D.4_-_Abnormal_Operations.docx

Scope and Qualifications for CLIN X0003 Attachment 3 (D.4)

Abnormal Operating Conditions and Incidents at LNG Facilities

1.0 Objective

The objective of this contract is to procure Liquefied Natural Gas (LNG) technical expertise services to review abnormal operating conditions or incidents at operational LNG facilities.

2.0 Introduction

The Federal Energy Regulatory Commission (FERC or Commission) requires a contractor to examine abnormal operating conditions or incidents at operational LNG facilities and this statement of work (SOW) describes the services required for carrying out that work. As part of this effort, the contractor is expected to review technical documentation related to the facility’s LNG storage tank or incident including related studies, reports, analyses, engineering design information, operations and maintenance procedures, and repair plans.

3.0 Background

The mission of the Office of Energy Projects (OEP) is to foster economic and environmental benefits for the nation through the approval and oversight of LNG projects that are in the public interest.

The Commission regulates the transmission of natural gas in interstate commerce and reviews proposals to build LNG facilities. Companies that propose to construct, operate, and maintain jurisdictional LNG facilities must secure approval from the Commission in the form of an Order Issuing Certificate or Order Issuing Authorization. To monitor compliance with its orders and regulations, the Commission conducts technical reviews and on-site engineering inspections during construction and operation of the LNG facilities. In addition, FERC jurisdictional LNG facilities are required by Conditions in the Order to file semi-annual operational reports that include specific information related to facility design and operating conditions. These facilities are also required to report significant non-scheduled events, including safety related incidents (e.g., LNG, condensate, refrigerant, or natural gas releases, fires explosions, mechanical failures, unusual overpressurization, and major injuries). In the event of an incident, the Director of OEP has delegated authority to take whatever steps are necessary to ensure operational reliability and to protect human life, health, property, or the environment, including authority to direct the LNG facility to cease operations. Following the initial company notification, Commission staff will determine the need for a separate follow-up report.

The Commission has an immediate need for an experienced LNG engineering consultant to examine abnormal operating conditions or incidents at operational LNG facilities and to ensure that all necessary actions are being taken to protect the public, property, and the environment from potential hazards. If applicable, the lessons learned will be applied to other LNG facilities under FERC jurisdiction.

4.0 Scope

The scope of this contract is to perform the following duties:

1. Review and evaluate the condition of the Project design features and operations.

2. Review and evaluate whether the LNG storage tank, equipment, or system involved in the incident should inspected for extent of damage.

3. Review and evaluate current and proposed risk reduction measures of the Project.

4. Review and evaluate permanent and/or temporary repairs and modifications of the Project features and operations.

5. Review and evaluate whether lessons learned from the incident would apply to other LNG facilities.

These reviews will require the consultant to examine project documents as it relates to the incident that will include but not be limited to: process design documents, operation and maintenance procedures, management of change documents, investigative reports and studies including the Root Cause Failure Analysis Report, damage assessments, repair procedures, and data request responses. The contractor will review this documentation to provide suggestions, comments, questions, and/or recommendations to ensure the applicable facilities are being evaluated, inspected, repaired, and operated in a safe manner and to prevent recurrence of a similar incident. The review shall be based on professional experience, good engineering practices, federal regulations (i.e, Title 49, Code of Federal Regulations, Part 193), industry standards, international LNG experience, FERC guidance documents, and historical or recent industrial accidents and incidents. Additionally, recommendations for improvement or changes that could impact other LNG facilities to ensure that future incidents can be avoided shall also be provided.

5.0 Deliverables

5.1 Abnormal Operating Condition/Incident Review

1. Abnormal operating condition/incident review and engineering data request — The contractor shall conduct a review and evaluation of the abnormal operating condition/incident including: a) condition of project design features and operations; b) whether LNG storage tank, equipment, or system involved in the incident should be inspected for extent of damage; c) current and proposed risk reduction measures; d) permanent and/or temporary repairs and modifications of the Project features and operations; and e) whether lessons learned from the incident would apply to other LNG facilities. The contractor shall submit a summary of the technical evaluation to FERC staff as indicated within the Scope of Work.

