JA Brazos 3-31 AM_R.pdf

Justification for Other than Full and Open Competition United States Department of Agriculture

Federal Acquisition Regulation (FAR) Part 6.3

1. Identification of the agency and the contracting activity.

United States Depaitment of Agriculture (USDA), Rural Development (RD) Procurement Management Office (PMO), 1400 Independence Ave, SW, Washington, DC 20250.

2. The nature and/or description of the action being approved.

a. Acquisition purpose and objectives: USDA/RD will awai·d a sole source contract using the authority in FAR 6.302-2. The award will be a labor-hour contract, with Alvai·ez and Mai·sal No1ih America, LLC. RD's objective is to establish and stand up a contract for financial/restrncturing adviso1y and appraisal/ evaluation se1vices no later than April 1, 2021.

The period ofperfo1mance (PoP) will be April 1, 2021-March 31, 2022. The estimated lifecycle amOlmt of this effo1i is $2.4M. This includes a three-month base period and three three-month option periods. The base period includes a labor CLIN for Restrncturing/ Adviso1y Se1vices, an optional CLIN for Appraisal/Evaluation Services, which is a one-time fnm-fixed price se1vice, and a Travel CLIN. The out-years contain a labor CLIN for Restrncturing Advis01y Se1vices and a Travel CLIN.

CLINNumber Description Estimated Amount 0001 Restrncturing Advis01y $510,000.00

Se1vices 0002 Aooraisal/Evaluation $60,000.00

0003 Travel $30 000.00 1001 Restrncturing Advis01y $570,000.00

Se1vices 1002 Travel $30,000.00

2001 Restrncturing Advis01y $570,000.00 Se1vices

2002 Travel $30,000.00

3001 Restrncturing Advis01y $570,000.00 Se1vices

3002 Travel $30,000.00

Total Lifecvcle Estimate $2,400,000.00

b. Project Background: USDA/RD has a critical and immediate need to award this contract to secure loans made by the Federal Financing Bank (FFB) and guaranteed by the Rural Utilities Se1vice (RUS) (hereinafter RUS/FFB loans) to Brazos Electric Power Cooperative, Inc. In Febrnaiy 2021, Texas was hit with a winter sto1m which took many of the non-weatherized generation plants offline. Price for power on the main state grid operated by Electric Reliability Council of Texas (ERCOT) surged to as high as $9,000.00 per megawatt hour.

3. A description of the supplies or services required to meet the agency’s needs (including the estimated value).

a. Project Title: Financial and Restructuring Advisory and Evaluation Services for USDA/RD Texas Utility Company Brazos Electric Power Cooperative Secured Loans.

b. Project Description: The purpose of this requirement is to establish a contract to assist securing the RUS/FFB loan with Brazos Electric Power Cooperative, Inc. The contractor will provide financial/restructuring advisory and appraisal/evaluation services to assist in retaining the security of the RUS/FFB loan and retaining receipts upon the loan. Services will include evaluation of all the assets securing the RUS/FFB loans and an in-depth analysis of the financials of Brazos Electric Power Cooperative, Inc. to ensure maximal recovery for RUS.

c. Total estimated dollar value and performance/delivery period: The total estimated cost is $2.4M. A letter contract in accordance with FAR 16.603 will provide preliminary contractual authorization for the contractor to begin immediately. The period of performance is anticipated from April 1, 2021-March 31, 2022.

d. Anticipated period of performance: April 1, 2021-March 31, 2022

4. The statutory authority permitting other than full and open competition.

41 U.S.C. 3304(a)(2), as implemented by FAR 6.302-2, titled "Unusual and compelling urgency."

5. A statement demonstrating the unique qualifications of the proposed contractor or the nature of the action requiring the use of the authority.

a. Name and address of the proposed contractor(s):

Alvarez & Marsal North America, LLC (DUNS 806273863) (hereafter A&M) 600 Madison Ave 8th Fl New York, NY 10022-1758

6. Nature of the acquisition and proposed unique qualifications of the contractor(s). The USDA’s RUS provides much-needed infrastructure or infrastructure improvements to rural communities. These include water and waste treatment, electric power and telecommunications services. All of the services help to expand economic opportunities and improve the quality of life for rural residents. The Electric Program provides funding to maintain, expand, upgrade and modernize America’s rural electric infrastructure. The loans and loan guarantees finance the construction or improvement of electric distribution, transmission and generation facilities in rural areas. The Electric Program also provides funding to support demand-side management, energy efficiency and conservation programs, and on-and off-grid renewable energy systems. Loans are made to cooperatives, corporations, states, territories, subdivisions, municipalities, utility districts and non-profit organizations. These financial, restructuring, and evaluation services are urgently required to protect the Government’s interest in large portfolio in secured loans with Brazos Electric Power Cooperative, Inc. Failure to obtain the described services could lead to the loss of significant collateral and valuation of the collateral securing the debt instruments which could lead to substantial restructuring of the trust indenture. Without the use of the contractor’s services, it is impossible to reasonably estimate the size of potential loss without such services.

