FBO_JOFOC_FCC_Allenwood_-_Sewer_Service.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN

COMPETITION

PUBLIC UTILITY – SEWER SERVICE

FEDERAL CORRECTIONAL COMPLEX ALLENWOOD

ALLENWOOD, PENNSYLVANIA

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

Sewer Utility Service FCC Allenwood

6.303-2(a) Pursuant to the Federal Acquisition Regulation (FAR) Part 6.302-1(b)(3), and the Bureau of Prisons Acquisition Policy (BPAP) Part 6.304(d), the Federal Bureau of Prisons (FBOP) has determined that the procurement of Sewer utility service for the Federal Correctional Complex (FCC) Allenwood, meets the criteria established for other than full and open competition. It is further determined that only one responsible source and no other supplies and/or services will satisfy agency requirements. This limitation on competition is justified as supported by the following information:

(b)(1) Identification of the Agency:

U.S. Department of Justice

Federal Bureau of Prisons

FCC Allenwood

Route 15 – 2 Miles North of Allenwood

Allenwood, PA 17810

(b)(2) Nature and/or description of action being approved:

This justification for other than full and open competition is for the acquisition of Sewer utility services provided to FCC Allenwood, from the original and sole provider of such services. FCC Allenwood has a present and continuing requirement for sewer utility service for the proper operation of the facility.

(b)(3) Description of supplies or services required to meet the agency needs:

FCC Allenwood requires sewer utility services in a manner and form that is consistent with all applicable laws, rules, codes, industry standards, permits, and regulations, promulgated by any and all governmental authorities having jurisdiction. Service shall be provided on an un-interruptible daily basis (365) days per year. The provider will be responsible to maintain and/or repair all associated sewer lines and equipment, including associated costs for such repair, from the delivery point or meter of FCC Allenwood. Pursuant to FAR Part 41.202, the contractor is required to provide the “entire sewer utility service” (i.e., collection, treatment, testing, system operation and maintenance, metering, billing, etc.).

Sewer utility services shall be provided from Effective Date of Award (EDOA) through 120 months from EDOA, subject to funds availability (FAR Clause 52.232-18).

The FBOP shall purchase Sewer Utility Service defined as sanitary sewer which is a separate underground carriage system specifically for transporting sewage from houses and commercial buildings to treatment or disposal processes. The estimated average daily flow is 642,750 gallons and an annual sewerage volume of 235,207,000 gallons. The FBOP reserves total system capacity of 736,000 gallons per day. The total estimated annual amount for sewer utility service is $1,305,163.64. The total estimated amount for a 120-month period is $13,051,636.43.

Contract Line Item Number Performance Period Estimated Annual Cost ($)

CLIN 0001 – Year 1 Effective Date of Award (EDOA) through 12 months $1,168,978.79

CLIN 0002 – Year 2 13 months from EDOA through 24 months $1,197,203.63

CLIN 0003 – Year 3 25 months from EDOA through 36 months $1,225,428.47

CLIN 0004 – Year 4 37 months from EDOA through 48 months $1,256,005.38

CLIN 0005 – Year 5 49 months from EDOA through 60 months $1,286,582.29

JOFOC FCC ALLENWOOD

Sewer Utility Services

CLIN 0006 – Year 6 61 months from EDOA through 72 months $1,317,159.20

CLIN 0007 – Year 7 73 months from EDOA through 84 months $1,350,088.18

CLIN 0008 – Year 8 85 months from EDOA through 96 months $1,383,017.16

CLIN 0009 – Year 9 97 months from EDOA through 108 months $1,415,946.14

CLIN 0009 – Year 10 109 months from EDOA through 120 months $1,451,227.19

Total Estimated Cost: $13,051,636.43

(b)(4) An identification of the statutory authority permitting other than full and open competition:

This justification to award as a sole source is prepared pursuant to the exception to full and open competition requirements in accordance with the statutory authority for these services is found at 41 USC § 253(c)(1), when the supplies or services required by the agency are available from only one responsible source.

The application which permits use of the cited statutory authority are stated at

FAR Part 6.302-1(b)(3), when acquiring utility services (see 41.101), circumstances may dictate that only one supplier can furnish the service (see

41.202).

