A8_FBO_GUA_Water_ _Wastewater_Utility_Service.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN

COMPETITION

PUBLIC UTILITY - WATER & WASTEWATER UTILITY SERVICE

METROPOLITAN DETENTION CENTER GUAYNABO

Catano, Puerto Rico

Contractor: Puerto Rico Aqueduct and Sewer Authority

Period of Coverage: 12/7 /2015 through 9/30/2016

Estimated Amount: $1,266,666. 70

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

Water and Wastewater Utility Service MDC Guaynabo

Pursuant to the Federal Acquisition Regulation (FAR) Subpart 6.302-1 (a) (I) and 6.302-l (b) (3), and the Bureau of Prisons Acquisition Policy (BPAP) Part 6.304 (c). the Federal Bureau of Prisons (FBOP) has determined that the procurement of water and wastewater utility service for the Metropolitan Detention Center (MDC) Guaynabo located within the city limits of Catano, Puerto Rico. meets the criteria established for other than full and open competition. It is further determined that only one responsible source and no other supplies and/or services will satisfy agency requirements. This limitation on competition is justified as supported by the following information in accordance with FAR Part 6.303-2:

1. Identification of the Agency and the Contracting Activity:

U.S. Department of Justice Federal Bureau of Prisons MDC Guaynabo P.O. Box 2008 Catano, PR. 00963-2008

2. Nature and/or Description of Action Being Approved:

This justification for other than full and open competition is for the acquisition of water and wastewater utility services supplied to the MDC Guaynabo, from the sole provider of such services.

MDC Guaynabo has a present and continuing requirement for water and wastewater utility service for the proper operation of the facility.

3. A Description of the Supplies or Services Rcguircd to Meet the Agency's Needs:

The Puerto Rico Aqueducts and Sewer Authority (PRASA) shall provide to the government facility at MDC Guaynabo. water and wastewater utility services in a manner and form that is consistent will all applicable laws. rules, codes, industry standards. permits. and regulations. promulgated by any and all government authorities having jurisdiction. The PRASA shall provide services on an un-interruptible daily basis (365) days per year. The PRASA will be responsible to maintain and/or repair all associated water and wastewater lines and equipment, including associated costs for such repair, up to the delivery point or meter of MDC Guaynabo. Pursuant to FAR Part 4 l .202, the PRASA continues to provide the "entire water and wastewater utility service" (i.e., production, distribution, collection, treatment. system operation and maintenance, metering, billing, etc.).

The PRASA shall provide water and wastewater utility services from December 7, 20 l 5 through September 30, 2016. subject to funds availability (FAR Clause 52.232-18). The services will be procured by way of purchase order in accordance with FAR 41.202(c). The total estimated monthly cost for the water and wastewater service is $126,666.6 7. The total estimated amount for a IO month period is $1.266.666. 70.

Contract Line Item Number Performance Period Estimated Annual Cost ($)

CUN 0001 December 2015 throu2h Seotember 2016 $ l ,266,666. 70 Total Estimated Cost: $ l ,266,666. 70

JOFOC MDC GUA YNABO

Water and Wastewater Utility Services

4. An Identification of the Statutory Authority Permitting Other Than Full and Open Competition:

This justification to award as a sole source is prepared pursuant to the exception to full and open competition requirements in accordance with the statutory authority for these services that is found at 41 USC§ 253(c)(l ), when the supplies or services required by the agency are available from only one responsible source. The application which permits use of the cited statutory authority are stated at FAR Part 6.302-1 (b )(3 }, .. When acquiring utility services (see 41.10 l ). circumstances may dictate that only one supplier can furnish the service (see 41.202).'' When a public utility supplier refuses to execute a tendered contract the agency may proceed with the acquisition and pay for the utility service under the provisions of 31 USC § 150 I (a)(8). This contracting officer is not required to make a responsibility detennination when awarding to a Foreign, State, or local government in accordance with FAR 9. l 02(b ). Analysis of the market indicates that the PRASA has proprietary rights up to the meter at MDC Guaynabo. In order for another provider to be capable of providing the service, significant capital improvements would be needed. The Bureau would be required to pay for the capital improvements, but it would not recover the costs of duplication of services, connection fees and infrastructure installation costs through competition. The current requirement is for follow-on services and does not include funding for capital improvements.

S. A Demonstration that the Proposed Contractor's Unique Qualifications or the Nature of the Acquisition Reau ires Use of the Authority Cited:

The PRASA is the government-owned sole provider of water and wastewater utility service on the island of Puerto Rico including the City of Catano service area. The PRASA is ruled by a Governing Board appointed by the Governor with the advice and consent of the Senate of Puerto Rico and daily operations are run by an Executive Director appointed by the Board. The Board is the governing body that sets all rates and tariffs with the responsibility of water and wastewater utility service for the locale in which MDC Guaynaho resides. The PRASA is an entity of the Commonwealth of Puerto Rico. the only agent authorized by rules and regulations to provide water and wastewater service on the island thus creating a natural monopoly. Having a single provider of water and wastewater services for this area is the most efficient method of distributing water and collecting/treating wastewater. This requirement cannot be obtained by contracting directly with a private source because building multiple treatment, distribution, and treatment systems would be costly and inefficient.

