S_A12_FBO_LEX_JOFOC_-_WATER_SERVICE_FY-17.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN

COMPETITION

PUBLIC UTILITY – WATER SERVICE

FEDERAL MEDICAL CENTER LEXINGTON

LEXINGTON, KENTUCKY

Contractor: Kentucky American Water

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

Estimated Amount: $637,735.53

UNITED STATES DEPARTMENT OF JUSTICE

FEDERAL BUREAU OF PRISONS

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

Water Utility Service FMC Lexington

Pursuant to the Federal Acquisition Regulation (FAR) Part 6.302-1(a)(1) and 6.302-1(b)(3), and the Bureau of Prisons Acquisition Policy (BPAP) 4100.05 Subpart 6.304(c), the Federal Bureau of Prisons (FBOP) has determined that the procurement of water utility service for FMC Lexington located within the city limits of Lexington, KY, meets the criteria established for other than full and open competition. It is further determined that only one responsible source and no other supplies and/or services will satisfy agency requirements. This limitation on competition is justified as supported by the following information in accordance with FAR Subpart 6.303-2:

1. Identification of the Agency:

U.S. Department of Justice Federal Bureau of Prisons FMC Lexington 3301 Leestown Rd.

Lexington, KY 40511

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

This procurement action is for the acquisition of water utility services provided to the FMC Lexington, KY, from the sole provider of such services in the FMC Lexington area. The FBOP, a component of the Department of Justice (DOJ) has a preceding, current, and continuing requirement for water utility service for the proper operation of the facility in order to provide a safe, secure environment to confine offenders and protect the public. The FBOP, Field Acquisition Office working to satisfy the acquisition needs of the FMC Lexington, intends to make a single award to the contractor who shall provide water utility services upon request by the institution. The pricing includes all associated charges to the government for providing the services required (e.g., insurance, overhead, minimum wages, planning, etc.). The quantity of supplies/services to be provided by the contractor is estimated. These estimates are not a representation to a offorer or contractor that the estimated quantities will be required or ordered, or that conditions affecting requirements will remain stable or normal. General information regarding the FBOP and its facilities is located at www.bop.gov.

3. Description of supplies or services required to meet the agency needs:

Pursuant to FAR Part 41.202, the Kentucky American Water (KAW) continues to provide the “entire water utility service” (i.e., distribution, transportation, conveyance, system operation and maintenance, storage, treatment, metering, billing, etc.). KAW shall provide to the government facility at FMC Lexington, water 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. The KAW shall provide services on an un-interruptible daily basis (365) days per year. KAW will be responsible to maintain and/or repair all associated pipelines and equipment, including associated costs for such repair, up to the delivery point or meter of FMC Lexington. KAW will be responsible to ensure that the pipelines and associated equipment, utilized to provide water services will be maintained and operated in compliance with all rules and regulations set by the Kentucky Department of Public Health, in accordance

JOFOC FMC LEXINGTON

Water Utility Services with all Federal, State, County, and local government for a safe and sanitary water service. Pursuant to FAR Part 41.202, KAW continues to provide the “entire water utility service” (i.e., production, distribution, system operation and maintenance, treatment, metering, billing, etc.).

Kentucky American Water (KAW) shall provide water utility services for the period from October 1, 2016, through September 30, 2017, for a 12 month period, subject to funds availability (FAR Clause 52.232-18).

The total estimated monthly amount for water utility service is $53,144.63. The total estimated amount for a 12-month period is $637,735.53.

