Argus_Sole_Source_Justification_and_Approval_Redacted_1.pdf

FAR SUBPART 13.5 SIMPLIFIED PROCEDURES FOR CERTAIN COMMERCIAL

ITEMS

SOLE SOURCE JUSTIFICATION AND APPROVAL

1. Identification of the Agency and the Contracting Activity

The requiring activity is the U.S. Department of Energy (DOE) Office of Petroleum Reserves (OPR) within DOE’s Office of Cybersecurity, Energy Security, and Emergency Response (CESER). The procuring activity for this requirement is the Office of Acquisition and Sales within the Project Management Office (PMO) of OPR based outside of New Orleans, Louisiana.

2. Nature and/or Description of the Action Being Approved

This is a sole source acquisition under FAR Part 13, “Simplified Acquisition Procedures,” to renew an existing contract with Argus Media, Inc., for a subscription to the following suite of products: Argus Crude, Argus Crude and Refined Products Outlook, Argus European Products, Argus Forward Curves – Americas Crude Oil, Argus Petroleum Transportation North America, Argus Possibility Curve, Argus Tanker Freight, and Argus US Products.

This award will consist of a base year and one one-year option. The contract is Firm-Fixed Price, and the period of performance is March 3, 2024, through March 2, 2026, should the option be exercised.

3. Description of the Supplies or Services Required to Meet the Agency’s Needs (Including the Estimated Value) The requirement is to provide real time crude oil and refined product pricing; crude oil demand, supply, and transportation data and outlooks; timely alerts and Argus commentaries pertaining to significant oil and refined product market events; as well as analytical tool to enhance understanding. The provision of such data and analytical insight is needed for three sites: OPR; the PMO of OPR based outside of New Orleans, Louisiana; and the Oak Ridge National Lab (ORNL) at the cost of approximately $976,000 for the two-year subscription. This will allow OPR to accomplish its mission to “reduce the impact of disruptions in supplies of petroleum products and to carry out obligations of the United States under the international energy program.” More specifically, the services provided will enable OPR to perform Congressionally mandated crude oil sales, monitor crude oil and refined product market dynamics for potential release of Strategic Petroleum Reserve (SPR) oil, and for conducting internal and/or congressionally mandated studies pertaining to the purpose, design, and utilization of the SPR. The PMO administers the actual drawdown, distribution and acquisition of SPR oil as well as manages the SPR sites. ORNL maintains and runs an oil valuation model based on Argus pricing and other data to value SPR crude oil streams.

4. Statutory Authority Simplified Procedures for Certain Commercial Items, 41 U.S.C. 1901 as implemented by FAR Subpart 13.5

5. A statement demonstrating the unique qualifications of proposed contractor or nature of the action requiring use of this authority Argus is uniquely qualified to provide these services to OPR because they are the industry trusted source of pricing info for U.S. crude streams in terms of breadth, depth, and transparency in methodology used to calculate price or price differentials. As an example, Argus generated a new crude oil ‘marker’ for Houston, Texas when the volume of oil trades in Houston reached a sufficiently high volume. The new marker not only provides valuable information about the market dynamics in Houston but also enhances price discovery/formation in competing sites. Argus covers more than 80 different internationally traded crude streams and the widest set of markets/regions with respect to crude oil and refined products. Argus also provides a high degree of transparency in their formulas for calculating the price differentials which appeals to traders, buyers, and sellers. Trades are published and allow subscribers to cross check and verify the deals against Argus pricing. Their pricing and trading data are critical for OPR to implement Congressionally mandated crude oil sales and potential oil exchanges and releases in an emergency situation.

6. A description of efforts to ensure that offers were solicited from as many potential sources as is practicable Argus Media was contacted directly. They confirmed that these products are sold directly from them and are not offered through resellers. A notice of intent to sole source this acquisition was posted on FedConnect and in SAM.gov for interested parties to identify their capabilities. No inquiries or responses were received.

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

The Contracting Officer determines that the anticipated price(s) will be fair and reasonable in accordance with FAR 13.106-3(a)(2)(ii). Sufficient historical pricing data exist to make the fair and reasonable determination.

8. A description of the market research conducted and the results.

Market research of other potential service providers in oil and refined product real time pricing data provision, trading data provision, and timely market analysis and commentaries was conducted via searches of previous/existing DOE contracts, communication with other offices utilizing similar services, interaction with service providers, feedback from SPR customers, and internet searches. OPR has been unable to locate other sources to provide granular, timely, and transparent oil pricing data and analyses critical to the accomplishment of its mission. For example, I H S Markit provides short and long-term oil supply and demand outlook, and monthly pricing data including forecasts; however, it does not provide daily pricing nor trading data. Bloomberg terminal provides real time crude oil and refined product pricing and trading info; however, they cover a narrower set of crude streams and do not provide the level of transparency that traders, refiners, and analysts seek. S&P Global also provides real time crude oil and refined product pricing and trading info; however, their gulf coast markers reflect purely the lowest cargo price each day whereas the Argus includes both waterborne and pipeline transactions to reflect a USGC-weighted average benchmark.

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

None

10. A listing of any sources that expressed a written interest in the acquisition.

See Item 6 above.

11. A statement of any actions the agency may take to remove or overcome any barriers to competition, if subsequent acquisitions are anticipated.

Prior to renewing this subscription in the future, OPR will continue to research the availability of other sources and publications to determine if new industry trusted sources become available that can provide the same level of comprehensive services.

Certification

Acquisition Initiator:

I certify that the facts and representations under my cognizance, which are included in this justification, and which form a basis for this justification, are complete and accurate.

Date

Economist

Contracting Officer:

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

The Contracting Officer determines that the anticipated price(s) will be fair and reasonable. The techniques identified at FAR 13.106-3(a)(2) will be used to ensure that

02/20/2024 award will be made at a fair and reasonable price. Sufficient historical pricing data exists to make the fair and reasonable determination.

Date

Contracting Officer

Approval

Based on the foregoing justification, I approve the procurement of the Argus Media subscription on an other than full and open competition basis pursuant to the authority of 41 U.S.C. 1901 as implemented by FAR Subpart 13.5.

Date

Competition Advocate