In addition, as a result of the abnormal operating condition/incident review, the contractor shall prepare engineering data request questions. The technical evaluation summary and engineering data request questions shall be provided to the COR and appropriate FERC staff 45 days after the contractor's receipt of the technical documentation. Actual timetables/schedules shall be determined by the FERC staff and may be adjusted as necessary to resolve unexpected issues (a general schedule is provided in section 8.0). The questions shall include a basis for the question (reason for the question), references to the technical documentation (i.e. report, P&ID number(s), design specifications), and any background information that would be helpful in understanding the question.

2. Technical meeting and recommendations — The contractor shall participate in a technical meeting with FERC staff by reviewing the Company responses to the engineering data request and determining whether the response meets the intent of the question.

After the technical meeting, the contractor shall develop a list of final recommendations on what next steps FERC should take which shall be provided to the COR and appropriate FERC staff one week after the technical meeting is held. Actual timetables/schedules shall be determined by the FERC staff and may be adjusted as necessary to resolve unexpected issues (a general schedule is provided in section 8.0). The contractor shall also include a brief explanation after each recommendation discussing why it is needed and what the Company would likely need to do to satisfy the recommendation if applicable.

6.0 Personnel Qualifications

Experience: Personnel qualifications shall demonstrate a minimum of five (5) years’ experience in design, operations, maintenance, safety, and/or fire protection engineering experience at industrial facilities or engineering firms with particular emphasis on processes involving LNG. Prior work experience associated with LNG facilities is more heavily valued and preferred over experience in other industrial facilities that do not involve the design, operation, and maintenance of processes that handle cryogenic fluids.

Education: Bachelor's degree in chemical, mechanical engineering, fire protection, or petroleum engineering or a combination of certifications and experience.

Functions: The engineer shall have sufficient technical expertise and experience to recognize potential and actual flaws in the design of an LNG facility and determine whether the design would need modifications. Emphasis shall be placed on the safe design, operability, and reliability of the facilities, including their possible interactions with existing/adjacent equipment. The basis of review shall include good engineering practices, federal regulations, industry standards, FERC guidance documents, prior experience, precedents, and engineering knowledge. The engineer shall have excellent interpersonal communication, organization, and time management skills. The engineer shall respond timely to inquiries from FERC staff and also present written and oral briefings and reports to FERC staff.

7.0 Additional Technical Requirements

7.1 The contractor shall furnish all labor, materials, equipment, facilities, software, transportation, and incidentals necessary to perform in accordance with this SOW, and associated terms and conditions. The contractor shall communicate with the FERC COR and FERC Project Manager as necessary to ensure all project related tasks are performed in a timely manner.

7.3 A deliverable is defined as any document/report that is required to be generated during the period of performance of the contract as outlined in the SOW. The contractor shall submit deliverables through the COR for review and approval. The COR shall respond to the deliverables submitted with a formal approval or non-approval. Deliverables shall be submitted via email using software compatible with FERC's systems along with a hard copy. In the event that document exceeds the email capacity of either party, the contractor shall setup a secure file transfer site for transfer of large documents. All deliverables are the property of the FERC and the information contained in the reports is considered proprietary.

7.4 The contractor shall participate in technical meetings/conference calls with FERC staff. Based upon these technical meetings, the contractor shall submit reports to the FERC staff setting forth the technical evaluation, recommendations, and conclusions for the various work efforts listed above.

7.5 The contractor shall promptly notify the FERC Project Manager and COR of any noncompliance resulting in significant impact and if a scheduling change is necessary to complete the assigned task. In no case shall this notification exceed 24 hours.

8.0 Schedule of Performance

Unless otherwise indicated, the tasks described in this SOW shall be accomplished by the contractor, with review and approval by the COR and FERC staff, according to the following estimated schedule:

Abnormal Operating Condition/Incident Review

9.0 Place of Performance

The primary place of performance is the contractor's facility with travel within the U.S.

10.0 Communication Protocol

FERC staff shall obtain and provide the contractor with the necessary initial background and technical material including facility specifications and design details related to the abnormal operating condition/incident. This information shall serve as a basis for the review. FERC staff shall be responsible for scheduling/coordinating any additional information needed from LNG facility.

The contractor as needed, shall make arrangements to meet with the COR (in person, by teleconference, etc.) to obtain additional direction and clarification on the task assignment. Regular interaction between the contractor and the COR is expected to occur to ensure that both parties are informed of ongoing developments.

The contractor shall also be responsible for participating in technical meetings/conference calls with FERC staff. Based upon the technical conferences, the contractor shall submit reports and findings to FERC staff. Reports and findings include a written technical evaluation, recommendations and conclusions for each technical meeting.

