USP Lee Natural Gas Utility JOFOC.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

Pursuant to the Federal Acquisition Regulation (FAR) Subpart 6.302-1 (a) and 6.302-1 (b) (3), and the Bureau of Prisons Acquisition Policy (BPAP) Part 6.304 (c), the Federal Bureau of Prisons (FBOP), United States Penitentiary, Lee, Virginia, has determined that the procurement of natural gas services for the United States Penitentiary (USP) Lee, and Federal Prison Camp (FPC) Lee (hereinafter referred to as "USP Lee") located near Jonesville, Virginia, 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 Part 6.303-2:

1. IDENTIFICATION OF THE AGENCY AND THE CONTRACTING ACTIVITY:

Department of Justice

Federal Bureau of Prisons

United States Penitentiary Lee

Lee County Industrial Park

Hickory Flats Road

Pennington Gap, VA 24277

2. NATURE AND/OR DESCRIPTION OF THE ACTION BEING APPROVED:

This justification for other than full and open competition is for the acquisition of natural gas utility services supplied to USP Lee, from the original and sole provider of such services.

USP Lee has a present and continuing requirement for natural gas services for the proper operation of the facility. The only known provider is willing to enter into a ten- year contract for natural gas utility services.

3. DESCRIPTION OF SUPPLIES AND SERVICES REQUIRED TO MEET THE AGENCY'S

NEEDS (INCLUDING ESTIMATED VALUES):

Magnum Hunter Production, Inc. (Magnum Hunter) is the only designated supplier for USP

Lee located at the Lee County Industrial Park Hickory Flats Road. Magnum Hunter has sole ownership of the supply line that supplies natural gas to the USP. USP Lee requires natural gas 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 un-interruptible daily basis 365 days per year. The provider will be responsible to maintain and/or repair all associated natural gas lines and equipment, including associated costs for such repair, from the delivery point or meter of USP Lee. Pursuant to FAR Part 41.202, the contractor is required to provide the "entire natural gas utility service" (i.e., treatment, testing, system operation and maintenance, metering, billing, etc.).

Magnum Hunter shall provide natural gas service from the Effective Date of Award (EDOA) through 120 months, subject to funds availability (FAR 52.232-18). The total estimated amount is $3,095,984.52.

4. 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)(l), when the supplies or serv ices 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 FAR 41.101 ), circumstances may dictate that only one supplier can furnish the service (see FAR 41.202).

5. DETERMINATION THAT PROPOSED CONTRACTOR' S UNIQUE QUALIFICATIONS

OR THE NATURE OF THE ACQUISITION REQUIRES THE USE OF THE

AUTHORITY CITED:

The provision of natural gas utility service is essential for the orderly operation of USP Lee, which has approximately 675,647 square feet under roof. This includes seven buildings outside of the secure perimeter. Magnum Hunter is the sole proprietor of the main supply gas line serving natural gas to USP Lee located in the rural area of Southwest Virginia.

6. EFFORTS MADE TO SOLICIT FROM AS MANY SOURCES AS PRACTICABLE

INCLUDING WHETHER OR NOT A NOTICE WAS OR WILL NOT BE PUBLICIZED

AS REQUIRED BY FAR PART. 5.2:

Due the exclusive transacting rights established by the deregulation of natural gas in Virginia, Magnum Hunter has an exclusive right to provide natural gas to USP Lee through company owned pipeline. As stated in FAR Part 5.202(a)(5), Exceptions, 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 Natural Gas utility services in the USP Lee area at this time.

7. DETERMINATION THAT THE ANTICIPATED COST TO THE GOVERNMENT WILL

BE FAIR AND REASONABLE:

The total estimated cost for the 120-month period is $3,095,984.52. This rate is considered fair and reasonable. It is equal to market prices levied by Magnum Hunter on other commercial users and commiserate with the price USP Less has paid historically. Prices offered by Magnum Hunter will continue to be analyzed by the contracting office, with the assistance of the Facilities Manager, in ensure prices remain reasonable.

8. DESCRIPTION OF MARKET RESEARCH CONDUCTED:

The market research conducted by the contracting office and the Facilities Department personnel determined that neither a GSA area-wide nor a single point contract is available in the USP Lee area. In August 2010, in accordance with Title 40 USC § 121 ( d), GSA issued the Department of Justice a Delegation of Authority for nationwide authori~y to negotiate and execute utility service contracts at Federal facilities under the control and direction of the FBOP. Magnum Hunter is the only service supplier capable at this time of providing USP Lee with natural gas services and has serviced the facility since dedication. No other company has presented itself with the capabilities or the infrastructure to provide natural gas to the current connection site.

9. OTHER FACTS SUPPORTlNG THE USE OF OTHER THAN FULL AND OPEN

COMPETITION:

None.

10. LIST OF SOURCES THAT EXPRESSED AN INTEREST IN THE ACQUISITION:

On June 5, 2019, an open and continuous sources sought notice was posted on www.fbo.gov.

No sources expressed an interest in this acquisition.

I I. ACTJONS, IF ANY, THE AGENCY MAY TAKE TO REMOVE OR OVERCOME ANY

BARRIERS TO COMPETITION BEFORE ANY SUBSEQUENT ACOUlSITION FOR

THE SUPPLIES OR SERVICES REQUIRED:

Contracting and requirement staff continues to conduct appropriate market research to determine if sources capable of satisfying the agency's reqLJirement 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 Bureau is issuing · orders to Magnum Hunter for natural gas utility_ requirements. If another potential sou~ce 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 gooc;i faith, the supporting data and information are accurate and complete to the best ofmy knowledge and belief and I would not be making this request ifit 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.

BONNIE

BUETER

Bonnie Bueter, Contract Specialist Field Acquisition Office

08/28/2019 Date

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.

J eu Acting Warden USP Lee

JENN l FER ~-:,~~_;=:,.~~:, BROUILLARD Er*:1

M68

Al Rauschuber, Jr., Chief Field Acquisition Office

Acting Procurement Executive

Approved:

i ·:l) .,s Date

08/30/2019

Date

The Competition Advocate for the procuring activity, designated pursuant to FAR 6.50 I and BPAP 4100.06, has reviewed this justification for a proposed contract action. Based on the forgoing determination and findings, I hereby approve this justification on an· other than ful l and -open competition basis pursuant to the statutory authority cited in paragraph 4 above, subject to availability of funds, and provided that the service herein described have otherwise bee thorized for acquis' ·

BradleyT. ross Assistant Director for Administration Competition Advocate qJ•J11 Date ·