A17_-_J_A_1.pdf

Justification and Approval for Sole Source

“Source Selection Information – see FAR 2.101 and 3.104”

1. Identification of the agency and contracting activity.

a. Federal agency and contracting activity. Bureau of Land Management

(BLM)

b. Contracting Officer information.

• Contracting Officer name – Emmett Larson

• Mailing address – Denver Federal Center Building 50

• E-mail address – elarson@blm.gov

• Telephone number – 303-236-6701

2. Nature and/or description of the action being approved.

The BLM operates and maintains a helium storage reservoir, enrichment plant, and pipeline system near Amarillo, TX, that supplies over 40 percent of domestic demand for helium. The BLM supplies crude helium to private helium refining companies which in turn refine the helium and market it to consumers. Congress enacted the Helium Stewardship Act of 2013 on October

2, 2013. The act:

• Ensures continued access to Federal crude helium;

• Provides for an orderly transition among three phases, resulting in minimal market disruption to end users;

• Increases taxpayer returns and stimulates investment in private helium sources by selling crude helium at market-driven prices;

• Bolsters transparency by requiring timely and public publication of information related to the Federal Helium Reserve;

• Obtains a global helium assessment that includes forecasts of demand and assessments of supply;

• Establishes helium extraction, separation, and conservation research and development programs; and

• Facilitates the development of a long-term strategy for helium acquisition for all Federal users.

The Act required the Department of the Interior, through the Director of the

BLM, to offer for sale, beginning in 2014, a portion of the conservation helium stored underground at the Cliffside Field north of Amarillo. The sale of helium will be accomplished in the following order of priority: Federal in-kind https://www.blm.gov/sites/blm.gov/files/Helium%20Stewardship%20Act%200f%202013_text_508.pdf crude helium, then current year sales delivered proportionally and sold through sales and auction.

On April 16, 2020, the BLM announced its disposal process for the Federal

Helium System that stated “– The Bureau of Land Management today announced the process and timeline by which remaining helium and helium assets will be disposed of in order to meet the requirements of the Helium

Stewardship Act of 2013. In accordance with that law, the BLM will no longer manage the Federal Helium System (including the Federal Helium Reserve) as of Sept. 30, 2021. Any excess helium and helium assets remaining on that date will be transferred to the General Services Administration (GSA), which will follow its statutory disposal process. Federal In-Kind users will continue to have access to helium until September 30, 2022, while the GSA completes their disposal process. This will also allow the BLM to continue operations until such time as all privately owned helium is produced from the field (about

2023).” (Attachment 1).

On January 13, 2022 the U.S. Department of Labor’s Occupational Safety and

Health Administration (OSHA) “has found that the U.S. Department of

Interior’s Bureau of Land Management violated procedures for safe handling of chemical materials at its Cliffside Helium Enrichment Unit in Amarillo, a federal chemical producing plant that refines and sells helium products to private entities. OSHA issued the facility 21 notices of unsafe working conditions. This is OSHA’s first use of the egregious violation policy in citing unsafe working conditions at a federal facility. The violations of process safety management procedures would carry a private sector penalty of $1,023,987.”

(Attachment 2). As a result of the OSHA findings, the helium plant was shut down in order to address the issues raised by the OSHA findings.

The above two items were the driving factors that led to the BLM decision to contract out operations of the plant. The publishing of an end date for BLM operating the plant, along with the planned selling of the Federal Helium

System, has led to operations staff finding new employment. Even if the BLM had staffing levels that would allow the BLM to start the plant back up with

Federal Government operators, the OSHA violations have led the BLM to the decision to contract out plant operations in order for the plant to operate safely, efficiently, and effectively.

The Government generates through sale approximately $335,000 per day from the helium production, not including Natural Gas and Natural Gas Liquids production. Even a delay of a few weeks would result in the Government not generating funds in excess of $4.6 million dollars. It is estimated that in the contract base period from May to September, the Government will generate funds in excess of $50 million.

https://www.osha.gov/ https://www.osha.gov/ https://www.dol.gov/sites/dolgov/files/OPA/news%20releases/OSHA20212208.pdf https://www.dol.gov/sites/dolgov/files/OPA/news%20releases/OSHA20212208.pdf

3. Description of the supplies or services required to meet the agency’s needs (including the estimated value).

a. Project title. BLM Cliffside Plant Operations

b. Project description. The BLM is contracting out to Messer, Inc for plant operations of the BLM Cliffside facility.

