Monday, September 10, 2012

Other Peoples' Money for Market Research: Army Invites You to Utah

For those of you tracking the Army’s program to acquire 25% of their energy from renewable sources by 2025, another blip on the radar.  This past Friday, The U.S. Army Energy Initiative Task Force (EITF), in coordination with the Tooele Army Depot (TEAD) announced an Open House from 9 a.m. to 5 p.m. October 10 and 11 at the Tooele Army Depot located in Tooele, Utah.  This is not an industry day, related to a specific opportunity (presumably), but just a chance to come have a look around, kick the tires and see what is what.

They are inviting “renewable energy industries and public entities to come to examine real property assets and mission activities at TEAD, and to learn about the potential of developing large-scale alternative/renewable energy at TEAD”.    They also promise to make attendees “familiar with the utilization of TEAD’s work-share program”.    Apparently, work-share programs are another form of Public Private Partnership, but I am unfamiliar with them.  Feel free to comment on this so that we can be enlightened.   The goal of this meeting is to “foster an open dialogue about TEAD’s renewable energy potential and provide a forum for industry to discuss their capabilities and interests in developing renewable energy projects”.   There will also be an option to audition for the staff of TEAD and EITF.  As a caveat, the announcement says that this is for market research purposes only; no Government commitment is implied.  

This is another example of an innovative use of the new standard in Government energy investing: Other Peoples’ Money.  For only the cost of travel, lodging and food, charged to industries’ vast business development funds, the EITF and TEAD will be able to determine what industry partners are willing to pony up to see and be seen.   Will this be the first task order?  Will participation enhance one’s probability for selection for the MATOC? Will Open Houses be standard for all TOs?  Who knows??

The purpose of the Open House is to allow the Government to do market research.   The benefit to industry is the opportunity to showcase capabilities and (I speculate here) gain insight into what the EITF and installations' process might look like.  I am assuming someone from Rocky Mountain Power (RMP) or the appropriate utility, muni or coop will be presenting to help folks understand what must be done to meet their standards as well.  Would be a shame to go all that way only to discover that the 10, 400 megawatts of generation capability that RMP has, is well above requirements.

I have noticed a disturbing trend among many of my clients and potential clients of late.   For those who don’t know, I help companies understand what DOD is doing in the energy space.   In the past six months, many of my clients have decided to throttle back their focus on DOD and refocus in the commercial and industrial markets.  The reason most often given is a lack of clarity in what the Government is going to do.

This is not a reflection on DOD alone, but on the uncertainty surrounding tax/investment credits, sequestration, succession following the election and many other variables.  Lots of folks sitting on their hands AND on their wallets.   For small businesses, this can be fatal.   That the EITF is moving forward should instill confidence, but helping industry understanding what the ROI for the business development dollars spent on events like these would be, is of even greater importance.  An assumption that TEAD will be the first TO is fair, but making it a fact would encourage even greater participation.  If you attend, drop me a note and let me know how it went.  Dan Nolan


Anonymous said...

The Open House concept sounds like one of these "win/win" ideas but is the playing field level?

-Should the utility company even be invited?
-Should existing stakeholders disclose existing relationships with the Army at Toole?
-Should the Army commit to small business set asides in future contracts in return for "free" market research?
-Should the Army have "public entities" disclose if they are trying to provide subsidized services in competition with private industry?

The technology exists for the Army to easily achieve the stated renewable energy goals at a competitive cost. The problem that needs to be solved is the creation of a simple repetitive business plan so that there is a clear path to renewable energy adoption.

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