DFSP Charleston JA.pdf

Control # CECT-NWO-21-10

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. CONTRACTING AGENCY:

U.S. Army Corps of Engineers, Omaha District, Contracting Division (CENWO-CT).

2. DESCRIPTION OF ACTION:

Requirement for a modification to a firm-fixed price contract, W9128F16D0027/W9128F18F0090, Defense Fuel Supply Point (DFSP) Charleston, SC.

This modification includes:

Conducting a site assessment and repairing 150’ section of damaged aboveground pipelines located southeast of Perimeter Rd. in wetlands area adjacent to Port Authority. Repair of pipe supports and repair of coating on disturbed piping is required.

The original contract was awarded using FY18 Working Capital Funds [97X4930] with a current contact amount of $10,774,896.26. Current year (FY21) funds will be used to award the modification.

3. DESCRIPTION OF SUPPLIES/SERVICES OR NATURE OF CONSTRUCTION:

Structural Associates, Inc., a small business, is under contract for the replacement of valves and pipe repairs at the wharf, repair of coatings, pipe supports, and piers for approximately 2.5 miles of two 18 inch diameter pipelines from the receiving wharf to the DFSP tank farm terminal.

A modification is required due to a vehicle traveling at a high rate of speed to elude authorities and the driver lost control, drove through the security fencing, and impacted the two 18” fuel lines that receive fuel from the Port of Charleston to the DFSP. The impact caused damaged to the fuel lines, pipe supports, and surrounding area.

As a precaution, the DFSP terminal operations immediately commenced defueling the two lines.

The US Coast Guard – Captain of the Port (COTP) issued a letter to the DFSP to immediately suspend all fueling operations until the fuel lines can be inspected, repaired, and tested before returning to services.

The Rough Order of Magnitude from the Project Manager (PM), Todd Wolpert, and Construction Representative, Matt Ellender, is estimated to be somewhere between $500,000 -$750,000. At least one of the fuel lines needs to be able to receive fuel the first week of March 2021 with the second fuel line operational within 30-60 days of the first fuel line being in operation.

Upon approval, the USACE contractor (Structural Associates, Inc.) would be directed to proceed with performing a site assessment and provide a proposal to make repairs to the pipelines.

4. AUTHORITY CITED:

10 U.S.C. 2304(C)(2), as implemented by FAR 6.302-2 and DFARS 206.302-2, Unusual and Compelling Urgency due to the operational mission of DFSP Charleston.

5. REASON FOR AUTHORITY CITED:

Physical completion of the project occurred in July 2020. As builts have been received. The Storm Water Prevention Plan [environmental] has not been received, but the contractor is working with the installation and other stakeholders to complete and closeout the contract.

Background:

On January 29, 2021, the Contracting Officer was made aware of a fatality at the DFSP Charleston installation work site. A vehicle was traveling at a high rate of speed to elude authorities and the driver lost control, drove through the security fencing, and impacted the two 18” fuel lines that receive fuel from the port of Charleston to the DFSP. The impact caused damaged to the fuel lines, pipe supports, and surrounding area.

Justification:

a. The contractor will need to assess the site and repair 150’ section of damaged aboveground pipelines located southeast of Perimeter Rd. in wetlands area adjacent to Port Authority. Repair of pipe supports and repair of coating on disturbed piping is required.

b. The DoD installations that receive fuel from DFSP have critical operational flying missions to protect National Security. National Security will be harmed if the DoD installations are not able to fulfill their mission due to unavailability of JP8 fuel. With the fuel supply severed due to the inability to receive fuel via the receipt lines that are damaged, mission readiness is impacted. JB Charleston “Air Force” fly C-17s to support the movement of large military troops and equipment worldwide in support of the DoD mission.

There is a large troop movement occurring in March 2021. If the DFSP cannot receive fuel to distribute to their customers, i.e. JB Charleston and others, they are unable to fly to meet their mission requirements because they will have no fuel. JB Charleston provides fuel to other DoD installations for training and flying missions and if they are unable to provide them with this fuel, then they would be unable to train or fly because they have no fuel for their aircraft. Pilots are required to fly so many hours per month to maintain qualifications and if there is no fuel for flying, then they cannot train to maintain qualifications; thus, this impacts their ability to be an operational installation when they fail to fly to maintain qualifications. 90% of the installations have flying missions that rely on DFSP to meet their required missions. DFSP is mandated by Congress to maintain specific war reserve amount of fuel in their tanks to support DoD missions.

c. The contractor is Structural Associates, Inc. Structural Associates received the contract award in 2018 with physical completion July 2020. They are working on final construction closeout documentation requirements. The contractor has working knowledge of the installation and all personnel have access to work on the installation, to include subcontractors that are hired locally. The contractor has previously conducted welding, testing and restoration on the lines that need repairing. The contractor has working relationship and established line of communication with the Port of Charleston.

d. DFSP Charleston, SC is located in a protected permitted wetland. What this means for a contractor is that they need permitting from the USACE Charleston District. The PM has advised that permitting from the Charleston District can take up to 6 months to obtain.

