S_A12_FBO_ALX_Natural_Gas_Utility_Service_Fy-17.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN

COMPETITION

PUBLIC UTILITY – NATURAL GAS LDC UTILITY SERVICE

FEDERAL CORRECTIONAL COMPLEX ALLENWOOD

WHITE DEER, PENNSYLVANIA

Contractor: UGI Utilities, Inc.

Period of Coverage: 10/1/2016 through 9/30/2017

Estimated Amount: $270,000.00

UNITED STATES DEPARTMENT OF JUSITICE

FEDERAL BUREAU OF PRISONS

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

NATURAL GAS LOCAL DISTRIBUTION COMPANY UTILITY SERVICE FCC ALLENWOOD

Pursuant to Federal Acquisition Regulation (FAR) Subpart 6.302-1(a)(1) and 6.302- 1(c)(3), and the Bureau of Prisons Acquisition Policy (BPAP) 4100.05 Part 6.304(b), the Federal Bureau of Prisons (FBOP) has determined the procurement of natural gas local distribution company utility service for the Federal Correctional Complex, Allenwood, meets the criteria established for other than full and open competition. It is further determined only one source exists and no other supplies or services will satisfy the agency’s need. This limitation on competition is justified as supported by the following information:

(1) Identification of the agency and contracting activity:

U. S. Department of Justice Federal Bureau of Prisons Federal Correctional Complex, Allenwood PO Box 3500 White Deer, PA 17887

(2) Nature and/or description of action being approved:

This justification for other than full and open competition is for the acquisition of natural gas LDC utility services provided to FCC Allenwood, from the original and sole provider of such services. FCC Allenwood has a present and continuing requirement for natural gas LDC utility service for the proper operation of the facility.

(3) Description of supplies and services required to meet the agency needs:

FCC Allenwood requires natural gas LDC utility services in a manner and form that is consistent with all applicable laws, rules, codes, industry standards, permits, and regulations, promulgated by any and all governmental authorities having jurisdiction. Services shall be provided on an uninterruptible daily basis 365 days per year. The provider will be responsible to maintain and/or repair all associated gas lines and equipment, including associated costs for such repair, from the delivery point or meter of FCC Allenwood. Pursuant to FAR Part 41.202, the contractor is required to provide the “entire natural gas transportation utility service” (i.e., testing, system operation and maintenance, metering, billing, etc.).

Natural gas LDC utility services shall be provided from Effective Date of Award (EDOA) through 12 months from EDOA, subject to funds availability (FAR Clause 52.232-18).

Contract Line Item Number Performance Period Estimated Annual Cost ($)

CLIN 0001 October 2016 $15,000.00 CLIN 0002 November 2016 $20,000.00 CLIN 0003 December 2016 $30,000.00 CLIN 0004 January 2017 $40,000.00 CLIN 0005 February 2017 $35,000.00 CLIN 0006 March 2017 $25,000.00 CLIN 0007 April 2017 $18,000.00 CLIN 0008 May 2017 $15,000.00 CLIN 0009 June 2017 $12,000.00

JOFOC FCC ALLENWOOD

Natural Gas Transportation Services

CLIN 0010 July 2017 $10,000.00

CLIN 0011 August 2017 $20,000.00

CLIN 0012 September 2017 $30,000.00

Total Estimated Cost: $270,000.00

(4) An Identification of statutory authority permitting other than full and open competition:

This justification to award as a sole source is prepared pursuant to the exception to full and open competition requirements in accordance with the statutory authority for these services that is found at 41 USC § 3304(a)(1), when the supplies or services required by the agency are available from only one responsible source. The application which permits use of the cited statutory authority is stated at FAR Part 6.302-1(b)(3), “when acquiring utility services (see 41.101), circumstances may dictate that only one supplier can furnish the service (see 41.202).”

(5) A demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited:

UGI Utilities Inc. (UGI) is the sole provider of natural gas transportation utility service in the FCC Allenwood service area and has been authorized by the Pennsylvania Public Utility Commission (P.U.C.) through Supplement No. 59 to Tariff Gas-PA P.U.C. No.8 http://gasmngmt.ugi.com/UGIP/doc/tariff/PUC8.pdf, to service the territory of

Gregg Township located in Union County, Pennsylvania. FCC Allenwood is situated within the boundaries of Gregg Township. All rates are regulated by the Pennsylvania PUC through this tariff.

(6) A description of efforts made to ensure that offers are solicited from as many potential sources as is practicable including whether or not a notice was or will be publicized as required by FAR Subpart 5.2:

As stated in FAR Part 5.202(a)(5), Exceptions to transmitting a notice to the

Government Point of Entry(GPE), the contracting officer need not submit a notice when “the proposed contract action is for utility services other than telecommunications services and only one source is available.”

