FA3002-08-R-0002.doc

Section B - Supplies or Services and Prices

Electricty

COST

Electricity quantities and unit prices will be based on the actual kilowatt-hours used at each base and the kWh costs per the accepted Strategic Supply Plan. Electricity costs invoiced on this line item will include all costs associated with providing electricity excluding REP and Sleeving Price Adders. This will be a direct pass through cost, including TDSP costs, with no profit, G&A, overhead or other items added. Cost to be billed on a monthly basis. This line item will be used after the first 6 months of performance and throughout the life of the contract.

FOB: Destination

SIGNAL CODE: A

MAX COST

REP/QSE Services Price Adder

FFP

Firm-Fixed Price for Retail Electric Provider (REP) services to include Qualified Scheduling Entity (QSE) Level IV services. Invoiced amount will be based on actual electricity usage (kWh) at each base times the Price Adder per kWh (five decimal places in dollars). This line item will be used throughout the life of the contract.

MAX

NET AMT

REP/QSE Services Sleeving Price Adder

The REP/QSE Services Sleeving Price Adder will be used in place of the REP/QSE Services Adder Price when necessary to obtain electrical service. Firm-Fixed Price for REP/QSE Services Sleeving Price Adder to include QSE Level IV services. Invoiced amount will be based on actual electricity usage (kWh) at each base times the Price Adder per kWh (five decimal places in dollars). This line item will be used throughout the life of the contract.

MAX

Escalation Factor

The Escalation Factor is a fixed percentage (0 - 100%) of the REP/QSE Services Price Adder and the REP/QSE Services Sleeving Price Adder to be escalated. If no portion of the adders is to be escalated, enter "0". The same escalation factor will be applied to both the REP/QSE Services Price Adder and the REP/QSE Services Sleeving Price Adder. This line item will be used throughout the life of the contract.

NET AMT

UNDEFINED

Initial 6 Month Electricity

DO NOT PROVIDE A PROPOSAL FOR THIS CLIN. Electricity costs will be invoiced on this line item for the first 6 months only. Costs to be invoiced on this line item will consist of the TDSP direct pass through costs and the electricity costs based on the FFP Unit Price (CLIN 000501) times the FFP Heat Rate Factor (CLIN 000502). Electricity costs invoiced on this line item will include all costs associated with providing electricity excluding the REP/QSE Services Price Adder (CLIN 0002).

MAX

000501

Initial 6 Month Electricity Unit Price

DO NOT PROVIDE A PROPOSAL FOR THIS CLIN. The electricity unit price for the first 6 months is the six month strip price for natural gas as published by the New York Mercantile Exchange (NYMEX) for the Henry Hub. The published natural gas price fixed for the first 6 months will be established by the Government no later than 1 June 2008. This line item will only be used for the first 6 months of performance.

MAX

000502

UNDEFINED

Heat Rate Factor

PROVIDE A PROPOSAL FOR THE HEAT RATE FACTOR. The heat rate factor is the factor that will be multiplied by the six month strip price established in CLIN 000501 to determine the electricity unit price for the first six months of delivery. The Heat Rate Factor will convert the Fixed Gas Price from $ per MMBtu to $ per kilowatt-hour. This line item will only be used for the first 6 months of performance.

MAX

Mobilization

One time price for creating a Subordinate Retail Electric Provider (SREP), creating the initial draft of the Strategic Supply Plan (SSP), travel to the 3 bases, and all necessary administrative work (including setting up website access) to begin serving the aggregated electric load.

MAX

SECTION B (CONT)

B-2. CLAUSES AND PROVISIONS

(a) Clauses and provisions from the Federal Acquisition Regulation (FAR) and supplements thereto are incorporated in this document by reference and in full text. Those incorporated by reference have the same force and effect as if they were given in full text.

(b) Clauses and provisions in this document will be numbered in sequence, but will not necessarily appear in consecutive order.

(c) Sections K, L and M will be physically removed from any resultant award, but will be deemed to be incorporated, by reference, in that award.

B-3. CONTRACT MODIFICATIONS

For the duration of this contract, the elements/percentages in the contractor’s final revised proposal shall be applied to all modifications to the contract which are negotiated on a fixed-fixed price basis, provided the work contemplated is commensurate with the scope of effort afforded in the contract.

B-4. REP/QSE SERVICES PRICE ADDER (CLIN 0002)

The REP/QSE Services Price Adder is the Firm-Fixed unit Price per kWh for Retail Electric Provider (REP) services to include Qualified Scheduling Entity (QSE) Level IV services. The REP/QSE Services Price Adder will include all general,and administrative expenses, overhead and profit associated with the REP responsibilities stated in Section C.