Structural Associates, Inc. permits are still open and have not been closed. If another contractor is selected to perform the work requirement, this would delay the site assessment and repairs by 6 months, and this is not acceptable. The DFSP will run out of fuel within 3 months. There will be no fuel for DFSP to issue to their customers in support of their missions as discussed above. Again, Congress mandates that the DFSP maintain specific war reserve amount of fuel in their tanks. There are two areas in the United States where soil liquefaction is present; California and South Carolina. Liquefaction takes place when loosely packed, water-logged sediments at or near the ground surface lose their strength in response to strong ground shaking. Liquefaction occurring beneath buildings and other structures can cause major damage during earthquakes. It is essential to get the system back into service to protect the infrastructure from any potential damage and preserve the integrity of the fuel lines to receive fuel from the ship to DFSP. The contractor will be assessing the amount of damage to the pipe supports. Damaged pipe supports, if not repaired and an earthquake occurs, can sink into the earth causing further damage to the pipeline.

e. Other factors that impact the decision to solicit only one source is the time and cost to conduct a competitive or 8(a) sole source procurement. USACE utilizes the MATOC, W9128F14R0048, to solicit, using the best value subjective trade off methodology or low price technically acceptable methodology. The time it takes to solicit and award a new competitive task order far exceeds the time it will take to negotiate the required repairs with one contractor. A competitive task order request takes on average 3-4 months to award. The modification negotiation is expected to be straightforward. The modification to the existing contract can be issued upon approval of this J&A. The contractor will begin work to prepare its proposal and negotiations can be finalized within 7 days of the receipt of its proposal.

Also, task orders in the range of $500,000 - $750,000 generally do not generate enough small business interest.

f. A competitive task order request, evaluation, and award usually takes about 3-4 months.

An 8(a) Sole Source award can take about 2-3 months to solicit, negotiate, and award a contract. If we had to use a competitive task order or 8(a) sole source award, we could experience additional delays because due to installation/State requirements for permitting and approvals of specialized non-destructive testing equipment (NDE). In the time it would take to award a new contract, the work under this modification would be completed. The first line is expected to be completed the first week of March 2021if the contractor was issued Notice to Proceed (NTP) on 4 February 2021, and the second line is expected to be completed about 30-60 days following completion of the first line. Structural Associates, Inc. and team are well equipped to begin immediately upon the contracting officer’s issuance of a NTE modification/Notice to Proceed. There would be significant duplication of costs to the Government if this action is not modified. DLA has already scheduled the tanker to deliver two shipments of fuel to the DFSP as noted below. The DFSP is unable to receive any of this fuel if their fuel lines are not repaired. They have no other means to receive fuel except by a tanker and no other place to store this fuel shipment. If DFSP has to return the ship to the refinery, they will need to pay a fee to return the fuel, but they can only return it if the refinery has space to take the fuel back.

Impact:

The DFSP is scheduled to receive a shipment of 142,000 bbls (5,964,000 gallons) of Jet A Fuel the first week of March 2021, and 50,000 bbls (2,100,000 gallons) on 14 March 2021. The DFSP is a major supplier of additized Jet A Fuel for Charleston AFB, SC; Ft Stewart, GA; Travis ANG, GA;

and Hunter Army Airfield, GA as well as supplier to other DoD military Installations. The fuel is additized to meet JP8 fuel standards and shipped via transfer line to Charleston AFB and trucked via commercial carrier to other military installations. DFSP Charleston will encounter mission failure to the operations of the military installations that they serve if the repairs are not completed. DFSP is not able to accept the scheduled fuel delivery if the repairs are not made to the receipt fuels line.

There are no alternative storage locations for the fuel that is scheduled to be delivered. The tanks at the DFSP are not impacted, but the section of fuel lines that supply fuel from the port to the DFSP are damaged. DFSP can issued fuel that they have now, but they cannot receive any more fuel.

Once they issue what they have in storage and run out, that is when the government DoD installations have mission failure as discussed in the justification.

6. EFFORTS TO OBTAIN COMPETITION: No efforts to increase competition were made. The original solicitation generated five proposals with the current small business contractor selected for providing the best value to the Government.

7. ACTIONS TO INCREASE COMPETITION: None

8. MARKET RESEARCH: Market Research was not conducted. The contract has not been closed out, an unfortunate accident occurred at the site and repairs are now required on the piping the contractor just finished in July 2020.

9. INTERESTED SOURCES: Other contractors on the MATOC, W9128F14R0048 Large business: Kinley Construction Company, Weston Solutions, Inc., Gilbane Federal, Aptim Federal Services, LLC., Wood Environmental & Infrastructure Solutions, Inc.

Small business: S&B Infrastructure, Ltd., KNK-Cape JV1, LLC., Reliable Contracting Group, LLC., Silver Mountain Construction, LLC., GSI Pacific Inc., KEAR Civil Corporation, Rockford Corporation, RORE, Inc.

10. OTHER FACTS: None