Approved_J&A_for_2-Year_Extension.pdf

JUSTIFICATION AND APPROVAL FOR OTHER THAN FULL AND OPEN COMPETITION

(J&A)

DATE: March 4, 2019

TO: Deborah Broderick Agency Competition Advocate

FROM: Jacob Veverka Engineering Officer, OIEE

SUBJECT: JUSTIFICATION FOR OTHER THAN FULL AND OPEN

COMPETITION

1. This document sets forth the facts and rationale justifying the use of other than full and open competition, in accordance with AIDAR 706.302-70(b)(5). This document was prepared by USAID/Haiti Office of Infrastructure, Energy, and Engineering (OIEE), Jacob Veverka Engineering Officer.

Contracting Agency:

Contracting Activity:

Cognizant Technical Office:

Activity Title:

Contract Number:

Period of Performance:

Location:

U.S. Agency for International Development (USAID)

USAID

Haiti Office of Infrastructure, Energy, and Engineering

(OIEE)

Legal Services for Cap Haitien Port Rehabilitation and Public-Private Partnership Project

AID-521-C-16-00006

May 24, 2016 - March 31, 2019

Haiti

2. The nature and/or description of the action being approved:

This is a request to approve a two-year time extension and contract scope expansion to continue complex specialized legal research and legal services provided by Gide Loyrette Nouel (Gide) in light of continuing changes to the Cap Haitien Port (CHP) Rehabilitation and the Caracol Power Utility (CPU) Project. Gide will continue to support the CHP Rehabilitation project (Port) Public-Private Partnership Project (PPP) tender and the transition of the USAID construction funded l0MW dual-fuel fired generating plant at the Caracol Industrial Park (CIP), from USAID-funded support to a PPP in the context of quickly evolving and broadening GOH and donor energy policy. These projects are an integral part of USAID's post-earthquake strategy to develop a strong economic pole in the North of Haiti centered around the CIP.

Gide provides specialized legal consulting services that includes intensive legal research and extremely specialized legal advice derived from applicable laws, statutes, and their independent regulatory research, to support USAID/Haiti and the Government of Haiti (GOH). Gide will provide enhanced legal support to USAID/Haiti and the GOH in the preparation and execution of a transparent and competitive award of a long-term PPP contract for management, operation and maintenance as well as potential capital investment in the CHP and the CPU, both located in northern Haiti, as well as in the broader national electrical PPP and mini-grid process.

Under this action, Gide will continue to provide specialized legal consultancy services to US AID in support of critical and complex legal matters relating to the privatization of the CHP and the privatization of the CPU, the latter to allow USAID to divest itself from continued support of the CPU. While both projects have progressed, reaching a worthwhile conclusion continues to be delayed as a result of natural disasters and political challenges, and now rapidly changing Haitian and donor energy policies. No additional funds are required for the extension period. The depth and breadth of Gide's legal expertise on these subjects and in these sectors in Haiti is precise and is not available within USAID or other potential offerors.

3. Description of the supplies or services required, including an estimated value:

The primary purpose of the subject award is to provide legal research, advice, and support with regard to the CHP, and similar PPP support for the CPU, an integral part of the CIP development strategy. The two-year extension period would allow Gide time to complete the PPP tender and transition process for both the CHP and CPU projects, while supporting USAID and the GOH with the broader national energy initiative. Subject to the stability of the Haitian Government, the tender process is now scheduled to begin in mid-2019 for the CPU and in April 2020 for the CHP Operator. After the CPU concessionaire receives the required private funding, USAID will begin the training and transfer of assets. It is expected that the CPU transfer process will take a minimum of 12 months. The CHP operator will begin port operations upon completion of construction at the port in early 2021.

Gide supports USAID by assisting in the PPP negotiations, providing an analysis of legal issues under U.S. and Haitian law, and international best practices affecting the viability of the transaction structure and legal feasibility. Their services are targeted to support, inform, and help to facilitate the design and implementation of the CHP rehabilitation project, and by extension, the CPU. Gide will advise USAID on the related tender procurements, bidding process, and support USAID to develop documents to define the interface that will be required of the eventual operators at the CHP and at the CPU.

Particularly for the CPU, it is anticipated that Gide will further provide support to the bidding process, technical assistance during the transition to a private operator, assistance transferring project staff to the new private operator, and technical and administrative support to the new private sector management team and staff for a limited period of time following privatization of the generation plant and distribution utility. A successful transfer to a viable concessionaire is critical to not only ensure the continuation of electricity to the industrial park and surrounding communities, but also to protect USAID's investment in the CPU.

The PPP is intended to legitimize the transfer of responsibility for operations of the facilities to private operators in partnership with the GOH through a competitive mechanism under Haitian law. Leveraging its experience and existing legal framework, Gide will continue to provide PPP-related legal consulting services to USAID/Haiti in order to support the improvement and the sustainability of both the CHP and the CPU through the transfer of responsibility for operations of the facilities to their respective private operators in partnership with the GOH through a competitive mechanism under Haitian law. The scope of work calls for the analysis oflegal issues under U.S. and Haitian law and international best practices that would affect the viability of the transaction structure, and assess its legal feasibility and necessary contractual provisions.

In addition, the CPU PPP has now transitioned into a larger two-part national PPP process including PPPs for regional grids, of which Caracol is a part, as well as a set of mini-grid PPPs. While the primary thrust of the energy sector work is expected to remain the PPP for the CPU (now part of the "Nord Est" power grid), other energy sector work in Haiti may also be required, including as to both the regional grids and the micro-grids.

US AID invested $53 million in the construction of the CPU that provides reliable electricity to the CIP, the CHP, and smrnunding communities. USAID's energy sector modernization strategy included transitioning the USAID funded power plant operation to a PPP in coordination with the GOH, and port modernization under the CHP Rehabilitation PPP strategy.

US AID is supporting the GOH by assisting in the selection of a private power operator through an international competitive tender process. USAID expects this to result in the awarding of a PPP for long-term operations of the power utility on a commercial basis.

Although political unrest and lapse in funding created substantial delays, the tendering process is on-going with the GOH issuing a request for proposal to twenty-five preselected firms. Barring continued political umest, it is anticipated that the GOH will sign a PPP agreement to a new concessionaire by May 31, 2019. Once a new PPP agreement is awarded, the concessionaire will have three months to secure approximately $20 million in private funding. If the concessionaire is unable to secure funding, the GOH will enter into a PPP agreement with second ranked concessionaire.

Gide's advice is built upon years of their extensive research and knowledge of this project, knowledge of French, American, and Haitian utility laws that enable the law firm to provide extremely specialized legal consulting services to USAID/Haiti. Gide is expected to continue coordinating with USAID's Haitian legal counsel to analyze legal issues that would affect the viability of the transaction, and assess the legal feasibility and necessary contractual provisions. The remaining obligated amount in the award is sufficient to cover the work required.

4. Statutory authority permitting other than full and open competition This request is made in accordance with AIDAR 706.302-70(b)(5) Impairment of f oreign aid programs, which provides that full and open competition "need not be obtained when it would impair or otherwise have an adverse effect on programs conducted for the purposes of foreign aid, relief, and rehabilitation." Under AIDAR 706.302-70(b)(5), a contracting activity may, without competition, make "[a]n award for the continued provision of highly specialized services when award to another source would result in substantial additional costs to the Government or would result in unacceptable delays."

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

Since the early 1960's Gide's core legal expertise is in the legal aspects of major industrial and public infrastructure projects. Gide's lawyers advise public institutions, international and multilateral agencies, manufacturers, investment funds and investors on the structuring and negotiation of project documentation and financing. Gide's core legal competency is to draft the legal framework of public-private partnerships (PPP) and sector laws, and have contributed to the structuring of over 250 projects in 30 countries.

Gide is considered the legal expert for project finance and PPP work, especially in the energy infrastructure sector, and is the only viable law firm with in-depth knowledge of Haitian laws and regulations, along with international standards, as it related to this project. Gide has broad experience in projects related to nuclear and renewable energy, oil and gas, mining, and waste and water treatment, and is the only law firm with related historical knowledge and in depth research of the local laws that relate to this project.

Prior to their work with USAID, Gide advised the Haitian Government and International Organizations on the concession of various sites for the construction of a new airport in Haiti. Gide is considered an expert in Haitian and French law and on international best practices relating to the privatization of regulated public infrastructure.

As further described below, Gide has unique qualifications to work on USAID's current PPP requirements, and furthermore, an award to Gide for the continued provision of highly specialized legal services is necessary to avoid substantial costs and unacceptable delays to USAID/Haiti.

Gide has a long history on the CHP Project. Gide was the law firm ofrecord to the IFC, provided the IFC with legal advice during the pre-feasibility due diligence phase of the CHP Rehabilitation and PPP Project. While serving as the IFC's legal advisor Gide worked extensively with the IFC, USAID and the GOH to determine the port project's legal viability. During this process, Gide built strong stakeholder relationships and developed significant proprietary knowledge on the project. Since 2016, Gide has worked as a legal advisor to USAID on the CHP PPP and on the CPU PPP. A new contractor would not have access to the intellectual property or legal research knowledge Gide developed while working for the IFC and during this contract with US AID. Re establishing relationships and duplicating Gide's intellectual property and legal research would result in significant and costly duplication of costs, that is not expected to be recovered through competition.

Secondly, Gide is uniquely qualified to represent USAID because of the combination of its understanding of IFC processes, port-sector PPPs, PPPs in French civil law countries, and Haitian legal and regulatory frameworks. Engaging a firm without substantial knowledge and experience working on IFC-led PPPs would require significant government expense for that firm to learn IFC processes, resulting in substantial duplication of costs, not expected to be recovered through competition.