(b)(5) A demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited:

The Gregg Township Municipal Authority (GTMA) is the government-owned sole provider of sewer utility service in the FCC Allenwood service area. The GTMA is an entity of Gregg Township, the only agent authorized by rules and regulations to provide sewer service in the Gregg Township area. Having a single supplier of sewer service for this area is the most efficient method of collecting and treating sewage. In accordance with Act 537, 35 P.S. § 750.1 et. Seq., Municipalities are required to develop and implement comprehensive official plans which provide for the resolution of existing sewage disposal problems, provide for future sewage disposal needs and provide for the future sewage disposal needs of the municipality. The Pennsylvania Department of Environmental Protection (DEP) approved the Act 537 Plan of Gregg Township and included the FCC Allenwood facilities within GTMA’s service area. No other sewage service provider may provide service to FCC Allenwood without receiving the approval of DEP for an amendment to the Gregg Township 537 Plan. A review of DEP database shows no such applications are pending.

(b)(6) A description of efforts made to ensure that offers are solicited from as many potential sources as is practicable including whether or not a notice was or will be publicized as required by FAR Subpart. 5.2:

As stated in FAR Part 5.202, Exceptions to transmitting a notice to the Government

Point of Entry(GPE) at (a)(5), the contracting officer need not submit a notice when “the proposed contract action is for utility services other than telecommunications services and only one source is available.”

(b)(7) A determination by the contracting officer that the anticipated cost to the

Government will be fair and reasonable:

The estimated average monthly cost, which was based on invoice history, for the sewer utility service is $89,170.39 with a total estimated usage for a 120 month period of $10,700,447.00. Utility rates are enacted by resolutions by the three member Board of Supervisors. The GTMA, which is charged under Commonwealth of

Pennsylvania law to ensure that rates be just and reasonable. The GTMA and the

GTMA website have provided sufficient data to the FBOP contracting officer, pursuant to FAR 15.402, Pricing Policy, allowing the ability to make a preliminary determination that such anticipated costs appear to be fair and reasonable. Gregg

Township is a township of the second class and operates under the guidelines of the Second Class Township Code Act of May 1, 1933. A formal decision in the form of periodic rulings, reviews, or similar actions of a governmental body, or embodied in the laws, are sufficient to set pricing (see FAR 15.403-1[c][2]). The establishment of the current supply and delivery of services began when the original service connections were installed in 1997. An agreement, effective July

1997, formally initiated the transfer of plant ownership from FBOP to GTMA. In a subsequent Deed agreement, effective December 1997, GTMA formally committed to accept ownership of the facility, reserving 736,000 gpd of treatment capacity for

FCC Allenwood. As such, this Contracting Officer has determined the anticipated cost to the Government will be fair and reasonable.

(b)(8) A description of the market research conducted:

This documentation is in accordance with FAR Part 10, which describes the policies and procedures for conducting market research in a process of finding viable sources of goods and services to meet government requirements and to find the most suitable approach to acquiring, distributing, and supporting supplies and services. This report is submitted in support of an acquisition with an estimated value in excess of the simplified acquisition threshold. Below are the findings of the market research for the above referenced requirement.

I. Background: A review of the obligation reveals the following – The Federal Correctional Complex Allenwood (hereinafter referred to as “FCC Allenwood”) has a current and continuing requirement for sewer utility service.

1. Title: Sewer Utility Service FCC Allenwood, to provide sewer services for the FBOP, FCC Allenwood in Allenwood, PA. FCC Allenwood does not have an onsite waste water treatment facility.

2. Product or Service Code: S- Utilities and Housekeeping Services – S119 Other Utilities.

3. North American Industry Classification System (NAICS): 221320 Sewage Treatment Facilities = this industry comprises establishments primarily engaged in operating sewer systems or sewage treatment facilities that collect, treat, and dispose of waste.

