Justification for Other Than Full and Open Competition (Cont�d) (SP0600-06-C-8252 � Dominion Energy)

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

DVP is required to provide utility services and all requirements set forth in the Contract. This includes, but is not limited to, all necessary labor, management, supervision, permits, licenses, certifications, equipment, supplies, materials, transportation, and any other incidental items or services required for the complete ownership of the HECSA assets. The estimated dollar value of the contemplated contract action is a $35,568,804 increase to the Contract for the remaining period of performance on this contract.

The contracting officer will execute a modification after the Army executes a Bill of Sale conveying the assets to DVP. The modification will incorporate the added scope for operations and maintenance, renewals and replacements, and initial system deficiency corrections of the HECSA electrical distribution system assets. An equitable adjustment to the fixed monthly utility services charge (USC) resulting from this modification will be funded, subject to availability of funds, and will be incrementally funded using O&M appropriations throughout the remainder of this contract.

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 41 U.S.C. §3304(a)(1), as implemented by FAR 6.302- 1, Only One Responsible Source and No Other Supplies or Services will Satisfy Agency Requirements. Specifically, FAR 6.302-1(b)(3) states: �When acquiring utility services (see FAR 41.101), circumstances may dictate that only one supplier can furnish the service (see (FAR 41.202).

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)):

DLA Energy intends to enter into sole source negotiations with DVP under the authority of 41 U.S.C. §3304(a)(1), as implemented by FAR 6.302-1, to negotiate the addition of the HECSA electrical infrastructure to the existing Fort Belvoir contract because circumstances dictate that DVP is the demonstrated contractor with the appropriate qualifications to furnish the required services.

HECSA lacks adequate resources to operate, maintain, and repair its electrical distribution system. The Army-owned and operated 12.5 kV electric distribution system at HECSA has exceeded its useful life expectancy. Currently, HECSA receives its electricity supply from a non-privatized DVP circuit that originates from outside of the installation and runs through a heavily treed right-of-way.

Additionally, the existing overhead conductors are of insufficient size for additional load growth and are . The existing underground primary

(SP0600-06-C-8252 � Dominion Energy) conductors date as far back as 1974 and have required numerous repairs since then. The underground primary line also contains , which increase outage duration due to the difficulty in analyzing where a failure occurs, which limits the ability to re-energize unaffected circuits. Moreover, the fused switches are from 1963, . DVP must, therefore, to allow HECSA to perform any switching or maintenance. Accordingly, due to the electrical system�s current state of disrepair at HESCA, the Army has determined that it should convey the electrical system to DVP to address current system deficiencies and transfer responsibility to DVP to conduct regular and recurring maintenance to improve functionality and reduce continued degradation of the electrical distribution system.

Currently, DVP owns the current electrical distribution system at Fort Belvoir and operates that utility under a 50-year utility services contract administered by DLA Energy. All of the HECSA assets are connected to DVP�s electrical distribution system, but the HECSA assets do not receive reliable and dedicated operations and maintenance support from the Army.

Privatizing the HECSA electrical distribution system to another contractor may cause disruption and negatively impact HECSA�s mission because DVP owns all of the electrical infrastructure systems surrounding the installation. HECSA is surrounded by DVP�s regulated and unregulated service territories, which would cause any other utility owner at HECSA to be landlocked between DVP�s systems. Thus, introducing a second utility service provider may lead to unacceptable delays in routine, urgent, or emergency responses. Additionally, another utility service provider may have different construction standards for the electrical distribution system, resulting in potential system conflicts across points of demarcation, which are the points where ownership of the systems changes.

This requirement necessitates having a single owner/operator to increase efficiencies and avoid unnecessary disruptions to the electrical distribution system. Awarding this requirement to another contractor would duplicate the Government�s administrative efforts and expenses because the Government would need to pay additional labor, overhead, and other general and administrative costs to the separate contractor. Accordingly, DVP is not only far more economical for the Government as the system owner but also is the only responsible source capable of meeting the Government�s requirement.

