A9_FBO_LEW_JOFOC_Water_Utility_Service_FY16.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN

COMPETITION

PUBLIC UTILITY- WATER UTILITY SERVICE

UNITED STATES PENITENTIARY LEWISBURG

LEWISBURG, PENNSYLVANIA

Contractor: Pennsylvania America Water Company

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

Estimated Amount: $1,203,090.57

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

WATER UTILITY SERVICE USP LEWISBURG

6.303-2 (a) Pursuant to Federal Acquisition Regulation (FAR) Subpart

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 . the procurement of water utility service for the United States Penitentiary, Lewisburg, PA and adjacent Satellite Camp meets the criteria established for other than full and open competition. It is further determined only one source exists and no other supplies or services will satisfy the agency's need. This limitation on competition is justified as supported by the following information:

(b) ( 1) Identification of the agency and contracting activity:

U. S. Department of Justice Federal Bureau of Prisons United States Penitentiary Lewisburg PO Box 1000 Lewisburg, PA 17837

(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 provided to USP Lewisburg , frcm the original and sole prOvider of such services. USP Lewisburg has a present and continuing requirement for water utility service for the proper operation of the facility.

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

USP Lewisburg requires water utility services in a manner and form that is consistent with all applicable laws, rules , cedes, industry standards, permits , and regulations, promulgated by any and all governmental authorities having jurisdiction. Services shall be provided on an uninterruptible daily basis (365) days per year . The provider 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 USP Lewisburg. Pursuant to FAR Part 41 . 202 , the contractor is required to provide the "entire water utility service" (i.e., treatmen t , testing, system operation and maintenance, metering , billing, etc . ).

Water utility services shall be provided from Effective Date of Award (EDOA) through 12 months from EDOA, subject to funds availability (FAR Clause 52.232-18) ; The FBOP shall purchase Water Utility Service defined as potable, firefighting water and shall meet the Go~ernment ' s daily needs for the proper operation of the facility. The total estimated annual amount for water utility service is $1,203 , 090.57 .

(b) (4) An Identification of statutory authority permitting other than full and open competition :

This justification to award as a sole source is prepared pursuant to the except ion 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.

JOFOC USP Lewisburg

Water Uti lity Services

The application which permits use of the cited statutory authority are stated at FAR Part 6 . 302-1( b ) (3) , when acquiring utility s ervices (see 41.101), circumstances may dictate that on l y one supplier can furnish the service (see 41.202).

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

Pennsylvania American Water Company is the sole provider of water utility service in the USP Lewisburg service area and ha s been a u thorized by the Pennsylvania Public Utili.ty Commission (P . U. C . )through Supplement No. 281 to Tariff Water-PA P.U . C . No . 4 (h ttp : //www.amwater.com/files/PAWaterTariff%204 .pd f) , to service the territory of Kelly Township located in Union County, Pennsylvania . USP Lewisburg is situated within the boundaries of Kelly Township. All rates are regulated by the Pennsylvania Public Utility Commission through this tariff.

(b) (6) A description of efforts made to ensure that offers are solicite d 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 , Except ions 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 i s available."

(b) (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 water utility service is $98 , 539 . 86 with a total estimated usage for a 12 month period of $1,203,090 . 57 . All rates are regulated by the P . U. C. through Supplement No . 281 to Tariff Water-PA P.U.C. No. 4 . The PA American Water 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. 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-l[c) (2]). This Contra c t ing Officer has determined the anticipated cost to the Government will be fair and reasonable.

(b) ( 8) A descripti on of the market research conducted :

This documentation is in accordance with FAR Part 10, which describes the policie s 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. Th i s report is submitted in support of an acquisition with an est imated value in excess of the simplified acquisition threshold . Below are the findings of the market research for the above referenced requirement .

Water Utility Services

I. Background: A review of the obligation reveals the fo llowing - The United States Penitentiary (hereinafter referred to as "USP Lewisburg") has a current and continuing requirement for water utility service.

1. Title : Water Utility Service USP Lewisburg , to p r ovide water services for the FBOP, USP Lewisburg in Lewisburg , PA.

2. Product or Service Code: S- Utilities and Housekeeping Services - Sll4 Utilities-Water.

3. North American Industry Classification System (NAICS): 221310 Water Supply and Irrigation Systems = this industry comprises establishments primarily engaged in water supply .

4.

5.

year

Standard Industrial Classification (SIC) Code:

Estimated Contract Value (including options)

4941 Water Supply

$1 , 203 , 090 . 57 1

II. Potential Sources : Pennsylvania American Water is the sole provider of wate r utility service in the USP Lewisburg service area. 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. A review of State of Pennsylvania regulations determined that a water utility service is not a deregulated utility. Deregulation would promote competition and only companies , not Government entities, fall under the jurisdiction of the Pennsylvania Public Utility Commiss ion . USP Lewisburg is located in Kelly Township Zoning District within Pennsylvania American Water Company's territories served.

In accordance with Title 31 USC § 6303 an executive agency shall use a procurement contract as the legal instrument reflecting a relationship between the United States Government and a State , a local government, or other recipient.

III. Deliver I Performance time: Pursuant to FAR Part 41. 202 , Pennsylvania American Wat e r continues to provide the "entire water ut ility service" (i . e ., treatment , testing , system operation and maintenance, metering, billing, etc . ). Pennsylvania American Water shall provide to the government facility at USP Lewisburg, water util ity services in a manner and form that is consistent with all applicab l e laws , rules, codes , industry standards , permits, and regulations, promulgated by any and all governmental authorities having jurisdiction. Pennsylvania American

Water Utility Services

Water shall provide services on an un-interruptible daily basis ( 365) days per year. Pennsylvania American Water will be responsible to maintain and/or repair all associated water lines and equipment, inc l uding associated costs for such repair , from the delivery point or meter of USP Lewisburg.