Requirement type: Support Services (non-R&D) Type of action: New Requirement Proposed contract/order type: Firm-fixed price Acquisition identification number: Contract number 140L0622C0012.

c. Total estimated dollar value and performance/delivery period. Total contract value of $5,479,553.60 with a total period of performance of May 2022 to September 2023.

4. Identification of the statutory authority permitting other than full and open competition.

This acquisition is conducted under the authority as set forth in Federal Acquisition Regulation (FAR) 6.302-2 Unusual and compelling urgency.

5. Demonstration that the proposed contractor(s) unique qualifications or the nature of the acquisition requires use of the authority cited.

a. Name of the proposed contractor(s). Messer, Inc.

b. Nature of the acquisition and proposed unique qualifications of the contractor(s). The BLM currently has a contract with Cliffside Refiners Limited Partnership (CRLP), who owns the equipment located at the Cliffside Site utilized in the refining of helium feedgas, including the CHEU, three Waukesha compressors, K100, K600, K610, DGA system, TSA systems, CH4 pumps, cable trays and associated cables, and instrument air buildings under contract number 140L0618C0006, to lease that helium processing plant. CRLP is made up of multiple companies, one of those companies being Messer, Inc.. Having a contractor other than a contractor that is part of the CRLP would not be beneficial to the Government. Having a separate contractor operate the plant who does not already have agreements, understanding, and access to the leased helium processing plant is not possible. Even if a new contractor could obtain agreements with CRLP, learn to operate the helium processing plant, and get access to the leased helium processing plant, the time to accomplish these tasks would cause serious financial harm to the Federal Government, as previously outlined.

6. Description of the efforts made to ensure that offers are solicited from as many potential sources as practicable. Indicate whether a FedBizOpps notice was or will be publicized as required by FAR Subpart 5.2 and, if not, which exception under FAR 5.202 applies. An RFI was published and results indicated that Messer, Inc. is the only company interested in contracting with the BLM and that can operate the plant and get it operational with the least negative financial impact to the Government. As stated above even a delay of an award for a few weeks would result in the Government not generating funds from sales in excess of $4.6 million dollars.

7. Determination by the Contracting Officer that the anticipated cost/price to the Government will be fair and reasonable. The Contracting Officer has determined the pricing fair and reasonable.

8. Description of the market research conducted (see FAR Part 10) and the results, or a statement of the reasons market research was not conducted.

Market research was conducted via an RFI and the results indicated Messer, Inc.

is the only interested, capable vendor that can ensure the plant is operational in the soonest possible time limiting the financial harm to the Government.

9. Any other facts supporting the use of other than full and open competition.

The Government generates through sale approximately $335,000 per day from the helium production, not including Natural Gas and NGL production. It is estimated that, if all options are exercised, the Government will generate funds in excess of $150 million. Beyond the funds generated by the sale of helium, the plant being non-operational has significant impact on small businesses in the helium industry. The Government has contracts for the storage and delivery of helium with many small businesses that are currently unable to get helium which has caused serious financial harm to those businesses.

10. Listing of sources, if any, that expressed, in writing, an interest in the acquisition. An RFI was issued and it was determined that Messer, Inc. is the only capable vendor that was interested and can get the plant operational in the quickest amount of time.

11. Statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the required supplies or services. Due to the nature of this requirement and the pending sale of the Federal Helium System it is not anticipated that there will be a subsequent acquisition for this requirement.

11. Contracting Officer certification.

This is to certify that the justification for the proposed acquisition has been reviewed and that to the best of my knowledge and belief the information and/or data provided to support the rationale and recommendation for approval is accurate and complete.

Official Name & Title Signature

Contracting Officer

Emmett Larson Branch Chief NOC Acquisitions

13. Head of the Contracting Activity signature(s).

Official Name & Title Signature

Head of the Contracting

Activity

Melissa Hutchison BLM Head of the Contracting Activity Division Chief, Division of Acquisition and Financial Assistance Business Management and Administration - Headquarters HQ-720