JOFOC-Natural_Gas_Line_(SIGNED).pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

Natural Gas Installation for Dale Bumper’s Small Farms Research Center

RATIONAL

Identification of Agency and Activity:

The agency requesting the following justification is USDA-ARS Dale Bumpers Small Farms Research Center located at 6883 So. State Hwy 23 Booneville, AR. The end user for this purchase is Dr. Annie Donoghue, Acting Research Leader and can be contacted at (479) 575-2413. Purchasing contact at this location is Michael Douglas and can be contacted at 979-260-9480.

Nature/Description of Action:

An objective of the USDA ARS Dale Bumpers Small Farms Research Center is to develop scientific principles and technologies to enhance the profitability of small scale farms. Small farms are threatened by a lack of profitability. The location headquarters are comprised of several buildings that utilize propane as its current fuel source for central heating and hot water heater use. The intent of this purchase order is to install a natural gas line to the center for utility use.

Description of Supplies/Services:

The purchase is for the following from Arkansas Oklahoma Gas Corporation (AOG):

Installation of a plastic gas line 2.8 miles (13,500 ft) to provide natural gas service at 6883 S.

State Hwy 23 Booneville, AR.

The total cost for the installation is estimated at $50,000. The purchasing instrument will be a purchase order.

Identification of Statutory Authority Permitting Other Than Full and Open Competition:

FAR 13.106-1(b)(1)(i) – Only one responsible source and no other supplies or services will satisfy agency requirements. When acquiring utility services, circumstances may dictate that only one supplier can furnish the service; or when the contemplated contract is for construction of a part of a utility system and the utility company itself is the only source available to work on the system. The Government is acquiring a utility from AOG which is the natural gas supplier for Dale Bumper’s Small Farms Research Center located in Booneville, AR.

Statutory Authority being cited is 41 U.S.C. 253(c)(1)

Demonstration of Contractor’s Unique Qualification/Nature of Acquisition Requirements:

Arkansas Oklahoma Gas Corporation is a natural gas company serving approximately 60,000 customers (residential, commercial and industrial) in Western Arkansas and Eastern Oklahoma. This is the natural gas provider that services Booneville, AR and can provide the location with an as needed supply of natural gas to efficiently operate the federal facilities.

As such, this company is recommended as the sole source for installing the necessary gas line for utility services at 6883 S. State Hwy 23 Booneville, AR 72927.

FedBizOpps Announcement/Potential Sources:

A sole source announcement was publicized in FBO on 6/20/2014 with responses due 7/3/2014. No responses were received.

Determination of Fair and Reasonable Cost:

This installation is determined to be fair and reasonable due to the actual cost of the installation is $216,381. The vendor is willing to cost share the line installation due to anticipated services to be provided, and has requested that USDA, ARS provide $50,000 of the $216,381 for the line installation.

Based upon price comparisons between natural gas and propane costs and the use of propane at the Dale Bumper’s Small Farms Research Center, we are anticipating approximately an annual savings of approximately $20,000 per year. As such our projected return on investment will be less than 3 years.

Furthermore since we will have a continuous supply of Natural Gas due to a direct connection, there will be no potential for depleted fuel sources as we have had in the past with utilizing propane tanks.

Market Research:

A cost estimate obtained from AOG is considered fair and reasonable due to the cost sharing of the line installation. The price per (13,500) foot to install the line is $16 per ft based upon the total cost of $216,381. Based upon the cost sharing the USDA-ARS’s cost is equivalent to $3.70 per ft.

Utilization of natural gas will also provide significant long term cost savings for the federal government as propane costs had reached peaks of almost $5 per gallon this previous winter wherein the average cost of natural gas is $.83.