4. Standard Industrial Classification (SIC) Code: 4952 Sewerage Systems

5. Estimated Contract Value (including options): $10,702,447.00 10 years

II. Potential Sources: The GTMA is the sole provider of sewer utility service in the FCC Allenwood service area. The GTMA board of supervisors is the governing body that approves all rates with the responsibility of sewer services for the locale in which FCC Allenwood resides. FAR provides that a formal decision in the form of periodic rulings, reviews, or similar actions of a governmental body, or embodied in the laws, are sufficient to set pricing and the purchasing of supplies and services are determined fair and reasonable from a responsible source.

I applied personal knowledge, interaction with knowledgeable individuals in local and Federal Government regarding market capabilities to meet the requirements, and research of generally accessible literature available on-line were the techniques used in researching this procurement for a supply/services of this type.

During construction of the institution, one contract was awarded for the installation and operation of one sewer pipeline leading from the complex to the sewage treatment plant. A review of State of Pennsylvania regulations determined that a sewer utility service is not a deregulated utility. Deregulation would promote competition and only companies, not Government entities, fall under the jurisdiction of the Pennsylvania Public Utility Commission. In the case of utilities owned and operated by municipalities (city, borough, or township), the commission does not have jurisdiction unless a municipality is serving customers who reside outside of its corporate boundaries. FCC Allenwood is within the Gregg

Township Zoning District. The GTMA acquired the sewage treatment plant from the

FBOP in 1999 and has since been providing wastewater services under contract. In

2006 a ten (10) year contract was executed for wastewater treatment with a surcharge agreement related to the wastewater services. In 2008 a significant surcharge was assessed against the FBOP, which was in excess of $250,000, due to significant and unprecedented amount of grease in the wastewater flow. Ultimately the surcharge was resolved for a nominal amount. One of the resulting actions of the incident with GTMA and FBOP/OGC/Craig Meyers/Chief/Real Estate & Environmental

Law, was to modify the Surcharge Agreement provided that a new contract was executed with GTMA. In accordance with Title 31 USC § 6303 an executive agency shall use a procurement contract as the legal instrument reflecting a relationship between the United States Government and a State, a local government, or other recipient.

III. Deliver / Performance time: Pursuant to FAR Part 41.202, the GTMA continues to provide the “entire sewer utility service” (i.e., collection, treatment, testing, system operation and maintenance, metering, billing, etc.).

The GTMA shall provide to the government facility at FCC Allenwood, sewer utility services in a manner and form that is consistent with all applicable laws, rules, codes, industry standards, permits, and regulations, promulgated by any and all governmental authorities having jurisdiction. The GTMA shall provide services on an un-interruptible daily basis (365) days per year. The GTMA will be responsible to maintain and/or repair all associated sewer lines and equipment, including associated costs for such repair, from the delivery point or meter of

FCC Allenwood.

The GTMA shall provide sewer utility services from Effective Date of Award (EDOA) through 120 months from EDOA, subject to funds availability (FAR Clause 52.232-18).

The total estimated annual amount for sewer utility service is $1,070,044.70. The total estimated amount for a 120-month period is $10,700,447.00.

IV. Commercial Item Determination: Sewer utility service is an item that is of a type customarily used by the general public and by non-governmental entities for purposes other than governmental purposes.

V. Market Analysis:

1. The results of market research have determined that the government’s needs can be met by an item customarily available in the commercial marketplace.

2. The market research conducted by the contracting office and the Facilities

Department staff determined that a GSA single point contract with GTMA effective through January 25, 2016, is currently valid in accordance with Title 31 USC §

1535. GSA is specifically authorized by law and regulation to purchase utility services on behalf of other agencies by providing an Assisted Acquisition.

However, GTMA has contacted the institution and Central Office legal staff about entering discussions of signing a new contract that will implement a new Surcharge

Agreement. GTMA is willing to enter into a bilateral agreement to provide sewer service. August 2010, in accordance with Title 40 USC § 121(d), GSA issued the

FBOP a Delegation of Authority for nationwide authority to negotiate and execute utility service contracts at Federal facilities under the control and direction of the FBOP in accordance with Title 40 USC § 501(b)(1)(B) for a 10 year period.