The REP/QSE Services Price Adder shall not include regulated and tariffed Transmission and/or Distribution Service Provider (TDSP) charges, which charges shall be billed on a direct cost pass-through basis on CLIN 0001.

B-5. REP/QSE SERVICES SLEEVING PRICE ADDER (CLIN 0003)

The REP/QSE Services Sleeving Price Adder is the Firm-Fixed unit Price per kWh for Retail Electric Provider (REP) services to include Qualified Scheduling Entity (QSE) Level IV services. Sleeving is associated with the purchase of electricity from another REP’s generation sources. The REP/QSE Services Sleeving Price Adder shall be utilized instead of the REP/QSE Services Price Adder when appropriate.

B-6. ESCALATION FACTOR (CLIN 0004)

The Escalation Factor is a fixed percentage (0 – 100%) of the REP/QSE Services Price Adder and REP/QSE Services Sleeving Price Adder to be escalated. If the proposed percentage is 0%, the price adder will remain the same for the life of the contract. The same proposed Escalation Factor will be applied to both the REP/QSE Serivces Price Adder and the REP/QSE Services Sleeving Price Adder.

The Price Adders will be escalated annually using an Escalation Rate which will be the final Producer Price Index, Industrial Electric Power, West South Central (Product Code 221122-437) as published by the Bureau of Labor Statistics for April of that year, applied on 1 Jan of the following year, utilizing August 2007 as the base year (August 2007 = 230.8) as follows:

Escalation Rate = (New Index – 230.8)/230.8

Annually Adjusted REP and Sleeving Price Adders = Contract REPand Sleeving Price Adders X [1 + (Escalation Factor X Escalation Rate)]

Producer Price Index Web Site: http://www.bls.gov/ppi/ppitable05.pdf

B-7. INITIAL 6 MONTH ELECTRICITY (CLIN 0005)

CLIN’s 0002 and 0005 are the only CLINs applicable to the first six months of deliveries to the bases. All of the electricity costs to include pass through TDSP charges will be invoiced on CLIN 0005 on a monthly basis. Costs will consist of the TDSP direct pass through costs and the electricity costs based on the firm-fixed price (FFP) Unit Price (CLIN 000501) times the firm-fixed price (FFP) Heat Rate Factor (CLIN 000502).

B-8. HEAT RATE FACTOR (CLIN 000502)

The Gas to Electric factor is the factor the contractor will propose to convert the six month strip price for natural gas from $ per MMBTU to a six month fixed price for electricity in $ per kilowatt hour. The Gas to Electric Heat Rate Factor shall include all ancillary costs not included in CLIN 0002 except for TDSP charges. The TDSP charges shall be a 100% pass through cost billed on CLIN 0005.

B-9. MINIMUM AND MAXIMUM QUANTITIES

The minimum quantity to be ordered under this contract during the first year is 7,000,000 kWh.

The maximum quantity to be ordered under this contract during the first year is 275,000,000 kWh.

Section C - Descriptions and Specifications

PERFORMANCE WORK STATEMENT

SECTION C: PERFORMANCE WORK STATEMENT

C.1

SCOPE OF WORK

(a) Air Education and Training Command (AETC) has a requirement for an Energy Reliability Council of Texas (ERCOT) Retail Electric Provider (REP) and Qualified Scheduling Entity (QSE), Level IV. The REP shall be responsible for all QSE functions related to this contract through a certified QSE. The QSE may be an integral part of the REP organization, provided by an affiliate, or subcontracted by the REP.

(b) The REP, through a Subordinate Retail Electric Provider (SREP) (See Para C.2), will aggregate the electric loads from three (3) AETC Texas bases (Goodfellow, Sheppard, and Laughlin) and manage a Strategic Supply Plan (SSP) (defined in paragraph C.3 below) to meet the needs for the supply of all electricity to the Delivery Points.

(c) The REP will provide electricity from multiple generation sources to ensure a continuous supply of electricity to the delivery points. It is the intent of this contract for the electricity to be supplied by different Generators and/or Wholesale Marketers to encourage competition thereby ensuring the government of a fair and reasonable price.

(d) In addition to ensuring a continuous supply of electricity for the three bases, the REP will solicit opportunities to support the development of renewable energy generation within ERCOT. Due to the unique opportunities afforded by electric deregulation in Texas and the indefinite term of this contract, AETC expects a significant portion of the power supplied to these three installations to be from renewable generation (per Executive Order 13423 and 10USC2911). The Energy Policy Act of 2005 (EPACT05) defines renewable generation and the minimum level of generation from renewable sources required by 2013 and every year thereafter. The Air Force’s position on renewable energy generation is further demonstrated by its membership in the Green Power Partnership (GPP).