(7) A determination by the contracting officer that the anticipated cost to the

Government will be fair and reasonable:

The estimated average monthly cost, which was based on invoice history, for the natural gas transportation service is $22,500.00 with a total estimated usage for a 12 month period of $270,000.00. All rates are regulated by the

P.U.C. through Supplement No. 127 to Tariff Gas-PA P.U.C. No. 5. The UGI website has provided sufficient data to the FBOP contracting officer, pursuant to FAR 15.402, Pricing Policy, allowing the ability to make a preliminary determination that such anticipated costs appear to be fair and reasonable. A formal decision in the form of periodic rulings, reviews, or similar actions of a governmental body, or embodied in the laws, are sufficient to set pricing [see FAR 15.403-1(c)(2)]. This Contracting Officer has determined the anticipated cost to the Government will be fair and reasonable.

http://gasmngmt.ugi.com/UGIP/doc/tariff/PUC8.pdf

Natural Gas Transportation Services

(8) A description of the market research conducted:

This documentation is in accordance with FAR Part 10, which describes the policies and procedures for conducting market research in a process of finding viable sources of goods and services to meet government requirements and to find the most suitable approach to acquiring, distributing, and supporting supplies and services. This report is submitted in support of an acquisition with an estimated value in excess of the simplified acquisition threshold. Below are the findings of the market research for the above referenced requirement.

I. Background: A review of the obligation reveals the following – The Federal Correctional Institution Allenwood (hereinafter referred to as “FCC Allenwood”) has a current and continuing requirement for natural gas transportation utility service.

1. Title: Natural Gas Transportation Utility Service FCC Allenwood, to provide natural gas transportation services for the FBOP, FCC Allenwood in Allenwood, PA.

2. Product or Service Code: S- Utilities and Housekeeping Services – S111 Utilities-Gas Services.

3. North American Industry Classification System (NAICS): 221210 Natural Gas Distribution - this industry comprises establishments primarily engaged in natural gas distribution.

4. Standard Industrial Classification (SIC) Code: 4924 Natural Gas Distribution

II. Potential Sources: UGI Utilities, Inc. is the sole provider of natural gas transportation utility service in the FCC Allenwood service area. FAR provides that a formal decision in the form of periodic rulings, reviews, or similar actions of a governmental body, or embodied in the laws, are sufficient to set pricing and the purchasing of supplies and services are determined fair and reasonable from a responsible source. I applied personal knowledge, interaction with knowledgeable individuals in local and Federal Government regarding market capabilities to meet the requirements, and research of generally accessible literature available on-line were the techniques used in researching this procurement for a supply/services of this type. A review of State of Pennsylvania regulations determined that a natural gas transportation utility service is not a deregulated utility.

Deregulation would promote competition and only companies, not Government entities, fall under the jurisdiction of the Pennsylvania Public Utility Commission. FCC Allenwood is located in Gregg Township Zoning District within Pennsylvania UGI Utilities Inc. territories served.

III. Deliver / Performance time: Pursuant to FAR Part 41.202, UGI Utilities, Inc. continues to provide the “entire natural gas transportation utility service” (i.e., testing, system operation and maintenance, metering, billing, etc.). UGI Utilities Inc. shall provide to the government facility at FCC Allenwood, natural gas transportation utility services in a manner and form that is consistent with all applicable laws, rules, codes, industry standards, permits, and regulations, promulgated by any and all governmental authorities having jurisdiction. UGI Utilities Inc. shall provide services on an uninterruptible daily basis 365 days per year. UGI will be responsible to maintain and/or repair all associated gas lines and equipment, including associated costs for such repair, from the delivery point or meter of FCC

Allenwood.

UGI shall provide natural gas transportation utility services from Effective

Date of Award (EDOA) through 12 months from EDOA, subject to funds availability (FAR Clause 52.232-18). The total estimated annual amount for natural gas transportation utility service is $270,000.00.

IV. Commercial Item Determination: Natural gas transportation utility service is an item that is of a type customarily used by the general public and by non-governmental entities for purposes other than governmental purposes.

V. Market Analysis:

1. The results of market research have determined that the government’s needs can be met by an item customarily available in the commercial marketplace.

2. The market research conducted by the contracting office and the

Facilities Department staff determined that a GSA area-wide or a single point contract does not exist with UGI. A search of previous purchases of similar/identical acquisitions shows UGI formally known as Penn Natural Gas is the current natural gas transportation service provider for FCC Allenwood and has serviced the facility since dedication. Also, UGI is the only service supplier capable at this time of providing FCC Allenwood with natural gas transportation services. No other company has presented itself with the capabilities nor the infrastructure to run gas lines to the current connection site as the territory is protected by tariff. No other sources have been located that are currently capable or that could acquire the capability of meeting the Bureau’s requirement.

3. I have determined that the North American Industrial Classification

System (NAICS) code is 221210-Natural Gas Distribution (Size Standard = 500

Employees). The contract will be a firm-fixed price requirements type utility purchase order.

VI. Results: Based on the information provided by the sources detailed above, the following information outlines the conclusions and provides the basis for this procurement.

1. It is this Contracting Officers determination there is a source available that is capable of providing the required services. The procurement will be conducted in accordance with the procedures as outlined in FAR Part 12, 13, and 41. A Performance-Based Acquisition method will not be used for this procurement as it is determined not applicable. A PBA relies on the use of measurable performance standards and financial incentives in a competitive environment to encourage competitors to develop and institute innovative and cost-effective methods of performing the work.

