KASOTC_JA_Final_24SEP2016_(1)_Redacted.pdf

Control #16-060

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. CONTRACTING AGENCY:

U.S. Army Corps of Engineers, Philadelphia District 100 Penn Square East, Wanamaker Building Philadelphia, PA 19102-3340

2. DESCRIPTION OF ACTION:

Approval is respectfully requested for a sole source, firm-fixed-price contract to purchase contractor furnished backup power plant equipment currently installed at King Abdullah II Special Operations Training Center (KASOTC), Jordan. This project will be funded with Operations & Maintenance, Army (OMA) funds, which are appropriate for this action. Based on Army Regulation 415-15 and 10 U.S.C 2805(c), the Government can use Operation and Maintenance, Army (OMA) funds for minor construction projects costing $750,000.00 or less.

3. DESCRIPTION OF SUPPLIES/SERVICES OR NATURE OF CONSTRUCTION:

KASOTC is an enduring (since 2009) Special Operations training location in Amman, Jordan. Backup power for KASOTC is provided by a 2 MW backup power plant that is currently being leased by Fluor Intercontinental, Inc. (Fluor) (CAGE: 1CZV4). Fluor is currently providing the leasing of the equipment and operation and maintenance (O&M) of the backup power plant under task order W912BU-10-D-0017-0008 (Task Order No. 8).

Task Order No. 8 was awarded to Fluor under the World-Wide Power, Multiple Award Task Order Contract (MATOC) 1 after fair opportunity to be considered for award was provided to the other MATOC contract holders. Task Order No. 8 expires on 29 September 2016. Prior to issuing a solicitation for the O&M of the backup power plant, the Government intends to purchase the currently installed Contractor Furnished Equipment (CFE), such that it will become Government Furnished Equipment (GFE).

The equipment in question, collectively referred to as CFE, consists of two generators (~1MW each), a manual transfer switch (MTS), an automatic transfer switch (ATS), and a main distribution panel (MDP).

The estimated price is

4. AUTHORITY CITED:

10 U.S.C. §2304(c)(1) as implemented in FAR 6.302-1(a)(2)(iii)(B), Only one responsible source and no other supplies or services will satisfy agency requirements.

1 W912BU-10-D-0016 (Berger Cummins Joint Venture), 0017 (IAP Worldwide Services, Inc.), and 0018 (Fluor, Inc.).

5. REASON FOR AUTHORITY CITED:

a. Justification

If the Government purchases the equipment associated with the backup power plant from a contractor other than Fluor, it will incur substantial duplication of costs. Other contractors will have to go through their supply chain, contact the supplier, negotiate a contract with the supplier, and have the generators delivered in a timely manner to KASTOC, Jordan. This process will involve significant labor hours on the part of the contractor, which will result in higher costs to the Government. It also risks untimely delivery of the generators and related equipment, which must be on site by 29 September 2016.

Fluor already has the necessary generators and related equipment onsite at KASOTC.

Therefore, Fluor would neither incur nor charge the Government the labor hours it would have taken other contractors to procure the generators. Also, the Government will not endure the risk of untimely delivery of the generators. Through the reasons above, no other vendor can provide competitive pricing and timely delivery.

Based on 6.302-1(a)(ii)(A), the Government can be waived from full and open competition because procuring these generators through competition will result in substantial duplication of costs to the Government. The Government would be expending unneeded time and costs for issuance of a solicitation and the evaluation of offerors as no other vendor can provide competitive pricing.

b. Alternatives Considered

The only alternative considered was to issue a solicitation for the purchase of the same type of equipment that is currently onsite at KASOTC. That alternative is not in the Government’s best interested as it would result in a substantial duplication of costs. This was confirmed after a notice of intent to issue a sole source task order to purchase the CFE from Fluor was posted on FedBizOpps. One contractor responded that it could sell two (2) 1 megawatt generators for each to the Government. This is twice the cost that is estimated, and did not include all of the other necessary equipment that is included in the CFE.

c. Impacts if Not Approved

There are two (2) crucial impacts to the Government if this J&A is not approved. They are

(1) duplication of costs and (2) unacceptable delays.