(e) The REP is responsible for the following:

1. Buying electricity at wholesale pricing for the total aggregated load.

2. Buying delivery service and paying the charges for transmission and distribution service to the Transmission and Distribution Service Provider (TDSP).

3. Scheduling.

4. Financial Settlement Services with ERCOT.

5. Performance Monitoring.

6. Real Time Optimization Services.

7. Serving as the direct contact with the customer for electric service issues.

8. Invoicing and distributing payments collected to subcontractors.

9. Providing a 24-hour toll free telephone number for customer calls.

10. Maintaining the electronic interface system to communicate with the Independent System Operator (ERCOT) and other Market Participants relating to customer switches and meter information.

11. Understanding and following the Public Utility Commission of Texas’ (PUCT) rules, including customer protection rules.

12. Providing historical electric data of all revenue meters available through web based software accessible by Government personnel (See C.9(b)).

13. Maintaining a complete separate set of books pertaining only to the government accounts (See C.2 (b) & (c)).

C.2

SUBORDINATE RETAIL ELECTRIC PROVIDER (SREP)

(a) The contractor shall provide a PUCT certified Subordinate Retail Electric Provider (SREP) for the sole benefit of the three AETC bases. The SREP must be established as soon as possible after contract award but no later than the first available ERCOT testing flight after contract award. AETC will not become its own REP, SREP, or its own QSE. If the REP has an existing Subordinate REP available it may re-designate that SREP for this contract.

(b) The purpose of the SREP is to facilitate separate accounting records, improve ability to audit records, such as reports from ERCOT, and to separate the block purchase, long term contracts identified for AETC from the existing contracts in the REP’s portfolio. The monthly reports from ERCOT to the SREP will thus be on AETC activity only.

(c) The SREP shall maintain a separate set of accounting records, thus facilitating the review and auditing of the specific costs associated with the unique portfolio of supply agreements. These accounting records shall include but shall not be limited to: location and source of generation; cost of electricity from each generator; transportation charges; line losses; congestion charges; and ancillary savings.

C.3

STRATEGIC SUPPLY PLAN (SSP)

(a) The Strategic Supply Plan (SSP) is the document that will guide the daily activities and specify the policies and objectives of this aggregated electricity purchasing program. The SSP will be developed by the Contractor and accepted by the Government. It will contain detailed operating guidelines for the Contractor to meet the contract requirements. The SSP will define how the Contractor will support the current and future electrical supply requirements identified by AETC, the most recent Energy Policy Act, and/or any applicable Executive Orders (EO). Presently there are two driving documents: EPACT2005 and EO13423.

(b) The SSP shall delineate the approach to be utilized to satisfy the aggregated electricity requirements for the three AETC bases. The delineated approach shall include the methodology to be utilized to build a portfolio of supply contracts to satisfy AETC’s aggregated load. The contracting methods presented in the SSP shall include utilization of purchases of blocks of energy, some that are 24 hours a day for 365 days per year and some of other time designations, to meet the aggregated load. The methodology for determining appropriate size and duration of the energy blocks will be presented.

(c) The SSP shall include the names of suppliers, the amount they are supplying and the type of energy (i.e. renewable). The SSP shall also describe how the contractor met the requirements of FAR 52.244-5, Competition in Subcontracting. IAW FAR 52.244-5(a), the contractor shall select subcontractors (including suppliers) on a competitive basis to the maximum practical extent consistent with the objectives and requirements of the contract. If there is only one source or the lowest price is not selected, the SSP shall include an explanation of the contractor’s selection.

(d) It is the Government’s expectation that a well developed and successfully implemented SSP will contribute to long term electricity price stabilization and reduce the risks associated with the price volatility of fossil fuel generation. Furthermore, it is expected that multiple discrete generation resources will reduce the risk of supply interruptions, thereby increasing the surety of supply.

(e) The SSP will clearly discuss the methods to be used to support the development of renewable generation sources and how these sources will provide long term supply of renewable energy at economical prices. Renewable generation is very key to the successful execution of this contract.

(f) The utilization of Renewable Energy Credits (RECs) shall be addressed in the Strategic Supply Plan (SSP). The SSP will address how RECs can be used to meet the renewable energy goal. However, it is the government’s desire that the bulk of the renewable energy requirements be from renewable generation in lieu of RECs.

(g) The SSP shall contain a section discussing the prescriptive approach to determining the “energy” price for each base. It is the Government’s intent that all three bases will pay the same energy charge per kWh. The actual delivery charges (TDSP costs) will vary by base.

