Freight_switcher_RFP_final.docx

www.pca.state.mn.us

Minnesota Diesel Program Volkswagen NOx Mitigation Settlement Phase 3 Freight Switcher Locomotive Repower/Replacement Grant Request for Proposals (RFP) The RFP assists applicants in applying for and managing state grants. This document describes the Freight Switcher Locomotive Replacement/Repower Grant, including information on who may apply for funding, the funding priorities for this grant round, match requirements, activities eligible for funding, and other information that will help applicants plan their project and submit a competitive application. Applications are due no later than 4:00 p.m. Central Time on May 20, 2025.

The applicant should check the SWIFT Supplier Portal for the most recent updates on this competitive grant, including questions and answers and addendums and the freight switcher locomotive grant webpage for webinar and other information.

Contents

Sample Grant Agreement and the Grant Application Form, can all be found at: SWIFT Supplier Portal.

Overview The Minnesota Pollution Control Agency (MPCA) seeks locomotive owners from private, public, and nonprofit sectors to apply to this grant opportunity to partially fund freight switcher locomotive repower or replacement in Minnesota with cleaner diesel engines or zero emission motors. The grant reduces diesel emissions from older diesel engines to improve air quality and public health by removing older diesel freight switchers and replacing them with new, cleaner freight switchers.

For the purposes of this RFP, the following terms and definitions will be used:

“All-electric” shall mean powered exclusively by electricity provided by a battery, fuel cell, or the grid.

“Alternate fueled” shall mean an engine, or a vehicle or piece of equipment that is powered by an engine, which uses a fuel different from or in addition to gasoline fuel or diesel fuel (e.g., CNG, propane, diesel-electric hybrid).

“Freight Switcher” shall mean a locomotive that moves rail cars around a rail yard as compared to a line-haul engine that moves freight long distances. This includes moving trains and/or freight between rail yards, e.g., short hauls of Class II and Class III railroads within the State of Minnesota.

“Generator Set” or “Gen Set” shall mean a switcher locomotive equipped with multiple engines that can turn off one or more engines to reduced emissions and save fuel depending on the load it is moving.

“Hybrid” shall mean a vehicle that combines an internal combustion engine with a battery and electric motor.

Funding The MPCA anticipates awarding approximately $1.4 million for locomotive repower/replacement grants. Grants under this RFP are funded by the Volkswagen Mitigation Trust agreement for clean diesel activities in the State of Minnesota. The grants are administered under Minn. Stat. §116.03, subd.2.

Grantees will be required to provide all remaining funds for the purchase of the new vehicle. Grantees may use other grant funds for their portion of the cost of a project so long as the total reimbursement amount is not over 100%. The old locomotives/locomotive engines that are replaced as part of this grant must be destroyed. Grant funds cannot be used to expand fleets.

The maximum award per vehicle replacement varies by replacement powertrain type.

Up to 40% of the cost of a repower with a new diesel or alternate fueled (e.g., CNG, propane, hybrid) engine(s) or generator sets, including the costs of installation of such engine(s).

Up to 25% of the cost of a new diesel or alternate fueled (e.g., CNG, propane, hybrid) freight switcher.

Up to 75% of the cost of a repower with a new all-electric engine(s), including the costs of installation of such engine(s), and charging infrastructure associated with the new all-electric engine(s).

Up to 75% of the cost of a new all-electric freight switcher, including charging infrastructure associated with the new all-electric freight switcher.

Reimbursement Grant funding for eligible costs will be reimbursed upon completion of the approved project with approved paid-in-full invoices. Project completion includes disabling of the old vehicle and engine. Photographs of the disabled engine and chassis and VIN will be required prior to disbursements of any funds under the grant contract.

All grant projects must be completed within two years of the start date of the grant agreement. The start date of the grant agreement is the date on which the grant agreement is fully executed.

Note: See “Engine Disabling” in Section 9. Grantee Responsibilities for more details.

Eligible and ineligible applicants Eligible applicants For-profit, nonprofit, individuals, and public entities, including state, local, and Tribal governments that own and operate freight switchers in Minnesota are eligible applicants. Applicants must be based in Minnesota, have a branch office in Minnesota, or be located on Indian country within Minnesota.

While multi-organizational collaboration is allowed, no single entity may be a part of multiple applications.

Ineligible applicants Entities or individuals that are currently suspended or debarred by the State of Minnesota and/or the federal government are ineligible applicants.