11.0 Applicable Documents

The applicable documents needed to complete any of the services described in section 4.0 shall be provided by the COR. Upon submission and approval of the Organizational Conflict of Interest (OCI) and CEII Non-Disclosure Agreement (NDA) certifications FERC shall provide the contractor access to the necessary engineering reports and correspondence. The COR may provide additional materials upon request and/or may direct the contractor to obtain materials directly from eLibrary.

When the contractor has completed the review of a facility and the information is no longer needed, the contractor shall either shred or burn all propriety information, or return it to the COR for disposal. If the contractor chooses to burn or shred the project information, a confirmation/receipt of this action shall be provided to the COR within five (5) days.

12.0 Travel

12.1 All travel shall be approved in writing by the COR.

12.2 The contractor shall coordinate travel arrangements with FERC staff. Travel will be performed in accordance with the FTR. Special transportation methods (e.g. helicopter, small plane, or boat) are not required for this contract. The contractor shall coordinate payment arrangements with the COR for submission to FERC's Division of Financial Services.

13.0 Quality Assurance / Control

13.1 All final documents shall be reviewed and edited by the contractor to ensure that the document is both technically and grammatically correct. Final documents shall be organized in a logical manner.

13.2 The contractor shall only tender for acceptance those deliverables that conform to the requirements of this contract. The Government reserves the right to inspect all deliverables that have been tendered for acceptance. The Government may require correction of non-conforming deliverables at no increase in price. If correction is not possible, the Government may seek an equitable price adjustment or adequate consideration for acceptance of the non-conforming deliverables.

14.0 Special Contract Requirements

14.1 Confidentiality of Information

(a) To the extent that the work under this contract requires that the contractor be given access to confidential or proprietary business, technical, or financial information belonging to the government or other companies, the contractor shall, after receipt thereof, treat such information as confidential and agree not to appropriate such information to its own use or to disclose such information to third parties unless specifically authorized by the Contracting Officer in writing. The foregoing obligations, however, shall not apply to:

(1) Information which, at the time of receipt by the contractor, is in the public domain;

(2) Information which is published after receipt thereof by the contractor or otherwise becomes part of the public domain through no fault of the contractor;

(3) Information which the contractor can demonstrate was in its possession at the time of receipt thereof and was not acquired directly or indirectly from the Government or other companies;

(4) Information which the contractor can demonstrate was received from a third party who did not require the contractor to hold it in confidence.

(b) The contractor shall obtain the written agreement, in a form satisfactory to the Contracting Officer, of each employee permitted access, whereby the employee agrees that he/she shall not discuss, divulge or disclose any such information or data to any person or entity except those persons within the contractor's organization directly concerned with the performance of the contract.

(c) The contractor agrees, if requested by the Government, to sign an agreement identical, in all material respects, to the provisions of this clause, with each company supplying information to the contractor under this contract, and to supply a copy of such agreement to the Contracting Officer. From the time upon request of the Contracting Officer, the contractor shall supply the Government with reports itemizing information received as confidential or proprietary and setting forth the company or companies from which the contractor received such information.

(d) The contractor agrees, that upon request by FERC, it shall execute a FERC-approved agreement with any party whose facilities or proprietary data it is given access to or is furnished, restricting use and disclosure of the data or the information obtained from the facilities. Upon request by FERC, such an agreement shall also be signed by contractor personnel.

14.2 Organizational Conflict of Interest (OCI)

Immediately upon assignment of a new project to the contractor and prior to incurrence of any review-related costs, the contractor shall prepare and submit one hard copy and one electronic copy of a No Conflict of Interest Statement as required by 40 CFR § 1506.5(c) to the Contracting Office (Contract Specialist), the Contracting Officer's Representative, and the Office of the General Counsel - Administrative Law staff. In the alternative, if the contractor decides that the appearance of a conflict of interest is possible or that a conflict exists, the contractor shall submit a full disclosure statement, describing the circumstances or conditions that create the conflict and any mitigating measures the contractor intends to implement to resolve the conflict or the appearance of a conflict. If no mitigation shall suffice, the contractor shall not be assigned to that particular Task. The Offeror shall also assure that each of the proposed subcontractors on the team for this Task has submitted to FERC, a No Conflict of Interest Statement, if the subcontractors are to be used. In addition, the contractor shall submit a plan for how it shall handle any potential conflicts which may arise during the performance period.