(h) The SSP will be a living document, which can be modified as needed by mutual agreement of the Contractor and the Government. Any changes to the SSP must be submitted to AETC for review by HQ AETC/A7COE and acceptance by AETC CONS Contracting Officer 30 days prior to initiating changes. After acceptance of changes, the SSP will be updated and distributed to the Program Manager and the Contracting Officers.

C.4

DELIVERABLES

(a) Contractor shall provide quarterly Status Reports which shall contain, but are not limited to, problems and actions taken to meet the requirements described in paragraphs C.5 through C.9.

(b) The Strategic Supply Plan shall be jointly reviewed at least annually to discuss future requirements for each installation and risk avoidance measures. Renewable energy deliveries and potential generation source development will also be discussed at that time. Updates to the SSP may be made after review and acceptance by AETC per paragraph C.3 (a).

(c) The contractor shall provide a Consolidated Invoice for all ESID accounts for each base serviced under this contract. Monthly invoices must be submitted via the Wide Area Workflow (WAWF) website as described in Section G.

(d) The contractor shall provide all Renewable Energy Certificates for the total renewable energy purchased for the previous calendar year. Contractor shall present the requisite forms and affidavits to certify that this energy is renewable and has been “retired”. Certificates shall be sent to the Administrative Contracting Officer (ACO) at each base, the base Utililty Engineer, and the AETC Utility Manager.

C.5

GENERAL

(a) The REP must abide by all State of Texas requirements as delineated in Substantive Rules - Chapter 25 of PUCT rules applicable to electric service providers. Both the REP and QSE shall be certified by the PUCT and ERCOT, as appropriate.

(b) The REP shall report any changes to the Level IV QSE service provider and provide a copy of the new QSE’s Level IV certification to the Contracting Officer no later than 10 days prior to assumption of services.

(c) ENABLING DOCUMENTS: The contractor shall not enter into any Enabling Document that constrains the contractor’s ability to solicit and contract with any generation source or meet any requirement of Section C. Throughout the life of this contract, the contractor shall not enter into any such agreements. If the contractor has any agreement that requires the sole sourcing of power through a single entity or requires the approval of that entity prior to contracting with any generation source, then the contractor does not meet the intent of this paragraph. As used herein “constrain” shall mean to limit the contractor’s ability:

1. to contract with any electric generating resources, especially new renewable energy sources (existing or under development) including independent generation sources;

2. to compete subcontractors (i.e. generation sources) to get competitive prices.

(d) All quantities required to be supplied to the three (3) bases included in this contract shall be considered firm requirements and guaranteed for delivery by the REP to the Delivery Points. The initial six month quantities shall contain a minimum of 5% renewable energy, one-half (2.5%) of which must come from NEW renewable generation as defined by the Department of Energy (DOE).

(e) The REP shall ensure the TDSP delivers the electricity required under this contract, and that the charges conform to the tariffs approved by the PUCT. One AETC Air Force Base is located in each of the following TDSP territories: Oncor Electric Delivery (Sheppard AFB), AEP Texas North Company (Goodfellow AFB), and AEP Texas Central Company (Laughlin AFB). There are currently a total of 23 electric revenue meters consisting of 3 interval meters and 20 non-interval meters (See Attachment 1).

(f) PENALTIES: The REP shall be liable for all ERCOT penalties assessed to facilities for the non-delivery of firm requirements except in cases of force majeure. The REP will pay any costs associated with its failure to schedule and coordinate for the delivery of electricity to each service point.

(g) If the contractor needs to purchase additional power to meet load requirements through another REP, the contractor will sleeve that power to the government per Section B paragraph B-5.

C.6

SCHEDULING AND SUPPLY MANAGEMENT

The Contractor is responsible for scheduling electric deliveries for all ESID accounts under this contract and providing quality control for said ESID accounts. The Contractor shall be responsible for supply management and overall coordination of scheduling the various supply receipts and market deliveries of electrical power to the specified delivery point of each ESID account identified in the contract. As such, the Contractor shall be knowledgeable of and responsible for imbalance policies, transmission grid losses, transmission congestion charges and TDSP line losses for the delivery of electricity to the service point of each ESID account under this contract.

C.7

RESPONSIBILITY OF SUPPLY

(a) The contractor shall be responsible for delivery of electricity to the Delivery Points specified under the terms of this contract. If at any time (unless under a condition of Force Majeure) an ESID account covered by this contract is forced to accept default supply service from the entity serving in its capacity as the Provider of Last Resort, the REP shall be responsible for payment of the additional costs incurred.

