JA FINAL 5.21.20 Redacted.pdf

DEFENSE LOGISTICS AGENCY

ENERGY

8725 JOHN J. KINGMAN ROAD

FORT BELVOIR, VIRGINIA 22060-6222

May 7, 2020

20-0034

Justification for Other than Full and Open Competition

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 a twelve-month option term (May 15, 2020 - May 14, 2021) under FAR clause 52.217-9 Option to Extend the Term of the Contract (Mar 2000), which was not evaluated at the time of contract award. This modification will require the incumbent contractor, TRC Government Services, LLC (TRC), to provide Contractor-Owned Contractor-Operated (COCO) fuel storage services on Government property at Marine Corps Base 29, Palms, CA (MCB 29 Palms) and Government-Owned Contractor-Operated (GOCO) services pertaining to the management, operation, maintenance, product quality surveillance, inventory control and accounting, security, safety, and environmental protection of the Marine Corps fuel facilities at MCB 29 Palms 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 $776,604.00. This modification to contract SP0600-99-D- 5939, will increase the contract’s value from . The twelve-month option will be funded with FY 2020 Defense-Wide Working Capital Funds (DWWCF).

TRC provides COCO/GOCO fuel storage services using best commercial standards at MCB 29 Palms. TRC operates, maintains, manages, and provides retail/bulk fuel services while safely receiving, storing, accounting for, and issuing DWWCF fuel products. The at MCB 29 Palms is dependent upon the fuel management services provided by the incumbent contractor.

The current contract for these services will expire on May 14, 2020. The follow-on modification will be awarded prior to May 15, 2020.

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

The procurement of these services will be for a twelve-month period which is being conducted using a negotiated bilateral modification to the contract in accordance with FAR 43.103(a)(3) and contract clause 52.217-9 Option to Extend the Term of the Contract (Mar 2000). The authority to extend this contract is granted under 10 U.S.C. §2922, as amended by section 881 of the National Defense Authorization Act for Fiscal Year 2018. This is a performance-based requirement. Successful performance will be measured by full compliance with the Performance Work Statement (PWS). Under this COCO/GOCO contract, the contractor is responsible for management, operation, maintenance, product quality surveillance, inventory control and accounting, security, safety, and environmental protection of the GOCO/COCO fuel facilities at MCB 29 Palms. As explained below, TRC is the only responsible source currently capable of performing acceptable services at MCB 29 Palms without delays, additional costs, or other adverse impacts to the Government. Therefore, a contract modification is crucial to maintain successful operations in order to continue to meet .

Justification for Other Than Full and Open Competition (Cont’d) SP0600-99-D-5939 – TRC Government Services, LLC

The requirement for bulk fuel storage, retail fuel services, and related facilities at MCB 29 Palms 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 an additional twelve-month period to TRC through a contract modification. The option extension was not evaluated at the time of contract award; this J&A is required to meet the requirements of FAR 17.207(f).

DWWCF in the amount of $776,604.00 is provided via PR #84579592 and PR #84579594 to fund this requirement for the twelve-month option period being exercised concurrently with this J&A. The additional period will be funded at the time of option exercise.

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, SP0600-99-D-5939, for these services was competitively awarded to Wilbros Operating Services, Inc., on July 14, 1999. On December 20, 2016, modification P00075 was issued to incorporate a Change-Of-Name Agreement which identified the prime contractor as TRC Government Services, LLC. The current contract was awarded with a five-year base period from June 1, 2000 through May 31, 2005 and three five (5)-year options, the last of which expired on July 13, 2019. Under Modification P00080, an additional ten-month option was executed to extend the contract, with a period of performance of July 15, 2019 through May 14, 2020. The total dollar value of the current contract is .

In order to

. Under this contract, the contractor is responsible for bulk storage system, including loading and off-loading racks with issue and receipt filtration, supplied by commercial tank trucks at the GOCO facilities, and responsible for the underground storage tanks and dispensers for retail and bulk issue of ground petroleum products that are supplied by commercial tank trucks at the COCO facilities. Additionally, the contractor is responsible for management, operation, maintenance, product quality surveillance, inventory control and accounting, security, safety, and environmental protection at both locations. The contractor provides all personnel, equipment, material, and facilities necessary for providing these services, while employing best commercial practices and complying with Federal, State, and Local guidelines & regulations. The at MCB 29 Palms is upon the fuel management services, fuel facilities, labor, and equipment provided by the contractor.