The MPCA may also deem an applicant ineligible because of, but not limited to: enforcement issues, labor standards, tax status, or other such issues.

Eligible and ineligible projects Eligible projects This grant is designed to replace pre-Tier 4 diesel freight switcher locomotives with new cleaner freight switcher locomotives or engines.

Eligible freight switchers may be repowered with a new diesel or alternative fueled (e.g., CNG, propane, hybrid) engine(s) or generator sets or replaced with a new diesel or alternate fueled (e.g., CNG, propane, hybrid) freight switcher.

Alternatively, eligible freight switchers may be repowered with a new all-electric engine(s) or replaced with a new all-electric freight switcher.

Eligible costs include installation and associated charging infrastructure.

Eligible freight switcher repower/replacement must be:

Diesel powered, pre-Tier 4, freight switcher Fully operational Currently operate in Minnesota 1,000 or more hours per year Must continue to operate in Minnesota for five years following replacement/repower Must operate in the capacity in a Class II or Class III railroad Ineligible projects Line-haul locomotives used to move freight long distances Mandated changes: engine replacements that are mandated under federal law.

Fleet expansion: Purchase of vehicles to expand a fleet Leased vehicles (not owned by applicant) Eligible and ineligible costs Eligible costs Eligible costs are costs for the repower or purchase of new diesel, alternate fueled, all-electric, engine and/or generator sets for an eligible freight switcher. The installation of engines and associated charging infrastructure is also eligible.

· Repower of engine(s) or generator sets to cleaner diesel, alternate fueled, or all-electric

· Replacement of freight switcher with new cleaner diesel, alternate fueled, or all-electric locomotive or railcar mover

· Charger installation costs

· Charging infrastructure associated with new all-electric engines or freight switchers

· Sales and federal excise tax on eligible costs Ineligible costs Ineligible costs include costs that are not directly related to the project. In addition, the following costs, even if they are directly related to the project, are ineligible.

Grant contractor costs Costs for diesel, natural gas, or propane fueling infrastructure Any expenses incurred during workplan application and final workplan development Costs incurred from equipment disabling Bad debts, late payment fees, finance charges or contingency funds, interest, and investment management fees Attorney fees Engineering/consultant fees Lobbying, lobbyists, and political contributions Mark-up on purchases and/or subcontracts.

Taxes (except as noted above as eligible) Activities addressing permit fees Activities addressing enforcement actions that involve a financial penalty Memberships (including subscriptions and dues) Food Alcoholic refreshments Entertainment, gifts, prizes, decorations and events Merit awards and bonuses Donations and fundraising Computer(s), tablets, and software, unless unique to the project and specifically approved by the MPCA as a direct expense Purchase or rental of mobile communication devices such as cell phones, unless unique to the project and specifically approved by the MPCA as a direct expense Any expenses incurred before the grant agreement is fully executed, including applicant’s expense for preparing the eligibility and cost applications RFP questions and answers MPCA is obligated to be transparent in all aspects of its grant work. To meet its obligation, all questions must be submitted in the same manner (email). Answers to submitted questions are only provided via the SWIFT Supplier Portal. It is the applicant’s responsibility to check the SWIFT Supplier Portal for the most recent updates on a competitive grant, including questions, answers, and addendums.

Applicants who have any questions regarding this RFP must email questions to grants.pca@state.mn.us, subject line: “Freight Switcher Locomotive Repower/Replacement Grant”, no later than 4:00 p.m. Central Time on May 5, 2025. Answers to questions will be posted frequently on the SWIFT Supplier Portal.

MPCA personnel are not authorized to discuss this RFP with applicants outside of the question-and-answer forum. Contact regarding this RFP with any MPCA personnel other than in the manner specified may result in disqualification.

Application submission instructions Application information must be accurate. Missing or inaccurate information could disqualify applicants. Please double check your responses to ensure applications are complete. Applications must be received electronically by the MPCA no later than 4:00 p.m. Central Time on May 20, 2025, via the SWIFT Supplier Portal. Application submissions received after the deadline will not be accepted.

Applicants must submit the following application materials in their original file formats for the application to be considered complete and eligible:

Grant Application (Microsoft Excel spreadsheet) Photos of the vehicles (optional) Verification of engine replacement (if applicable, see Section 8. Application review process) The application form is available on the SWIFT Supplier Portal. If multiple replacements are being requested, all projects must be included in one application using the application forms provided.