2. One potential source is a local entity, the incumbent UGI, which appears able to satisfy the requirement and is regulated by the P.U.C. UGI is other than small business.

3. The provision of natural gas transportation service is essential for the orderly operation of FCC Allenwood. The specifications/description requirements documents shall specify needs using market research in a manner designed to promote full and open competition and only include provisions or conditions to the extent necessary to satisfy the needs of the FBOP or as authorized by law. However, the Pennsylvania P.U.C. regulations state that

Natural Gas Transportation Services in order to provide economical and efficient service to a community, the state of Pennsylvania grants electric distribution, natural gas distribution, steam heat, water, and wastewater companies the right to provide their service within a specific geographic area. History shows and economics dictate that the construction of facilities by multiple utilities in the same location would be extremely costly and disruptive to communities. The utility is regulated by state or local government to assure fair rates for safe and adequate service. The ratemaking process ensures the lowest reasonable rate for consumers while maintaining the financial stability of the utility. Under the law, the utility is entitled to recovery of its reasonable incurred expenses.

4. This requirement will not be posted to Fedbizopps as a combined synopsis solicitation to promote competition, broaden industry participation, and assist small business concerns in obtaining contracts for FCC Allenwood, Pennsylvania. This requirement meets the exemption at FAR 5.202(5) the proposed contract action is for utility services other than telecommunications services and only one source is available. UGI is the sole provider of natural gas transportation utility service in the FCC Allenwood service area. UGI is a private entity in Gregg Township, the only agent authorized by rules and regulations to provide natural gas local distribution company service in the Gregg Township area. Having a single supplier of natural gas transportation service for this area is the most efficient method of supplying natural gas.

5. The Bureau does not have the state and local approval or the resources to provide the funding for another company to install gas lines. The natural gas supply will be provided by Direct Energy Business Marketing, LLC under contract GS-00P-13-BSC-1034 and will be utilizing UGI pipelines.

6. The U.S. General Services Administration has issued a Delegation of Contracting Authority to the U.S. Department of Justice, FBOP to negotiate and execute utility service contracts. This includes the provision of natural gas local distribution company utility service for FCC Allenwood for a period of 1 year.

7. I also make the determination that this procurement action “NOT” be set-aside for small business. The Small Business Procurement Review for the purchase of utility services has been granted a waiver by the Office of Small and Disadvantaged Business Utilization to the FBOP for submitting routine procurements to the Office of Small and Disadvantaged Business Utilization for review in accordance with PGD 09-02.

VII. Recommendation: The Government contemplates the single award of a firm-fixed price requirements type natural gas transportation utility service contract. The estimated date of award will be made approximately October 1, 2016.

Comments: The conclusions from this market research will be incorporated into the agreement document for providing Natural Gas Transportation Utility Service for FCC Allenwood.

(9) Any other facts supporting the use of other than full and open competition:

The provision of natural gas transportation utility service is essential for the orderly operation of FCC Allenwood, which has a rated capacity to collectively house more than approximately 3567 inmates. The complex consists of a high security United States Penitentiary (USP), a medium

Natural Gas Transportation Services security Federal Correctional Institution (FCI), and a Low Security

Correctional Institution (LSCI). Commonwealth utility regulations limit the providers of this service to only one. Utility requirements do not require follow-on acquisition actions. Therefore, FAR 6.302-1(a)(2)(ii) is not applicable.

(10) A listing of the sources, if any, that expressed, in writing, an interest in the acquisition:

There were no other sources which expressed an interest in this acquisition.

(11) A statement of the actions, if any, the agency may take to remove or overcome barriers to competition before any subsequent acquisition for the services required:

Contracting and requirement staff continue to conduct appropriate market research to determine if sources capable of satisfying the agency’s requirement exist and to overcome competition barriers. Deregulation laws are presently nonexistent and no alternative source of service is currently available. A review of FPDS-NG shows only the FBOP is issuing orders to UGI for natural gas transportation utility requirements. FCC Allenwood is a consumer of services from the public utility. If another potential source emerges, the agency will assess whether competition for future requirements is feasible.

(12) Contracting Officer’s Certification:

I hereby certify that this request for Justification and Approval of Other than Full and Open Competition is made in good faith, the supporting data and information are accurate and complete to the best of my knowledge and belief and I would not be making this request if it were feasible to fully compete this requirement. I further certify that this request is not the result of lack of advanced planning or a desire to expend funds while those funds are still available.

//SIGNED\\ 9/12/2016

Dennis Dempsey, Contract Specialist Date

Field Acquisition Office

(c) I hereby certify that the supporting data provided by the technical and requirements personnel which form the basis for this justification is complete and accurate to the best of my knowledge and belief.

//SIGNED\\ 9/8/2016

Steve Kepner, Complex Facilities Manager Date

FCC Allenwood

Concurrence:

//SIGNED\\ 9/9/2019

L.J. Oddo, Complex Warden Date

FCC Allenwood

Approved:

//SIGNED\\ 9/15/2016

Jill D. Ryan, Chief Date

Field Acquisition Office