A9_FBO_CAA_JOFOC_Natural_Gas.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN

COMPETITION

PUBLIC UTILITY – NATURAL GAS UTILITY SERVICE

UNITED STATES PENITENTIARY CANAAN

WAYMART, PENNSYLVANIA

Contractor: Arapaho Communications

Period of Coverage: 10/1/2015 through 3/31/2016

Estimated Amount: $2,255,500.00

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

Natural Gas Utility Service USP Canaan

Pursuant to the Federal Acquisition Regulation (FAR) Part 6.302-1(a) and 6.302-1(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 natural gas utility service for the United States Penitentiary (USP) Canaan, 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:

U.S. Department of Justice

Federal Bureau of Prisons

USP Canaan

3057 Easton Turnpike Road

Waymart, PA 18472

(2) Nature and/or description of action being approved:

This justification for other than full and open competition is for the acquisition of natural gas utility services provided to USP Canaan, from the original and sole provider of such services. USP Canaan has a present and continuing requirement for natural gas utility service for the proper operation of the facility. This justification is for October 2015 through March 2016 or until a long term contract is awarded, whichever is sooner. A Request for Contract Action (RCA) package has previously been submitted for the 10 year requirements.

(3) Description of supplies or services required to meet the agency needs:

Arapaho Communications, LP, shall provide to the government facility at USP Canaan, natural gas 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. Services shall be provided on an un-interruptible daily basis. Arapaho Communications will be responsible to maintain and/or repair all associated natural gas lines and equipment, including associated costs for such repair, to the delivery point or meter of USP Canaan. Pursuant to FAR Part 41.202, Arapaho

Communications continues to provide the “entire electric utility service” (e.g., transmission, distribution, system operation and maintenance, metering, billing, etc.).

Arapaho Communications shall provide natural gas utility service from Effective Date of Award (EDOA)

October 1, 2015 through March 31, 2016, for a 6 month period, subject to funds availability (FAR Clause

52.232-18). The total estimated monthly amount for natural gas is $375,916.66. The total estimated amount for a 6 month period is $2,255,500.

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

CLIN 0001 October 2015 $238,500

CLIN 0001 November 2015 $345,000

CLIN 0001 December 2015 $428,000

CLIN 0001 January 2016 $449,000

JOFOC USP CANAAN

Natural Gas Utility Services

CLIN 0001 February 2016 $415,500

CLIN 0001 March 2016 $379,500

Total Estimated Cost: $2,255,500

(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)(1), 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 41.101), circumstances may dictate that only one supplier can furnish the service (see 41.202). Analysis of the market indicates that Arapaho Communications has proprietary rights up to the meter at USP Canaan. 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.

(5) A demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited:

Natural Gas service is currently only available from Arapaho Communications for the geographic location of the facility. Arapaho Communications is the owner of the pipeline and purchases natural gas at market prices. USP Canaan is the only customer on the pipeline, therefore the pipeline is not regulated by the

Pennsylvania Public Utility Commission as a local distribution company.

(6) A description of efforts made to ensure that offers are solicited from as many potential sources as is practicable including whether or not 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.”

(7) A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable:

The estimated average monthly cost, which was based on invoice history, for the natural gas utility service is

$375,916.66 with a total estimated usage for a 6 month period of $2,255,500. The current rates offered by

Arapaho Communications are comparable to the market price levied other commercial and industrial users in the USP Canaan area. Arapaho Communications 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 establishment of the current supply and delivery of services began when the original service connections were installed and the meters set in 2000.

(8) A description of the market research conducted:

This documentation is in accordance with FAR Part 10, 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 amount 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 United States Penitentiary

Canaan(hereinafter referred to as “USP Canaan”) has a current and continuing requirement for the purchase of natural gas 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. USP Canaan has purchased natural gas service from this same vendor since 2000.

1. Title: Natural Gas Utility Service - USP Canaan

2. Product or Service Code: S- Utilities and Housekeeping Services – S111 Gas Services

3. North American Industry Classification System (NAICS): 221210 Natural Gas Distribution = this industry comprises (1) establishments primarily engaged in operating gas distribution systems

(e.g., mains, meters); (2) establishments known as gas marketers that buy gas from the well and sell it to a distribution system; (3) establishments know as gas brokers or agents that arrange the sale of gas over gas distribution systems operated by others; and (4) establishments primarily engaged in transmitting and distributing gas to final consumers

4. Standard Industrial Classification (SIC) Code: 4924 Natural Gas Distribution

II. DELIVERY / PERFORMANCE: Purchase order to provide natural gas utility services October 1, 2015, through March 31, 2016. Arapaho Communications shall provide to the government facility at USP

Canaan, natural gas 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. Arapaho Communications shall provide services on an un-interruptible daily basis.

Arapaho Communications will be responsible to maintain and/or repair all associated pipelines and equipment, including associated costs for such repair, to the delivery point or meter of USP Canaan.