Finally, Gide has unique capabilities as a leading international law firm and its experience working on large-scale infrastructure PPP projects in Francophone and civil law countries. Gide's International Legal Team has over 25 years of experience in large scale PPP transactions, assistance to governments, International Finance Institutions, lenders, sponsors and equity investors, from initial feasibility analysis to international bidding processes and financial closings. Further, much of this work experience has occurred in developing country contexts.

Therefore, the continued provision of highly specialized legal services with Gide is necessary, in this instance, to avoid substantial costs, duplication of effort, and unacceptable delays to the Port and Power projects. Such a delay is unacceptable as USAID/Haiti intends to have a new operator take over operations of the CHP container operations and begin operating the facility as a PPP by mid-2019. For these reasons, extending Gide's provision of highly specialized legal services is critical for program implementation and USAID's ability to achieve its foreign assistance goals.

6. Description of the efforts made to ensure that offers are solicited from as many potential sources as practicable, including whether a notice was or will be publicized as required by Federal Acquisition Regulation (FAR) 5.202 [AIDAR 705.002]:

A Notice of Intent (NOi) was publicized on FedBizOpps on October 31, 2018, in accordance with FAR 5.201. This notice announced that USAID/Haiti intend to extend the period of performance by two (2) years. No inquiries or responses were received.

The J&A will be publicized within 14 days of ACA approval.

7. A determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable:

The anticipated cost to the government was determined fair and reasonable at time of award. This determination is based on a review of historical costs. Under this no cost extension, the previously determined fair and reasonable rates will remain the same at the previously negotiated level.

8. Description of the market research conducted, and the results or a statement of the reasons market research was not conducted The original contract was awarded based on extensive market research done by USAID/Haiti in the years it has worked on port development in northern Haiti. This has led to comprehensive knowledge of vendors, stakeholders and experts that are active in this field. Based on this information, USAID/Haiti believes that Gide possesses the appropriate combination of French, Haitian, and USA legal expertise, current knowledge of the Haiti Port and Energy Infrastructure projects, and has experience with USAID/Haiti and other relevant stakeholders to provide the support needed immediately.

9. Other facts supporting the use of other than full and open competition:

The continuation of Gide's highly specialized legal services is critical as we enter, after numerous delays, the utility tender phase with the GOH, while at the same time the GOH has launched its new energy regulator and a nationwide PPP initiative, including Caracol tender. After selection of a viable company to assume the commercial operation of the power plant and a transition period, USAID will cease supporting the power plant.

Continuation with Gide is essential as the firm is the only entity with experience of French, Haitian, and US utility regulations and laws. Further, Gide is the only legal firm with the historical background and knowledge of the project. No other legal firms have expressed an interest in this project, however if another firm were located, USAID would encounter unacceptable delays to the port and power plant projects, duplication in start up costs, and unacceptable learning curve risks. Barring further political unrest, such a delay is unacceptable as USAID/Haiti intends to have a new operator take over operations during 2019. Further, selection of a viable concessionaire is critical to not only ensure the continuation of electricity to the industrial park and surrounding communities, but also to protect USAID's investments in the CHP and CPU. To prevent even further delays, it is critical for the tender process to proceed prior to the upcoming October elections. For these reasons, extending Gide's provision of highly specialized legal services is critical for program implementation and USAID's ability to achieve its foreign assistance goals.

Gide is successfully performing under the current contract. Based on Contractor Performance Reviews, Gide met all and exceeded contract requirements, providing outstanding quality and service. For FY 2017 Gide's performance was rated as follows:

Quality-"Exceptional", Cost Control-"Satisfactory", Schedule-"Very Good", and Management- "Very Good," and Regulatory Compliance- "Satisfactory".

A request for a sole source contract to Gide for Legal consulting services to support USAID/Haiti in connection with the preparation and execution of the PPP for the Cap Haitien Port (J&A) was approved on May 13, 2016. A second J&A to incorporate additional legal support services for the CPU was approved on August 31, 2017.

10. Sources, if any, that expressed an interest, in writing, in the acquisition:

A Notice of Intent (NOI) was publicized on FedBizOpps on October 31, 2018, in accordance with FAR 5.201 . No inquiries or responses were received.

11. The actions the Agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required All subsequent requirements for these services after successful completion of this contract will be competed through full and open competition.

12. Technical 01· requfrement p!:lrsonnel certification In accordance with FAR 6.3°03.2(b), I hereby certify that the technical statements included above and which form a basis for the justification are complement and accurate.

a ------· 3/14/19 Jacob Veverka, Engineering Officer Date

13. Conh·acting Officer Certification

I hereby certify that the justification is accurate and complete to the best of my knowledge and belief

Sheil Bumpass Contrncting Offic 1'

Cleaa·an~e

Justification and approval to ~mend Contract Number: AID-52 l-C-16-00006 for an additional twoyear~

3/14/19 Thomas E. Rhodes, Chief, OIEE Date e-clearnnce 3/14/19 Clll'istopher Ryder, Regional Legal Officer Date

1_4. Agency Competition Advocate

[\}Xpproved [ ] Disapproved

Date

Agency Competition Advocate