Justification for an Exception to Fair Opportunity RFE.pdf

DEPARTMENT OF TRANSPORTATION

FEDERAL HIGHWAY ADMINISTRATION

Justification for an Exception to Fair Opportunity

1. Identification of the agency and the contracting activity.

Federal Highway Administration (FHWA), Office of Acquisition and Grants Management.

1200 New Jersey Avenue, S.E., Washington, DC 20590.

2. Nature and/or description of the action being approved.

This is a justification for an exception to fair opportunity to award a task order to Skadden Arps Slate Meagher Flom LLP (Skadden) under ID/IQ Contract No. 693JJ318D000009.

The task order associated with this justification is to provide legal advisory services for a prospective loan applicant in connection with the Central Texas Regional Mobility Authority’s (the “Borrower”) 183N and 183A (Phase III) Projects (together, the “Project”) under the Transporation Infrastructure Financing and Innovation Act (TIFIA) Program.

This justification is prepared in accordance with the content requiremetns in FAR 16.505(b)(2)(ii)(B).

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

The Build America Bureau (Bureau) administers the TIFIA program, which provides (secured) direct loans, loan guarantees, and standby lines of credit to borrowers seeking to develop major surface transporation infrastructure projects. For each credit assistance request, the Bureau retains external legal counsel to provide support in the areas of: general due diligence; loan drafting and negotiation; advising on collateral package; and closing of credit transactions. The planned task order associated with this justification is for legal services in connection with potential negotiations between the Government and other parties, as part of the Borrower’s TIFIA loan credit assistance request.

The estimated value of this task order is $276,350. The value, however, does not represent the actual costs to be paid by the Government and instead the estimated cost to the borrower/sponsor seeking financing from DOT who will pay all documented fees and expenses of the Contractor. See section 7 for additional information.

4. Identification of the exception to fair opportunity (see 16.505(b)(2)) and the supporting rationale.

The exception to fair opportunity utilized for this proposed action is FAR 16.505 (b)(2)(i)(C) - the order must be issued on a sole-source basis in the interest of economy and efficiency because it is a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order.

Skadden previously provided legal services for the Borrower’s Manor Expressway Project (the “Original Project”) under their current ID/IQ contract (Contract No.

693JJ318D000009); specifically, Task Order (TO) No. 693JJ318F200025 (the “Current TO”). This task order was competed and all ID/IQ awardees had an opportunity to be considered for this award. Skadden also provided similar services under the previous ID/IQ contract (DTFH61-12-D-00026-T-5002) (the “Previous TO”). The due diligence tasks previously performed for the Original Project provide Skadden with significant knowledge of CTRMA and the underlying credit proposed to support the new TIFIA loan, which is CTRMA’s system of toll roads in the Austin, Texas area (the “System”). The System was the dedicated repayment source for both the Original Project and the 183S project from the previous ID/IQ task order. As such, Skadden has extensive knowledge of the structure and documentation supporting the System revenue pledge, which would result in significant time savings in respect of due diligence hours. This time savings would result in a lower cost associated with the due diligence task area under the New TO.

In addition, Skadden’s recent work on the Original Project’s loan agreement and bond documents- just one year ago- will reduce the time necessary to negotiate and document the TIFIA loan and related supplemental indentures for the Project; these documents will be substantially similar to those negotiated for the Original Project. Furthermore, Skadden’s familiarity with the due diligence materials and with negotiation history from the Original Project will be useful for, and save time in, structuring the negotiations for the Project.

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

The task order will be issued as Time and Material/Labor Hour task order. The order will be issued against an FHWA IDIQ contract, for which the labor rates and labor categories have previously been evaluated and determined to be fair and reasonable. The Government will evaluate the labor hour cost estimate to ensure the billing rates are consistent with the IDIQ-approved labor categories and rates, as well if the cost is complete and reasonable in relation to the task order requirements. The evaluated cost will based on multiplying the fully burdened hourly rate for each labor category/staff by the estimated hours. The Government will also evaluate the cost against historical costs for similar services to ensure the amount is fair and reasonable.

The total evaluated cost, however, does not represent the actual costs to be paid by the Government. This is a No-Cost task order, and the borrower/sponsor seeking financing from DOT for the Project will pay all documented fees and expenses of the Contractor.

Under a No-Cost Task Order, the Contractor will serve as transactional counsel for the financing of the project, and will represent DOT and the Bureau in connection with the Transaction and related matters. The applicant for credit assistance (or its affiliate) will directly make payment to the Contractor for services rendered under this No Cost Task Order in accordance with the terms of a sponsor payment letter/agreement executed by the applicant (or its affiliate) and the Contractor. The Government has no obligation to, and will not, pay any of the Contractor’s fees, costs and expenses incurred under this Task Order.

9. Other facts supporting the use justification.

Skadden’s in-depth understanding of the circumstances surrounding the negotiation of the previous TIFIA loan makes them capable of providing these services at the level of quality necessary. A new contractor would require extensive time become familiar with the Borrower and perform at the desired level of quality and schedule to satisfactorily complete the tasks. No other Contractor could step in at this juncture in the application process, and be able to provide the legal advisory services with enough time, and at a level of quality, necessary to ensure the Government’s best interests and that the Borrow’s loan application is processed accurately and expedituosly. Due to the unique requirements of the TIFIA program, Skadden is the only capable source to meet the Government’s requirements.

11. Statement of the actions, if any, the agency may take to remove or overcome any barriers that led to the exception to fair opportunity before any subsequent acquisition for the supplies or services is made.

To ensure that industry is made aware of all future information related to this acquisition, the justification will be posted and made available to via the Government port of entry.

However, because some of the information and material are subject to attorney/client privilege, as well as other protections associated with sensitive information, there is no immediate known action that the Government can take to remove or overcome the barrier that led to the exception to fair opportunity.

12. Certification and Approval

The evidence and any supporting data which form a basis for the justification is complete and accurate.

Date: 2020.03.11 10:41:22 -04'00' Date

Attorney Advisor/Bureau Counsel Office of the General Counsel U.S. Department of Transportation

I certify that the information provided in this justification is accurate and complete to the best of my knowledge and belief. Based upon the preceding information, I hereby approve this Justification for an Exception to Fair Opportunity to award a new task order to Skadden under FHWA contract No. 693JJ318D000009 for legal advisory services in connection with the Central Texas Regional Mobility Authority’s 183M and 183A Projects.

Date: 2020.04.10 13:04:21 -04'00'

Date Contracting Officer Office of Acquisition and Grants Management Federal Highway Administration