17_AUG_16_JA_FB_OM_2_MONTH_STOPGAP_CONTRACT_redacted_Redacted.pdf

CONTROL NO. LRC-JA-16-06

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. CONTRACTING ACTIVITY:

Department of the Army, Corps of Engineers Chicago District 231 South LaSalle Street, Suite 1500, Chicago,. Illinois 60604 Procuring Contracting Officer: Regina G. Blair Office Symbol: CELRC-CT Phone Number: {312) 846-5371

2. DESCRIPTION OF ACTION: The Chicago District is seeking authority to enter into a sole-source follow on contract with Smith Root, Incorporated (hereinafter, "SRI"), a US owned small business operating at 14014 NE Salmon Creek Avenue, Vancouver, Washington, 98686-1610.

a. The District is proposing to accomplish this procurement by way of a newly established firm-fixed price service contract, which will provide short-term, stop-gap services for four to six weeks. This stop gap contract is subsequent to a long-term contract that expires on 8 SEPT 2016, just prior to completion of negotiations and subsequent award of an interim contract designed to provide O&M services for a period of six to twelve months. Throughout the rest of this document, the 4 to 6-week contract will be called the stop-gap contract, and the 6 to 12-month contract will be called the interim contract. Both the stop-gap contract and the interim contract are proposed (vice a long-term contract) in order to permit USACE enough time to prepare for a competitive procurement for all or part of these essential O&M services, by or before 2018. The stop-gap contract is proposed because the identification, description and negotiation of the interim contract's numerous data deliverables, along with the associated data rights, has been more involved, and hence more time-consuming, than was realized last year. Hence, the stop-gap, contract, being of an unusual and compelling urgency, will not call for data deliverables, but rather will consist of just the services essential to keeping the Fish Barrier in operation without interruption until the interim contract is awarded.

b. Civil works appropriations have been committed for this acquisition and relative funds will be used to finance the resulting contract.

c The planned stop-gap contract is a sole-source, follow-on contract with SRI for the operation and maintenance (O&M) ofthe Chicago Sanitary and Ship Canal {CSSC} Aquatic Nuisance Species Dispersal Barriers Systems, Romeoville, IL.

3. DESCRIPTION OF SUPPLIES/SERVICES:

The Electric Dispersal Barriers /IA, llB, and Demonstration Barrier I are located at 750 and 790 East Old Romeo Road, in Lockport, Illinois, 60441. These facilities underthe cognizance of the USACE Chicago District, lie along the banks of the Chicago Sanitary and Ship Canal {CSSC}, which is part of the Chicago Area Waterway system. The barriers were constructed to deter the movement of invasive species, such as Asian Carp, between the Mississippi River and Great Lakes basins. The barrier project currently consists of three distinct parts: Demonstration Barrier I, Barrier /IA, and Barrier llB. Each of the barriers consists of steel electrodes fastened to the bottom of the canal which send a low-voltage, pulsing direct current (DC) through the water in order to repel invasive fish. Barriers /IA and llB are

I located 800 to 1,300 feet downstream of the Demonstration Barrier. They are able to generate a more powerful electric field over a larger area and consist of two independent sets of electrodes and control houses. Each control house and set of electrodes can be operated independently. A new barrier (Permanent Barrier I) is being constructed and is expected to be completed in late 2017 /early 2018. The operation and maintenance of the new barrier will not be included in this or the interim contract.

By way of this proposed contract, SRI will be required to furnish the minimally necessary management, personnel, services, tools, meters, parts, materials, supplies, and equipment required to operate and maintain Demonstration Barrier I, Barrier llA, and Barrier llB. This includes monitoring, maintaining, and repairing the essential pulse-generating systems, telemetry control systems, and other absolutely necessary support systems. Monitoring is to be provided 24 hours/day, 7 days/week. Various scheduled maintenance events will occur on bi-weekly and_ quarterly schedules.

