely adverse impacts to navigation or dredging. The overall objective of the study was to identify appropriate, effective and economical alternatives capable of achieving the required solution. The twenty options for increasing dissolved oxygen levels were carefully analyzed to determine which were potentially effective for implementation in the harbor system and/or at the location of a point source discharge.

(5) Oxygen Injection was identified as the best alternative to meet project requirements. The

PCI oxygen generators are a critical component of the selected system.

6. Efforts to Obtain Competition: The Savannah District issued a Sources Sought Announcement in the Federal Business Opportunities website in November 2012 for the two Dissolved Oxygen Injection Systems during the development of the construction contract. The DO system including the existing oxygen generators provided by PCI was selected because no other company presented evidence that showed experience working in marine environments or using equipment that is related to DO systems. The District determined that PCI, who also owns the patent rights to the technology, was the only source capable of meeting the original construction requirement. In accordance with the warranty documentation, PCI is the only authorized service, training, installation, maintenance and repair support agent for this equipment. In an effort to preserve the warranty, no other source was sought to perform this work under the warranty period.

7. Actions to Increase Competition: Through current market research the District has determined that PCI, who also owns the patent rights to the technology is the only source capable of meeting the requirements for maintenance and repair of the PCI oxygen generator systems that are part of the DO Injection Systems constructed as part of SHEP.

8. Market Research: As discussed in paragraph 5, Reason for Authority Cited, the Savannah District contracted for a detailed scientific analysis of measures available for improving dissolved oxygen in the harbor during the development of the contract for the two DO systems.

In an attempt to identify interested sources capable of providing a DO system that meets the project’s needs the Savannah District issued a “Sources Sought” in the Federal Business Opportunities for a DO Injection System in November 2012. PCI was selected because no other company presented evidence that showed experience working in marine environments or using equipment that is related to DO systems. As seen in past procurements the performance of maintenance by the original manufacturer during a warranty period is typical for industrial equipment of this nature.

9. Other Facts: The DO systems will be within their warranty period during the proposed maintenance and repair contract. Improper maintenance could void the warranty on the systems.

Also, failure of the oxygen generators due to lack of proper maintenance could impact deepening of Savannah Harbor by preventing dredging operations to proceed in the harbor. The delay would in turn impact safe and efficient passage of harbor ship traffic, especially the large military deployment and civilian container ships. No past procurement history exist for a dissolved oxygen facility of this magnitude.

10. Interested Sources: PCI has expressed interest in providing the described spare parts and maintenance service in a contract for maintenance and repair parts for the ten oxygen generators.

11. Technical/Requirements Certification - I certify that the supporting data included in this justification and approval are accurate and complete to the best of my knowledge and belief.

NAME: Jonathan Broadie, P.E. SIGNATURE:

TITLE: Chief, Operations and Asset Management Section DATE:

12. Fair and Reasonable Cost Determination – I hereby determine that the anticipated cost or price to the Government for this contract action will be fair and reasonable. This determination will be made based on the price analysis of historical data and information obtained from technical experts.

BROADIE.JONATH

AN.ANDREW.13854

30708

Digitally signed by

BROADIE.JONATHAN.ANDREW.1

385430708 Date: 2020.03.23 10:38:47 -04'00'

NAME: SIGNATURE:

TITLE: Contracting Officer

DATE:

13. Legal Review for Sufficiency: I have reviewed this justification and have no legal objection.

NAME: Allie E. Vandivier SIGNATURE:

TITLE: Attorney-Advisor Savannah District DATE:

14. Small Business Review: I have reviewed this justification and have no small business concerns.

TITLE: Small Business Specialist

Savannah District DATE:

Approval

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

Based on the foregoing, I hereby approve the procurement of maintenance and spare parts of Pacific Consolidated Industries (PCI) oxygen generators on an other than full and open competition basis by the authority of 10 U.S.C. 2304(c)(1) as implemented by FAR Part 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements. This acquisition totals $169,571.21 and approval is subject to availability of funds, provided that the services and property herein described have otherwise been authorized for acquisition.

TITLE: Contracting Officer

DATE:

23 Mar 2020

VANDIVIER.A

LLIE.EVANS.1

522682957

Digitally signed by

VANDIVIER.ALLIE.E

VANS.1522682957

Date: 2020.03.23 10:57:08 -04'00'

HOLLIS.LEILA

.1229930300

Digitally signed by

HOLLIS.LEILA.1229930300

Date: 2020.03.24 17:24:02 -04'00'

27 March 2020