Tuesday, August 28, 2012

MATOC Industry Day: More Blind Date than Match Making

I attended the $7.1B Army PPA MATOC industry day, hosted at Redstone Arsenal by the Huntsville Corps of Engineers along with about 600 interested and, in some cases, anxious parties. When I wrote about this last week, I emphasized the opportunity for match making. The reality did not meet the opportunity.   The briefings were as informative as contracting specialist can make them and many questions were answered.  Many were not.  The desire for a number of the industry attendees was to find team partners, but the Corps folks hadn’t figured that out.  All name tags were just generic “VISITOR” badges and all questions had to submitted on cards to preclude advertisement in the disguise of a question.  Still, at the end of the day, the Corps did offer to distribute the attendee listing via Projnet.  They are getting there.

The bottomline is that this MATOC is employing a tried and true process to do something that has not really been done before.  The Corps and the Army Energy Initiative Task Force are finding their way, making sure they are as open as they can be and still maintain consistency with the Federal Acquisition Regulations (FARs).  The FARs are not exactly the most flexible set of rules around, but they are the most exacting.  Every compliant proposal will be awarded, according to the folks there.   The challenge will be in being compliant.  The most demanding requirement, for past performance, will make or break proposals.

For the four technologies specified (solar (2MW), wind, biomass, geothermal (4MW)), proposers for any of the techs would have to demonstrate that they had designed, financed, built and operated that technology in three or more commercial projects in the United States in the same general application as in the proposed project, and that it has been in operation in each such commercial project for at least  three years.   If you do not have the requisite past performance, you can’t propose for that technology.  Proposers may be certified in one technology, but not in another.  There will be no communication with the source selection board, so get it right the first time.

The other bone of contention was over the requirement for a price for a given technology.  John Lushetsky of the AEITF gave me a good explanation of the FAR requirements for a price in a MATOC, but when one thinks about a number that will serve as the ceiling for future pricing on task orders with the potential of a 30 year contract, one can become nervous and giggly.   Too low and you will never make a cent; too high and you are non-compliant.  My guess is that it will be difficult to disqualify a proposer on price, but if you provide the price per kilowatt-hour for your tech at 4:00 p.m. on August 4th in downtown L.A., you should not be far off.

Several attendees asked questions regarding specifics of the eventual task orders that will come out. The Corps team flatly refused to discuss TOs.   The AEITF is working to develop those, but gave no indications when the first TOs would be released.  The AEITF will be coordinating NEPA, DOD Energy Clearing House and other administrative tasks in order to relieve industry of those burdens.   The challenge for the AEITF and Industry will be the pace at which those TOs are released.  Too fast and business development budget can be overwhelmed.  Too slow and potential bidders will have to move on to other projects.  What would be useful is some sort of indication of the types of technology being considered by installation to allow for initial research.  This would have to be consistent with the requirements of the FARs.

Although not a major topic of discussion, interaction with the utilities did come up.  The Corps representatives allowed as that they could use the provision of USC 591 to “circumvent” the utilities if they are “unwilling or unable to meet unusual standards of service reliability that are necessary for purposes of national defense”.  The SecDef can authorize “purchasing electricity from any provider if the Secretary finds that the utility having the applicable state-approved franchise (or other service authorization)” won’t play ball.  Of course if the local utility feels cut out of the process and subject to lost revenues, then interconnection and wheeling charges could be astronomical.  Those charges are not to be included in any pricing.

As regards Energy Security, according to the RFP, “grid isolation technology will likely be required as defined in the Task Order so that a continuously operated plant will self-isolate and remain functional upon external grid power failure. The grid isolation effort will be included as an optional price in the Task Order”.  When asked about energy storage, the Corps panel said that would take it if it were free, but they were not interested in paying for it.  An intermittent technology without storage provides no energy security.

This is not a perfect process, nor will it ever be, but it is an enormous step that will provide an instrument for anyone in DOD to use in order to go after renewable energy.  The MATOC is only the license to hunt; the real business is in the task orders to come.   In those TOs will be the provisions for energy security and the details necessary to answer all (or most) questions.    Get writing! Dan Nolan

UPDATE:  The EITF has created a LinkedIn Group to facilitate match making.  Check out their Group!  Dan Nolan

Monday, August 20, 2012

Matchmaking in Huntsville: Intel Gathering and Speed Dating

Packing my bags for Huntsville and the pre-proposal conference for the contract “Renewable and Alternative Energy Power Production for DoD Installations”.  This will be a great opportunity to gather intelligence, but also do some match making.  Given the requirements for small business participation and the heavy past performance prerequisites, teaming and joint ventures are going to be the rule rather than the exception on this contract.  If you are a small business with power purchase agreements under your belt, please contact me here or seek me out at the conference.  Have I got a deal for you!

