A16_SOLE_SOURCE_JUSTIFICATION_1.pdf

SOLE SOURCE JUSTIFICATION

Federal Supply Schedule Order

This document is a Sole Source Justification for an order to be placed against the General

Services Administration Federal Supply Schedule/Multiple Award Schedule. This justification is prepared in accordance with GSAR 538.7104-3(b)(2).

1. Agency and Contracting Activity

Department of the Interior

Office of Acquisition and Property Management, BSEE/BOEM/OSMRE Programs

On behalf of the Bureau of Ocean Energy Management

2. Nature and Description of the Action

The Bureau of Ocean Energy Management has a requirement entitled Addressing Offshore Oil and Gas Economic Impact Modeling Needs. The Government intends to issue a sole-source RFQ and award a GSA Multiple Award Schedule order to Industrial Economics, Inc. (IEc) under GSA

MAS SIN 541620, Environmental Consulting Services.

The estimated value of this action is $650,000.00. The anticipated period of performance is approximately 33 months after award.

3. Description of the Supplies or Services Required

BOEM requires applied economic analysis and economic impact modeling support for offshore oil and gas activities on the U.S. Outer Continental Shelf. The work includes updating and refining BOEM’s existing Cumulative Impacts Model (CIM) and Lifecycle Impacts Model

(LCIM), updating IMPLAN data within those models, performing other model updates, developing or supporting economic impact models for selected OCS regions, preparing a synthesis report and technical summary, and providing related project management, documentation, reporting, and training.

The CIM and LCIM are BOEM-specific economic impact models that were developed, updated, and refined under prior BOEM contracts performed by IEc. The current requirement is not a new, stand-alone economic modeling study. It is a specialized follow-on requirement that depends on direct knowledge of the existing BOEM model architecture, methodology, assumptions, data sources, code, prior refinements, IMPLAN structure, BOEM-specific applications, and lessons learned from prior model development and use.

4. Authority and Supporting Rationale

This acquisition will be conducted under the authority of the Multiple Award Schedule Program.

Orders placed against Federal Supply Schedule contracts are exempt from the requirements of

FAR Part 6; however, the ordering activity must justify its action when awarding on a sole-source basis.

The authority for this sole-source action is GSAR 538.7104-3(b)(1)(ii):

“Only one source is capable of providing the products, services, or solution required at the level of quality required because the products, services, or solutions are unique or highly specialized.”

IEc is the only source identified as capable of providing the required services at the level of quality required because the required solution is unique and highly specialized. IEc developed and/or refined the BOEM CIM and LCIM models and has direct knowledge of the models’ structure, assumptions, methodology, IMPLAN data integration, prior updates, BOEM-specific applications, and historical decision-making context. This knowledge is necessary to perform the required model updates efficiently and consistently with BOEM’s existing analytical framework.

Although market research identified other firms with general applied economics, energy economics, IMPLAN/input-output modeling, and federal policy support capability, the

Government’s need is not merely for general economic modeling services. BOEM requires specialized follow-on support for existing BOEM-specific models that have been built and refined through prior BOEM efforts. A contractor without direct CIM/LCIM knowledge would need substantial time to review, understand, reconstruct, validate, and reconcile the existing models before beginning productive performance.

The Program Office has advised that another contractor could theoretically perform the work and that BOEM appears to have editable/source versions of the models. However, the limiting factor is not theoretical capability. The limiting factor is the substantial duplicated effort, schedule delay, and transition risk that would result from requiring a new contractor to become sufficiently familiar with the existing BOEM-specific models. The Program Office estimated that a new contractor would require approximately 332 to 532 hours of additional onboarding effort, resulting in approximately $77,000 to $124,000 in duplicated labor cost and approximately 13 to

25 weeks of cumulative schedule delay before productive model update work could begin.