(b) Force Majeure: As used herein, “Force Majeure” means any cause beyond the reasonable control of, and without the fault or negligence of, the party claiming Force Majeure. It shall include, without limitation, sabotage, strikes, acts of God, war, riot, civil disturbance, drought, earthquake, flood, explosion, fire, lightning, landslide, delays of common carriers, and acts of the Government in either its sovereign or contractual capacity. The Contractor shall notify the Contracting Officer in writing as soon as it is reasonably possible after the commencement of any Force Majeure condition, setting forth the full particulars in connection therewith, and shall remedy such occurrence with all reasonable dispatch, and shall promptly give written notice to the Contracting Officer of the cessation of such condition. In no event shall the economic hardship of any party constitute a Force Majeure condition. Likewise, the inability of the Contractor to obtain transmission service, to obtain generation contracts, or in the event of higher actual costs to the Contractor, shall not constitute a Force Majeure condition.

(c) Power Quality: As the Government’s representative in the ERCOT market, the contractor shall ensure the electric power supplied to each AETC base is adequate and sufficient in regards to voltage, distortion, variance, and harmonics so as to permit the successful operation of the buildings and associated equipment. Upon notification of power factor penalty fees from the TDSP, the contractor shall provide assistance to the base in determining the cause(s) and recommending solutions.

C.8

ELECTRICAL LOAD CHANGES

(a) It is possible that additional ESID accounts (billing meters) not included in the solicitation may be added to the resultant contract at one or more of the three bases in the foreseeable future. In that event, AETC will provide the REP with the facility’s electric requirement (when available) and the two parties shall complete a bilateral modification to incorporate the additional accounts into the contract.

(b) Conversely, future electrical loads may decrease as the result of such things as mission realignments, energy efficiency improvements, or construction of on-site generation sources.

C.9

CONTRACT MANAGEMENT

(a) The contractor shall notify the government of any actual or anticipated changes/problems to contract requirements arising from generation, transportation, and/or deliveries within 24 hours after identifying the problem and within 24 hours of correcting problems. The contractor shall provide procedures for notification of any problems identified by the government.

(b) The contractor shall provide the government access to a web-based information system . Through this information system the Government will have access to current market prices and news, analyses of market trends, regulatory changes and energy industry activity. The system will also provide access to energy load and billing data, allow downloading of the information into spreadsheets and other applications for more detailed analysis, and permit visual access to current and historic invoices. Individual/base account consumption data shall be made available in graphical format as a rolling 12 month presentation.

C.10

MOBILIZATION

Mobilization is that period of time between Contract Award and Initial delivery of electricity. During that period of time the Contractor is expected to:

(a) Develop the initial draft of the SSP,

(b) Initiate activity for the establishment of the SREP,

(c) Travel to each of the three bases to establish initial contacts,

(d) Provide a spreadsheet clearly identifying each ESID and the expected switch date for each account at least 10 calendar days prior to the switch, and

(e) Any other tasks required to initiate work under this contract to include setting up website access per Section C.9(b).

C.11

DEFINITIONS

GREEN POWER PARTNERSHIP (GPP): A federal voluntary program that encourages organizations to use renewable power as a part of best-practice environmental management highlighting the nation's government facilities and businesses that are switching to renewable power.

ENABLING AGREEMENT: As used in this Performance Work Statement (PWS), an Enabling Agreement is a legal instrument executed between the Offeror (as the potential Contractor) and any third party which provides the Offeror necessary corporate attributes to function effectively in the ERCOT electric market. The Enabling Agreements are primarily used to provide the financial support (credit) necessary to allow the REP to enter into delivery contracts with generators. An Enabling Agreement could take the form of an Edison Electrical Institute Tripartite (EEI) Agreement if the Wholesale/Credit entity is an affiliate entity. If the Wholesale/Credit entity is an unaffiliated third party, then the Enabling Agreement could be called an Energy Marketing Support Agreement (EMSA). Regardless of the actual nomenclature used to identify the agreement(s), this definition is intended to encompass whatever documents or legal instruments that are in place to permit the Offeror to operate as an REP in the Texas deregulated electric market.

ERCOT: The Electric Reliability Council of Texas (ERCOT) is the Independent System Operator (ISO) for the Texas grid system. ERCOT is a Texas nonprofit corporation that has been certified by the PUCT as the Independent Organization, as defined in §39.151 of PURA. The mission of the ERCOT is to direct and ensure reliable and cost-effective operation of the electric grid and to enable fair and efficient market-driven solutions to meet customers’ electric service needs.

ESID: Energy Service Identification Number (ESID) is the number assigned to the meter location where the electricity is delivered.

Generation Resource: Facility that produces energy and is owned or operated by a Generation Entity.

Generation Entity: Owner or controller of a Generation Resource used for generating electricity and electrically connected to the ERCOT System.