6. A Description of Efforts Made to Ensure that Offers are Solicjted From As Many Potential Sources as is Practicable Including Whether a Notice Was or Will be Publicized as Required by FAR Subpart 5.2:

As stated in FAR Part 5.202, Exceptions to transmitting a notice to the Government Point of Entry(GPE) at (a)(5), the contracting officer need not submit a notice when "the proposed contract action is for utility services other than telecommunications services and only one source is available." There are no General Services Administration (GSA) area-wide or single point contracts for water and wastewater utility service in the MDC Guaynabo area at this time. Several Sources

Water and Wastewater Utility Services

Sought Notices have been posted via the Fedbizopps database in order to seek competition. No replies were received in response to these notices.

7. A Determination by the Contracting Officer that the Cost to the Government Will Be Fair and Reasonable:

The estimated average monthly cost, which was based on invoice history, for the water and wastewater utility service is $I 26,666.67 with a total estimated usage for a 10 month period of $1,266,666. 70. The current rates offered by the PRASA are equal to the market price levied other commercial, industrial, and government users in the MDC Guaynabo area. Utility rates are enacted by resolutions by the Board of the Authority. which is charged under Puerto Rico law to ensure that rates be just and reasonable. The PRASA website has provided sufficient data to the FBOP contracting officer, pursuant to FAR 15.402, Pricing Policy. allowing the ability to make a preliminary determination that such anticipated costs appear to be fair and reasonable. The PRASA is a public corporation chartered by the Commonwealth of Puerto Rico pursuant to the right and power granted by Title 22 §§ 141-161 of the Laws of Puerto Rico. A formal decision in the form of periodic rulings, reviews. or similar actions of a governmental body, or embodied in the laws, are sufficient to set pricing (see FAR 15.403-1 [clf2l) and the purchasing of supplies and services from a responsible source is determined fair and reasonable. The establishment of the current connection and delivery of services began when the original service connections were installed and the meters set in 1993. As such. this Contracting Officer has determined the anticipated cost to the Government will be fair and reasonable. ·

8. A Description of the Market Research Conducted and the Results

This documentation is in accordance with FAR Part I 0, which describes the policies and procedures for conducting market research in a process of finding viable sources of goods and services to meet government requirements and to find the most suitable approach to acquiring. distributing. and supporting supplies and services. The extent of market research will vary, depending on such factors as urgency. estimated dollar value. complexity. and past experience. Market research involves obtaining information specific to the item being acquired. This report is submitted in support of an acquisition with an estimated value in excess of the simplified acquisition threshold .

Below are the findings of the market research for the above referenced requirement.

I. BACKGROUND: A review of the obligation reveals the following- the Metropolitan Detention Center Guaynabo (hereinafter referred to as "'MDC Guaynabo") has a current and continuing requirement for the purchase of water and wastewater utility service for the continuation of normal operations of the institution in order to provide a safe. secure environment to confine ·Offenders and protect the public. MDC Guaynabo has purchased water and wastewater service from this same vendor since 1993.

A. Title: Water and Wastewater Utility Service- MDC Guaynabo B. Product or Service Code: S-Utilities and Housekeeping Services-SI 14 Utilities-Water and

S 119 Other Utilities C. North American Industry Classification System CNAICS): 221310 Water Supply and

Water and Wastewater Utility Services

Irrigation Systems=this industry comprises establishments primarily engaged in operating water treatment plants and/or operating water supply systems; and 221320 Sewage Treatment Facilities=this industry comprises establishments primarily engaged in operating water and sewer systems or sewage treatment facilities that collect. treat, and dispose of waste.

D. Standard Industrial Classification (SIC) Code: 4941 Water Supply - 4952 Sewerage Systems

II. DELIVERY I PERFORMANCE: Purchase order to provide water and wastewater utility services December 7, 2015. through the month of September 30. 2016. The Puerto Rico Aqueducts and Sewer Authority (PRASA) shall provide to the government facility at MDC Guaynabo, water and wastewater utility services in a manner and form that is consistent with all applicable laws. rules. codes. industry standards. permits, and regulations. promulgated by any and all governmental authorities having jurisdiction. The PRASA shall provide services on an un-interruptible daily basis (365) days per year. The PRASA wili be responsible to maintain and/or repair all associated water and wastewater lines and equipment. including associated costs for such repair, up to the delivery point or meter of MDC Guaynabo. Pursuant to FAR Part 41.202, the PRASA continues to provide the ·•entire water and wastewater utility service" (i.e., production, distribution, collection, treatment, system operation and maintenance, metering, billing, etc.).

