Jebel_Ali_JA_15-0060_9.14.15_redacted.pdf

DEFENSE LOGISTICS AGENCY

ENERGY

8725 JOHN J. KINGMAN ROAD

FORT BELVOIR, VIRGINIA 22060-6222

September 10, 2015

<15-0060>

Justification for Other than Full and Open Competition

1. Summary/Introduction:

The Defense Logistics Agency (DLA-Energy) is a subcomponent of the Department of Defense (DOD). This Justification & Approval (J&A) is hereby submitted in accordance with FAR 6.302-1. It supports an additional performance period for other than full and open competition for contract SP0600-10-C-5034 with service provided by Star Energy Resources Limited (SEOT). The contract is a Firm-Fixed-Price (FFP) contract for Contractor-owned, Contractor-operated (COCO) storage services in the Port of Jebel Ali, United Arab Emirates (UAE). DLA- Energy-FESBB hereby submits Justification for Only One Responsible Source or Limited Sources in requesting a 31-day period of performance not contemplated at time of award. The total estimated value for the 31-day period of performance is $980,089.16. The period of performance will be October 1, 2015 – October 31, 2015. The contract value is increased from $54,532,783.35 to $55,512,872.51.

2. Nature and/or description of the action being approved (FAR 6.303-2(b)(2):

A 31-day period of performance will be added to contract SP0600-10-C-5034 for Contractor - Owned, Contractor-Operated storage services in the Port of Jebel Ali, United Arab Emirates.

Market research and response to Request for Proposals SPE600-15-R-0502 indicate that there is only responsible source available for this requirement. This 31-day period of performance is outside of the scope of the original contract award. There are no options remaining in accordance with contract provision I209.03Extension Provision (Storage) (DLA Energy SEP 1991).

The performance period under the current contract for COCO storage services in the Port of Jebel Ali SP0600-10-C-5034 is set to expire on September 30, 2015. Contract Award for the follow-on contract made under Solicitation no. SPE600-15-R-0502 was expected to be made by the expiration date of March 31, 2015 but shifts in mission requirements for storage services at Jebel Ali have delayed this award.

3. Description of supplies or services required to meet the agency’s need (including estimated value) (FAR 6.303-2(b)(3)):

Contract SP0600-10-C-5034 was awarded on March 17, 2010 under full and open competition for commercial COCO storage services of Government-owned product totaling

. The 31-day period of performance continues COCO storage services of Government-owned product totaling

Justification for Other Than Full and Open Competition (Cont’d)

(SP0600-10-C-5034– STAR ENERGY RESOURCES LIMITED)

The 31-day period of performance from October 1, 2015 – October 31, 2015 will allow for continued storage operations of .

Solicitation SPE600-15-R-0502 is being executed concurrently in order to procure long-term services. The estimated value of the J&A is for $980,089.16. The cumulative value of the three J&As completed for contract SP0600-10-C-5034 is $5,807,266.40.

4. Identification of the statutory authority permitting other than full and open competition (FAR 6.303-2(b)(4)):

This J&A is based upon the authority of 10 U.S.C. §2304(c)(1), as implemented by Federal Acquisition Regulation (FAR) 6.302-1, and more specifically, the authority of FAR 6.302- 1(a)(2). When the supplies or services required by the agency are available from only one responsible source, or, for DoD, NASA, and the Coast Guard, from only one or a limited number of responsible sources, and no other type of supplies or services will satisfy agency requirements, full and open competition need not be provided for.

5. Demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited (FAR 6.303-2(b)(5)):

SEOT has been the sole offeror in response to the three previous solicitations issued (SP0600-03-R-0155 , SP0600-09-R-0510 and SPE600-15-R-0502) for the same services within the Port of Jebel Ali. Star Energy’s terminal is also the largest Deep Water terminal inside the Strait of Hormuz and thus provides regional assets with maximum flexibility.

DLA Energy has made continued efforts to find potential sources that can meet the requirement.

This requirement was synopsized on FEDBIZOPPS on November 24, 2014. Solicitation SPE600-15-R-0502 was issued on June 9, 2015 under full and open competition. In addition to SEOT, NAI-Logistics and Drew Marine, USA demonstrated interest by submitting questions in response to the Request for Proposals. However, only SEOT submitted a proposal.

The requirement documents that generated contract SP0600-10-C-

5034 explicitly identified the Port of Jebel Ali as the desired place of performance and the area of consideration was a criterion of technical acceptability.

(SP0600-10-C-5034– STAR ENERGY RESOURCES LIMITED)

6. Description of the efforts made to ensure that offers are/were solicited from as many potential sources as is/was practicable, including whether a notice was or will be publicized as required by Subpart 5.2 and, if not, which exception under 5.202 applies (FAR 6.303- 2(b)(6)):

DLA Energy has made continued efforts to find potential sources that can meet the requirement.

This requirement was synopsized on the Federal Business Opportunities website on November 24, 2014. Solicitation SPE600-15-R-0502 was issued on June 9, 2015 under full and open competition. In addition to SEOT, NAI-Logistics and Drew Marine, USA demonstrated interest by submitting questions in response to the Request for Proposals. However, only SEOT submitted a proposal.

7. Determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable (FAR 6.303-2(b)(7)):

The Contracting Officer has determined that the anticipated cost to the Government of $980,089.16 per month ($5.84/bbl/yr) is fair and reasonable in accordance with FAR 15.404- 1(b)(2)(ii) comparison of proposed prices to historical prices paid for the same or similar items.

The price compares very favorably to that found in other contracts for storage services in the Middle East administered by DLA Energy-FESBB. For comparative purposes, storage services in the Port of Salalah, Oman (SP0600-13-C-5324) are priced at $10.45/BBL/YR and storage services in Fujairah, UAE (SP0600-11-C-5102) are priced at $5.92/BBL/YR.

8. Description of the market research conducted and the results or a statement of the reason market research was not conducted (FAR 6.303-2(b)(8)):

Market research was conducted using historical data from the three previous solicitations issued for the same services within the same area of consideration, and no other sources were identified.

9. Any other facts supporting the use of other than full and open competition, such as (FAR 6.303-2(b)(9):

(i) 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.

Not Applicable.

(SP0600-10-C-5034– STAR ENERGY RESOURCES LIMITED)

(ii) When 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.

Not Applicable.

(iii) When 6.302-2 is cited, estimated cost, or other rationale as to the extent and nature of the harm to the Government.

Not Applicable.

10. A listing of the sources, if any, that expressed, in writing, an interest in the acquisition (FAR 6.303-2(b)(10):

NAI-Logistics and Drew Marine, USA demonstrated interest by submitting questions in response to the Request for Proposal SPE600-15-R-0502.

11. Actions that may be taken to remove or overcome barriers to competition before any subsequent acquisition for the supplies or services are required (FAR 6.303-2(b)(11)):

Market research shows that while there are other commercial vendors in the area that can provide petroleum product storage solutions, none have the storage capacity to meet the current requirement. The Contracting Officer recommends an analysis of required throughput in order to determine if there is a quantity that will both satisfy the requirement and increase competition for services. As part of this analysis, it would be advantageous to hold an industry conference to determine actual capacity in the region.

Competition could also be increased by issuing the next follow-on contract several years in advance. This would allow contractors time to build facilities in order to meet current volume required.

(SP0600-10-C-5034– STAR ENERGY RESOURCES LIMITED)

I hereby certify that the data which forms the basis for this justification is accurate and complete to the best of my knowledge and belief.

Contracting Specialist Contracting Officer Overseas COCO & Lab Overseas COCO & Lab Testing Branch Testing Branch Date: Date:

Division Chief, Overseas Services Division Date:

I hereby certify that the data which forms the basis for this justification is accurate and complete and that the purchase request covers only the minimum requirements to satisfy the needs of the Government.

Chief, Facilities Management Branch Date:

(SP0600-10-C-5034– STAR ENERGY RESOURCES LIMITED)

I have reviewed and concur with this Justification

Director, Bulk Petroleum Services Date:

Assistant Counsel DLA Counsel-Energy Date:

Approved:

Defense Logistics Agency Energy Competition Advocate Date: