JA 22-0014 Ft. Gordon FINAL_Redacted.pdf

DEFENSE LOGISTICS AGENCY

ENERGY

8725 JOHN J. KINGMAN ROAD

FORT BELVOIR, VIRGINIA 22060-6222

J&A Tracking Number 22-0014

Justification for Other than Full and Open Competition For Extension of Fuel Services at Ft. Gordon, GA

UNDER AUTHORITY OF

10 U.S.C. § 2304(c)(1) ONE RESPONSIBLE SOURCE

1. Summary/Introduction:

The Defense Logistics Agency (DLA) Energy is the contracting activity for petroleum products and services for the Department of Defense (DoD). This Justification & Approval (J&A) is for the addition of one four-year option and three one-year options with the performance period of April 1, 2022, through March 31, 2026, April 1, 2026, through March 31, 2027, April 1, 2027, through March 31, 2028, and April 1, 2028 through March 31, 2029 respectively, which were not evaluated at the time of contract award. This modification will require the incumbent contractor, TRC Government Services, LLC (TRC), to continue providing Contractor-Owned Contractor- Operated (COCO) fuel services at Fort Gordon, GA (Ft Gordon) on a sole source basis under the authority found at FAR 6.302-1(a)(2)(iii). The value of the action being approved is

. This modification to contract SP0600-01-D-5112 will increase the contract’s value from to . The four-year option will be funded with FY 2022 Defense-Wide Working Capital Funds (DWWCF) in the amount of . The three one-year options will be funded in FY2026, FY2027 and FY2028 with DWWCF in the amount of .

TRC will provide COCO fuel storage services using best commercial standards at Ft. Gordon.

TRC operates, maintains, manages, and provides retail/bulk fuel services while safely receiving, storing, accounting for, and issuing of fuel funded by DWWCF. The mission at Ft. Gordon is upon the fuel management services provided by the incumbent contractor. The current contract for these services will expire on March 31, 2022. The resulting modification will be awarded/issued prior to March 31, 2022.

2. Nature and/or description of the action being approved (FAR 6.303-2(b)(2)):

Services under contract SP0600-01-D-5112 will be extended under one four-year option period and three one-year option periods via bilateral modification to the contract in accordance with contract clause 52.217-9 Option to Extend the Term of the Contract (Mar 2009). The authority to extend this contract is granted under 10 U.S.C. §2922, liquid fuels and natural gas contracts for storage, handling, or distribution, as amended by section 881 of the National Defense Authorization Act for Fiscal Year 2018. The total contract period, after exercising all available options under this J&A, will not exceed the maximum period authorized under 10 U.S.C. §2922, as amended. The above-mentioned options were not evaluated at the time of contract award; and this J&A is required to meet the requirements of FAR 17.207(f).

Justification for Other Than Full and Open Competition (Cont’d) SP0600-01-D-5112 – TRC Government Services, LLC

This is a performance-based requirement. Successful performance will be measured by full compliance with the Performance Work Statement (PWS). Under this contract for COCO services, the contractor is responsible for management, operation, maintenance, product quality surveillance, inventory control and accounting, security, safety, and environmental protection of the COCO fuel facilities at Ft. Gordon. As explained below, TRC is the only responsible source currently capable of performing acceptable services at Ft. Gordon without delays, additional costs, or other adverse impacts to the Government. Therefore, a contract modification adding the additional option periods is to maintain successful operations to continue to meet

The requirement for bulk fuel storage and retail fuel services at Ft. Gordon is continuing and highly specialized. TRC is providing acceptable performance under the current contract. As discussed below, procuring these services from another source will result in substantial duplication of costs and unacceptable delays in meeting the Government’s requirements.

Therefore, based on these potential risks, the Government intends to extend the contract term for a combined period of seven years through a contract modification.

Funding is provided by the DWWCF via PR #92307762 for to fund this requirement for the fourth option period. The additional three one-year periods will be funded in the amount of . If all options are exercised, the total amount funded will equal for a combined option period of seven years.

3. Description of supplies or services required to meet the agency’s need (including estimated value) (FAR 6.303-2(b)(3)):

The current contract, SP0600-01-D-5112, for these services was competitively awarded to Wilbros Operating Services, Inc. on October 4, 2001. On December 21, 2016, modification P00034 was issued to incorporate a Change-Of-Name Agreement which identified the prime contractor as TRC Government Services, LLC. The original award was for a five-year base period which began on April 1, 2002 through March 31, 2007, with three five-year options. The last option was exercised, and the current contract term will expire on March 31, 2022.

In order to meet the mission at Ft. Gordon, it is that the COCO fuel services are not interrupted. Under this contract, the contractor is responsible for retail and bulk fuel dispensing.

Fuel operations at the bulk and retail fuel facility must be safely and efficiently conducted to receive, store, and issue petroleum products with appropriate controls to ensure adequate fuel quality, inventory accuracy and environmental compliance in accordance with DLA Energy guidance, the highest industry standard, and best commercial practice and complying with Federal, State, and Local guidelines & regulations. The Contractor will perform all fuel operations, inventory management, quality surveillance, maintenance, training, safety and environmental protection functions at the ground fuel service stations and bulk storage sites.

Additionally, the contractor is responsible for safely receiving and issuing fuel without causing delay, interruption, or demurrage. When directed by DLA Energy or required for normal operations, the contractor is responsible for transferring products between tanks to consolidate types or grades. The mission at Ft. Gordon is upon the fuel services and facilities, labor, and equipment provided by the contractor.

The value of the services under the 4-year option period from April 1, 2022 through March 31, 2026 equals $1,448,544.00. The total value of the services under the fifth option from April 1, 2026 through March 31, 2027, the sixth option from April 1, 2027 through March 31, 2028, and the seventh and final option from April 1, 2028 through March 31, 2029 is $1,043,628.00.

4. Identification of the statutory authority permitting other than full and open competition (FAR 6.303-2(b)(4)):

This J&A is based upon the authority of 10 U.S.C. § 2304(c)(1), as implemented by FAR 6.302- 1 – Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements, and more specifically, the authority of FAR 6.302-1(a)(2)(iii). The services sought are highly specialized and award of this requirement to another source at this time would likely result in substantial duplication of cost to the Government that is not expected to be recovered through competition and would result in unacceptable delays in fulfilling the agency’s requirements.

5. Demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited (FAR 6.303-2(b)(5)):

The mission at Ft. Gordon is upon the current fuel services provided under contract SP0600-01-D-5112 by the incumbent, TRC. The customer requires continuous and high-quality fuel services. Ft. Gordon is an active Army base with many fueling services supporting the base each day. These services are to the support of Ft. Gordon. Timely fuel support, system maintenance, and quality control in accordance with (IAW) Army’s standards are required to

. The existing work force is trained and able to conduct operations without interruption. TRC’s performance of these services at Ft. Gordon is acceptable based on the Contracting Officer’s Representative (COR) and Contractor Performance Assessment Reporting System (CPARS) assessments. Additionally, TRC currently possesses the facilities, equipment, and personnel to sustain the services during the period of performance IAW the current contract SP0600-01-D-5112. A new contractor would need preparation time prior to beginning performance to acquire the infrastructure and permits and be willing to absorb and manage all associated risks of the facilities and any environmental concerns to perform the contract.

Furthermore, a new contractor would require time to develop and implement operations and training plans and to train personnel. Historically, newly awarded contracts for similar services have required preparation periods of up to after contract award and prior to the start of COCO fuel services.

Conducting full and open competition for this follow-on contract is not in the best interests of the Government. Awarding this requirement through full and open competition would result in substantial duplication of cost to the Government that is not expected to be recovered through competition.

An informal analysis of prices and an examination of the market was conducted. The proposed pricing included estimated maintenance repair for the anticipated extended period. A price escalation was included within the proposal for the inflation costs of goods and services ( in the first year, in the second year and in the third year. The contractor anticipates inflation stabilizing at in the third year, the price escalation was included in the subsequent years), as well as costs for subcontractors to perform operator level inspection and maintenance, therefore providing the rationale that the proposed pricing would be higher for this extension.

The Government did not negotiate alternate pricing arrangements for price elements such as major repair pricing and demolition of the facility.

The extension of the contract term allows the Government to maximize the value of the start-up costs expended during the base period of the contract. While the Government will ultimately need to re-procure these services using full and open competition at the conclusion of the maximum 30-year period allowed under 10 U.S.C. 2922, as amended, it is in the Government’s best interest to avoid this premature duplication of costs by taking advantage of the maximum commercial viability of the existing COCO facilities and continuing the services under the current contract. Ft. Gordon has started the necessary research to identify a new site and has started the process for a new lease to build a new facility. Soliciting these services at this time would result in service . By extending the current contract as authorized by 10 U.S.C. §2922, the Government will avoid the of services, will maximize on the value that has already been invested in the currently available COCO facilities by extending its use, and will be saving on start-up costs that would otherwise be incurred if a new contract was awarded.

In accordance with FAR 6.302-1, TRC is currently the only known responsible source with the ability to meet the agency’s requirement for fuel services for an additional four-year option and three one-year option periods without substantial duplication of costs or delays in obtaining such services.

6. Description of the efforts made to ensure that offers are/were solicited from as many potential sources as is/was practicable, including whether a notice was or will be publicized as required by Subpart 5.2 and, if not, which exception under 5.202 applies (FAR 6.303- 2(b)(6)):

On November 10, 2021, a synopsis was posted to the Contracting Opportunities website (SAM.gov) to provide notice of the follow-on contract requirement and to solicit capability statements from other potential vendors. DLA Energy received one response from

. Based on the Agency’s review of historical data (including other contracts and capability statements for similar COCO fuel facilities and services) a new contractor will require a phase-in time of in order to be ready to provide the required services. An award to a new contractor would result in an interruption to the fuel services at Ft. Gordon and a duplication of costs to the Government.

7. Determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable (FAR 6.303-2(b)(7)):

The proposed price accounts for the age, wear and tear of the facility and needing to replace grandfathered equipment that currently works but is no longer available within the industry. The contractor obtained cost to update the facility and ensure its operability and compliance during the extension. All major repair pricing was included within the proposal submitted by TRC. By doing this, the contractor was able to create a base line and better determine the out-year maintenance and regulatory costs. A new solicitation is unlikely to obtain better prices.

The total price submitted by TRC, , for the four additional option periods contemplated under this J&A is determined to be fair and reasonable based on a comparison with the historical prices paid by the Government in accordance with FAR 15.404-1(b)(2)(ii).

8. Description of the market research conducted and the results or a statement of the reason market research was not conducted (FAR 6.303-2(b)(8)):

DLA Energy has conducted market research that indicates these services are available commercially. DLA Energy supplemented the information about general market conditions for these services by posting a synopsis to SAM.gov on November 10, 2021, to determine whether there were additional firms who would make an offer on this requirement. As mentioned above, the Government received one response to the synopsis from .

However, based on the Agency’s review of historical data (including other contracts and capability statements for similar COCO fuel facilities and services) a new contractor will require a phase-in time of in order to be ready to provide the required services. As such, an award to a new contractor at the present time would result in an to the fuel services at Ft. Gordon and substantial duplication of costs to the Government. Additionally, the facilities are contractor owned contractor operated (COCO) by the incumbent contractor and as discussed in Section 5, TRC is the only known responsible source capable of utilizing existing facilities to meet the agency’s requirement for fuel services.

9. Any other facts supporting the use of other than full and open competition, such as (FAR 6.303-2(b)(9)):

(i) Explanation of why technical data packages, specifications, engineering descriptions, statements of work, or purchase descriptions suitable for full and open competition have not been developed or are not available.

Not applicable.

(ii) When 6.302-1 is cited for follow-on acquisitions as described in 6.302-1(a)(2)(ii), an estimate of the cost to the Government that would be duplicated and how the estimate was derived.

Not applicable.

(iii) When 6.302-2 is cited, estimated cost, or other rationale as to the extent and nature of the harm to the Government.

Not applicable.

10. A listing of the sources, if any, that expressed, in writing, an interest in the acquisition (FAR 6.303-2(b)(10)):

DLA Energy FESAB received one (1) response to the Synopsis Notice, which came from . The capability statement submitted by indicated that it possessed experience in COCO services. However, based on the Agency’s review of historical data (including other contracts and capability statements for similar COCO fuel facilities and services) a new contractor will require a phase-in time of in order to be ready to provide the required services. As such, an award to a new contractor at the present time would result in an to the fuel services at Ft. Gordon and a duplication of costs to the Government.