Pursuant to FAR Part 41.202, Arapaho Communications continues to provide the “entire Natural Gas utility service” (i.e., transmission, distribution, system operation and maintenance, metering, billing, etc.).

Arapaho Communications shall provide Natural Gas utility services from EDOA of October 1, 2015 through

March 31, 2016, subject to funds availability (FAR Clause 52.232-18). The total estimated amount for

Natural Gas utility service for a 6 month period is $2,255,500.

III. POTENTIAL SOURCES: Arapaho Communications, LP, 840-A Kastrin, El Paso, TX 79907-2724

IV. MARKET ANALYSIS:

1. The results of market research have determined that the Government’s needs can be met by an item that is of a type customarily available in the commercial marketplace and is used by the general public and by non-governmental entities for purposes other than governmental purposes.

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

X Searched database and contacted GSA Energy Center of Expertise; Found no areawide or single point contract is available.

X Searched FPDS-NG; Found only the FBOP is purchasing natural gas service from Arapaho

Communications.

X

Searched previous purchases of similar/identical acquisitions; Found the Arapaho

Communications is the current provider to USP Canaan and has provided service since 2000.

This is a continuation of service.

3. Results: Only one source could be found. A Justification for Other Than Full and Open

Competition is provided for approval.

V. RECOMMENDATION:

1. It is this Contracting Officers determination there is a source available that is capable of providing the required services. The requirement will be awarded to Arapaho Communications as a single award of a firm-fixed price requirements type natural gas utility purchase order utilizing FAR Part 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.

2. One potential source is the incumbent Arapaho Communications, which appears able to satisfy the requirement. The provision of natural gas service is essential for the orderly operation of USP

Canaan. History shows and economics dictate that the construction of facilities by multiple utilities in the same location would be extremely costly and disruptive to communities. Arapaho

Communications, LP, is a small business. Arapaho Communications is not a regulated utility.

3. This requirement will not be posted to Fedbizopps as a combined synopsis solicitation to promote competition, broaden industry participation, and assist small business concerns in obtaining contracts for USP Canaan, Pennsylvania. 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. Arapaho Communications is the sole provider of natural gas service in the

USP Canaan service area.

4. The FBOP does not currently have the resources to provide the funding for another company to install alternative gas transmission system, another distribution system is not available at the meter, and no other contractor can provide natural gas service through Arapaho Communications network.

5. 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. This includes the provision of natural gas service for USP Canaan.

6. 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 be met by a commercial item. Natural gas 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 natural gas utility service purchase order will be performed by Arapaho Communications, LP. The FBOP, as the requiring agency, must make a determination of the best procurement approach that satisfies USP Canaan’s schedule, performance, and delivery requirements. No other source could be expected to make the capital investments for the infrastructure required to provide natural gas service to meet USP Canaan’s consumption requirements.

Contracting and requirement staff continue to conduct appropriate market research to determine if sources capable of satisfying the agency’s requirement exist and to overcome competition barriers. If another potential source emerges, the agency will assess whether competition for future requirements is feasible.

The conclusions from this market research will be incorporated into the agreement document for providing

Natural Gas Utility Services natural gas utility service for USP Canaan.

(9) Any other facts supporting the use of other than full and open competition:

The provision of Natural Gas utility service is essential for the orderly operation of USP Canaan, which has a rated capacity to collectively house approximately 1536 inmates. State regulations and FBOP Construction

Contracting have limited the providers of this service to only one provider.

(10) A listing of the sources, if any, that expressed, in writing, an interest in the acquisition:

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 agency may take to remove or overcome barriers to competition before any subsequent acquisition for the supplies or services required:

At the present time, full and open competition is not available for this requisition. A GSA area-wide or single-point contract is currently not available, pursuant to FAR Part 41. Contracting staff continue to conduct appropriate market research to determine if sources capable of satisfying the agency’s requirement exist. Natural Gas service provided by Arapaho Communication to USP Canaan near Waymart, PA, was under contract JX00c-407 from the time of initial facility construction until the contract expired in December

2010. The Facilities Manager has prepared and submitted a RCA package to the Field Acquisition Office for the Natural Gas requirements for USP Canaan. If another potential source emerges, the agency will assess whether competition for future requirements is feasible. USP Canaan 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 USP Canaan 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.

Dennis Dempsey, Contract Specialist Date

Field Acquisition Office

I hereby certify that the supporting data provided by the technical and requirements personnel which form the

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Natural Gas Utility Services basis for this justification is complete and accurate to the best of my knowledge and belief.

Benjamin Bush, Facilities Manager Date

USP Canaan

Concurrence:

C. Maiorana, Warden Date

USP Canaan

Jill D. Ryan, Chief Date

Field Acquisition Office

J. L. Norwood, Regional Director Date

Northeast Region

Matthew D. Nace, Procurement Executive Date

Administration Division

W. F. Dalius, Jr Date

Assistant Director for Administration

Approved:

Denise M. Class, Senior Deputy Assistant Director Date

Administration Division / Competition Advocate

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