Search of previous purchases of similar/identical acquisitions shows the GTMA is the current sewer service provider for FCC Allenwood and has serviced the facility since dedication. Also, the GTMA is the only service supplier capable at this time of providing FCC Allenwood with sewer services. No other company has presented itself with the capabilities nor the infrastructure to run sewer lines to the current connection site. The GTMA is the current sewer utility service provider for FCC Allenwood and has continuously serviced the facility since 1997.

The amount compensated for the construction of the sewerage infrastructure system currently being used at FCC Allenwood is not available or has not been located, but market research of like requirements show the negotiated connection fees for sewer service at two other Bureau institutions was $8.5 million and $3.65 million.

No other sources have been located that are currently capable or that could acquire the capability of meeting the Bureau’s requirement. Regardless of other providers, a deed signed in 1997 further covenants and agrees by acceptance continued usage for thirty (30) years.

3. I have determined that the North American Industrial Classification System (NAICS) code is 221320 – Sewage Treatment Facilities (Size Standard =$7 Million).

The contract will be a firm-fixed price requirements type utility contract.

VI. Results: Based on the information provided by the sources detailed above, the following information outlines the conclusions and provides the basis for this procurement.

1. It is this Contracting Officers determination there is a source available that is capable of providing the required services. The procurement will be conducted in accordance with the procedures as outlined in FAR Part 12, 15, and 41. A

Performance-Based Acquisition method will not be used for this procurement as it is determined not applicable. A PBA relies on the use of measurable performance standards and financial incentives in a competitive environment to encourage competitors to develop and institute innovative and cost-effective methods of performing the work.

2. One potential source is a local entity, the incumbent GTMA, which appears able to satisfy the requirement and is regulated by the Gregg Township Board of

Supervisors. Gregg Township recognizes Ordinances as an avenue through which local law is adopted. Resolutions are a sub-set of ordinances, stating a municipality’s opinion on a given matter and authorizing such actions as setting various fees for services, and initiating agreements between the municipality and other entities. GTMA is other than small business.

3. The provision of sewer utility service is essential for the orderly operation of FCC Allenwood. The specifications/description requirements documents shall specify needs using market research in a manner designed to promote full and open competition and only include provisions or conditions to the extent necessary to satisfy the needs of the FBOP or as authorized by law. However, the Pennsylvania

PUC regulations state that in order to provide economical and efficient service to a community, the state of Pennsylvania grants electric distribution, natural gas distribution, steam heat, water, and wastewater companies the right to provide their service within a specific geographic area. History shows and economics dictate that the construction of facilities by multiple utilities in the same location would be extremely costly and disruptive to communities. The utility is regulated by state or local government to assure fair rates for safe and adequate service. The ratemaking process ensures the lowest reasonable rate for consumers while maintaining the financial stability of the utility. Under the law, the utility is entitled to recovery of its reasonable incurred expenses.

4. This requirement will not be posted to Fedbizopps as a combined synopsis solicitation to promote competition, broaden industry participation, and assist small business concerns in obtaining contracts for FCC Allenwood, Pennsylvania.

This requirement meets the exemption at FAR 5.202(5) the proposed contract action is for utility services other than telecommunications services and only one source is available. The GTMA is the government-owned sole provider of sewer utility service in the FCC Allenwood service area. The GTMA is an entity of Gregg Township, the only agent authorized by rules and regulations to provide sewer service in the Gregg Township area. Having a single supplier of sewer service for this area is the most efficient method of collecting and treating sewage.

5. The Bureau does not have the state and local approval or the resources to provide the funding for another company to install a treatment plant at the institution, another pipeline is not available, and no other contractor can provide sewer service through GTMA pipelines.

6. Mark Ewing, Director, Energy Center of Expertise of the U.S. General Services Administration has issued a Delegation of Contracting Authority to the U.S.

Department of Justice, Federal Bureau of Prisons to negotiate and execute utility service contracts. This includes the provision of sewer service for FCC Allenwood for a period of 10 years.

7. I also make the determination that this procurement action “NOT” be set-aside for small business. The Small Business Procurement Review for the purchase of utility services has been granted a waiver by the Office of Small and Disadvantaged

Business Utilization to the FBOP for submitting routine procurements to the Office of Small and Disadvantaged Business Utilization for review in accordance with PGD

09-02.