Contract Line Item Number Performance Period Estimated Annual Cost ($) CLIN 0001 October 2016 $51,059.31 CLIN 0002 November 2016 $67,481.89 CLIN 0003 December 2016 $67,866.05 CLIN 0004 January 2017 $56,458.60 CLIN 0005 February 2017 $47,739.94 CLIN 0006 March 2017 $55,949.54 CLIN 0007 April 2017 $48,507.70 CLIN 0008 May 2017 $55,869.16 CLIN 0009 June 2017 $48,511.37 CLIN 0010 July 2017 $52,895.42 CLIN 0011 August 2017 $53,024.64 CLIN 00112 September 2017 $52,371.91 Total Estimated Cost: $637,735.53

4. An identification of the 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 are 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).” When a public utility supplier refuses to execute a tendered contract the agency may proceed with the acquisition and pay for the utility service under the provisions of 31 USC § 1501(a)(8). Analysis of the market indicates that the KAW has proprietary rights up to the meter at FMC Lexington. In order for another provider to be capable of providing the service, significant capital improvements would be needed. The Bureau would be required to pay for the capital improvements, but it would not recover the costs of duplication of services, connection fees and infrastructure installation costs through competition. The current requirement is for follow-on services and does not include funding for capital improvements.

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

It is the policy of the Federal Government to obtain utility service from sources which are most advantageous to the Government in terms of economy, efficiency, reliability, and/or service. KAW is the sole provider of water utility service in the FMC Lexington service area. KAW is a private entity in the State of Kentucky, the only agent authorized by rules and regulations to provide water service in the

Lexington area. Having a single supplier of water service for this area is the most efficient method of providing potable water. In accordance with Kentucky Administrative Regulations: Provides that the Public Service Commission (PSC) shall prescribe rules for the performance of any service or the furnishing of any commodity by the utility. Requires every utility to file with the commission reports, schedules, and other information that the commission requires and to promulgate an administrative regulation for the performance of a service or the furnishing of a commodity by a utility. This administrative regulation establishes general rules which apply to water utilities.

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, Exceptions to transmitting a notice to the Government Point of Entry(GPE) at (a)(5), 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.” There are no General Services Administration (GSA) area-wide or single point contracts for water utility service in the FMC Lexington area at this time. This contracting officer has determined, in accordance with FAR 5.202(a)(5), that this requirement appears to be a non-competitive market and the contracting officer need not submit a notice of, nor the issuance of, the RFQ to the GPE.

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 water utility service is $53,144.63 with a total estimated usage for a 12 month period of $637,735.53. Utility rates are approved by the PSC. The KAW, which is charged under State of Kentucky law to ensure that rates be just and reasonable. The State of Kentucky, City of Lexington, and Kentucky American Water websites have 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.

All rates, rules and regulations of the KAW are subject to the approval of the PSC of the State of Kentucky.

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]). The establishment of the current supply and delivery of services began when the original service connections were installed. As such, this Contracting Officer has determined the anticipated cost to the Government will be fair and reasonable.

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. The amount of market research will vary, depending on such factors as urgency, estimated dollar value, complexity, and past experience. Market research involves obtaining information specific to the item being acquired. 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 – FMC Lexington has a current and continuing requirement for the purchase of water utility service for the continuation of normal operations of the institution in order to provide a safe, secure environment to confine offenders and protect the public.

1. Title: Water Utility Service – FMC Lexington

2. Product or Service Code: S- Utilities and Housekeeping Services– S114 Water Service.

3. North American Industry Classification System (NAICS): 221310 Water Supply and Irrigation

Systems = this industry comprises establishments primarily engaged in operating water treatment plants and/or operating water supply systems. The water supply system may include pumping stations, aqueducts, and/or distribution mains. The water may be used for drinking, irrigation, or other uses.

4. Standard Industrial Classification (SIC) Code: 4941 Water Supply

II. DELIVERY / PERFORMANCE: Purchase order to provide water utility services from October 1, 2016 through September 30, 2017. The KAW shall provide to the government facility at FMC Lexington, water 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. KAW shall provide services on an un-interruptible daily basis (365) days per year. KAW will be responsible to maintain and/or repair all associated water lines and equipment, including associated costs for such repair, from the delivery point or meter of FMC Lexington. Pursuant to FAR Part 41.202, KAW continues to provide the “entire water utility service” (i.e., collection, treatment, testing, system operation and maintenance, metering, billing, etc.).

III. POTENTIAL SOURCES: Kentucky American Water, P.O. Box 578, Alton, IL 62002-0578

IV. MARKET ANALYSIS:

1. The results of market research have determined that the Government’s needs can be met by an item that is of a type customarily available in the commercial marketplace and is used by the general public.

