A9_FBO_LEX_JOFOC_-_WATER_SERVICE.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN

COMPETITION

PUBLIC UTILITY – WATER SERVICE

FEDERAL MEDICAL CENTER LEXINGTON

LEXINGTON, KENTUCKY

Contractor: Kentucky American Water

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

Estimated Amount: $611,529.11

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

Water Utility Service FMC Lexington

(a) Pursuant to the Federal Acquisition Regulation (FAR) Part 6.302-1(a)91) 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 FMC Lexington located within the city limits of

Lexington, KY, 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

FMC Lexington

3301 Leestown Rd.

Lexington, KY 40511

(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 the FMC Lexington, KY, from the sole provider of such services in the Lexington area. FMC

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

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

Kentucky American Water (KAW), shall provide to the government facility at FMC Lexington, 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

KAW shall provide services on an un-interruptible daily basis (365) days per year. KAW 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 FMC Lexington. KAW 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 Kentucky Department of Public Health, in accordance with all Federal, State, County, and local government for a safe and sanitary water service. Pursuant to

FAR Part 41.202, KAW continues to provide the “entire water utility service” (i.e., production, distribution, system operation and maintenance, treatment, metering, billing, etc.).

Kentucky American Water (KAW) 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 total estimated monthly amount for water and sewer utility service is $50,960.76. The total estimated amount for a 12-month period is $611,529.11.

JOFOC FMC LEXINGTON

Water Utility Services

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

CLIN 0001 October 2015 $42,404.80

CLIN 0002 November 2015 $64,852.35

CLIN 0003 December 2015 $77,154.83

CLIN 0004 January 2016 $44,618.96

CLIN 0005 February 2016 $31,706.65

CLIN 0006 March 2016 $41,479.20

CLIN 0007 April 2016 $25,224.29

CLIN 0008 May 2016 $57,093.27

CLIN 0009 June 2016 $56,379.46

CLIN 0010 July 2016 $59,595.38

CLIN 0011 August 2016 $57,233.32

CLIN 00112 September 2016 $53,786.60

Total Estimated Cost: $611,529.11

(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 KAW has proprietary rights up to the meter at FMC

Lexington. 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.

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

Kentucky American Water (KAW) is the sole provider of water utility service in the FMC Lexington service area. KAW is a private entity in the State of Kentucky, the only agent authorized by rules and regulations to provide water service in the Lexington area. Having a single supplier of water service for this area is the most efficient method of providing potable water. In accordance with Kentucky Administrative

Regulations: Provides that the Public Service Commission (PSC) shall prescribe rules for the performance of any service or the furnishing of any commodity by the utility. Requires every utility to file with the commission reports, schedules, and other information that the commission requires and to promulgate an administrative regulation for the performance of a service or the furnishing of a commodity by a utility.

This administrative regulation establishes general rules which apply to water utilities.

(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.”

(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

$50,960.76 with a total estimated usage for a 12 month period of $611,529.11. Utility rates are approved by the PSC. The KAW, which is charged under State of Kentucky law to ensure that rates be just and reasonable. The State of Kentucky, City of Lexington, and Kentucky American Water websites have 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.

All rates, rules and regulations of the KAW are subject to the approval of the PSC of the State of Kentucky.

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]). The establishment of the current supply and delivery of services began when the original service connections were installed. 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. 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 – FMC Lexington has a current and continuing requirement for the purchase of water 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.

1. Title: Water Utility Service – FMC Lexington

2. Product or Service Code: S- Utilities and Housekeeping Services– S114 Water Service.

3. 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. The water supply system may include pumping stations, aqueducts, and/or distribution mains. The water may be used for drinking, irrigation, or other uses.

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

II. DELIVERY / PERFORMANCE: Purchase order to provide water utility services from October 1, 2015 through September 30, 2016. The KAW shall provide to the government facility at FMC

Lexington, 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. KAW shall provide services on an un-interruptible daily basis (365) days per year. KAW 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 FMC

Lexington. Pursuant to FAR Part 41.202, KAW continues to provide the “entire water utility service”

(i.e., collection, treatment, testing, system operation and maintenance, metering, billing, etc.).

III. POTENTIAL SOURCES: Kentucky American Water, P.O. Box 578, Alton, IL 62002-0578

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.

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

X FedBizOpps Sources Sought Synopsis; Found no other interested party capable of providing water utility service.

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

X Searched FPDS-NG; Found GSA, VA, and the FBOP are purchasing water service from the

KAW.

X Searched previous purchases of similar/identical acquisitions; Found the KAW is current provider to FMC Lexington. This is a continuation of service.

3. Results: Results of Market Research were as follows: Only on 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 KAW as a single award of a firm-fixed price requirements type water 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. Kentucky American Water is the sole provider of water utility service in the FMC Lexington service area. The PSC is the independent governing body that approves all rates with the responsibility of water services for the locale in which FMC Lexington resides. 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 and from the institution. A review of State of Kentucky regulations determined that a water utility service is not a deregulated utility. Deregulation would promote competition. FMC Lexington is within the City of Lexington Zoning District. KAW is other than small business.

3. This requirement will not be posted to Fedbizopps to promote competition, broaden industry participation, and assist small business concerns in obtaining contracts for FMC Lexington. 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. KAW is an entity in the

City, the only agent authorized by rules and regulations to provide water service in the Lexington area. Having a single supplier of water and sewer service for this area is the most efficient method of providing and distributing potable water service.

4. Search of previous purchases of similar/identical acquisitions shows the KAW is the current water service provider for FMC Lexington and has serviced the facility since dedication. Also, KAW is the only service supplier capable at this time of providing FMC Lexington with water services. No other company has presented itself with the capabilities nor the infrastructure to run water lines to the current connection site. No other sources have been located that are currently capable or that could acquire the capability of meeting the Bureau’s requirement. The Bureau does not have the state and local approval or the resources to provide the funding for another company to install a new water system at the institution, other pipelines are not available, and no other contractor can provide water sewer service through the KAW pipelines.

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 water service for FMC Lexington.

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

VI. COMMENTS: The Government contemplates the single award of a firm-fixed price requirements type water utility service purchase order resulting from this requirement. The conclusions from this market research will be incorporated into the document for providing Water Utility Service for FMC Lexington.

(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 FMC Lexington, which is designed to collectively house with a rated capacity of approximately 1,275 inmates. The institution consists of a Federal Medical Center (FMC), and a Federal Prison Camp (FPC). State regulations and 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 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 available. A review of government procurement databases shows only the FBOP, GSA, and VA are issuing orders to the Kentucky

American Water for water utility requirements. FMC Lexington 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, 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// _9/15/2015_

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.

//Signed// _9/16/2015_

Kevin Hicks, Facilities Manager Date

FMC Lexington

Concurrence:

//Signed// _9/16/2015_

Francisco J. Quintana, Warden Date

FMC Lexington

//Signed// _9/21/2015_

Jill D. Ryan, Chief Date

Field Acquisition Office

//Signed// for _1217/2015_

J. F. Caraway, Regional Director Date

Mid-Atlantic Region

//Signed// _12/21/2015_

Matthew D. Nace, Procurement Executive Date

Administration Division

Approved:

//Signed// _12/22/2015_

Bradley T. Gross Date

Assistant Director for Administration

Competition Advocate