8. FAR 52.212-4 at paragraph (d) Disputes will need to be tailored with the requirements are supplemented to provide that matters involving the interpretation of retail rates, rate schedules, tariffs, riders, and tariff related terms provided under this contract and related matters involving the interpretation of retail rates, rate schedules, tariffs, riders, and tariff related terms provided in the contract terms and conditions of service are subject to the jurisdiction and regulation of the utility rate commission having jurisdiction.

9. FAR 52.212-4 at paragraph (f) Excusable Delays will need to be tailored with the following concerning Force Majeure which overcomes and has precedence over the Excusable Delays section of the clause in its entirety. Events not reasonably anticipated or within the control of the claiming party. Neither the FBOP nor the contractor shall be considered to be in default with respect to any obligations under this contract by reason of uncontrollable forces. The term "uncontrollable forces" being deemed, for the purposes of this contract, to mean any cause beyond the control of the party affected, including but not limited to failure of facilities, flood, earthquake, storm lightning, fire, pandemic influenza, epidemic, war, riot, civil disturbance, labor disturbance, acts of public enemy, sabotage, other national emergency, restraint by a court of public authority, actions of Governments or regulatory bodies, future changes in laws, rules, regulations, utility practices, or distribution failure, which, by exercise of due diligence and foresight, such party could not reasonably have been expected to avoid. Either party rendered unable to fulfill any obligations by reason of uncontrollable forces shall exercise due diligence to remove such inability with all reasonable dispatch. In no event shall the economic hardship of either party constitute a Force Majeure condition. The following conditions, by themselves, shall not constitute a Force Majeure condition: inability of the contractor to obtain transportation or the event of higher actual costs than contracted costs to the contractor.

10. FAR 52.212-4 at paragraph (g) Invoices (vi) Terms of any discount for prompt payment offered; and (i) Payment (2) Prompt Payment (4) Discount will need to be tailored with Prompt payment as the regulation applies to invoice payments on all contracts, except contracts with payment terms and late payment penalties established by other governmental authority (e.g., tariffs). Temporary

Department Policy effective through July 11, 2013 and consistent with OMB

Memorandum M-12-16, that Departmental components accelerate payments to all prime contractors, making payment within 15 days of receipt of adequate documentation or in accordance with FAR Part 41 the due date of the invoice to avoid any late fees or penalties.

11. FAR 52.212-4 at paragraph (m) Termination for Cause will need to be tailored with the following section on Termination for Cause which overcomes and has precedence over the Termination for Cause section of the clause at FAR 52.212-4(m) in its entirety. The Government may terminate for cause in the event of a material failure to comply with any term or condition which is not remedied within 5 business days from the date of notice of default. In the event of termination for cause, the Government shall not be liable to the contractor for any amount for supplies of services not accepted, and the contractor shall be liable to the Government for any and all rights and remedies provided by law. If it is determined that the Government improperly terminated this contract for default, such termination shall be deemed a termination for convenience.

12. FAR 42.15 Past performance evaluation is relevant information for future source selection purposes regarding a contractor’s actions under previously awarded contracts. Even though conducting contractor performance evaluations would entail the expenditure of Government resources with little to no corresponding benefit. The nature of the requirement (the procurement of commercially available sewer utility services) does not mandate the level of contractor performance that would allow the Government to perform a meaningful evaluation (e.g., no real technical performance, no meaningful contract administration on behalf of the contractor, no key personnel). The contractor provides a single, limited, and regulated sole service so there is no likelihood that any evaluation would be used by another agency for a source selection, which is the primary purpose for the FAR 42.15 requirement and would likely never utilize whatever minimal information could be gleaned from performing the evaluation.