Power Generation Company: An Entity registered by the PUCT that: (1) generates electricity that is intended to be sold at wholesale; (2) does not own a transmission or distribution Facility in this state other than an essential interconnecting Facility, a Facility not dedicated to public use, or a Facility otherwise excluded from the PURA definition of “electric utility”; and (3) does not have a certificated service area.

QSE: A Qualified Scheduling Entity (QSE) is a market participant that is qualified by ERCOT in accordance with ERCOT Protocol Section 16, Registration and Qualification of Market Participants, to submit Balanced Schedules and Ancillary Services bids and settle payments with ERCOT on behalf of Resource Entities (REs or Generators) or Load Serving Entities (LSEs) such as Retail Electric Providers (REPs). QSEs must submit daily schedules for their bilateral transactions with total generation and demand, specified at zonal level, and bid curves for zonal balancing up and balancing down energy. The schedules for generation and demand are required to be balanced so that supply equals demand. QSEs also bid for ancillary services and settle financial payments with ERCOT.

Levels of QSE Qualification

For administrative purposes ERCOT classifies QSEs in four (4) service levels. This is to ensure qualification commensurate with the types of services each QSE expects to perform in the market.

Level 1 Qualified to perform Inter-QSE trades only; does not have direct representation of Load Serving Entities or Resource Entities.

Level 2 Qualified to represent Load serving Entities; does not have direct representation of Resource Entities; may also perform level 1 activity.

Level 3 Qualified to represent Load Serving Entities and/or Resource Entities without providing Ancillary Services; may also perform level 1 and 2 activities.

Level 4 Qualified to represent Load Serving Entities and/or Resource Entities and provide Ancillary Services; may also perform level 1, 2 and 3 activities.

REP: A Retail Electric Provider (REP) is licensed by the Texas Public Utility Commission to sell electric energy to retail customers in the areas of Texas where the sale of electricity is open to retail competition (see para C.1(a)).

SREP: A Subordinate Retail Electric Provider (SREP), as used for this contract, means a separately certified REP established by utilizing the parent REP’s credentials for the specific purpose of serving the three AETC bases (Goodfellow, Laughlin, Sheppard) located in the electrically deregulated portion of Texas.

WHOLESALE MARKETER An entity that:

Becomes an owner or controller of electric energy in this state for the purpose of buying and selling the electric energy at wholesale;

Does not own generation, transmission, or distribution Facilities in this state;

Does not have a certificated service area; and

Has been granted authority by the Federal Energy Regulatory Commission to sell electric energy at market-based rates or has registered as a power marketer.

PWS ATTACHMENT 1

Energy Service Identification Numbers By Base

Sheppard AFB

Goodfellow AFB

Laughlin AFB

Section E - Inspection and Acceptance

INSPECTION AND ACCEPTANCE TERMS

Supplies/services will be inspected/accepted at:

CLAUSES INCORPORATED BY REFERENCE

Section F - Deliveries or Performance

DELIVERY INFORMATION

31-AUG-2058

JOHN KAIN

266 F STREET WEST

RANDOLPH AFB TX 78150-4321

210-652-1785

F3PF17

31-AUG-2058

F3PF17

31-JUL-2058

F3PF17

31-JUL-2058

F3PF17

31-JAN-2009

F3PF17

31-JAN-2009

31-JAN-2009

31-JUL-2008

JOHN KAIN

266 F STREET WEST

RANDOLPH AFB TX 78150-4321

210-652-1785

F3PF17

Section G - Contract Administration Data

INVOICING INSTRUCTIONS

Section G - Contract Administration Data

G-1

INVOICING INSTRUCTIONS

(a) The contractor shall provide a Consolidated Invoice (see para. (c) below) for all ESID accounts at each base serviced under this contract. Monthly invoices must be submitted via the Wide Area Workflow (WAWF). WAWF information and training is available online at https://wawf.eb.mil. Additional training will be available for the selected contractor.

(b) In accordance with Texas PUC regulations, a separate invoice per ESID account must be provided. All charges shall appear on the customer invoice as a direct “pass through” charge with no additional mark up. Contractor shall submit the ESID invoices as an attachment to the Consolidated Invoice in WAWF. ESID account invoices must include the following information:

CLIN 0001 and 0004, Electricity. The information in below shall be subtotaled and identified on each ESID invoice as the appropriate Contract Line Item Number (CLIN 0001 or 0004).

1.

Installation name and individual account information (Account Number and ESID, Meter Number, and Service Address). The invoice shall also include the contractor’s information: name, address, and customer service number.

2.

Billing period for each invoice.

3.

Total energy (consumption in kWh) per account number.

4.

Metering data shall clearly show previous and current meter readings with multiplier factor used to compute the consumption being invoiced.

5.

Demand information (kW) for each account.