III. POTENTIAL SOURCES: Puerto Rico Aqueducts and Sewer Authority (PRASA), P.O. Box 7066, Tesoreria, San Juan. PR 01292-6734

IV. MARKET ANALYSIS:

A. The results of market research have determined that the Government's needs can be met by items of a type customarily available in the commercial marketplace.

B. The following methods were utilized to conduct Market Research:

f:l FedBizOpps Sources Sought Synopsis; Found no other interested party capable of providing LJ water and wastewater utility service.

f:l Searched database and contacted GSA Energy Center of Expertise; Found no area wide or LJ single point contract is available.

f:l Searched FPDS-NG: Found GSA. Department of Defense, VA, and the FBOP are purchasing LJ water and wastewater service from PRASA.

f:l Searched previous purchases of similar/identical acquisitions; Found the PRASA is current LJ provider to MDC Guaynabo. This is a continuation of service.

C. Results: Results of Market Research were as follows: Only one source could be found.

A Justification for Other Than Full and Open Competition is provided for approval.

V. RECOMMENDATION:

A. The requirement will be awarded to PRASA as a single award of a finn-fixed price requirements type water and wastewater utility purchase order utilizing FAR Parts 6, 12. 13, and 41. A Performance-Based Acquisition method will not be used for this procurement as it is determined not applicable. A PBA relies on the use of measurable performance standards and financial incentives in a competitive environment to encourage competitors to develop and institute innovative and cost-effective methods of performing the work.

Water and Wastewater Utility Services

B. One potential source is a local entity, the incumbent PRASA, which appears able to satisfy the requirement and is regulated by the PRASA Board of Supervisors. Puerto Rico Law is used as an avenue through which local law is adopted. Resolutions are a sub-set of ordinances, stating a commonwealth' s opinion on a given matter and authorizing such actions as setting various fees for services. and initiating agreements between the commonwealth and other entities. PRASA is other than small business. PRASA is not considered a regulated utility.

C. This requirement will not be posted to Fedbizopps as a solicitation to promote competition, broaden industry participation. and assist small business concerns in obtaining contracts for MDC Guaynabo. Puerto Rico. This requirement meets the exemption at FAR 5.202(5) the proposed contract action is for utility services other than telecommunications services and only one source is available. The PRASA is the government-owned sole provider of water and wastewater utility service in the MDC Guaynabo service area. The PRASA is an entity of the Commonwealth of Puerto Rico. the only agent authorized by rules and regulations to provide water and wastewater service on the island of Puerto Rico area thus creating a natural monopoly. Having a single provider of water and wastewater service for this area is the most efficient method of treating. distributing and metering water and wastewater services.

D. The Bureau does not have the commonwealth or local approval or the resources to provide the funding for another company to install alternative water and wastewater treatment facilities at the institution, another distribution/collection system is not available, and no other contractor can provide water and wastewater service through PRASA network.

E. The U.S. General Services Administration has issued a Delegation of Contracting Authority to the U.S. Department of Justice. Federal Bureau of Prisons to negotiate and execute utility service contracts.

F. I also make the determination that this procurement action .. NOT" be set-aside for small business

VI. COMMENTS: Based on the results of the above research, it is determined that this requirement can met by a commercial item. Water and wastewater utility service is an item that is of a type customarily used by the general public and by non-governmental entities for purposes other than governmental purposes. This Contracting Officer, as the awarding official, has determined that the award of the water and wastewater utility service purchase order will be performed by PRASA a Government entity. Market research involves obtaining information specific to the item being acquired. The market research conducted by the contracting office and facility department personnel determined that a GSA area-wide or single point contract is not available in accordance with Title 31 USC § 1535. No lnteragency Agreement is available for use either. GSA is specifically authorized by law and regulation to purchase utility services on behalf of other agencies by providing an Assisted Acquisition. August 2010. in accordance with Title 40 USC§ I 2l(d), GSA issued the Department of Justice for the FBOP a Delegation of Authority for nationwide authority to negotiate and execute utility service contracts at Federal facilities under the control and direction of the FBOP in accordance with Title 40 USC § 50 I (b)( I )(8). The FBOP, as the requiring agency, must make a determination of the best procurement approach that satisfies MDC Guaynabo 's schedule. performance, and delivery requirements. The PRASA is the current water and wastewater utility service provider for MDC Guaynabo and has continuously serviced the

Water and Wastewater Utility Services facility since 1993. The PRASA controls the water distribution capacity on the island of Puerto Rico. as well as the wastewater collection grid. The PRASA provides water and wastewater services to all sectors of the market (public. private, and government). No other source could be expected to make the capital investments for the infrastructure required to provide water and wastewater service or meet the regulatory approvals to treat and deliver water or collect and treat wastewater to meet MDC Guaynabo's consumption requirements. Because Puerto Rico is remote, there is not a realistic possibility of importing water from other sources off the island. The MDC Guaynabo has no reasonable expectation(s) that the Commonwealth of Puerto Rico PRASA would entertain entering into a contractual relaLionship at this time. Numerous attempts to secure anything in writing to confirm PRASA 's position regarding this subject have been unsuccessful.

