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 Shearman Sterling LLP (Shearman) under Indefinite Delivery/Indefinite Quantity (ID/IQ) Contract No. 693JJ318D000008. The task order associated with this justification will provide legal advisory services in connection with the Capital Beltway Express Lanes Northern Extension (Project NEXT or the Project), the approximately two-mile northern extension of the Interstate 495 (I-495) Express Lanes located in the McLean area of Fairfax County, Virginia. The project is associated with a refinancing of a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan. This justification is prepared in accordance with the content requirements 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 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 packages; and closing of credit transactions.

The planned task order associated with this justification is for legal services associated with Project NEXT, the possible refinancing of the TIFIA loan for the I-495 Express Lanes (the “CBE Loan”) as well as an amendment to the Concession Agreement between the Virginia DOT (“VDOT”) and the Transurban subsidiary acting as concessionaire thereunder that governs both the Project and the I-495 Express Lanes.

This will be a new task order under Shearman’s ID/IQ Contract No. 693JJ318D000008, with an anticipated period of performance of 24 months. The estimated value of this task order is $1,107,700.00. The value, however, does not represent the actual price/cost to be paid by the Government, but 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 5 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)(B) - only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized.

Shearman previously provided legal services for both the I-395 extension to the I-95 Express Lanes under the previous ID/IQ (Contract No. DTFH61-12-D-00025/0211) (395 Project) and for the Fredericksburg Extension to the I-95 Express Lanes under the current ID/IQ (693JJ318D000008/693JJ319F200001) (FredEx Project). Both I-395 and FredEx involved evaluation and negotiation for a possible follow-on TIFIA loan to an existing loan for a Transurban-controlled express lane project in Virginia governed by a Concession Agreement with VDOT. Both also involved negotiation with Transurban and VDOT of possible amendments to the I-95 Concession Agreement. The I-95 Concession Agreement and the I-495 Concession Agreement are substantially identical. As such, Shearman was involved, as legal counsel to the Bureau, in an identical process on two prior occasions. As part of their work on both prior matters, Shearman gained essential diligence knowledge of the underlying documentation, which is substantially identical on I-495 to that on I-95. In addition, Shearman is intimately aware of the course of negotiations with both Transurban and VDOT on the two prior transactions, including knowledge of the key issues that resulted in Transurban forgoing a TIFIA loan on both prior occasions.

Sherman’s in-depth understanding of the circumstances surrounding the negotiation of the similar TIFIA loans makes them the only capable firm to provide these services. A new contractor would not have the requisite background and knowledge to efficiently complete the work under the order. A new contractor would require extensive time to perform at the desired level of quality. No other contractor could enter at this point in the process and be able to provide the services at the level of quality necessary to ensure the Government’s best interests and that the loan is secured. Due to the unique circumstances and similarities to prior work, Shearman Sterling LLP is the only capable source to meet the Government’s requirements.

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

The planned action will result in a Time and Material/Labor Hour task order against an existing FHWA ID/IQ 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 ID/IQ-approved labor categories and rates, as well as if the cost is complete and reasonable in relation to the task order requirements. The evaluated cost will be 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.

6. Other facts supporting the use justification.

Due to the significant timing constraints presented by the Project, it is essential that the Government quickly engage with Transurban and VDOT to identify the gating issues, possible paths forward, and begin negotiations of the Concession amendment and loan terms. Shearman’s familiarity with the documentation, negotiating history, and parties involved is essential to meeting the timeline presented. A firm without the knowledge of the documentation would require significant time to read the documentation and identify the issues, at significant additional cost. Further, even after familiarizing themselves with the documentation, no new firm would have the knowledge of the issues presented on both I-395 and I-95 that resulted in Transurban forgoing a TIFIA loan. They would not be aware of the key issues to VDOT and Transurban in those negotiations, or the points conceded by either party or the Department. As a result, significant additional time would be expended identifying or renegotiating issues long since settled.

7. 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 the public via the Government port of entry, www.beta.SAM.gov. 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.

http://www.beta.sam.gov/

Date: 2020.03.04 12:01:12 -05'00'

8. Certification

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

Date: 2020.03.04 11:46:53 -05'00'

Date , COR 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.

Date: 2020.03.04 12:12:34 -05'00'

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

Approvals

Based upon the preceding information, I hereby recommend approval of this Justification for an Exception to Fair Opportunity to award a task order to Shearman Sterling LLP for legal advisory services in connection with the Capital Beltway Express Lanes Northern Extension Project.

Date Office of Credit Programs Build America Bureau

Date: 2020.03.18 15:25:37 -04'00' Date

Office of Assistance Agreements and Acquisition Services Office of Acquisition and Grants Management

Date Chief Acquisition Officer Office of Acquisition and Grants Management

Date: 2020.03.12 14:14:33 -04'00'

Attorney Advisor Date Office of Chief Counsel

Based upon the preceding information, I hereby approve this Justification for an Exception to Fair Opportunity to award a new task order to Shearman Sterling LLP under FHWA Contract No. 693JJ318D000008 for legal advisory services in connection with the refinancing of the TIFIA loan for the I-495 Express Lanes, as well as an amendment to the Concession Agreement between the Virginia DOT and the Transurban subsidiary.

Date: 2020.03.27 09:38:01 -04'00' Date

Competition Advocate Federal Highway Administration

Date: 2020.03.26 22:59:22 -04'00'