The estimated value of this work is for 4 to 6 weeks of O&M services. This stop-gap contract will provide uninterrupted O&M services for the barriers until a new interim O&M contract can be awarded for 6 to 12 months of services. The interim contract will take a few weeks to negotiate, since it will · include data deliverables that cannot be negotiated in a week or two. Hence, the interim contract will be negotiated during the 4 to 6-week life of the stop-gap contract. Overall, the long-term plan for the Chicago District is to develop and solicit a competitive three to five-year O&M contract that will include all operations tasks and as many maintenance tasks as possible. Another parallel and concurrent contract will likely be necessary for the specialized maintenance services that require the technical expertise of SRI or a similarly skilled firm. That may require a further sole-source contract with SRI, but with a significantly reduced scope and value. Meanwhile, for our current pressing short-term need, the described stop-gap contract, the Contractor will maintain essential O&M services for a brief four to six weeks, permitting USACE Chicago District enough time to capably and competently negotiate the 6 to 12-month interim contract.

4. AUTHORITY CITED: 10 U.S.C. 2304(c) (2), as implemented by 6.302-2, Unusual and Compelling Urgency. Specifically, the relevant authority is FAR 6.302-2(a) (2) "When the agency's need for the supplies or services is of such an unusual and compelling urgency that the Government would be seriously injured unless the agency is permitted to limit the number of sources from which it solicits bids or proposals, full and open competition need not be provided for."

5. REASONS FOR AUTHORITY CITED:

a. Background: The Fish Barrier System is unique in the world with regard to its size and purpose, which is to completely stop invasive species from transiting a large waterway. Prior to working on the CSSC Barriers, SRI had done extensive research and development on electric deterrent systems for intake structures and mobile deterrent systems on vessels. The Corps contracted with SRI to build Demonstration Barrier I (Contract No.DACW23-00-C-0001- Demonstration Barrier), which was experimental. Building upon the lessons learned with Demonstration Barrier I, the Corps contracted with SRI to construct Fish Barriers llA and llB (Contracts DACW23-03-C-0013 - Dispersal Ba_rrier llA; and W912P6-10-C-0007 - Disp.ersal Barrier llB), which were much more complicated and powerful than the Demonstration Barrier.. A Barriers' O&M solicitation was advertised as a full and open competition in 2012, but the Corps only received a proposal from SRI. Hence, the long term Barrier O&M contract (Contract No.W912P6-13-C-0001) was awarded to SRI on November 09, 2012. For reasons described herein, this contract was recently extended for six months to September 2016. Hence, the Chicago

District needs a bdef, 4 to 6-week stop-gap contract, permitting uninterrupted operation of the Fish Barrier until a 6 to 12-month interim contract can be established.

The Chicago District held an Industry Days event for the Electric Dispersal Barriers on 28 and 29 January 2016. The afternoon of 28 January featured in-office presentations on the barrier system to potential contactors. Attendees were then provided an opportunity to tour the site on 29 January. Feedback from this event indicated that there is definite interest among other firms in. providing services at the barriers, but also significant concern that companies other than SRI would have enough information about the barrier systems to effectively operate and maintain the barriers.

SRI has indicated a willingness to provide most of the information requested. However, SRI and the Corps have agreed that this information was never specifically requested as deliverables before and requires time and effort to compile. Therefore, the control system data deliverables are being included in the described interim contract. The data deliverables will not be part of the proposed stop-gap contract, being impracticable to incorporate such a detailed, involved requirement for a stop gap contract that will last no more than 6 weeks. Rather, the stop-gap contract will include just enough services to keep the Barrier functioning without interruption until the interim contract is awarded. The stop-gap contract can only be provided by SRI, and the stop-gap is of an unusual and compelling urgency because having no O&M services at the Barrier for 4 to 6 weeks would be very risky, and probably result in an interruption in Barrier operation. Such a breach is intolerable, as is described herein.

b. Justification: SRI is the only viable available source for this urgent, stop-gap contract because they are the only firm that has the existing knowledge to operate and maintain all parts of the barrier systems and to provide the control system data deliverables, with such short notice. SRI built each of the existing barriers to be operated and maintained under the proposed contract and developed and installed the system to control pulsing the barriers that is called the Fish Barrier Telemetry Control System (FBTCS). SRI has not licensed the FBTCS technology for use by others. Hence, any contractor other than SRI would have to spend months, or even years, to learn how to understand and use the previously procured equipment to establish O&M methodology and procedures adequate to support efficient and uninterrupted functioning of the barriers. So, SRI alone can provided these stop-gap services with almost no notice. The pulse-generating control system is mission critical for all Barriers.