Because of the urgent time frame and the need to protect the Government’s loans and assets from issues such as other creditors’ priming liens, possible improper use of its collateral including contract proceeds, associated with potential Chapter 11 hearings there is no time to process this procurement through the usual procurement process.

A&M has experience in financial and restructuring advisory services and asset evaluation.

Through interviews conducted by the Government, A&M has demonstrated that they have the capability and expertise necessary to immediately provide the required support to meet the needs of this requirement. A&M provided several examples of similar projects they have worked on and provided details of their experience in this realm.

6. A description of efforts made to ensure offers are solicited from as many potential sources as is practicable.

Providing fair opportunity would result in unacceptable delays. This process requires time to develop a requirement based on substantial market research, solicit proposals, evaluate the proposals, and create the award document before a contractor could initiate the service. It is estimated it would take a minimum of three months for the procurement process. Delays in the procurement process would put the Government at risk, because there is an urgent need to protect the Government’s loans and assets.

A&M has significant experience in these types of services and can commence work immediately. It is in the Government’s best interest to award the proposed contract to A&M.

7. A determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

USDA will perform an analysis of pricing in accordance with FAR 15.404-1.

8. A description of the market research conducted and the results or a statement of the reason Market Research was not conducted.

The Government conducted one-on-one market research discussions with

Market research was conducted in accordance with FAR Part 10, as follows:

One vendor was chosen to meet the aggressive timeline. As previously stated, there is not enough time to process this requirement under normal acquisition procedures, such as solicitation and evaluation, due to this urgent need.

The following market research was conducted in accordance with FAR Part 10, using:

DSBS – The Dynamic Small Business Search Tool was used to determine if any small businesses could provide services regarding this requirement. Based on this search there were 2,608 small vendors when searching for NAICS 541611. The search of NAICS 541611, “restructure’ and the State of Texas revealed 5 vendors.

GSA e-Library searched NAICS 541611 based on this search there were 1,692 small businesses.

Using the search criteria 541611 with the key word “restructure” 83 vendors came up.

Although there seems to be a significant number of vendors that could possibly provide support for this requirement, there is only one vendor that could meet the aggressive timeline. Additionally, due to the unusual and compelling urgency precludes full and open competition. Delay in contract award would result in serious financial repercussions to the Government, which is discussed in detail in paragraph 9 below. A&M has enough subject matter expertise needed to successfully support this requirement.

9. Any other facts supporting the use of other than full and open competition.

The requirement for these services became known on March 5, 2021. USDA/RD conducted Market Research in the form of database searches and interviews with vendors between March 8, 2021 and March 26, 2021. Due to the legal complexity of this requirement, it took longer than anticipated to find qualified vendors.

It is critical that a finance/restructuring and appraisal/evaluation consultant with utility company expertise be brought on as quickly as possible since the bankruptcy is currently ongoing, and the need is immediate. There is also a limited number of firms with the expertise that is needed to meet this requirement and some of them are being hired by the other parties to the bankruptcy. If RUS does not hire a consultant immediately there may not be adequate experts available in these fields.

10. A listing of the sources, if any, that expressed a written interest in the acquisition.

11. A statement of actions, if any, the agency may take to remove or overcome any barriers to competition if subsequent acquisitions are anticipated.

Due to the urgent nature of this requirement, the issuance of a letter contract is needed immediately. If the Government determines there will be a need to continue this requirement past the 12-month PoP, USDA/RD will research establishing Blanket Purchase Agreements (BPA) and/or Indefinite Delivery Indefinite Quantity (IDIQ) contracts for future requirements of this nature.

Certifications & Approvals

Supporting data that form the basis for and included in this justification are certified accurate and complete.

JAMES ELLIOTT

DigitallysignedbyJAMESELLIOTT Date:202 1.03.31 13:14:19-04'00'

Jim Elliott Rural Utility Se1vice (RUS) Deputy Assistant Administrator

The info1mation contained in this Justification for Other Than Full and Open Competition is ce11ified accurate and complete to the best of my knowledge and belief.

CRAIG ZIEGEMEIER

Digitally signed byCRAIGZIEGEMEIER

Date: 2021.03.31 12:17:50-05'00'

Craig Ziegemeier Contracting Officer

Additional Reviews & Approvals

Advocate for competition for the procuring activity (if over $700,000, but not exceeding $13.5 million). I have reviewed this justification and find it to be accurate and complete to the best of my knowledge and belief. Therefore, unless additional approvals are required as prescribed below, as advocate for competition for the procuring activity, I hereby approve this justification.

LORI LLOYD

Lori Lloyd, MASCO

Digitally signed by LORI LLOYD

Date: 2021.03.31 15:30:30 -04'00'

Mission Area Advocate for Competition