2. The following methods were utilized to conduct Market Research:

X Reviewed historical acquisition information.

X Personal knowledge in procuring supplies/services of this type.

X Review of Government and/or commercial databases for relevant information.

X FedBizOpps Sources Sought Synopsis; Found no other interested party capable of providing water utility service.

X Searched database and contacted GSA Energy Center of Expertise; Found no areawide or single point contract is available.

X Searched FPDS-NG; Found GSA, VA, and the FBOP are purchasing water service from the

KAW.

X Searched previous purchases of similar/identical acquisitions; Found the KAW is current provider to FMC Lexington. This is a continuation of service.

X Reviewing results of recent market research undertaken to meet similar or identical requirments.

X Contacting knowledgeable individuals in Government and Industry regarding market capabilities to meet requirements.

3. Results: Results of Market Research were as follows: Only on source could be found. A

Justification for Other than Full and Open Competition is provided for approval.

V. RECOMMENDATION: The market research conducted by the contracting office and the Facilities Department staff determined that a GSA area-wide nor a single point contract with KAW is available in accordance with Title 31 USC § 1535. GSA is specifically authorized by law and regulation to purchase utility services on behalf of other agencies by providing an Assisted Acquisition. August 2010, in accordance with Title 40 USC § 121(d), GSA issued the FBOP a Delegation of Authority for nationwide authority to negotiate and execute utility service contracts at Federal facilities under the control and direction of the FBOP in accordance with Title 40 USC § 501(b)(1)(B). Search of previous purchases of similar/identical acquisitions shows the KAW is the current water service provider for FMC Lexington and has serviced the facility since dedication.

Also, KAW is the only service supplier capable at this time of providing FMC Lexington with water services. No other company or municipality has presented itself with the capabilities or the infrastructure to run water lines to the current connection site. The amount compensated for the construction of the water infrastructure systems currently being used at FMC Lexington is not available. No other sources have been located that are currently capable or that could acquire the capability of meeting the Bureau’s requirement.

1. It is this Contracting Officers determination there is a source available that is capable of providing the required services. The requirement will be awarded to KAW as a single award of a firm-fixed price requirements type water utility purchase order utilizing FAR Part 6, 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. Kentucky American Water is the sole provider of water utility service in the FMC Lexington service area. The PSC is the independent governing body that approves all rates with the responsibility of water services for the locale in which FMC Lexington resides. 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.

During construction of the institution, one contract was awarded for the installation and operation of one water pipeline leading to and from the institution. A review of State of Kentucky regulations determined that a water utility service is not a deregulated utility. Deregulation would promote competition. FMC Lexington is within the City of Lexington Zoning District. KAW is other than small business.

3. This requirement will not be posted to Fedbizopps to promote competition, broaden industry participation, and assist small business concerns in obtaining contracts for FMC Lexington. 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. KAW is an entity in the City, the only agent authorized by rules and regulations to provide water service in the Lexington area. Having a single supplier of water service for this area is the most efficient method of providing and distributing potable water service.

4. Search of previous purchases of similar/identical acquisitions shows the KAW is the current water service provider for FMC Lexington and has serviced the facility since dedication. Also, KAW is the only service supplier capable at this time of providing FMC Lexington with water services. No other company has presented itself with the capabilities nor the infrastructure to run water lines to the current connection site. No other sources have been located that are currently capable or that knowledge and belief, and that 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 advance planning or a desire to expend funds while those funds are still available.

//SIGNED\\ 9/6/2016

Dennis Dempsey, Contract Specialist Date

Field Acquisition Office

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\\ for 9/15/2016

Doug Diller, Acting Facilities Manager Date

FMC Lexington

Concurrence:

In accordance with BPAP 4100.05 Subpart 6.304(c), I certify that I have reviewed this justification and find it adequate to support other than full and open competition.

//SIGNED\\ 9/15/2016

Francisco J. Quintana, Warden Date

FMC Lexington

Approved:

//SIGNED\\ for 9/20/2016

Jill D. Ryan, Chief Date

Field Acquisition Office