Pennsylvania American Water shall provide wa t er utility services from Effective Date of Award (EDOA) through 12 months from EDOA , subject to funds availability (FAR Clause 52 . 232-18) . The total estimated annual amount for water utility service is $1 , 203,090 . 57.

IV . 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.

V. Market Analysis:

1. The results of market research have determined that the government's needs can be met by an item customarily available in the commercial marketplace .

2. The market research conducted by the contracting office and the Facilities Department staff determined that a GSA single point contract with Pennsylvania American Water does not exist and GSA does not wish to pursue a bi-lateral contract . Pennsylvania American Water is the water service provider for USP Lewisburg and has serviced the facility for many years. On December 15 , 2011 , a letter was received from Pennsylvania American Water indicating they are refraining from entering into bi-lateral written contracts . A search of previous purchases of similar/identical acquisitions shows Pennsylvania American Water is the current water service provider for USP Lewisburg and has serviced the facility since dedication.

Also, Pennsylvania American Water is the only service supplier capable at this time of providing USP Lewisburg with water services. No other company has presented itself with the capabilities nqr the infrastructure to run water lines to the current connection site as the territory is protected by tariff. Pennsylvania American Water is the current water utility service provider for USP Lewisburg and has continuously serviced the facility for many years. No other sources have been located that are currently capable or that could acquire the capability of meeting the Bureau's requirement.

3. I have determined that the Nor t h American Industrial Classification System (NAICS) code is 221310 - Water Supply and Irrigation Systems (Size Standard =$7 Million) . The contract will be a firm-fixed price requirements type utility contract.

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

Water Utility Services

1. It is this Contracting Officers determination there is a source available that is capable of providi ng the required services. The procurement will be conducted in accordance with the procedures as outlined in FAR Part 12, 15, 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 a local enti t y, the incumbent Pennsylvania American Water, which appears able to satisfy the requirement and is regulated by the P . U.C. Pennsylvania American Water is other than small business.

3 . The provision of water utility service is essential for the orderly operation of USP Lewisburg. The specifications/description requirements do cuments shall specif y 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 Pennsylvania P.U . C . regulations state that in order to provide economical and efficient service to a community , the state of Pennsylvania 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 i n the same location would be extremely costly and disruptive to communit ies. The utility is regu l ated by state or local government to assure fair rates for safe and adequate service. The ratemaking process ensures the l owest reasonable rate for consumers while maintaining the financial stability of the utility . Under the l aw, the utility is entitled to recovery of its reasonable incurred expenses.

4 . This requirement will not be posted to Fedbizopps as a combined synopsis solicitation to promo te compet i tion , broaden indust ry participation , and as sis t small business concerns in obtaining contracts for USP Le wisburg , 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 .

Pennsylvania American Water is the sole provider of water utility service in the USP Lewisburg service area. Pennsylvania American Water is an entity of Kelly Township, the only agent authorized by rules and regulations to provide water service in the Kelly Township area . A single supplier of water service for this area is the most ef f icient method of supplying water .

5. The Bureau does not have the state and local approva l or the resources to provide the funding for another company to install water lines and no other contractor can provide water service through Pennsylvania American Water pipelines .

Water Uti lity Services

6. Mark Ewing , Director , Energy Center of Expertise of 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 USP Lewisburg for a period of 1 year.

7 . I also make the determination that this procurement action "NOTu be set-aside for small business . The Small Business Procurement Review for the purcha.se of uti l ity se r vices ha s 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 a ccordance with PGD 09-02.

VII. Recommendation : The Government contemplates the s ingle award of a firm-fixed price requirements type water u t ility service contract.

Comments : The conclusions from this market research will be incorporated into the agreement document for pr oviding Water Utility Service for USP Lewisburg.

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

The provision of water utility service is essential for the orderly operation of USP Lewisburg , wh ich has a rated capacity to collectively house approximately 1 , 432 inmates . The institution consists of a high security United States Penitentiary (USP) , Satellite Camp and RDAP.

Commonwealth regulations and limit the providers of this service to only one . Utility requirements do not require follow-on acquisition actions .

Therefore, 6 . 302 - 1 (a) (2) (ii) is not applicable. In accordance with Title 31 USC § 6303 an e xecutive agency shall use a procur ement contract as the legal instrument reflecting a relationship between the United States Government and a State, a local government , or other recipient .

(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 i n 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 services required :

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 . Deregulation laws are presently nonexistent and no alternative source of service is currently

Water Utility Services available. A review of FPDS-NG shows only the FBOP is issuing orders to

Pennsylvania American Water for water utility requirements. USP Lewisburg 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.

(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, the supporting data and information are accurate and complete to the best of my knowledge and belief and 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 advanced planning or a desire to expend funds while those funds are still available.

//Signed// _9/3/2015_

Dennis Dempsey, Contract Specialist Date

Field Acquisition Office

Water Utility Services

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

//Signed// 8/27/2015

Ken Neuhard, Facility Manager Date

USP Lewisburg

Concurrence:

//Signed// 9/1/2015

David J. Ebbert, Warden Date

USP Lewisburg

//Signed// 9/4/2015

Jill D. Ryan, Chief Date

Field Acquisition Office

//Signed// 9/9/2015

J. L. Norwood, Regional Director Date

Northeast Region

//Signed// 9/11/2015

Matthew D. Nace, Procurement Executive Date

Administration Division

//Signed// 9/15/2015

W. F. Dalius, Jr. Date

Assistant Director for Administration

Approved:

//Signed// 9/16/2015

Denise M. Class, Senior Deputy Assistant Director Date

Administration Division / Competition Advocate