Contracting and requirement staff continues to conduct appropriate market research to detennine if sources capable of satisfying the agency' s requirement exist and to overcome competition barriers.

Deregulation laws are presently nonexistent in this area and no alternative source of service is currently available. A review of FPDS-NG shows several other agencies (i.e., GSA, DOD, VA.

etc.) are issuing purchase orders to the PRASA for their water and wastewater utility requirements.

As with all the other agencies, MDC Guaynabo is a consumer of services from the public utility. If another potential source emerges, the agency will assess whether competition for future requirements is feasible.

The provision of water and wastewater services is essential for the orderly operation of MDC Guaynabo. History shows and economics dictate that the construction of infrastructure facilities by multiple utilities in the same location would be extremely costly and disruptive to communities.

The utility is regulated by local government to assure fair rates for safe and adequate service. The ratemaking process ensures the lowest reasonable rate for consumers while maintaining the financial stability of the utility. Under the law. the utility is entitled to recovery of its reasonable incurred expenses.

9. Any Other Facts Suoporting the Use of Other Than Full and Open Competition:

The provision of water and wastewater utility service is essential for the orderly operation of MDC Guaynabo. which has a rated capacity to collectively house approximately 1300 inmates. The institution's primary mission is to hold pre-trails and holdover inmates as a service to the US District Courts and the US Marshals Service for the Districts' of Puerto Rico and the US Virgin Islands. Commonwealth regulations and ordinances limit the providers of this service to only one.

10. A Listing of the Sources, if any, that Expressed in Writing, an Interest in the Acauisition:

There were no other sources which expressed an interest in this acquisition or that would be able to provide the service to meet the minimum requirements of the government.

11. A Statement of the Actions, if any, the Agencv May Take to Remove or Overcome Barrien to Competitiop Before any Subsequent Acquisition for the Supplies or Services Required:

Contracting and requirement staff continue to conduct appropriate market research to detennine if

JOFOC MDC GUAYNABO

Water and Wastewater Utility Services sources capable of satisfying the agency’s requirement exist and to overcome competition barriers. Deregulation laws are presently nonexistent in this area and no alternative source of service is currently available. A review of Federal procurement reporting database show several other agencies (i.e., Army, FEMA, GSA, VA, etc.) are issuing purchase orders to the PRASA for their water and wastewater utility requirements. As with all other agencies, MDC Guaynabo is a consumer of services from the public utility. If another potential source emerges, the agency will assess whether competition for future requirements is feasible. MDC Guaynabo will continue to monitor the trends in the utility industry to seek competition or sources that may be able to meet the minimum needs of the government and its utility requirements. Should opportunities arise in the future MDC

Guaynabo will take appropriate action.

12. Contracting Officer’s Certification:

I hereby certify that this request for Justification and Approval of other than Full and Open

Competition is made in good faith that the supporting data and information are accurate and complete to the best of my knowledge and belief, and that I would not be making this request if it were feasible to fully compete this requirement. I further certify that this request is not the result of lack of advance planning or a desire to expend funds while those funds are still available.

//Signed// 9/1/2015

Dennis Dempsey, Contract Specialist Date

Field Acquisition Office

(c) I hereby certify that the supporting data provided by the technical and requirements personnel which form the basis for this justification is complete and accurate to the best of my knowledge and belief.

Charles Davis, Facilities Manager Date

MDC Guaynabo

Concurrence of:

Steve Mora, Warden Date

MDC Guaynabo

JOFOC MDC GUAYNABO

Water and Wastewater Utility Services

//Signed// 9/16/2015

Jill D. Ryan, Chief Date

Field Acquisition Office (FAO)

//Signed// 11/9/2015

H. J. Marberry, Regional Director Date

Southeast Regional Office

//Signed// 4/25/2016

Matthew D. Nace, Procurement Executive Date

Administration Division

Approved:

The Competition Advocate, designated pursuant to FAR 6.501 and BPAP 4100.05, has reviewed this justification for a proposed contract action. Based on the forgoing determination and findings, I hereby approve the acquisition of Water and Wastewater

Utility Services for MDC Guaynabo, on an other than full and open competition basis.

//Signed// for 4/26/2016

Bradley T. Gross Date

Assistant Director for Administration

Competition Advocate