A16_SOLE_SOURCE_Attahmnt_1_20250523_1.docx

Attachment 1

SOLE SOURCE JUSTIFICATION

FAR 13.5- TEST PROGRAM FOR CERTAIN COMMERCIAL ITEMS

Demonstration that the proposed contractor's unique qualifications or the nature of the acquisition requires use of the authority cited at section 4202 of the Clinger-Cohen Act of 1996

Quorum Software (formerly Aucerna, Caesar Systems) is the sole source having the requisite expertise to provide the software licenses and support services required by the Bureau of Ocean Energy Management (BOEM) for its ongoing efforts which entail the continued development and production of a critical Reserve, Resource, Engineering, and Economic evaluation platform with highly specialized software. By using Quorum’s Petro VR software, BOEM has acquired a certain level of experience and training in using the software and has also developed a fairly robust version of the model. This model enables BOEM Resource Evaluation geoscientists, engineers, and economists to complete a Fair Market Value (FMV) analysis and to analyze offshore carbon storage projects. Many modifications to the Quorum software related to the functionality and installing new functionality based on regulatory requirements has been implemented that is unique to BOEM mission. This includes but not limits to policy changes such as: annual lease rental rates, royalty rate, royalty suspension volumes, and royalty credits with price thresholds and floors governing the application of minimum bid amounts (per acre/hectare), tract size (acres or hectares), primary lease terms that is correspond to specified water depth ranges, and drilling depth intervals as well as social discount rate, private discount rate, inflation rate and ability to apply different inflation factors and discount rates at various points in time. If the government were to switch to another software product besides the currently used Petro VR, a significant amount of time as well as effort would be required in learning and developing the new software. With the current Petro VR software provided by Quorum, BOEM has built a unique tool that has provided the Government with extensive customization to suit its unique requirements.

Assuring the receipt of Fair Market Value on Outer Continental Shelf (OCS) lands is mandated by the OCS Lands Act and its amendments and it remains a critical responsibility of the Resource Evaluation Program. This acquisition will allow Quorum to provide the Government with continued development and production of a highly specialized software tool via the acquisition of Perpetual Software Licenses. BOEM has worked with Quorum and previous vendors to enable specific requirements and at BOEM’s request Quorum and predecessor owners has efficiently implemented many significant improvements to its commercially available software package that provide value-added opportunities for the FMV analysis and carbon storage projects, all of which would require extensive time and duplication of effort if attempted by a new vendor. Much of the customized enhancements were born out of the vendor’s ability to effectively adapt its product to provide FMV analysis workflows and solutions that satisfy Federal regulations and policies. One of the examples is the MutiCore and Contract module adaptation in the Petro VR latest version release in enhancing the software efficiency.

These improvements have enabled BOEM to develop a technical workflow that provides timely FMV for tract evaluation and bid adequacy analysis and allows for effective characterization of offshore carbon project economics. The BOEM would run a significant risk to transition to a new FMV software from the current one should a software and workflow other than the one provided by Quorum be acquired from a new vendor. In addition, an award to any other source would result in substantial duplication of costs to the Government that is not expected to be recovered through competition.

If the existing Quorum software was replaced with a different product, the Resource Evaluation Program Office would lose all the technological, human, and financial capital that has been invested in defining this most critical element of BOEM business processes. This in turn may result in a significant delay of transitioning from the current application to a new model.

At a minimum, a transition to a new software product for FMV analysis would require an unnecessary investment of several thousand man hours on structured software training and several tens of thousands of man hours to achieve the level of technical competency currently deployed with the existing solution. From a programmatic standpoint, this investment of full time employees would have to come at the expense of other work processes. A transition to new software would also result in a significant duplication of cost to the U.S. Government as new training requirements and learning opportunities would replicate exstensive sunk costs that BOEM has already invested in commercial product, training, and workflow customizations.

The existing investment made by BOEM in the Quorum products is significant, in terms of both paid training and workflow customizations, and as acquired corporate knowledge. The BOEM currently has multiple software users that are trained at an expert level using the existing software. The BOEM recognizes the significant risk of cost duplication, loss of productivity, and potentially loss of qualified personnel in the event that a new software product other than PetroVR is installed.