The purpose of the barrier is to stop the movement of fish. The pulses of DC current transmitted to the water are what deters the fish. If pulse generation strays from its specified parameters or stops entirely, the barrier becomes ineffective. Variation of the electrical parameters outside of specified ranges could also lead to electrical safety hazards for operators stationed at the barrier. Therefore, th'e performance of the pulse-generation control system is crucial to both project effectiveness and project safety. The O&M of the barrier is integral to such effectiveness and safety. In particular, since this is an extensive, complex, and highly energized system, it cannot run efficiently for any extended period of time without engineers and technicians who know how to operate and maintain it. Such continuous and flawless operation is critical because the Barrier cannot be breached, for even a few minutes, by invasive species.

As mentioned above, a break in services from SRI for 4 to 6 weeks would probably result in such a breach, permitting the invasive species into Lake Michigan. Again, only SRI can provide this service, and the stop-gap contract is of unusual and compelling urgency because a 4 to 6 week lapse in services makes a breach an unacceptably high risk. In summary, any contractor besides SRI for the stop-gap contract means intolerable risk-i.e. too little, too late.

SRl's unique technology is an integral part of the CSSC Barriers, which include a sophisticated and customized control system designed by SRI.

While another contractor may be able to design a different control system to accomplish the same goal, it would be at a substantial duplication of cost, and create an unacceptable delay as discussed further below.

SRl's key personnel include PhDs, scientists and engineers who have been involved with the design and programming of the FBTCS, and who are also aware of the lessons learned with the design and installation of the CSSC Barriers. As a direct result of its experience under our barrier contracts, SRI has continued to develop and refine its analytical models and techniques and methods to improve its technologies, specifically in the Great Lakes region, and directly on the invasive Asian Carp species.

Another contractor would have to start from the very beginning to learn by investigation and experimentation how to maintain continuous and effective and safe operation and maintenance of the barriers.

. Compilation and delivery of the necessary data is to be accomplished through the data deliverables to be requested in the anticipated interim contract. Hence, only SRI can do this for 4 to 6 weeks, beginning 8 SEPT 2016. Hence, we have undeniably identified an unusual and compelling urgency to award the stop-gap contract to SRI.

In the meantime, for a new contractor to learn how to operate and maintain the control system, without having developed said system or having detailed documentation of it, would be the biggest challenge, in terms of both money and time. Without necessary information, as well as hands-on training, any other firm would need to re-engineer the control systems. It would not be simply a design effort for another party to develop a similar integration and control system; it would truly be a research and development effort. A typical engineering firm would not do this type of work. Another competitive source would have to be willing to invest in the necessary up-front development. This is a barrier to competition because there isn't a large national market for fish barriers (not many are built) and the large entry cost involved in getting up to speed may not have a big return in terms of the number of future projects that can be won. Therefore, the Government would likely have to fully pay forthe research & development efforts undertaken to develop a competitor. It is difficult to provide any type of cost estimate for what this would cost and any specific estimate would not have a high confidence level. However, the cost would surely exceed the for the stop-gap contract. There is also no reason to believe that an inexperienced contractor without full documentation information could operate and maintain the existing barriers for Jess than the estimated cost for SRI of for up to 6 weeks, let alone do so with any measure of confidence in avoiding a complete system failure.

In summary, even if another contractor was able to secure the control system, we cannot presume that they would be able to operate and maintain the control system so as to prevent a momentary breach, let alone a complete failure.

c. Risk: Competition and/or delays cause Barrier risk to climb very high regarding the interim contract, and especially so regarding the stop-gap contract. Unacceptable delays would be encountered, with glaring risk, if this war)< were performed by another Contractor in the next few months. As discussed in Section S.d above, and thus SRI has not shared sufficiently detailed specifications to allow USACE to create a solicitation that could operate the system. Another contractor would have to spend a significant amount of time in order to fully understand and operate the Fish Barrier Telemetry Control System (FBTCS) or develop their own system but that research and design effort would likely take several years. Such precious time is not available to us over the next few weeks. Hence, no other contractor could "ramp up" to learn how to operate and maintain the barriers in the six to twelve months proposed for the interim contract, let alone the brief but crucial 4 to 6-week stop-gap contract. Again, this stop-gap contract is to start in just 4 weeks.

