Attachment TGS NOPEC JandA_1.pdf

Figure 1

Part 404, Chapter 3 Justification for Other Than Full and Open Competition

JUSTIFICATION AND APPROVAL

Justification for Other Than Full and Open Competition (FAR 6.3)

1. Contracting Agency and Activity. The Department of the Interior, United States Geological Survey, Eastern Energy Resources Science Center, Reston Acquisition Branch plans to contract by means other than full and open competition. This document sets forth the justification and approval for use of one of the exceptions to full and open competition allowed under the Competition in Contracting Act (CICA) of 1984.

2. Nature of Action Being Approved. This action involves the licensing of two-dimensional seismic reflection data from the Arctic Alaska Petroleum Province. The proposed awardee is TGS-NOPEC Geophysical Company (hereafter TGS).

3. Description of Supplies or Services. The Eastern Energy Resources Science Center, Alaska Petroleum Systems project requires the acquisition of digital, two-dimensional (2D), seismic reflection data from the Arctic Alaska Petroleum Province, which includes the Alaska North Slope and adjacent offshore areas.

The 2D seismic data must be located offshore from the northwestern coast of Alaska within an area defined by 70.0 to 75.5 degrees north latitude and 156.5 to 169.0 degrees west longitude.

Data must have been collected during the past decade (i.e., 2010 or more recent) using an airgun source and streamer geometry sufficient to collect 10 seconds of data in nominal fold of at least

160. Deliverable data shall include Kirchhoff pre-stack time migration in sgy format and complete navigation data.

4. Estimated Dollar Value. IDIQ contract for maximum of $2,130,000.

5. Statutory Authority. The proposed action may be awarded without full and open competition under 41 U.S.C. 253(a)(1) as implemented in FAR 6.302-1.

6. Rationale Supporting Use of Citation in No. 5 An explanation of seismic reflection data and several pertinent definitions are provided in section 7.

a. TGS is the only vendor that offers 2D seismic data in specific locations needed for the USGS to complete the work described in section 3.

b. The USGS has conducted a search of all companies that offer licenses for 2D seismic reflection data in the region described in section 3. Using the parameters described in section 7 (below) as selection criteria, the data offered for licensing by TGS in the offshore Alaska region defined in section 3 are unique. In fact, the data offered by TGS uniquely fills gaps that exist between data previously licensed by the USGS from other companies.

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7. Other Information. An explanation of seismic reflection data and the licensing of such data for use is necessary to provide background for this procurement.

Seismic reflection data: The objective of this procurement is to obtain a license to speculative, multi-client (non-exclusive), 2-D digital seismic reflection data. USGS requires pre-stack time migrated (PSTM) data in sgy format to facilitate loading into digital workstations and integrating with previously licensed data already resident in our workstations.

Companies that specialize in the collection of seismic data commonly identify regions of interest to the oil industry and design speculative seismic surveys. The seismic company bears the entire cost of designing, collecting, processing, and marketing the seismic data. Seismic surveys may be 2-D, in which seismic data are collected along discrete lines, or may be 3-D data, in which seismic data are collected as a volume across a broad area. Only 2-D data are considered in this procurement because no 3-D data exists in the area of focus.

After data are collected and processed using computer technology to reduce noise and improve resolution, those are made available for a fee to any organization that has interest in the region, and the data can be acquired either as individual seismic lines or as an entire set of seismic lines.

The right to use the data is transferred as a license, and the license fee typically is set as a per-length (per-mile or per-kilometer) charge. Speculative seismic data are considered multi-client, or non-exclusive, because multiple organizations may purchase a license to the same data.

However, the data are considered confidential and may not be shared with parties outside the licensing organization.

Because the seismic data collected by a specific company are exclusive to that company, no two companies offer for licensing the same data. Therefore, parameters must be considered in selecting seismic data for licensing, including:

(i) Location – the seismic data must be located in an area pertinent to the work to be conducted.

(ii) Line orientation – the seismic data must be oriented in specific geographic coordinates to perform the work to be conducted.

(iii) Line length – longer continuous seismic lines typically are more useful for mapping subsurface rock layers that shorter seismic lines. Vintage – typically newer data is better than older data because of incremental improvements that have been made in data collection and processing.

(iv) Energy source – seismic data are collected by introducing sound waves into the earth using vibroseis (large vehicles with hydraulic pads that vibrate – limited to onshore areas), compressed air (when data are collected from water surface), or dynamite; the energy source influences the quality of data obtained.

(v) Fold – this is a measure of the number of seismic receivers (instruments that collect the sound waves that are reflected off of rock layers and return to the earth’s surface) used to produce a single seismic trace in the data; larger fold data typically are better quality.

(vi) Reprocessed data – the quality of older seismic data commonly are improved by “reprocessing,” which involves the application of advanced computer algorithms to improve the resolution of the data.

a. A limited number of companies offer 2D seismic data licenses in areas required by the USGS. TGS offers data where no other vendor does.

b. No cost to the Government is duplicated because the USGS has not licensed seismic data in the specific locations covered by this acquisition, and no other source offers seismic data for licensing in these locations.

c. No secret processes, patent, or data rights precludes competition because no data are offered in these locations.

8. The Efforts to Identify Additional Sources Including the Market Research Conducted.

All seismic vendors known to the USGS to offer data for license in the Arctic Alaska Petroleum Province were evaluated with regard to whether data are available in specific areas but only TGS- NOPEC meets the Government’s minimum requirements .In addition, the data libraries of other seismic vendors were searched and no 2D data in the Arctic Alaska Petroleum Province was found.

Regular interactions with the oil industry community in Alaska and State and Federal agencies responsible for overseeing oil exploration activities in Alaska enables the USGS to know historical seismic data collection and to monitor ongoing surveys. In addition, public domain files from the Alaska Department of Natural Resources – Division of Oil and Gas, U.S. Bureau of Land Management, and U.S. Bureau of Ocean Energy Management describing seismic survey permits issued were searched. A notice of intent to award sole source for an identical item was posted recently without response from any other companies.

9. Future Plans to Permit Competition.

There are very few seismic companies that own data-for-license in the Arctic Alaska Petroleum Province, and virtually all data are in unique locations, so there is little that can be done by the Government to increase competition. However, future requirements will undergo market research and be competed to the maximum extent practical.

10. Recommendation and Certification from Program Office

Based on the above, I recommend this acquisition be conducted on the basis of other than full and open competition. I certify that technical data which form a basis for this justification that are the responsibility of technical or requirements personnel are complete and accurate.

David W. Houseknecht Date Senior Research Geologist

The U.S. Geological Survey (USGS) considers employee signatures to be Personal Protected Information, and therefore all employee signatures have been redacted. By posting this document, the Contracting Officer attests all appropriate signatures have been obtained.

11. Certifications from the Contracting Officer:

a. The contracting officer determined that the price is fair and reasonable based on a comparison of the price paid for a similar order from the contractor.

b. The requirements of the Competition in Contracting Act, (41 U.S.C. 253), as implemented in the Federal and Interior Acquisition Regulations, have been considered in preparing this justification.

This justification is accurate and complete to the best of my knowledge and belief.

12. Approvals

The U.S. Geological Survey (USGS) considers employee signatures to be Personal Protected Information, and therefore all employee signatures have been redacted. By posting this document, the Contracting Officer attests all appropriate signatures have been obtained.