The models also rely on proprietary IMPLAN data. Potential offerors would need to execute both a BOEM nondisclosure agreement and a separate IMPLAN nondisclosure agreement before receiving the existing models for meaningful review. This pre-award review process would add time and burden to the procurement and would still not eliminate the substantial model-familiarization effort required after award.

For these reasons, IEc is uniquely qualified to perform the requirement at the level of quality required. Award to another source would require recreating knowledge and model familiarity already developed through prior BOEM contracts, would increase the risk of inconsistent NEPA and National OCS Oil and Gas Leasing Program analyses, and would delay BOEM’s ability to obtain timely economic impact modeling support.

5. Determination that the price will be fair and reasonable.

Use of the GSA MAS supports use of an existing governmentwide contract vehicle for commercial services, incorporates pre-established schedule terms and conditions allowing for a streamlined acquisition process and taking advantage of pre-negotiated rates.

The Government will request a price quotation from IEc and will evaluate the quoted for use of the pre-negotiated rates. Additionally the labor mix will be evaluated to ensure the level of effort is suitable to meet the needs of the requirement.

6. Market Research

Market research was conducted in accordance with FAR Part 10 and included review of the

Program Office’s market research, the Statement of Work, prior BOEM contract history, publicly available Government contract and report information, firms with applied economics and IMPLAN/input-output modeling experience, and relevant GAO bid protest decisions addressing sole-source follow-on acquisitions, substantial duplication of cost, unacceptable delay, transition risk, and prior contractor knowledge.

Market research identified multiple firms with general or related capability in applied economics, energy economics, economic impact analysis, IMPLAN/input-output modeling, and federal policy or environmental support. Potential sources included IEc, Kapur Energy Environment

Economics, Mathematica, McKinsey & Company, RTI International, Eastern Research Group, ICF, Louisiana State University Center for Energy Studies / LSU AgCenter, Northern

Economics, IMPLAN Group LLC, and Tetra Tech.

The Contracting Officer also reviewed GSA MAS 541620 Environmental Consulting Services and identified multiple schedule contractors, including IEc. While this research confirms that general economic modeling capability exists in the marketplace, it does not establish that another source can meet BOEM’s specific follow-on requirement at the required quality level without substantial duplicated effort, increased transition risk, and unacceptable delay.

7. Other Facts Supporting the Justification

The current requirement builds directly on BOEM’s existing CIM and LCIM models. These models are used to estimate the amounts and geographic distributions of economic impacts, such as jobs supported and value added, arising from oil and gas activities in the U.S. Outer

Continental Shelf. These estimates support NEPA documents, documents associated with the

National OCS Oil and Gas Leasing Program, and annual reports regarding the economic impacts of OCS energy activities.

IEc has direct experience with the existing models and BOEM-specific methodology. A new contractor would need to spend significant time understanding the model architecture, data inputs, IMPLAN structure, assumptions, prior refinements, code, and BOEM’s use of model outputs. This duplicated onboarding effort would not represent forward progress on BOEM’s current requirement and would increase the risk of inconsistent or delayed analytical outputs.

The Government’s decision is not based on incumbent preference or administrative convenience.

The decision is based on the unique and highly specialized nature of the required follow-on model work, IEc’s direct knowledge of the existing BOEM models, the estimated duplicated onboarding cost and schedule delay associated with a new contractor, and the mission risk associated with inconsistent economic impact modeling outputs.

8. Actions to Remove or Overcome Barriers to Future Competition

BOEM will consider actions to reduce barriers to competition for future requirements, as practicable. These actions may include maintaining and organizing current model documentation, preserving editable/source versions of model files, documenting assumptions and data sources, identifying licensing or nondisclosure requirements associated with IMPLAN data, and requiring updated technical documentation as part of this order. These actions may improve the Government’s ability to compete future model maintenance, update, or enhancement requirements when schedule and mission needs permit.

9. Certification

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

Jennifer Moreci

Contracting Officer

10. Approval

Katherine King

Chief of Contracting Office- AOB2