We have established that competition is needed for the many Fish Barrier projects. But as described, the time entailed in such competitive procurements is intolerably risky at this time. The significant delay on this contract would critically impact the project purpose. The CSSC is a man-made waterway that connects the Chicago Riverto the Des Plaines River, creating the only continuous hydraulic connection between the Great Lakes basin and the Mississippi River basin. Movement of invasive species offish between these basins is a significant concern. Currently the biggest concern is the potential movement of Bighead and Silver Carps, commonly referred to as Asian Carp, from the Mississippi basin to the Great Lakes. These species have the potential to greatly reduce native fish populations in areas they occupy.

There is significant concern about the impact they·cauld have on the commercial and sport fisheries of the Great Lakes. If the proposed contract was presently changed to a competitive procurement it would likely yield the same result of an award to SRI. SRI was the only bi.cider for the previous attempt to competitively advertise O&M of the CSSC Barriers (which resulted in W912P6-13-C-0001).

The Chicago District is working with SRI to ensure that SRI provides all data deliverables associated with the existing barriers via the inclusion of data deliverable requests in the interim contract. Therefore, although competition will be feasible in the future, it is unfeasible for enough lead-time to be realized to compete the interim contract, Jet alone the stop-gap contract, within just a few weeks, or even months. Again, the stop-gap contract will permit USACE enough time to quickly negotiate the interim contract, which will include the much-needed data deliverables. Extra effort would have to be put into publicizing the project to attempt to draw out bidders. Also, given the specialized nature of the work, the solicitation process would have to include submittal of proposals and review by a selection board, rather than a low bid selection. These delays to the project schedule are unacceptable. A delay is tantamount to a breach, a barrier breakdown ... This stop-gap contract is of unusual and compelling urgency because in less than 30-days the current contract expires. Until the interim contract is realized, only SRI can provide these O&M services without putting the Barrier at undue risk. The interim contract is the unavoidable segway to competitive procurements.

6. EFFORTS TO OBTAIN COMPETITION:

a. Efforts To Avoid Perpetuating a Sole Source Environment: Based on information in paragraph 5, competition for this action, as well as the interim contract, was not feasible at this time. In the District's efforts to avoid perpetuating a sole source environment for this project, since the inception of the Fish Barrier project, the District has promoted and provided competition to provide the most advantageous contracts for the government. The last CSSC Barriers O&M contract was competitively advertised.

Smith-Root was the only bidder for the previous attempt to competitively advertise this work (which resulted in W912P6-13-C-0001). The solicitation was posted with detailed as-built drawing and all available operation and maintenance manuals. The documents included the following:

1. As-Built drawings for 2A, 2B, and Demo Barriers; 2. SRI O&M Manual for Demo Barrier (circa 2002);

3. SRI O&M Manual for Barrier 2A (updated 10/8/2012); 4. SRI O&M Manual for Barrier 2B (updated 1/16/2013)

In orderto obtain future competition for work at the CSSC Barriers, the Chicago District held an Industry Days event on 28 and 29 January 2016. Over 150 contractors attended this event .. Feedback from this event indicated that there is definite interest among other firms in providing services at the barriers, but also significant concern that companies other than SRI would have enough information about the barrier systems to effectively operate and maintain the barriers. The Chicago District believes that obtaining the control system data deliverables to be requested in this proposed contract will provide the necessary information to initiate true competition for O&M services. O&M services will be transitioned to competition as soon as practicable. Competition is unfeasible for a 6-week stop gap contract that starts in early September. Again, this is a pressing requirement that cries out for swift action.

b. Promoting SB Subcontracting Opportunities: Our efforts relating to promoting SB subcontracting opportunities will be to continue to encourage the proposed contractor to use other small businesses to

· the maximum extent practicable

7. ACTIONS TO INCREASE COMPETITION: On June 13, 2016 the interim requirement was announced at the Government's point of entry, the "Federal Business Opportunities" (FBO) website. Under the notice, the District publicized its intent to sole source the proposed work to SRI. No responses resulted from that announcement by the response due date, June 29, 2016. To date, SRI has no authorized providers for O&M of their barrier systems. The stop-gap contract was not synopsized, being exempt under FAR 5.202(a) (2).

