A9_FBO_GIL_JOFOC_Water_FY16.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN

COMPETITION

PUBLIC UTILITY – WATER UTILITY SERVICE

FEDERAL CORRECTIONAL INSTITUTION GILMER

GLENVILLE, WEST VIRGINIA

Contractor: Gilmer County Public Service District

Period of Coverage: 10/1/2015 through 9/30/2016

Estimated Amount: $782,000.00

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

FCI Gilmer Water Utility Service

(a) 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 water utility service for the Federal Correctional Institution (FCI) Gilmer located in Gilmer County, West Virginia, 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:

(b)(1) Identification of the Agency:

U.S. Department of Justice

Federal Bureau of Prisons

FCI Gilmer

201 FCI Lane

Glenville, WV 26351

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

This justification for other than full and open competition is for the acquisition of Water utility services supplied to FCI

Gilmer, from the original and sole provider of such services. FCI Gilmer has a present and continuing requirement for

Water service for the proper operation of the facility.

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

Pursuant to FAR Part 41.202, the Gilmer County Public Service District continues to provide the “entire Water utility service” (i.e., production, distribution, system operation and maintenance, treatment, metering, billing, etc.). The

Gilmer County Public Service District (GCPSD) shall provide to the government facility at FCI Gilmer, Water 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 GCPSD shall provide services on an un-interruptible daily basis (365) days per year. The GCPSD will be responsible to maintain and/or repair all associated pipelines and equipment, including associated costs for such repair, up to the delivery point or meter of FCI Gilmer. The GCPSD will be responsible to ensure that the pipelines and associated equipment, utilized to provide water services will be maintained and operated in compliance with all rules and regulations set by the West

Virginia Public Service Commission, in accordance with all Federal, State, County, and local government for a safe and sanitary water service.

The GCPSD shall provide Water utility services for the period from October 1, 2015, through September 30, 2016, for a 12 month period, subject to funds availability (FAR Clause 52.232-18). The average monthly amount for Water utility service is estimated to be $65,000. The total estimated annual amount for Water utility service is $782,000.00.

(b)(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). 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 § 1501(a)(8). Analysis of the market indicates that the GCPSD has proprietary rights up to the meter at FCI Gilmer. 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

JOFOC FCI GILMER

Water Utility Services for capital improvements. In accordance with FAR 9.102(b), a contracting officer is not required to make a responsibility determination when awarding to a Foreign, State, or local government.

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

The GCPSD is the government-owned sole provider of Water utility service in the Gilmer County service area. The

West Virginia Public Service Commission is the governing body that sets all rates and tariffs with the responsibility of

Water utility service for the locale in which FCI Gilmer resides. GCPSD is an entity in the West Virginia Public

Service Commission jurisdiction and the only agent authorized by rules and regulations to provide these services within the service area. Having a single supplier of Water for this area is the most efficient method of providing these services. This requirement cannot be conveniently or economically obtained by contracting directly with a private source because building multiple distribution and removal systems would be costly and inefficient.

(b)(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.’ A General Services Administration (GSA) area-wide nor a single point contract for Water utility services in the FCI Gilmer area is available at this time.

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

The current rates offered by the GCPSD are equal to the market price levied other commercial and industrial users in the FCI Gilmer area. The GCPSD published tariff 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 Gilmer County Public Service District is a non-profit corporation operating pursuant to the right and power granted by Chapter 24, Article 2 of the West Virginia Code. Utility rates are enacted by tariffs set by the West Virginia Public Service Commission, which is charged under West Virginia law to ensure that rates be just and reasonable. As regulated by the West Virginia Public Service Commission, GCPSD is authorized to provide (i) production, treatment, and distribution of water; and (ii) for such utility services as the area may now or hereafter have the power to provide. Water rates established by the West Virginia Public Service

Commission shall be adjusted as necessary by the Commission to compensate proportionately for any increase in the cost of energy purchased by the GCPDS. 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[c][2]) and the purchasing of supplies and services from a responsible source is determined 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 2002. As such, this contracting officer has determined the anticipated cost to the Government will be fair and reasonable.

(b)(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. 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.

Background: A review of the obligation reveals the following – The Federal Correctional Institution Gilmer

(hereinafter referred to as “FCI Gilmer”) has a current and continuing requirement for Water utility service.

Title: Water Utility Service FCI Gilmer, to provide Water services for the FBOP, FCI Gilmer in Glenville, WV. FCI

Gilmer does not have onsite water treatment facilities.

Product Service Code: S- Utilities and Housekeeping Services – S114 Utilities/water.

North American Industry Classification System (NAICS): 221310 Water Supply and Irrigation Systems = this industry comprises establishments primarily engaged in operating water treatment plants and/or operating water supply systems.

Standard Industrial Classification (SIC) Code: 4941 Water Supply.

Estimated Contract Value (including options): $782,000 for 1 year

Potential Sources: The GCPSD is the sole provider of Water utility service in the FCI Gilmer service area. The West

Virginia Public Service Commission is the governing body that approves all rates with the responsibility of Water utility services for the locale in which FCI Gilmer resides. FAR provides that 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 and the purchasing of supplies and services are determined fair and reasonable from a responsible source. I applied personal knowledge, interaction with knowledgeable individuals in local and Federal Government regarding market capabilities to meet the requirements, and research of generally accessible literature available on-line were the techniques used in researching this procurement for a supply/services of this type. During construction of the institution, one contract was awarded for the installation and operation of one water pipeline leading to the institution.

A review of State of West Virginia regulations determined that a Water utility service is not a deregulated utility.

Deregulation would promote competition, but the GCPSD falls under the jurisdiction of the West Virginia Public

Service Commission. FCI Gilmer is within the service area of GCPSD, which has been providing water utility services since 2002.