6.

Power Factor (kW) for each account.

7.

TDSP charges shall be in accordance with PUCT approved tariffs, as published at http://www.puc.state.tx.us/electric/rates/TDR.cfm.

8.

Any transmission loss charges and/or congestion charges.

CLIN 0002 and 0003, REP Price Adders. Each ESID invoice must identify, by the appropriate CLIN, the total REP costs based on actual electricity usage multiplied by the appropriate price adder unit price in Section B.

(c) Consolidated Invoices. It is anticipated that the contractor will submit one Consolidated Invoice per base per month. However, if different meter read cycles are associated with one base, submittal of more than one Consolidated Invoice may be approved by the Contracting Officer.

1. The contractor shall summarize ESID invoices by the CLIN subtotals for CLINS 0001 through

0004 as appropriate.

2. The summary of CLIN totals must be provided as an additional attachment in WAWF.

3. The Consolidated Invoices will contain only the summary totals for CLIN 0001 or 0004 and

0002 and/or 0003.

(d) CLIN 0005, Mobilization. A separate invoice for one time lump sum payment of mobilization costs billable at the end of the mobilization period.

(e) No later than 14 days after award, a sample ESID invoice and summary total must be submitted and approved by the Contracting Officer.

(f) If an invoice cannot be based on actual meter reading, the REP may issue an invoice based on an estimated reading for the affected account. The REP must inform the customer of the reason for the issuance of the estimated bill, and the Government reserves the right to obtain documentation relating to the efforts taken by the REP to obtain the meter read data. For estimated billing purposes, the contractor shall use the historical monthly consumption data as the initial estimate. All estimated bills shall be reconciled on the next invoice.

Section H - Special Contract Requirements

SPECIAL CLAUSES

H-1 CLAUSES AND PROVISIONS

Sections K, L and M will be physically removed from any resultant award, but will be deemed incorporated, by reference, in that award.

H-2 INCORPORATION OF CONTRACTOR’S PROPOSAL

The government reserves the right to incorporate the contractor’s proposal into the resultant contract by reference.

H-3 CONTRACTING OFFICER'S AUTHORITY

The Procuring Contracting Officer is the only person authorized to approve changes in any of the requirements under this contract and, not withstanding any provisions contained elsewhere in this contract, the said authority remains solely in the Contracting Officer. In the event the contractor effects any such change at the direction of any person other than the Contracting Officer, the change will be considered to have been made without authority and at the contractor’s own risk and cost.

H-4 ADMINISTRATIVE CONTRACTING OFFICERS

An Administrative Contracting Officer (ACO) will be designated at each base. The ACO will issue and administer task orders for each base. The ACOs will be identified after contract award.

H-5 TECHNICAL REPRESENTATION

The Administrative Contracting Officer (ACO) will designate Contracting Officer Technical Representatives (COTRs) as his/her representatives for the purpose of quality inspection and assisting the ACO in the administration of the contract. The Procuring Contracting Officer (PCO) is the only individual authorized to redirect the effort or in any way amend any of the terms of this contract.

H-6 CONTRACTOR'S ACCOUNTING SYSTEM

Contractor agrees to maintain essentially the same accounting system during the period of this contract.

H-7 DCAA AUDITS

In accordance with FAR 16.301, the resulting contract will include payment of allowable incurred costs for cost reimbursable electricity. The Allowable Cost and Payment clause (FAR 52.216-7) states that at any time or times, the Contracting Officer may have the contractor’s invoices or vouchers, and statements of cost audited. The Contracting Officer may request the cognizant Defense Contract Audit Agency (DCAA) office to perform these audits.

In addition, the Contracting Officer may request the cognizant DCAA office perform a semi-annual assessment of the contractor’s financial condition. A re-assessment may be requested on a more frequent basis if the situation warrants.

H-8 PHASE-OUT SERVICES

In the event a follow-on contract is awarded, contractor shall cooperate fully with the follow-on contractor to assure that continuity is maintained. Contractor shall provide all reasonable support to the Government and any follow-on contractor to ensure an orderly transition and minimize any impact during the changeover.

H-9 FLUCTUATIONS IN REQUIREMENTS

Throughout the life of the contract, fluctuations may occur that affect the electricity usage at one or more base including, but not limited to, future Air Force on-base generation; energy savings performance contract (ESPC) task orders; and housing privatization.

Future Air Force On-Base Generation - The Air Force is encouraging the development of on-base renewable energy generation. Goodfellow is presently developing a solicitation to be released when approved, for the construction of an on-base photovoltaic array. The potential array would likely have an electrical generation capacity of approximately 1.15 megawatts and an annual energy output of approximately 2 million kWh. Additional projects at Laughlin and Sheppard are also under consideration.