The Corps of Engineers will also continue to stage regular industry days and construction conferences to invite comments and input from potential contractors.

Competition is not practical for the stop-gap contract, since it will start just a few weeks, and will last no more than 6 weeks. Again, the interim contract, with data deliverables and associated data rights, is our necessary segway to competition.

8. MARKET RESEARCH: To ensure that market research efforts would provide comprehensive acquisition management information, our search focused on identifying commercial sources of fish deterrence technology and electric fish barrier manufacturers, distributors and dealers, via published and on-line resources. Because SRI has their own unique design and associated proprietary knowledge, there were no other producers of such technology or products. See description of our Industry Days, described above, in paragraph 7.

9. INTERESTED SOURCES: Although the interim contract was announced on FBO, the stop-gap was not, being exempt under FAR 5.202(a) (2), which frees actions of such notable urgency from the requirement for synopsis. However, regarding the interim contract, as required by FAR 5.201, a notice was published at FBO, informing all interested parties of the intended interim contract procurement. As expected, there were no responses from interested vendors.

10. OTHER FACTORS:

a. Acquisition History: Presently, Smith-Root holds unique and intimate knowledge of how to assemble the components into a system and precisely control and monitor the resulting integrated pulse-generating system to ensure effective and safe O&M. As described herein, this k.nowledge is essential to the need to operate and maintain the barrier system without any failures

b. Design Aspects: SRI developed the pulse-generating control system, custom builds the circuit boards to control the operation of the system, wrote the source code for the FBTCS and integrated the electronic components of the fish barrier deterrent system. This makes direct competition in their specialty area very unattractive and no others have chosen to develop competing technology.

Because direct competition has not been realized for the production of this particular equipment, there hence have been no firms to develop the necessary skills for the O&M of this fish barrier control system. No other firms have designed such systems, and likewise no other firms have operation or maintained such systems. So, although this contract is not for system design, it logically follows that since no other firm has designed these systems, there are as of yet no other firms who have been able to even begin a learning curve on such specialized systems.

c. Subcontracting Opportunities: The proposed contractor's business size is small; therefore, a SB Subcontracting Plan will not be required. However, SRI in the past has sub.contracted some of the non-specialized portions of the required work to other small businesses. The District will continue to encourage the contractor to use other small businesses to the maximum extent practicable.

11. TECHNICAL CERTIFICATION:

I certify tbat the supporting data under my cognizance which are included in the J&A are accurate and

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I certify that the supporting data under my cognizance which are included in the J&A are accurate and complete to the best of my knowledge and belief.

Name:

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I certify that the supporting data under my cognizance which are included in the J&A are accurate and complete to the best of my knowledge and belief.

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Title: . r _ ::,___ _ cc_:

14: OFFICE OF COUNSEL:

I certify that the supporting data under my cognizance which are included in the J&A are accurate and complete to the best of my knowledge and belief.

Name:

13. FAIR AND RESONABLE COST DETERMINATION: I hereby determine that the anticipated cost to the Government for this proposed contract will be fair and reasonable. The contractor's proposal will be evaluated using cost/price analysis and if necessary DCAA audit recommendations to assess whether the costs proposed are current and justifiable. The final negotiated agreement will give full consideration to all contractual requirements including delivery schedule to support this determination, If this acquisition is more than $750K, the contractor will be required to supply a certificate of current cost and pricing data.

Name: Regina G. Blair Date: 16 AUGUST 2016

Title: Contracting Chief, Chicago District Signature: _

14. CONTRACTING OFFICER CERTIFICATION AND APPROVAL: I certify that this justification is accurate and completed to the best of my knowledge and belief and approval same, subject to availability of funds, and provided that the services and property herein described have otherwise been authorized for acquisition.

Name: Regina G. Blair Date: 16 AUGUST 2016

Title: Contracting Chief. Chicago District Signature: