HNC_EFO_Puerto_Rico_ARNG_JA_AAFC-Approved_9-28-2018_Redacted.pdf

U.S. Army Corps ofEngineers

Huntsville Engineering and Support Center

(HNC)

Repair/Replace Damaged Equipment for the Puerto Rico Army National Guard

Justification for Other than Full and Open Competition

10 U.S.C. 2304c(b)(2) implemented, under the authority in 16.505(b)(2)(i)(B), "Only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized. "

Estimated Amount:

$8,900,000.00

Justification Review Document For Other Than Full and Open Competition

Repair/Replace Damaged Equipment for the Puerto Rico Army National Guard

Requirement: To repair and/or replace Energy Savings Performance Contract (ESPC) equipment damaged/destroyed by HmTicanes Irma, Jose, and Maria in 2017 at three (3) Puerto Rico Army National Guard (PRARNG) locations (Camp Santiago, Fort Allen, and Cieba).

PRARNG is unable to realize the guaranteed savings without these repairs, which substantially increases performance risk across at the three locations listed above.

Authority: The Exception to Fair Opportunity is authorized under 10 U.S.C. 2304c(b)(2) implemented, under the authority in 16.505(b)(2)(i)(B), "Only one awardee ;s capable of provjding the supplies or servjces required at the level of quabty required because the supphes or services ordered are unique or highly specialized. "

Amount: $8,900,000.00

Prepared by:

Contracting Officer:

Technical Representative:

Requirements Representative:

Reviews: I have reviewed this justification and find it adequate to support other than full and open competition.

Program Manager:

Legal Counsel:

PARC-WIN CONCURRENCE:

HQ USACE Small Business:

Name:

HQ USA CE Technical:

Signature:

HQ Legal Counsel:

Name:

Signature:

DSN:

Date:

DSN:

Date:

DSN:

Date:

EXCEPTION TO FAIR OPPORTUNITY

Task Order Award to Johnson Controls Government Systems (JCI), LLC

Contract W912DY-15-D-0046

1. CONTRACTING AGENCY: United States Anny Corps of Engineers (USA.CE), Huntsville Engineering and Support Center (CEHNC), 4820 University Square, Huntsville, AL 35816-1822.

2. DESCRIPTION OF ACTION: The anticipated award will be a Firm-Fixed Price task order awarded to Johnson Controls Government Systems (JCI), LLC under the Energy Savings Performance Contract (ESPC) W912DY-15-D-0046 forthe repair and /or replacement of equipment destroyed at the three (3) Pue1to Rico Army National Guard (PRARNG) sites (Camp Santiago, Fort Allen, and Cieba) during the 2017 Hurricanes that hit Puerto Rico. 90% of the work is to perform repairs to the Solar Photo Voltaic (PV) Systems at all three sites and to maintain the energy resiliency (defined as the ability to withstand and recover from deliberate attacks, accidents, or naturally occurring threats or incidents as they are applied to the mission of the installation) at Camp Santiago, Fort Allen and Cieba. The remaining ten percent is to repair the lighting and other Energy Conservation Measures (ECM). 40% of the estimated value is for labor and 60% is for materials and equipment.

The Solar PV Systems and other ECMs, which were damaged at all three sites, were originally awarded under W912DY-09-D-0017/0016. The repair/replacement work will be pe1formed under the ESPC, W912DY-15-D-0046, under CLIN 0003 Utility Monitoring Control Systems (UMCS), CLIN 0009 Distributed Generation, CLIN 0010 "Renewable Energy Systems'', CLIN 0011 Energy Utility Distribution and are considered within scope. (See In-Scope Determination).

The period of performance for this task order is approximately 12 months from the date of award. Once the equipment repairs are installed and accepted by the Government, this task order will be closed. JCI will be responsible for the performance of the equipment installed under W912DY-09-D-0017, Task Order (TO) 0016 and will receive payment only if the contractual savings are realized.

The repair effort has been delayed because there were no excess savings in the existing Task Order to cover the cost of the repairs and no available funding. PRARN G requested funding and recently provided FY 18 OMA funds for the repairs and resiliency effo1ts . The estimated value is $8,900,000.

3. DESCRIPTION OF SERVICES: Equipment (Photovoltaic Systems, Lighting, Leak Detection and Rainwater Harvesting, Energy Star Refrigeration, Solar Thermal System) previously installed by JCI under ESPC Contract W912DY-09-D-0017, Task Order (TO) 0016, was severely damaged and/or destroyed during the 2017 hurricanes that affected Pue1to Rico.

JCI will repair and/or replace all damaged equipment in order for PRARNG to realize the savings guaranteed by JCI under its existing TO contract.

The proposed awardee, JCI, is the only energy savings performance contractor with the requisite technology, tools and expe1tise to conduct repairs to the equipment it provided and installed during the previous ESPC task order implementation phase. Additionally, JCI purchased and installed the equipment under an Energy Savings Performance Contract, under which JCI is responsible for the guaranteed savings stipulated in the task order and for the pe1formance of the equipment and will receive payment only ifthe contractual savings are realized.

4. AUTHORITY AND SUPPORTING RATIONALE FOR AUTHORITY CITED:

10 U.S.C. 2304c(b)(2) implemented, under the authority in 16.505(b)(2)(i)(B): "Only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized. " The initial 3rd patty financed ESPC project to provide and install equipment at the three sites was awarded under contract W912DY-09-D-0017, Task Order 0016.

Under normal conditions of an ESPC contract, the contractor is required to maintain control of all operation, maintenance, and repair of the equipment installed under the contract.

The devastating hurricanes in 2017 that affected Pue1to Rico caused severe damage/destruction of equipment installed by JCI to provide the energy savings under the ESPC at Santiago, Allen, and Ciaba. Since the Government had already accepted the equipment, under the terms of the ESPC contract, the Government now has to assume responsibility for the repair of the equipment.

Had the hurricanes not been so devastating, this task order would not be required. Due to the complexity and knowledge that the current contractor, JCI has of the equipment, facilities' footprint, and experience in performing the tasks associated with the previously approved ECMs tis in the Government's best interest to award a contract for the repair and/or replace to JCI rather than another Energy Service Contractor (ESCO):

a. JCI currently maintains the ESPC system integrity and accountability.

b. If another contractor is selected, the Government would necessarily have to partially terminate for convenience that portion of the JCI task order that includes the damaged equipment. The Government would incur partial termination costs including prepayment penalties.

c. Reducing the existing contract scope could impact the balance of the ECMs, as high and low savings ECMs are often bundled to make the financing arrangement acceptable to lenders. The result could potentially require JCI to secure a new lender or to renegotiate its loan, incurring additional costs.

d. The Government avoids creating ambiguity between JCI and another ESCO related to a potential savings shoitfall, which could place the Government in the untenable position of having to try to adjudicate responsibility for the savings shortfall.

e. Another ESCO would not have the JCI original design so it would have to create its own design and equipment list for JCI's approval to ensure the guaranteed savings.

5. Efforts to Obtain Competition: The KO contacted all twelve (12) ESCOs within the MA TOC Pool between 31 August 18 and 12 September 18 to determine their interest in proposing on the PRARNG repair effort. Nine (9) ESCOs provided a negative response, one (1) indicated "probably"; one (1) indicated "unlikely" and one ( 1) was only interested if the savings could be segregated for the repair effo1t and not associated with JCI's guaranteed savings.

The MA TOC Pool currently consist of twelve large businesses.

CEHNC is in the process of conducting an On-Ramp for small businesses under the ESPC MA TOC to ensure future TOs less than $5M may be set aside for small business concerns.

ESPC task order awards are normally competed. However, if this effo1t were competed and awarded to another contractor, the repair eff01t would be delayed approximately two (2) years based on the timeframe from contractor selection, design, installation, test and acceptance process identified under the Federal Energy Management Program (FEMP) and implemented by the ESPC program. Additionally, there would be substantial risk of interference with JCI's guaranteed savings. .

6. Other Facts:

a. Procurement History.

i. W912DY-09-D-0017, Task Order 0016 was awarded competitively to JCI on

29 September 2014 for the implementation of Energy Conservation Measures (ECMs) at three (3) PRARNG sites (Camp Santiago, Fort Allen and Cieba)

ii. The task order was yd Party Financed with an implementation price of $28,133,596.67 (Firmed-Fixed Price).

iii. The ECMs included in this task order included, Photovoltaic System, Lighting Improvements, Leak Detection and Rainwater Harvesting, Energy Star Refrigeration, and Solar Thermal System

rv. Performance Period (payback) is 16 years, 6 months. Project is currently in year 3 of performance and payments.

v. NAICS - 541330-Engineering Services

VI. PSC: N059

b. Payments. Since the equipment was accepted by the Government and damage to the equipment resulted from an "act of God'', the Government is required to continue to make the payments required under the contract, even though energy savings are not being met due to the damaged equipment.

c. New Task Order. The new task order will be closed after the equipment is repaired/replaced, tested, and accepted by the Government. The energy savings will be calculated using the original task order.

d. JCI received one task order under W912DY-15-D-0046 in September 2017. The current eSRS rep01t demonstrates JCI is making satisfactory progress in meeting all of their subcontracting goals. Under ESPC, the performance period for a task order can be up to 25 years.

7. Contracting Officer Certification

00'

8. Technical Certification:

9. Requirements Certification: "I certify that the supporting data under my cognizance which are included in the justification are accurate and complete to the best of my knowledge and belief."

10. Fair and Reasonable Cost Determination:

I hereby determine that the anticipated price to the Government for this contract action will be determined to be fair and reasonable prior to award. Price reasonableness will be determined by using cost and/or price analysis and comparing the contractor's proposal to the Independent Government Cost Estimate (IGCE) prepared for this project. The IGCE was developed using the MII Cost Estimating Software that incorporates the 2016 RS Means Cost Book for labor, equipment and materials. The rates are adjusted to reflect the current escalation rate and location factor.

APPROVAL:

Based on the foregoing justification, I hereby approve the procurement of this requirement for the repair/replacement of the ESPC equipment that was damaged/destroyed on a non competitive basis and IA W 10 U.S.C. 2304c(b)(2) implemented, under the authority in 16.505(b)(2)(i)(B), "Only one m11ardee is capable of providing the supplies or services required at the level of quality required because the supplies or sen1ices ordered are unique or Mghly specialized" in the total estimated amount of $8,900,000, and provided that the services and property herein described have otherwise been authorized for acquisition,