JA Redacted N62473-21-G-4403 UESC SCI (Word Format)HQ-KS_Redacted.pdf

DEPARTMENT OF THE NAVY

NAVAL FACILITIES ENGINEERING SYSTEMS COMMAND SOUTHWEST

750 PACIFIC HIGHWAY

SAN DIEGO CA 92132-5190

IN REPLY REFER TO

J&A Number 22-02 N62473-21-G-4403

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity.

The agency is the Department of the Navy (DON). The contracting activity is the Naval Facilities Engineering Systems Command Southwest (NAVFAC SW), San Diego, California.

2. Description of the Action Being Approved.

Approval is requested to negotiate and issue a Utility Energy Service Contract (UESC) task order for Naval Base Coronado (NBC), San Clemente Island (SCI) site, under the terms and conditions of Basic Ordering Agreement (BOA) N62473-21-G-4403 with Southern California Gas Company (SoCalGas). SoCalGas is a public utility company regulated by the California Public Utilities Commission (CPUC). The BOA allows for services without full and open competition pursuant to the statutory authorities of 10 United States Code (U.S.C.) § 2304(c)(5) and 10 U.S.C. § 2913(d).

3. Description of Supplies/Services.

Subject to the provisions of the BOA and the task order, SoCalGas will supply all labor, materials, transportation, supervision, testing, and closeout documentation necessary to provide design/build services, including design and construction documents to implement Fiscal Year (FY) 2019 NBC SCI Energy Resilience and Conservation Investment Program (ERCIP) Project-1003, SCI Wind Turbines that include the following two Energy Conservation Measures (ECMs):

Remove the existing three-wind turbine generators located on SCI and replace them with up to five (5) new wind turbine generators. Nominal new wind turbine generating capacity shall be 2,500 Kilowatts (KW).

Provide an energy storage system to function with the new SCI wind turbines and the existing island diesel generating plant. Nominal capacity of the new energy storage system shall be 2,000 KW power output and storage capacity between 4,000 kilowatt-hour (KWH) and 8,000 KWH.

The implementation of this energy demand and conservation project allows the Government to monitor, manage and control its energy usage, and to continue to produce renewable energy for use on a remote island facility, resulting in significant reduction of energy costs. The current project Life Cycle Cost Analysis (LCCA) is based on preliminary energy evaluation and modeling.

The LCCA will follow all applicable Department of Defense and DON guidance as well as Title 10 Code of Federal Regulation Part 436, Federal Energy Management and Planning Programs, and specifically the National Institute of Science and Technology Handbook 135 provisions.

4. Statutory Authority Permitting Other Than Full and Open Competition.

10 U.S.C. § 2304(c)(5) and Federal Acquisition Regulations (FAR) 6.302-5, provide that full and open competition is not required where a statute, in this case 10 U.S.C. § 2913(d), expressly authorizes that an acquisition may be awarded to a specified source.

10 U.S.C. § 2913(d), authorizes military installations “to enter into agreements with gas or electric utilities to design and implement cost-effective demand and conservation programs (including energy management services, facilities alterations, and the installation and maintenance of energy saving devices and technologies by the utilities) to address the requirements and circumstances of the installation."

Additionally, Section 2823 of the National Defense Authorization Act for Fiscal Year 2021, amended 10 U.S.C.

§ 2914, Energy Resilience and Conservation Construction Projects, which authorizes military construction projects for energy resilience, energy security, and energy conservation as are authorized by law, to provides the following:

“(c) RELATION TO CERTAIN OTHER AUTHORITIES.—A project under this section may include—

(1) activities related to a utility system authorized under subsections (h), (j), and (k) of section 2688 or section 2913 of this title, notwithstanding that the United States does not own the utility system covered by the project; and

(2) energy-related activities included as a separate requirement in an energy savings performance contract (as defined in section 804(3) of the National Energy Conservation Policy Act (42 U.S.C. 8287c(3))).”

This amendment to 10 U.S.C.§ 2914 provides further clarifying statutory language allowing the execution of ERCIP projects in conjunction with 10 U.S.C. § 2913 authority.

5. Rationale Justifying Use of Cited Statutory Authority.

A key objective of 10 U.S.C. § 2913(d) is to authorize and encourage military installations to take advantage of programs offered to customers of gas or electric utilities for reducing energy consumption.

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6. Description of Efforts Made to Solicit Offers from as Many Offerors as Practicable.

ERCIP Project-003 was initially solicited using full and open competitive procedures under solicitation #N62473-20-R-0045. Two proposals were received in response to this solicitation. One of the proposals was determined to be technically unacceptable and both proposals offered prices significantly exceeding the Construction Cost Limitation for the project. In short, this solicitation resulted in a bid bust.