SP0600-99-D-5939 – TRC Government Services, LLC

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 Federal Acquisition Regulation (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 at MCB 29 Palms is upon the current fuel services provided under this contract by the incumbent, TRC. The customer requires continuous, high quality fuels management services. MCB 29 Palms is an active Marine Corps Base with many fueling services supporting the base each day. These services are of MCB 29 Palms. Timely fuel support, system maintenance, and quality control in accordance with (IAW) Marine Corps’ standards is required to . The existing work force is trained and able to conduct operations without interruption. TRC’s performance of these services at MCB 29 Palms is based on

Additionally, TRC currently possesses the facilities, equipment, and personnel to sustain the services during the period of performance IAW the current contract SP0600-99-D-5939. 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 12 months after contract award prior to the start of COCO/GOCO fuels storage 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. The Contracting Officer compared the prices offered by TRC to

. The total price offered by TRC, is $776,604.00, which is . The costs associated for two similar COCO storage services contracts at and were and , respectively, for a twelve-month period, which would include start-up costs associated with the COCO Fuel Services. Additionally, contract costs at two recent GOCO locations at and and were and , respectively, for a twelve-month performance period under each contract. Award of a contract to a new service provider at MCB 29 Palms would result in start-up costs commensurate with these estimates, as an incoming service

SP0600-99-D-5939 – TRC Government Services, LLC provider would incur similar start-up costs in the course of establishing new COCO fuel facilities and GOCO fuel services.

Additionally, extension of the contract for twelve months is more cost effective than procurement of a new contract for a 48-month period for the same services under 10 U.S.C. § 2922. This contract was awarded in 1999 for a period of twenty years, the maximum period authorized under 10 U.S.C. §2922 at the time. The statute has since been amended by Section 881 of the National Defense Authorization Act for Fiscal Year 2018 to authorize a total period of 30 years, commensurate with the commercial useful life for these types of COCO facilities.

The installation of new storage tanks and associated facilities is a primary cost element of the startup costs for a new contractor. The fact that the existing tanks at MCB 29 Palms are covered by warranty essentially eliminates the cost risk associated with potential tank replacement. The extension of the contract term further 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 COCO facilities and continuing services of the GOCO facilities.

MCB 29 Palms has already identified a new site and begun site preparation activities, including installation of utilities, potentially extending roads, and various site surveying activities; however soliciting these services at this time would result in service interruption and by not including the additional option period in the current contract. By extending the current contract as authorized by the National Defense Authorization Act for Fiscal Year 2018, the Government will avoid the interruption of services, will maximize on the value that has already been invested in the currently available COCO/GOCO facilities by extending its use, and will be saving on start-up costs that would have had been 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 storage and maintenance services for an additional twelve month period 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 April 27, 2020, a sources sought notice was posted to the Contracting Opportunities website (betaSAM.gov) to provide notice of the follow-on contract requirement and to solicit capability statements from other potential vendors. DLA Energy received two responses, one from

., and the other from . Both vendors are capable of providing the required service but the phase-in time provided by both and will result in an interruption to the fuel services at MCB 29 Palms.

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 Contracting Officer has determined that the anticipated cost to the Government will be fair and reasonable based on

. The Contracting Officer compared the prices offered by TRC to the

. The total price offered by TRC, $776,604.00, is . The costs associated for two similar COCO storage services contracts at and were and , respectively, for a twelve-month period, which would include start-up costs associated with the COCO Fuel Services. Additionally, costs at two recent GOCO locations at and and , were and , respectively, for a twelve-month performance period under each contract. TRC’s offered price is also

The price submitted by TRC, $776,604.00, is determined to be fair and reasonable based on

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 sources sought notice to betaSAM.gov on April 27,2020, to determine whether there were additional firms who would make an offer on this requirement.

The Government received two responses to the sources sought notice. Although the Government received two responses to the source sought notice, the phase-in time provided by both and will result in an interruption to the fuel services at MCB 29 Palms.

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 two (2) responses to the Sources Sought Notice, which came from and The capability statement submitted by indicated that it possessed experience in COCO services, however, its for the GOCO Services and for the COCO services

. This phase-in time provided by both respondents will result in an interruption to the fuel services at MCB 29 Palms.

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)):

There are no inherent barriers to competition for GOCO and COCO fuels services at MCB 29 Palms. DLA Energy is preparing to solicit for similar services at two new locations, which received several responses to a Sources Sought in response to the two new requirements. For this requirement, the Government is using other than full and open competition to avoid substantial duplication of costs and delays in service that would be incurred using another contractor, and maximize the duration of existing services to the extent authorized under 10 U.S.C. 2922. The Government has determined that TRC is the only responsible source to provide the services at MCB 29 Palms as TRC is currently the only source capable of performing acceptable services at MCB 29 Palms without delays, additional costs, or other adverse risks to the Government. The modification to the contract will be executed on or before May 14, 2020, with performance beginning by May 15, 2020.

SP0600-99-D-5939 – TRC Government Services, LLC

I hereby certify that the data which forms the basis for this justification is accurate and complete to the best of my knowledge and belief.

Contract Specialist Bulk Petroleum Supply Chain Services

Contracting Officer

Division Chief

I hereby certify that the data which forms the basis for this justification is accurate and complete and that the purchase request covers only the minimum requirements to satisfy the needs of the Government.

Chief, Facilities Management Branch

I have reviewed and concur with this Justification.

Deputy Director

I have reviewed this Justification.

Assistant Counsel DLA Counsel-Energy

Approved:

Advocate for Competition