Deliver / Performance time: Pursuant to FAR Part 41.202, the GCPSD continues to provide the “entire Water utility service” (i.e., collection, treatment, testing, system operation and maintenance, metering, billing, etc.). The GCPSD shall provide to the government facility at FCI Gilmer, Water 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 GCPSD shall provide services on an un-interruptible daily basis

(365) days per year. The GCPSD will be responsible to maintain and/or repair all associated Water lines and equipment, including associated costs for such repair, from the delivery point or meter of FCI Gilmer.

The GCPSD shall provide Water utility services from October 1, 2015, through September 30, 2016, subject to funds availability (FAR Clause 52.232-18). The total estimated annual amount for water utility service is $782,000.00

Commercial Item Determination: Water 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.

Market Analysis:

The results of market research have determined that the government’s needs can be met by items customarily available in the commercial marketplace.

The market research conducted by the contracting office and the Facilities Department personnel determined that a

GSA area-wide or single point contract is not available in accordance with Title 31 USC § 1535. No Interagency

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. In August 2010, in accordance with 40

USC 121 § (d), GSA issued 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 40 USC

501 § (b)(1)(B)for a 10 year period. The FBOP, as the requiring agency, must make a determination of the best procurement approach that satisfies FCI Gilmer’s schedule, performance, and delivery requirements. The Gilmer

County Public Service District (GCPSD) is the current Water utility service provider for FCI Gilmer and has serviced the facility since 2002. No other source could be expected to make the capital investments for the infrastructure required to provide Water service to meet FCI Gilmer’s requirements. FCI Gilmer has no reasonable expectation(s) that the GCPSD would entertain entering into a contractual relationship at this time. Numerous attempts to secure anything in writing to confirm the company’s position regarding this subject have been unsuccessful. Several letters and market research questionnaires have been sent to GCPSD trying to determine interest in entering into a bilateral written contract for the provision of Water utility services. GCPSD has not responded to any inquiry.

I have determined that the North American Industrial Classification System (NAICS) code is 221310 – Water Supply and Irrigation Systems (Size Standard = $7.0 Million). The purchase order will be a firm-fixed price requirements type utility order in accordance with FAR 41.202(c).

Results: Based on the information provided by the sources detailed above, the following information outlines the conclusions and provides the basis for this procurement.

It is this Contracting Officers determination there is a source available that is capable of providing the required services. The procurement will be conducted in accordance with the procedures as outlined in FAR Part 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.

One potential source is a local entity, the incumbent GCPSD, which appears able to satisfy the requirement and is regulated by the West Virginia Public Service Commission. The GCPSD recognizes Tariffs as an avenue through which local law is adopted. GCPSD is other than small business.

The provision of Water utility service is essential for the orderly operation of FCI Gilmer. The specifications/description requirements documents shall specify needs using market research in a manner designed to promote full and open competition and only include provisions or conditions to the extent necessary to satisfy the needs of the FBOP or as authorized by law. However, the West Virginia Public Service Commission regulations state that in order to provide economical and efficient service to a community, the state of West Virginia grants electric distribution, natural gas distribution, steam heat, water, and wastewater companies the right to provide their service within a specific geographic area. 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. The utility is regulated by state or 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.

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 FCI Gilmer, Glenville, West Virginia. 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 GCPSD is the government-owned sole provider of Water utility service in the FCI Gilmer service area. The GCPSD is an entity in the West Virginia Public Service Commission jurisdiction and is the only agent authorized by rules and regulations to provide Water service in the Gilmer County, WV area. Having a single supplier of Water service for this area is the most efficient method of providing potable water.

The Bureau does not have the state and local approval or the resources to provide the funding for another company to install a treatment plant at the institution, another pipeline is not available, and no other contractor can provide water and/or sewer service through GCPSD pipelines.

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

Water service for FCI Gilmer.

I also make the determination that this procurement action “NOT” be set-aside for small business. The Small

Business Procurement Review for the purchase of utility services has been granted a waiver by the Office of Small and

Disadvantaged Business Utilization to the FBOP for submitting routine procurements to the Office of Small and

Disadvantaged Business Utilization for review in accordance with PGD 09-02.

Recommendation: The Government contemplates the single award of a firm-fixed price requirements type Water utility service purchase order.

Comments: The conclusions from this market research will be incorporated into the agreement document for providing Water Utility Service for FCI Gilmer.

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

The provision of Water utility services is essential for the orderly operation of FCI Gilmer, which was designed with a rated capacity to collectively house approximately 1280 inmates. The facility houses male inmates of all security levels who are in in-custody and out-custody status. State regulations and local ordinances limit the providers of this service to only one.

(b)(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.

(b)(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:

Contracting and requirements staff continue to conduct appropriate market research to determine if sources capable of satisfying the agency’s requirement exist and to overcome competition barriers. Deregulation laws are presently nonexistent and no alternative source of service is currently available. If another potential source emerges, the agency will assess whether competition for future requirements is feasible.

(b)(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// 8/12/2015

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

//Signed// 8/10/2015

Joseph Flack, Acting Facility Manager Date

FCI Gilmer

Concurrence:

//Signed// 8/11/2015

C. Williams, Warden Date

FCI Gilmer

//Signed// 8/18/2015

Jill D. Ryan, Chief Date

Field Acquisition Office

//Signed// for 8/19/2015

J. F. Caraway, Regional Director Date

Mid-Atlantic Region

//Signed// for 8/28/2015

Matthew D. Nace, Procurement Executive Date

Administration Division

//Signed// for 8/28/2015

W. F. Dalius, Jr. Date

Assistant Director for Administration

Approved:

//Signed// 8/28/2015

Denise M. Class, Senior Deputy Assistant Director Date

Administration Division / Competition Advocate