A16_SSJ_Attachment_1_FINAL_1.docx

Attachment to Sole Source Justification

1. Bureau and Contracting Activity [FAR 13.501(a)(1)(ii) and 6.303-2(b)(1)] This acquisition is being executed by the Bureau of Safety and Environmental Enforcement (BSEE), Office of Administration (OA), Acquisition Operations Branch (AOB) for requirements developed by the BSEE, Gulf of Mexico Region (GOMR), Office of Production and Development (PD). This document sets forth the justification and approval for a requirement that limits sources and is prepared in accordance with FAR 13.501 and 41 U.S.C. 1901 (simplified acquisition procedures for commercial items greater than the simplified acquisition threshold but not greater than $5M).

2. Description of Supplies or Services [FAR 13.501(a)(1)(ii) and 6.303-2(b)(3)] BSEE intends on issuing a firm fixed price award to Gemini Solutions, Inc. (GSI) to renew the annual subscription for five (5) existing licenses of GSI’s reservoir simulation and accompanying software applications. Engineers and geoscientists in BSEE’s Gulf of Mexico Region Office of Production and Development use reservoir simulation to evaluate operator requests to conduct well operations on the Outer Continental Shelf (OCS). A purchase order is anticipated to be issued with a 12-month base period and four (4) 12-month option periods with options for acquiring additional licenses or reducing the number of licenses during the period of performance.

10.(a) Demonstration that the proposed contractor's unique qualifications or the nature of the acquisition requires use of the authority cited [FAR 6.303-2(b)(5)]. [Prepared by Program Office] BSEE has used GSI’s software for over 20 years. It’s been specifically modified for BSEE’s unique requirements. BSEE uses GSI’s software, in part, to estimate flowing and shut-in wellbore pressure gradients during and immediately after a blowout as part of the Well Containment Screening Tool review. BSEE determines from estimated pressure gradients if an operator’s proposed well casing design submitted in an Application for Permit to Drill (APD) can withstand burst and collapse pressures when the reservoir is open to flow. BSEE’s goal is to accurately and efficiently evaluate a well’s design to ensure operator safety and prevent the environmental impacts of an oil spill.

The combination of reservoir simulation and casing integrity evaluation in a quick and streamlined single piece of software is unique to GSI’s Merlin application. Other software, when purchased separately, can produce the results from Merlin but not at the expense of unnecessarily long simulation times and inefficiencies in porting the results from one software to another. BSEE’s review time is limited – companies must sync BSEE approval with contracting a drilling rig. The short duration from when a company submits an APD to when they spud the well makes it especially important for BSEE to be able to complete pressure gradient reviews quickly (among its many other reviews).

GSI built several forms for importing and exporting data that mirror the existing forms used by BSEE and its sister agency BOEM. It’s unlikely for other companies to build and maintain this functionality. Its Progressive Depth Modeling is unique – it can run simulations on combinations of reservoirs simultaneously in one iteration, modeling what an operator would see when penetrating sequential reservoirs, rather than having to manually simulate combinations of reservoirs over multiple iterations. Merlin also uniquely tells the user when inputs may have been mistyped based on the model’s other inputs.

In addition to Merlin, GSI has statistical modeling (running multiple models simultaneously to generate probabilities based on different PVT and geology inputs), Nodal analysis, history matching, economic evaluation, and mapping. No other single piece of software has all these components modified specific to BSEE’s needs, and we are certain that no other company can develop a similar bespoke solution without significant costs and delays, which would greatly impair BSEE’s ability to fulfill its safety and environmental enforcement obligations.

10.(b) Describe the efforts taken to ensure offers were solicited from as many potential sources as is practicable, including whether a Government-wide point of entry (GPE) notice was or will be published as required by FAR 5.2 and, if not, which exception under FAR 5.202 applies. [FAR 6.303-2(b)(6)]. [Prepared by Program Office] A pre-solicitation notice will be published announcing the Government’s intent to issue a sole source purchase order. Alternative vendors who believe they can meet the Government’s requirement will be able to submit proof of its capabilities for Government review and consideration. In addition, this justification will be published to ensure that the public is aware of the intended activity. Consequently, full and open competition is not planned for this effort.

10.(c) Demonstration that the anticipated cost to the Government will be fair and reasonable [FAR 6.303-2(b)(7)]. [Prepared by Contracting Officer] BSEE will obtain sufficient pricing details from the intended source to allow for thorough technical and price analysis to ensure pricing quoted under this effort is in accordance with standard commercial pricing practices.

In addition to obtaining a commercial price list, anticipated cost can be deemed fair and reasonable by comparing proposed prices with prices found reasonable on previous purchases by BSEE.

10.(d) Describe the market research conducted and the results or a statement of the reason market research was not conducted. [FAR 6.303-2(b)(8)]. [Initiated by the Program Office and finalized in collaboration with the Contracting Officer] BSEE engineers and geoscientists investigated the utility of other software. No other single piece of software combines reservoir simulation and casing integrity evaluation and has the set of bespoke modifications tailored to BSEE’s reviews. Other software solutions also lacked to a disqualifying degree the linear and imperative workflow available in GSI’s Merlin and accompanying tools necessary to complete reviews in an efficient and timely manner.

10.(e) Any other facts supporting the use of a sole source acquisition. [FAR 6.303-2(b)(9)]. [Prepared by Program Office] BSEE also uses GSI’s suite of software applications to evaluate operator requests for prematurely abandoning reservoirs (Application for Permit to Modify sub-review), enhanced oil recovery projects, and future utility of idle iron (Decommissioning sub-review) in addition to internal assessments not tied to the permitting process. Using a combination of different software for each of these reviews would unnecessarily increase complexity and lead to mixed results between software.

GSI has continually added new components and functionality to meet the Bureau’s specific needs and has worked together with BSEE engineers and geoscientists on numerous projects.

With the introduction of a new set of software, BSEE would assume a very serious risk of work disruption that would greatly impair BSEE’s ability to fulfill its safety and environmental enforcement obligations.

10.(f) List sources, if any, that expressed, in writing, an interest in the acquisition. [FAR 6.303-2(b)(10)]. [Prepared by Program Office] No other sources have expressed interest in this acquisition to date.

10.(g) Statement of the actions, if any, the agency may take to remove or overcome any barriers that led to competition before any subsequent acquisition for supplies and services. [FAR 6.303-2(b)(11)] [Initiated by the Program Office and finalized in collaboration with the Contracting Officer] BSEE GOMR PD will reassess its future needs for this requirement at the end of the performance period of the award and accordingly, review the marketplace for alternatives to the reservoir simulation software, taking into account technical acceptability and replacement cost.