Debriefs conducted with the offerors submitting offers in response to the solicitation, and further Government analysis of the project scope, revealed the significant risks associated with this project resulting from:

- Limited market availability of wind turbine generator models in the size range required for this project;

- The shipment of large wind turbine parts to SCI;

- Construction of tall wind turbine structures on the island; and,

- General logistics challenges in working on SCI, which is remote from the Southern California coastline and supporting installations.

Given this result, the use of a UESC BOA is considered a viable alternative to the use of full and open competition or other multiple award construction contract vehicles in order to obtain an experienced energy construction contractor. SoCalGas in particular was considered due to their prior experience working on SCI and prior experience constructing wind turbine generators on San Nicolas Island.

In accordance with Section 844, “Public Disclosure of Justification and Approval Documents for Noncompetitive Contracts,” of the FY 2008 National Defense Authorization Act and FAR 6.305, this J&A will be published on Contract Opportunities via the beta.SAM.gov website within fourteen (14) days after task order award.

Pursuant to FAR 5.203, a Notice of Intent (NOI) for this project was posted for 15 days on Contract Opportunities via the beta.SAM.gov website from September 9, 2021 to September 24, 2021. No response was received. SoCalGas is the regulated public gas utility company authorized under 10 U.S.C. § 2913(d) to provide services at the NBC, SCI site, and is currently the only utility company willing and able to provide UESC services there.

7. Determination of Fair and Reasonable Cost.

The Contracting Officer has determined the anticipated cost to the Government of the supplies/services covered by this J&A will be fair and reasonable in accordance with the Government estimate and SoCalGas Company’s procurement processes.

SoCalGas’s internal procurement process begins with developing evaluation criteria to create a level playing field, avoid conflicts of interest, and substantiate the basis for evaluation. In accordance with FAR 52.244-5, Competition in Subcontracting, and for the purpose of obtaining best value to the Government through fair and reasonable pricing, SoCalGas will engage in a competitive subcontractor selection process for performance of each ECM. During the evaluation process, SoCalGas creates a bid abstract, conducts bid interviews, and selects subcontractors utilizing a best value continuum. Documents supporting competition are provided to NAVFAC SW prior to award, including a bid abstract, bid interviews, and final evaluation by a selection team. The Government’s review and analysis of the competitive procedure, subcontractor selection, and resulting price are a consideration in determining whether fair and reasonable costs have been achieved.

8. Actions to Remove Barriers to Future Competition.

A NOI will be issued for all future BOA UESC task orders. To maximize the use of competitive procedures where possible, SoCalGas will compete all subcontractor work associated with the contemplated task order utilizing a procurement process that meets the requirements of the CPUC and further undergoes independent audits on an annual basis.

In accordance with FAR 44.204(c), all BOA UESC task orders shall incorporate the requirement to comply with FAR 52.244-5, Competition in Subcontracting.

CERTIFICATIONS AND APPROVAL

TECHNICAL/REQUIREMENTS CERTIFICATION

I certify that the facts and representations under my cognizance which are included in this justification and supporting acquisition planning documents, except as noted herein, are complete and accurate to the best of my knowledge and belief.

__________________________ (619) 705-4979 JAMES W. MCKECHNIE Phone Date Project Manager

NAVFAC SW

LEGAL SUFFICIENCY REVIEW

I have determined this justification is legally sufficient.

__________________________ (619) 705-5843 SCOTT W. JOHANSEN Phone Date Counsel

NAVFAC SW

CONTRACTING OFFICER CERTIFICATION

I certify that this justification is accurate and complete to the best of my knowledge and belief.

__________________________ (619) 705-4895 LISA M. YOUNG Phone Date Director of Public Works Contracting

ECHELON IV CHIEF OF THE CONTRACTING OFFICE CERTIFICATION

I certify that this Justification is accurate and complete to the best of my knowledge and belief.

__________________________ (619) 705-6400 RENAE A. KVENDRU Phone Date Chief of the Contracting Office

ECHELON III ENDORSEMENTS

ECH III CHIEF OF THE CONTRACTING OFFICE CERTIFICATION

Upon the basis of the information contained in this request, I hereby endorse, as the Echelon III Chief of the Contracting Office, the issuance of the Justification action as described herein.

JILL E. NII

Chief of the Contracting Office NAVFAC Pacific

Date

ECHELON II ENDORSEMENT

ECH II DIVISION DIRECTOR ENDORSEMENT

KRAIG DRAPER

Director of Contracting, Client Operations II

NAVFAC

Date

ECHELON II APPROVAL

ASSISTANT COMMANDER FOR CONTRACTING APPROVAL

CINDY READAL

Assistant Commander for Contracting

NAVFAC

Date