Energy Savings Performance Contract (ESPC) - The Air Force has an initiative to create energy savings by Energy Savings Performance Contracts (ESPCs) providing new or replacing current energy related systems. As a result of this initiative, resultant energy savings may impact the electric usage at any or all of the bases.

Housing Privatization - The Air Force has several on-going initiatives to pursue public and private resources to meet family housing needs. In 1996, Congress provided the Air Force with authority that permits privatization of family housing. Privatization of family housing has occurred at Laughlin AFB, Goodfellow AFB and Sheppard AFB.

The contractor will be kept informed as these projects develop. In accordance with FAR 52.241-8, Changes in Electricity Requirements Unregulated Services, the contract may be modified in the event that there is an increase or decrease in the projected annual electricity requirements of 20% or greater.

H-10 TERMINATION FOR CONVENIENCE NOTICE

This is an indefinite term contract which will continue until the Government provides a Notice of Termination for Convenience to the contractor unless the contractor defaults on the contracts. The Government will provide no less than a 365-day notice of the intent to terminate the contract for convenience.

Section I - Contract Clauses

CLAUSES INCORPORATED BY REFERENCE

CLAUSES INCORPORATED BY FULL TEXT

52.216-7 ALLOWABLE COST AND PAYMENT (DEC 2002) (Applicable to CLIN 0001 only)

(a) Invoicing.

(1) The Government will make payments to the Contractor when requested as work progresses, but (except for small business concerns) not more often than once every 2 weeks, in amounts determined to be allowable by the Contracting Officer in accordance with Federal Acquisition Regulation (FAR) subpart 31.2 in effect on the date of this contract and the terms of this contract. The Contractor may submit to an authorized representative of the Contracting Officer, in such form and reasonable detail as the representative may require, an invoice or voucher supported by a statement of the claimed allowable cost for performing this contract.

(2) Contract financing payments are not subject to the interest penalty provisions of the Prompt Payment Act. Interim payments made prior to the final payment under the contract are contract financing payments, except interim payments if this contract contains Alternate I to the clause at 52.232-25.

(3) The designated payment office will make interim payments for contract financing on the 30th day after the designated billing office receives a proper payment request.

In the event that the Government requires an audit or other review of a specific payment request to ensure compliance with the terms and conditions of the contract, the designated payment office is not compelled to make payment by the specified due date.

(b) Reimbursing costs. (1) For the purpose of reimbursing allowable costs (except as provided in subparagraph (b)(2) of the clause, with respect to pension, deferred profit sharing, and employee stock ownership plan contributions), the term "costs" includes only--

(i) Those recorded costs that, at the time of the request for reimbursement, the Contractor has paid by cash, check, or other form of actual payment for items or services purchased directly for the contract;

(ii) When the Contractor is not delinquent in paying costs of contract performance in the ordinary course of business, costs incurred, but not necessarily paid, for--

(A) Supplies and services purchased directly for the contract and associated financing payments to subcontractors, provided payments determined due will be made--

(1) In accordance with the terms and conditions of a subcontract or invoice; and

(2) Ordinarily within 30 days of the submission of the Contractor's payment request to the Government;

(B) Materials issued from the Contractor's inventory and placed in the production process for use on the contract;

(C) Direct labor;

(D) Direct travel;

(E) Other direct in-house costs; and

(F) Properly allocable and allowable indirect costs, as shown in the records maintained by the Contractor for purposes of obtaining reimbursement under Government contracts; and

(iii) The amount of financing payments that have been paid by cash, check, or other forms of payment to subcontractors.

(2) Accrued costs of Contractor contributions under employee pension plans shall be excluded until actually paid unless--

(i) The Contractor's practice is to make contributions to the retirement fund quarterly or more frequently; and

(ii) The contribution does not remain unpaid 30 days after the end of the applicable quarter or shorter payment period (any contribution remaining unpaid shall be excluded from the Contractor's indirect costs for payment purposes).

(3) Notwithstanding the audit and adjustment of invoices or vouchers under paragraph (g) of this clause, allowable indirect costs under this contract shall be obtained by applying indirect cost rates established in accordance with paragraph (d) of this clause.

(4) Any statements in specifications or other documents incorporated in this contract by reference designating performance of services or furnishing of materials at the Contractor's expense or at no cost to the Government shall be disregarded for purposes of cost-reimbursement under this clause.

(c) Small business concerns. A small business concern may receive more frequent payments than every 2 weeks.

(d) Final indirect cost rates. (1) Final annual indirect cost rates and the appropriate bases shall be established in accordance with Subpart 42.7 of the Federal Acquisition Regulation (FAR) in…