PreSol-22-Justification for Other than Full and Open Competition.pdf

ORO F 542.25

(Rev. 08/18)

U.S. Department of Energy Consolidated Service Center

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

FAR PART 6

I. IDENTIFICATION OF AGENCY AND CONTRACTING ACTIVITY

Requirement Originating Organization: Department of Energy (DOE)

Contracting Activity: Office of Science (SC) Consolidated Service Center (CSC) Oak Ridge, Tennessee

II. NATURE AND/OR DESCRIPTION OF THE ACTION BEING APPROVED

In support of the DOE SC, the CSC plans to contract by means other than full and open competition.

This Justification for Other than Full and Open Competition (JOFOC) establishes the justification and approval for the use of one of the exceptions to full and open competition allowed by 41 U.S.C.

3304 as promulgated by Federal Acquisition Regulation (FAR) 6.302.

This action is for a new, sole-source contract with the Tennessee Valley Authority (TVA) to provide electric utility services to the following facilities on the Oak Ridge Reservation: the Y-12 National Security Complex (Y-12) and Oak Ridge National Laboratory (ORNL), including the Spallation Neutron Source (SNS).

The contract is for ten years, 120 months total. The period of performance will be October 1, 2020 to September 30, 2030.

III. DESCRIPTION OF SUPPLIES OR SERVICES REQUIRED TO MEET THE AGENCY’S NEEDS

Electric utility service is required at 161 kilovolts (kV) for operations conducted at Y-12 and ORNL, including SNS. These sites require approximately 791,000 megawatt hours annually of electricity in order to operate. As a result of its extremely large load and high voltage delivery requirements, DOE is a direct service customer of TVA. The total estimated value of the contract is $450,000,000.

IV. STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN COMPETITION

FAR 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements, provides that an agency may contract without providing for full and open competition when the supplies or services needed are available from only one responsible source and no other supplies or services will satisfy the agency’s requirements. Additionally, FAR 6.302- 1(b)(3) states that when acquiring utility services such as electrical power, circumstances may dictate that only one supplier is capable of furnishing the services.

U.S. Department of Energy Consolidated Service Center

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

V. DEMONSTRATION THAT THE PROPOSED CONTRACTOR’S UNIQUE QUALIFICATIONS OR THE

NATURE OF THE ACQUISITION REQUIRES USE OF THE AUTHORITY CITED

This contract is for electric utility services and TVA is the only responsible source capable of fulfilling DOE’s requirement. Based on statutory authority, this contract will be a sole-source action. Electric utility services have been procured on a sole source basis from TVA since 1967.

TVA is the only generator of 161 kV electricity in East Tennessee. They own the only transmission lines which service this area and DOE directly under the existing utility market structure in the State of Tennessee. Tennessee’s retail electricity market has not been deregulated and no public utility can extend service into a municipality or territory otherwise receiving service from another electric utility without obtaining approval from the Tennessee Public Utilities Commission pursuant to Tennessee Code 65-4-104 and 65-4-107. Although TVA supplies electricity to the local utility (Oak Ridge Electric Department), it does so at lower delivery voltages (69 kV). Consequently, the local utility lacks the electrical distribution capability to provide the 161 kV that is needed for the sites to operate. Without the supply of 161 KV electricity, the DOE would not be able to operate, leaving its mission unfulfilled.

VI. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE SOLICITED FROM AS MANY

POTENTIAL SOURCES AS IS PRACTICABLE, INCLUDING WHETHER A NOTICE WAS OR WILL BE

PUBLICIZED AS REQUIRED BY FAR SUBPART 5.2 AND, IF NOT, WHICH EXCEPTION UNDER FAR 5.202

APPLIES

TVA is the sole available provider of 161 kV electricity in East Tennessee, as such no efforts have been made to ensure that offers are solicited. FAR 5.202(a)(5) provides an exception to the requirement to publicize this action. The proposed contract action is for utility services other than telecommunications services and TVA is the only responsible source available.

VII. DETERMINATION BY THE CONTRACTING OFFICER THAT THE ANTICIPATED COST TO THE

GOVERNMENT WILL BE FAIR AND REASONABLE

The cost to DOE for electrical utility services will be based on TVA’s general service load and/or manufacturing tariff rates for direct service customers and is deemed fair and reasonable. DOE is one of 58 “direct serve” customers of TVA. TVA’s rates are regulated by its Board of Directors, thus all “direct serve” customers are treated in the same manner with respect to their rate structure.

DOE pays the same rates as other “D” class direct serve customers (annual demand greater than 25,001 kW). Per the TVA Act of 1933, TVA is mandated to provide the lowest, feasible rates to all of its customers.

VIII. DESCRIPTION OF THE MARKET RESEARCH CONDUCTED AND THE RESULTS

Market research shows that TVA is the only power generating and transmitting entity in the area capable of and possessing the statutory authority to provide the required power levels needed at Y-12, ORNL and SNS. The local utility is incapable of providing the required electrical load and

U.S. Department of Energy Consolidated Service Center

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

voltage requirements DOE requires in order to complete their respective missions. In addition, there are no GSA Area-wide contracts in effect for this area.

IX. ANY OTHER FACTS SUPPORTING THE USE OF OTHER THAN FULL AND OPEN COMPETITION SUCH

AS:

a. 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:

N/A.

b. When FAR 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:

c. When FAR 6.302-2 is cited, data, estimated cost, or other rationale as to the extent and nature of the harm to the Government:

X. A LISTING OF THE SOURCES, IF ANY, THAT EXPRESSED, IN WRITING, AN INTEREST IN THE

ACQUISITION

See Section VIII above.

XI. STATEMENT OF THE ACTIONS, IF ANY, THE AGENCY MAY TAKE TO REMOVE OR OVERCOME ANY

BARRIERS TO COMPETITION BEFORE ANY SUBSEQUENT ACQUISITION FOR THE SUPPLIES OR

SERVICES REQUIRED:

Competition is not being sought for this acquisition. TVA is the only source capable of supplying DOE required electrical loads. Furthermore, DOE cannot modify its electrical needs due to the unique mission requirements of Y-12 and ORNL. Unless an alternate provider can supply electricity to handle DOE’s required electrical loads, DOE will continue to be restricted to contracting with TVA for electric utility services.

U.S. Department of Energy Consolidated Service Center

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

CERTIFICATIONS

The supporting data which form a basis for this justification are certified as accurate and complete.

SIGNATURE

G.A. Scott McGill Contracting Officer’s Representative

Date

The information contained in this JOFOC is certified accurate and complete to the best of my knowledge and belief.

SIGNATURE

Bryce L. Robinson Contracting Officer

Date