Submit applications and required forms via the SWIFT Supplier Portal with the subject line: “Freight Switcher Locomotive Repower/Replacement Grant”. The MPCA is not responsible for any errors or delays caused by technology-related issues, even if they are caused by the MPCA.

· Applicants do not need to log in to view the RFP and associated documents in the SWIFT system.

· Applicants interested in applying will need to register as a bidder in the system by clicking on the SWIFT Supplier Portal, then Register for an Account and Register as a Bidder.

· Applicants should allow up to two business days to become registered as a Bidder. If an applicant is already registered in the SWIFT system as a Supplier (previously known as a vendor), then the applicant does not need to register as a bidder. The applicant will need their Supplier ID.

Questions regarding submitting an application can be directed to the Vendor Assistance Help Desk at 651-201-8100, option 1 or by clicking on Supplier Portal Help within the SWIFT Supplier Portal.

Applications submitted via any other method, including but not limited to fax, mail, email, and in-person deliveries, will not be accepted.

All applications must be submitted their original file format (Excel spreadsheet).

Application review process Applications received by the grant deadline will be reviewed by a team of MPCA staff using a two-stage process. Late applications will not be considered for review.

Stage 1: Eligibility review The MPCA will determine if eligibility requirements are met. Any application found to be ineligible may be eliminated from further evaluation. Minimum requirements:

Applicant is eligible Application is received on time Project is eligible Stage 2: Application scoring Only applications meeting the eligibility criteria under stage 1 will be scored in stage 2. Reviewers will evaluate applications using the weighted criteria listed in Exhibit 1 at the end of this document.

The MPCA may request clarification of submitted information from one or more applicants and will only accept written responses for evaluation purposes. The response to the request for clarification may be considered along with the original application for application scoring.

In addition to its authority to offer reduced awards, the MPCA reserves the right to withdraw the award or to refrain from awarding any grants. At its discretion, the MPCA may perform an appropriate cost and pricing check of an application. The applicant’s past performance as a grantee of that state agency may be considered when evaluating a grant application.

Priorities It is the policy of the State of Minnesota to ensure fairness, precision, equity and consistency in competitive grant awards. This includes implementing diversity and inclusion in grant making. The Policy on Rating Criteria for Competitive Grant Review establishes the expectation that grant programs intentionally identify how the grant serves diverse populations, especially populations experiencing inequities and/or disparities. This grant prioritizes emissions reductions in communities with higher concentrations of low-income residents and people of color, including tribal communities, by awarding points for vehicle replacements in environmental justice areas and areas of higher vulnerability to negative health outcomes related to diesel air pollution.

A map of environmental justice areas in Minnesota can be found online here. This map is subject to change. MPCA will use the most current map available at the time of evaluation.

Points are also awarded to small businesses that are registered with the Minnesota Department of Administration as a veteran-owned, economically disadvantaged, or targeted group business owned and operated by women, minorities, or persons with a substantial physical disability. Please reference additional information here: https://mn.gov/admin/business/vendor-info/oep/sbcp/.

Notification All applicants will be notified by MPCA staff approximately 45 days after application due date. Applicants selected for funding will be contacted concerning the next steps in the award process, including execution of the appropriate agreements and workplan submissions.

Grantee responsibilities Awardees are required to be a registered vendor in SWIFT and will sign the grant agreement using DocuSign. To register, go to the Supplier Portal webpage SWIFT and click on the Vendor Registration Link.

Applicants should allow up to two business days to become registered as a Bidder. If an applicant is already registered in the SWIFT system as a Supplier (previously known as a vendor), then the applicant does not need to register as a bidder. The applicant will need their Supplier ID.

Questions regarding registering can be directed to the Vendor Assistance Help Desk at 651-201-8100, option 1 or by clicking on Supplier Portal Help within the SWIFT Supplier Portal.

Awardees are required to submit a quote from the new vehicle vendor to verify the new vehicle’s cost information used in the application. Awardees must submit this information within 14 days of receiving their award notification, or the project may be deemed ineligible. This information will be included in the award notification.

Grant agreement Each awardee must formally enter into a grant agreement. The agreement will address the conditions of the award, including implementation of the project. Once the agreement is signed, the recipient is expected to read and comply with all conditions of the agreement.

A sample State of Minnesota Grant Agreement can be found on SWIFT Supplier Portal for your reference. Much of the language reflected in the agreement is required by statute.