Wednesday, August 15, 2012

Post RFP, Pre-Proposal Conference: BBQ instead of Crow in Huntsville

In order to get the taste of crow out of my mouth, how about some good ‘ole Alabama barbecue?  I am headed to Huntsville, AL next week to take care of that, oh, and to attend the pre-proposal conference at the Sparkman Center, Redstone Arsenal on 22 August. The  conference for the contract “Renewable and Alternative Energy Power Production for DoD Installations”, hosted by the US Army, Corps of Engineers, Huntsville office, will be at the Bob Jones Auditorium, Sparkman Center, Redstone Arsenal, Building 5300, Martin Road, Huntsville, AL. 

Thursday, August 9, 2012

5th Fuel Gets a Green Paint Job: Army Seeks Renewed ESPC Contract Interest

I was very surprised to see the latest Huntsville solicitation that hit the streets recently.  No, not the multibillion dollar PPA RFP (I’ve had my fill of crow on that one), but the multimillion dollar energy saving performance contract source sought.      One might wonder at the timing of this release, without the usual fanfare from the Army energy office.  Obviously, it has no interest from the Energy Initiative Task Force whose sole focus is big renewable projects.   Bringing this out on the heels of the much ballyhooed PPA deal would tend to distract, not bring attention to the potential project(s).   Regardless, I have always been a huge proponent of the “5thFuel”, energy conservation and this addition to the tool kit is much welcomed.

As most know, the Army has had a separate ESPC contract vehicle for some time.  This is the 3rd iteration. Army installations have always had the choice to use the Army vehicle, the DOE instrument, ESCO's on the GSA schedule or to initiate a stand-alone, separate contract.  Historically the Army has used the DOE contract vehicle and the Army's own vehicle in equal measure. 

If you look at the past 18 months, the Army has streamlined its ESPC contracting process so that individual task orders get done in about 14 months or less on average.  Also there are about 50% more actions on the Army as compared to the DOE contract vehicle.   

The news here is that due to the Army's overall increased use of ESPC's the past 2 years, there is an emerging requirement to recompete the ESPC vehicle earlier than anticipated to ensure a vehicle  is in place to replace the current contract before the ceiling on that contract is reached.   Meeting market demand?  What a concept!

So, what are the differences between what DOE is doing and what Huntsville wants to do?    I asked folks in the know in the Army and got their take:

-          Army vehicle has been faster from start to finish.    The Army vehicle requires installations to pay up-front, out of Base Operating Support funds. The DOE vehicle rolls in all "project facilitation" costs into the contract, paid back over time.  There will be  a  different set of ESCO's on each vehicle, and in some regions of the country an installation may want to use the vehicle that offers access to an ESCO that is strong in that region.
-          DOE has traditionally had better access to technical experts at DOE labs than the Army (which is good for projects that include renewable).  The Army feels they have addressed this and are now doing ESPC's out of Huntsville with renewable.
If the Army can figure out how to overcome some of the concerns Commanders have in using the current ESPCs (M&V mistrust, egregious markups, etc.), then good on them.  More work for everyone is a good thing, so if you are in this business, get you names in and keep me posted on the process.  The Army clearly has the bit in their teeth and are off to the races.  And good job keeping it on the down low, if that was the intent.   Dan Nolan

Tuesday, August 7, 2012

Chomp, chew...can't talk.....right now.  Mouth full of crow.....read this.   RFP, FAQs and all things Huntsville related are here.  Responses are due 5 Oct 2012 (Amend. 1).  To the ProposalMobile!!  Hmmmm....feathers.....

Friday, August 3, 2012

Navy Goes Back to the Well: Repeat Opportunity at China Lake for Renewable Energy

No news on the Army’s Renewable and Alternative Energy Power Production for DOD Installation solicitation.  The 26 July notice indicated that it will be on the street within the next 15 days, so watch your lanes.  Circle 10 August on your calendars! 

The Air Force and Navy approaches to the Presidential one gigawatt per service goal continue to follow a more decentralized path, although both Services have EITF-like organizations.  The USAF’s Renewable Energy Project Development (REPD) Subpanel vets potential projects and then passes on winners to the appropriate AF agencies for execution. 

The Navy released a Shore Energy Policy in late June to describe how they will achieve their piece of the pie.  The policy defines energy security and is clear on what that means: “Provide reliable, resilient, and redundant mission critical sources to Navy tier I and II task critical assets (TCA) ashore”.   The Navy has had a Shore Energy Policy Board since Oct of 2001, who could fulfill the screening/vetting role .  It is unclear if they are passing out projects, but that being said, in pursuit of their one gigawatt goal, the Navy is going back to the well.  Literally.

The Navy released a sources sought solicitation for “Large Scale Renewable Energy Generation facility at Naval Air Weapons Station (NAWS) China Lake”.  For those not familiar with China Lake, it is the home of the DOD’s largest renewable energy power plant(s), 270 megawatts of geothermal generated electricity.  The four plants are owned by commercial interests.  The Navy is now looking for ideas in the 20-200MW range at China Lake.  The solicitation does not specify a technology.  While we wait on the Army MATOC, go check out the Navy’s offering.  Service the close in target while you wait for the deep battle to begin.  Dan Nolan