1. As stated in paragraph 5a, there would be duplication of costs of purchasing this equipment through competition. As stated above, Fluor already has the generators and related equipment onsite. They do not charge the Government procurement costs and delivery costs. Therefore, no other vendor can provide competitive pricing and timely delivery. Furthermore, the market research solidifies this fact. A contractor responded that it could meet the requirements but it would be at twice the estimated cost.

2. If this sole source requirement is not approved, there may be an inevitable disruption of power. Fluor would take these generators offsite after the existing O&M contract has expired. Without these crucial backup generators, it would leave the KASOTC plant with unduly risk. Given the harsh environment, any of the working generators may fail at any given notice. The Government needs to have available backup generators that they can swap with in a moment’s notice. Failure to have these backup generators poses a great risk and threat to the Government’s mission and the lives of the soldiers and civilians that are currently on the compound. Even if spot generators were able to be obtained and installed in time, disrupted prime power services would likely result in using inefficient spot generation, which would require more fuel, and increase costs.

In sum, it is in the Government’s best interests to purchase the CFE from Fluor by way of a sole source task order rather than issue a solicitation for the same type of equipment. This will relieve the Government from incurring a substantial duplication of costs and incurring a great risk to the soldiers and civilians located at KASOTC, Jordan. Hence, in the interest of economy, efficiency, and risk management, the currently installed CFE at KASOTC must be purchased on a sole-source basis.

6. EFFORTS TO OBTAIN COMPETITION:

In an effort to obtain competition for the purchase of backup power plant, NAP posted a notice of intent to issue a sole source contract to Fluor for the purchase of the CFE on FedBizOpps. The only response was from a contractor that provided a price significantly higher than the estimated price (see Market Research section, below). As suspected, there is no other contractor that could provide the equipment needed, equipment which is already on site in Jordan, without substantial duplication of costs to the Government. After the Government purchases the CFE, it will solicit proposals for a new contract for the O&M of the backup power plant through the GSA Federal Supply Schedule.

7. ACTIONS TO INCREASE COMPETITION:

As discovered after posting the notice of intent, purchasing anything other than the existing CFE from Fluor will result in a substantial duplication of costs to the Government. After the Government purchases the CFE from Fluor, USACE will solicit proposals for a new contract for the O&M of the backup power plant through the GSA Federal Supply Schedule. The scope is presently being prepared by the requiring activity with an award by January 2017.

By purchasing the CFE, and providing it as GFE, competitor contractors will not be at a disadvantage due to mobilization costs required to ship leased equipment to Jordan.

Therefore, the purchase of the CFE will actually increase competition for the O&M services.

8. MARKET RESEARCH:

A notice of intent, to issue a sole source contract to Fluor to provide the backup generators and associated equipment located at KASOTC in Jordan, was posted to the Federal Business Opportunities (FBO) website on 02 September 2016. Within the notice, we clearly communicated that the Government intends on issuing a sole source contract to Fluor to procure the backup generators and associated equipment located at KASOTC in Jordan.

The notice of intent closed on 09 September 2016.

One firm submitted a response to the notice of intent. The firm stated that they can provide two (2) 1 megawatt generators with immediate delivery or one (2) megawatt generator with 4 month delivery. The contractor also provided a quote for the 1 megawatt generator for each and a quote for the 2 megawatt generator for . The contractor’s price did not include the proper cabling and miscellaneous equipment that are required to allow the generators to run at the base.

The market research confirms that allowing full and open competition does not provide a cost benefit to the Government. Therefore, full and open competition is unfeasible for this procurement.

9. INTERESTED SOURCES:

1 interested vendor. Based on the above, the vendor’s price was twice as much as the estimated price.

10. OTHER FACTS:

As stated above, purchasing this equipment requires the use of construction funds. Based on Army Regulation 415-15 and 10 U.S.C 2805(c), the Government can use Operation and Maintenance, Army (OMA) funds for minor construction projects costing $750,000.00 or less. For this requirement, the estimated amount is . Therefore, the use of OMA funds to purchase the generators at KASOTC is acceptable.

Ryan Parks

Program Manager

15 SEP 2016