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)):

As stated above, a competitive procurement was conducted which resulted in an award to DVP in September 2006 for the privatization of the Fort Belvoir electrical distribution system. Prior to issuing the competitive solicitation in 2004, a Request for Interest (RFI) was issued on the Federal Business Opportunities website, notice of the procurement was sent to

(SP0600-06-C-8252 � Dominion Energy) industry by utilizing a mass mailing list consisting of approximately 250 companies that had previously requested to be notified of future utility services opportunities, and a search of the Small Business Administration�s Procurement Marketing and Access Network (Pro-Net) database was conducted using the applicable North American Industry Classification System code 221122, Electric Power Distribution. Further assessment of the 38 small businesses identified in the Pro-Net search was conducted. The majority of the companies identified lacked experience, technical, and financial capabilities. Nonetheless, those companies expressing an interest were notified upon issuance of the solicitation. Subsequent to issuing the solicitation the Government held a preproposal conference and site visits. Attendees indicating an interest in the Fort Belvoir electrical distribution systems were:

Dominion Virginia Power The Louis Berger Group GDS Associates American Operations Corp.

Engineering & Environmental, Inc.

Cardinal Energy

Subsequent to the preproposal and site visits, the solicitation closed with DVP submitting the only proposal.

Follow-up market research indicated that no new regulated entities have entered the electrical distribution and transmission market in the area around HECSA (Fairfax County) since the award of the contract to DVP in September 2006. Additionally, DLA Energy contacted the only non-regulated electric utility services contractor/system owner that had previously submitted proposals on other procurements and to gauge its interest in the HECSA requirements. The company expressed no interest in the HECSA requirements.

As a result of the prior full and open competition and subsequent review of the regulated marketplace in the vicinity of HECSA and Fort Belvoir, DVP has been identified as the only interested, responsible, qualified, and technically capable organization to provide the required services. A redacted J&A will be made publicly available in accordance with FAR 6.305.

The exception at FAR 5.202(a)(5) applies because the proposed contract action is for utility services and only one source is available. The exception at FAR 5.202(a)(11) also applies, as the proposed contract action is made under the terms of an existing contract that was previously synopsized in sufficient detail to comply with the requirements of FAR 5.207 with respect to the current proposed contract action.

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

Given the nature of the requirement, and the underlying contract�s life, a fair and reasonable price cannot be determined through price analysis alone. In accordance with FAR 15.404- 1(a)(4), cost analysis may be used to evaluate data other than certified cost or pricing data to

(SP0600-06-C-8252 � Dominion Energy) determine cost reasonableness or cost realism when a fair and reasonable price cannot be determined through price analysis alone. A price analysis will also be conducted pursuant to FAR 15.404-1(a)(2). Due to the long-term nature of the requirement, a cost realism analysis will also be conducted under the authority of FAR 15.404-1(d)(3). The awarded price is anticipated to be fair, reasonable, and realistic.

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)):

As discussed above, DVP is the only source available that can furnish the required service for HECSA�s electrical distribution system. Additional market research was conducted, and that market research confirmed that DVP was the only available source for HECSA�s requirements.

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.

A technical data package with specifications, engineering descriptions, and statements of work was initially developed for the original utility services requirement at Fort Belvoir that was awarded in 2006. These documents were also developed for the HECSA requirements. However, as DVP has been identified as the only interested, responsible, qualified, and technically capable organization to provide the required services, these documents are being utilized for the purposes of negotiating a modification to the existing Fort Belvoir contract with DVP through measures other than full and open competition.

(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):

(SP0600-06-C-8252 � Dominion Energy)

No sources other than the current Contractor, DVP, expressed interest, in writing, in the privatization of HECSA.

11. Actions that may be taken to remove or overcome barriers to competition before any subsequent acquisition for the supplies or services are required (FAR 6.303-2(b)(11)):

Under competitive procedures DVP was awarded a 50-year contract for utility services. In accordance with 10 U.S.C. § 2688, the Army conveyed the electrical distribution system to DVP for fair market value. Therefore, no additional actions will be taken to remove or overcome barriers to competition because no barriers exist due to the nature of the action.