Survey To help report project effectiveness and design future RFPs the MPCA may survey grantees at 6 and 12 months following the award. Information requested may include, but is not limited to:

· Hours of use

· Miles per gallon average or gallons per hour

· General operational performance/reliability

· Insights on RFP application and marketing process Equipment disabling If awarded a grant, the old diesel vehicle must be permanently disabled. Disabling the engine may be completed by cutting a three-inch diameter hole in the engine block to permanently disable the engine. The MPCA recognizes that locomotive destruction poses significant logistic challenges. The VW Consent Decree states the chassis must be cut or rendered permanently disabled prior to any funds being distributed under this grant agreement. Disabling the chassis may be completed by cutting through the frame rails on each side at a point located between the front and rear axles. Alternative methods of destruction can be conducted with prior written approval of the MPCA.

Photographs of the disabled chassis and engine must be submitted prior to disbursements of any funds under this grant contract. Please see the Grantee Reimbursement Guide for additional information and photo examples.

Public data Applications are private or nonpublic until opened. Once opened, the name and address of the applicant and the amount requested is public. All other data in an application is private or nonpublic data until all grant agreements are fully executed. After MPCA has executed all agreements, all remaining data in the applications is public with the exception of trade secret data as defined and classified in Minn. Stat. §13.37. A statement by a grantee that the application is copyrighted or otherwise protected does not prevent public access to the application (Minn. Stat. §13.599, subd. 3).

Conflict of interest Minnesota state agencies must work to deliberately avoid actual, potential and perceived conflicts of interest at the individual and organizational levels. Please refer to the State of Minnesota, Office of Grants Management for information on any potential, actual, or perceived conflicts of interest: https://mn.gov/admin/government/grants/policies-statutes-forms/.

Grant monitoring Minn. Stat. §16B.97 and Policy on Grant Monitoring require the following:

· One monitoring visit during the grant period on all state grants of $50,000 and higher

· Annual monitoring visits during the grant period on all grants of $250,000 and higher

· Conducting a financial reconciliation of grantee’s expenditures at least once during the grant period on grants of $50,000 and higher. For this purpose, the grantee must make expense receipts, employee timesheets, invoices, and any other supporting documents available upon request by the state.

The monitoring schedule relating to the grant project will be determined at a later date.

Grantee bidding requirements For (Non-Government Organizations) NGOs:

The grantee must take all necessary affirmative steps to assure that targeted vendors from businesses with active certifications through these entities are used when possible:

· State Department of Administration's Certified Targeted Group, Economically Disadvantaged and Veteran-Owned Vendor List

· Metropolitan Council’s Targeted Vendor list: Minnesota Unified Certification Program

· Small Business Certification Program through Hennepin County, Ramsey County, and City of St. Paul: Central Certification Program The grantee must maintain:

· Written standards of conduct covering conflicts of interest and governing the actions of its employees engaged in the selection, award and administration of contracts.

· Support documentation of the purchasing and/or bidding process utilized to contract services in their financial records, including support documentation justifying a single/sole source bid, if applicable.

The grantee must not contract with vendors who are suspended or debarred in Minnesota: http://www.mmd.admin.state.mn.us/debarredreport.asp.

For grant-funded projects that include construction work and have a total project cost of $25,000 or more, prevailing wage rules apply per; Minn. Stat. §§177.41 through 177.44. These rules require that the wages of laborers and workers should be comparable to wages paid for similar work in the community as a whole.

For municipalities:

Grantees that are municipalities must follow:

· The contracting and bidding requirements in the Uniform Municipal Contracting Law as defined in Minn. Stat.§471.345

· The requirements of prevailing wage for grant-funded projects that include construction work and have a total project cost of $25,000 or more, per Minn. Stat. §§177.41 through 177.44 The bid request must state the project is subject to prevailing wage. These rules require that the wages of laborers and workers should be comparable to wages paid for similar work in the community as a whole. A prevailing wage form should accompany these bid submittals.

The grantee must not contract with vendors who are suspended or debarred in Minnesota: https://mn.gov/admin/osp/government/suspended-debarred/index2.jsp Required financial and grantee capacity review Minn. Stat. §16B.981/Chapter 62 - MN Laws, Article 7, Section 11 requires that a pre-award risk assessment is conducted for grant awards of $50,000 or more.

All grantees as defined in Minn. Stat. §16B.981 Subd. 1 (c) applying for grants in the state of Minnesota must undergo a financial and capacity review prior to a grant award of $50,000 and higher.

In order to comply with this requirement, the following information and documents will need to be submitted before the grant contract agreement is fully executed (but do not submit them until you are contacted and requested to do so):

I. Capacity Responses: All potential grantees: Exhibit C

a) Please describe your history of performing the work that will be funded by the grant:

· This includes describing your organization’s current staffing and current budget.

II. Certification: No current principals have been convicted of a felony financial crime in the last ten years: All potential Grantees: Exhibit D III. Evidence of good standing: For-profit and nonprofit potential grantees: Exhibit E

· For-profit and nonprofit grantees: Filed and up-to-date with the Secretary of State IV. Nonprofit grantees as applicable: Exhibit F

· Most recent Form 990 or Form 990-EZ

· Most recent audited financial statement of a charitable organization which has received total revenue in excess of $750,000 for the 12 months of operations covered by the statement per Minn. Stat. §309.53

· Most recent board-reviewed (or managing group if applicable) financial statements, description of internal controls over business expenditures and outcomes of grant funds, if awarded, and evidence of exemption The submission of inaccurate or misleading information may be grounds for disqualification from the grant contract agreement award and may subject an organization to suspension or debarment proceedings, as well as other remedies available to the State, by law.

Based on Minn. Stat. §16B.981/Chapter 62 - MN Laws, Article 7, Section 11, Subd. 3-5 establishes the authority for a granting agency to:

· Provide or require enhanced grant oversight

· Request additional information from a potential grantee to determine whether there is a substantial risk that the potential grantee cannot or would not perform the required duties of the grant agreement.

· The potential grantee has 30 business days to respond

· Develop a plan to address the risk or concerns identified

· Not award the grant.

· The granting agency must provide notice of this determination to not award the grant to the grantee and the Commissioner of Administration.

· The notice must include the following:

· The reason for postponing/not awarding the grant

· The timeline for the process for contesting the agency’s decision

Please note, only awarded applicants will be required to fill out the referenced forms

Audits Per Minn. Stat. §16B.98 Subd. 8, the grantee’s books, records, documents, and accounting procedures and practices of the grantee or other party that are relevant to the grant or transaction are subject to examination by the granting agency and either the legislative auditor or the state auditor, as appropriate. This requirement will last for a minimum of six years from the grant agreement end date, receipt, and approval of all final reports, or the required period of time to satisfy all state and program retention requirements, whichever is later.

Affirmative action and non-discrimination requirements for all grantees:

A. The grantee agrees not to discriminate against any employee or applicant for employment because of race, color, creed, religion, national origin, sex, marital status, status in regard to public assistance, membership or activity in a local commission, disability, sexual orientation, or age in regard to any position for which the employee or applicant for employment is qualified. Minn. Stat. §363A.02. The grantee agrees to take affirmative steps to employ, advance in employment, upgrade, train, and recruit minority persons, women, and persons with disabilities.

B. The grantee must not discriminate against any employee or applicant for employment because of physical or mental disability in regard to any position for which the employee or applicant for employment is qualified. The grantee agrees to take affirmative action to employ, advance in employment, and otherwise treat qualified disabled persons without discrimination based upon their physical or mental disability in all employment practices such as the following: employment, upgrading, demotion or transfer, recruitment, advertising, layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeship. Minn. R. 5000.3500.

C. The grantee agrees to comply with the rules and relevant orders of the Minnesota Department of Human Rights issued pursuant to the Minnesota Human Rights Act.

Voter registration requirement The grantee will comply with Minn. Stat. §201.162 by providing voter registration services for its employees and for the public served by the grantee.

Exhibit 1: Application evaluation score sheet Evaluation factors A 100-point scale per vehicle will be used to evaluate eligible applications. Scores will be used to develop final recommendations. For more information, review the evaluation methods document in the SWIFT portal.

Projects will be evaluated and ranked according to the following criteria:

1. Emissions reductions cost effectiveness (up to 47 points). Vehicles are ranked by their relative cost effectiveness at reducing three different pollutants.

The maximum point awards for each pollutant are:

2. Environmental justice and vulnerable population benefits (up to 35 points).

A. Emissions reduced in environmental justice areas: up to 30 points in such areas in Greater MN and up to 20 points in the Twin Cities Metro. Points are based on the primary and secondary ZIP codes of operation.

B. Vulnerable population benefits: up to 5 points. Points are based on written answers to the vulnerable population questions on the application.

Minnesota Pollution Control Agency 651-296-6300 | 800-657-3864 or use your preferred relay service | Info.pca@state.mn.us Available in alternative formats

image1.png