J&A_(30026-2-GR-19).rtf

file_0.jpg file_1.wmf file_2.jpg file_3.wmf

Single Source Justification (Simplified Acquisition)

24 Jul 17

Section A: General Contract Information file_4.wmf file_5.jpg file_6.wmf file_7.jpg file_8.wmf

Single Source Justification (Simplified Acquisition)

24 Jul 17

Contracting Activity: 772ESS/PKD

Project/Program Name: IN THE MATTER OF THE APPLICATION OF BLACK HILLS WYOMING GAS, LLC d/b/a BLACK HILLS ENERGY FOR APPROVAL OF A GENERAL RATE INCREASE OF $16,121,638 OR 17.28% ANNUALLY TO RETAIL GAS RATES

Purchase Request/Identification Number:

Estimated Contract Cost (including Options): $75,000 Section B: Description of the Supplies/Services Required

Black Hills Energy (BHE) Docket 30026-2-GR-19 was filed 3 June. The 26 June Amended Application is requesting a 17% system average increase. Our preliminary assessment shows a $20,000 (~2%) increase to the F.E. Warren AFB natural gas annual cost.

A separate filing currently before the Wyoming Commission requests consolidation of the utility assets and operations of four separate utilities wholly owned by Black Hills Utility Holdings. The instant proceeding proposes consolidating rates and tariffs into five separate pricing divisions. The legacy Cheyenne Light Fuel & Power customers, which includes F.E. Warren AFB, fairs very well under the proposal, receiving an average increase in the range of 2%, while other pricing divisions are seeing rate increases above 50%. This simple fact could lead intervenors to propose a more across-the-board increase to all customers.

Based on the data received from F.E. Warren AFB, the annual spend is approximately $1 million. If F.E. Warren AFB were to receive the system average increase of 17%, the total cost exposure is $170,000 annually.

Further, BHE indicates in its testimony that it requests permission to close the interruptible service option, and to move customers currently taking interruptible service to a higher-priced firm service rate. F.E. Warren AFB is believed to be an interruptible customer, based on the documentation the base provided. We need to confirm this assumption using actual BHE invoices. We are unclear at this time whether the rate impact of 2% that is cited by BHE for the Cheyenne Division Large General Service Interruptible class includes the shift to firm service. If it does not, the shift to firm service may increase F.E. Warren AFB rates by 20% total, or $200,000.

For these reasons, we believe there is risk of significant annual rate increases to the F.E. Warren AFB as a result of BHE’s filing, in the range of $170,000 to $200,000.

An evaluation of all filed pleadings, testimony, and data is necessary to determine if the rates proposed are non-discriminatory, accurately reflect the actual cost of providing the service, and are necessary under the circumstances. In addition, expert assistance in reviewing all filed and to be filed documents, drafting data requests and responses, testimony, cross examination, briefs, and strategy is necessary for proper preparation of this case. The Contractor’s assistance will be needed in all phases of case preparation from this point until the conclusion of the case.

SectionC: Justification for Soliciting from a Single Source or Brand Name

Brubaker & Associates Inc. (BAI) has been identified as the contractor who employs the experts that have been determined to have the required background, experience, and a track record for having their recommendations followed. Specifically, Michael P. Gorman has 35 years of experience in this field, has filed testimony in over 350 regulatory proceedings, starting June 1991, he started in the utility regulatory field in Sept 1990; was a consultant in August 1983; and is a Charted Financial Analyst (CFA). This experience and expertise in dealing with service rate increases and depreciation rates is necessary to assist the Government in the analysis, presentation, and defense of any claims or requests for adjustment to contract terms and conditions as a result of the anticipated litigation. BAI was chosen based on trial experience of the litigation attorneys of ULFSC. BAI has the most appropriate level of experience and reputation of any utility rate expert team with this level of technical expertise, experience, proven results, a working knowledge of government rates, and has filed testimony on behalf of the federal government multiple times. Their particular expertise, opinion, reputation are what the ULFSC has chosen for this litigation. " 10 USC 2304 (c)(3) and FAR Part 6.302-3(a)(2)(iii) states that full and open competition need not be provided when it is necessary to acquire the services of an expert for litigation. Other experts of similar caliber were considered, but are not available due to conflict or prior commitments in this case.

Section D: Efforts to Obtain Competition

The Government has reviewed other contract vehicles but has found BAI as the most suitable in regards to their background, experience, and track record along with their record in regards to litigation and no further research is required by the exception. Additionally, an explicit exception to full & open competition for the purchase of the services of an expert to support the Federal Government in any current or anticipated litigation or dispute is found in FAR Subpart 6.302-3(a)(2)(iii).

Section E: Steps to Preclude Future Single Source or Brand NameAwards

An explicit exception to full & open competition for the purchase of the services of an expert to support the Federal Government in any current or anticipated litigation or dispute is found in FAR Subpart 6.302-3(a)(2) (iii).

Section F: Contracting Officer's Determination

I have determined, in accordance with FAR13.106-1(b)(1), that the circumstances of this contract action deem only a single source is reasonably available.

Date Typed Name and Rank/Grade of Contracting Officer Signature of Contracting Officer