However, as directed, it is a requirement of FAR 42.15 and will be conducted in accordance with PERFORMANCE EVALUATION APRIL 2011: Evaluation of vendor performance utilizing CPARS. The services, although not directly supervised, shall be reviewed by FBOP staff to ensure compliance. The vendor’s performance will be evaluated in accordance with FAR 42.15. Monitoring reports (report card) will be prepared by the Contracting Officer Representative (COR) and/or the Contracting

Officer or the Administrative Contracting Officer, and a copy maintained in the contract file. In accordance with FAR 42.1502 & 42.1503, agencies shall prepare an evaluation of vendor performance and submit it to the Past Performance

Information Retrieval System (PPIRS). The FBOP utilizes the Department of Defense

(DOD) web based Contractor Performance Assessment Reporting System (CPARs)

Enterprise Solution for collection of contractor Past Performance Information

(PPI). CPARS has connectivity with the PPIRS database. The vendor shall provide and maintain a current e-mail address throughout the life of the contract. The vendor will receive an e-mail from the Focal Point thru the following e-mail address webptsmh@navy.mil. The e-mail will contain a “USER ID” and temporary password for the vendor to register in the CPARS system. The vendor must be registered to access and review its evaluation and/or provide a response. If assistance is required when registering, please contact the institution ACO/Contracting

Staff/Focal Point.

VII. Recommendation: The Government contemplates the single award of a firm-fixed price requirements type sewer utility service contract resulting from this RFP.

The estimated date of award resulting from the RFP will be made approximately

August 1, 2013.

Comments: The conclusions from this market research will be incorporated into the agreement document for providing Sewer Utility Service for FCC Allenwood.

(b)(9) Any other facts supporting the use of other than full and open competition:

The provision of sewer utility service is essential for the orderly operation of

FCC Allenwood, which is designed to collectively house more than approximately

2300 inmates. The complex consists of a high security United States Penitentiary

(USP), a medium security Federal Correctional Institution, and a Low Security

Correctional Institution (LSCI). Commonwealth regulations and ordinances limit the providers of this service to only one. Utility requirements do not require follow-on acquisition actions. Therefore, 6.302-1(a)(2)(ii) is not applicable.

In accordance with Title 31 USC § 6303 an executive agency shall use a procurement contract as the legal instrument reflecting a relationship between the United

States Government and a State, a local government, or other recipient.

(b)(10) A listing of the sources, if any, that expressed, in writing, an interest in the acquisition:

There were no other sources which expressed an interest in this acquisition.

(b)(11) A statement of the actions, if any, the agency may take to remove or overcome barriers to competition before any subsequent acquisition for the supplies or services mailto:webptsmh@navy.mil required:

Contracting and requirement staff continue to conduct appropriate market research to determine if sources capable of satisfying the agency’s requirement exist and to overcome competition barriers. Deregulation laws are presently nonexistent and no alternative source of service is currently available. A review of FPDS-NG shows only the FBOP is issuing orders to the GTMA for sewer utility requirements. FCC Allenwood is a consumer of services from the public utility. If another potential source emerges, the agency will assess whether competition for future requirements is feasible.

(b)(12) Contracting Officer’s Certification:

I hereby certify that this request for Justification and Approval of Other Than

Full and Open Competition is made in good faith, that the supporting data and information are accurate and complete to the best of my knowledge and belief, and that I would not be making this request if it were feasible to fully compete this requirement. I further certify that this request is not the result of lack of advance planning or a desire to expend funds while those funds are still available.

//s// _7/8/13_______

Dennis Dempsey, CS, CEP Date

Field Acquisition Office

(c) I hereby certify that the supporting data provided by the technical and requirements personnel which form the basis for this justification is complete and accurate to the best of my knowledge and belief.

//s// 7/9/13

Steve Kepner Date

Facility Manager

Concurrence:

//s// 7/9/13

Donna Zickefoose, Complex Warden Date

FCC Allenwood

//s// for 7/9/13

John F. Wenkman, Chief Date

Field Acquisition Office

//s// 7/16/13

J. L. Norwood, Regional Director Date

Northeast Region

//s// 7/22/13

Alan M. Rotach, Associate General Counsel Date

Office of General Counsel

//s// 7/13/13

Matthew D. Nace, Date

Procurement Executive

Approved:

//s// for 7/24/13

W.F. Dalius, Jr Date

Assistant Director for Administration/Competition Advocate