Defense Energy Consortium (DECo) RFI Slide Deck Presentation 08052024.pdf

Your Success is Our Mission!

UNCLASSIFIED

Air Force Installation & Mission Support Center

Mr. Kirk Phillips, GS-15

Director, AF OEA

Aug. 5, 2024

Defense Energy

Consortium (DECo) under 10 U.S.C. § 4022

UNCLASSIFIED 2

Agenda

■ Air Force Office of Energy Assurance

■ Mission/Vision

■ Energy Innovation: Principles/Priorities

■ Problem: Energy Resilience at Scale, Speed & Cost-Effectiveness

■ Opportunity: Defense Energy Consortium (DECo)

■ Congress’ Call to Action: Create an Energy Resilience Consortium

■ Consortium Overview

■ DECo

■ Funding Strategy (3rd Party Financing)

■ Next Steps

■ Issue RFI

UNCLASSIFIED 4

Mission Assure Air Force mission readiness through identification and development of impactful energy resilience solutions.

Vision To secure Air Force warfighter superiority with the world’s most resilient infrastructure.

The Air Force Office of Energy Assurance

UNCLASSIFIED 5

Air Force Energy Innovation

PRINCIPLES

■ Resilience and Mission Focused

■ Move at Commercial Speed

■ Leverage and Combine All Appropriate Funding for Comprehensive Solutions (Department of the

Air Force, Vendor, Federal Agencies, State, Financiers)

■ Creatively Leverage All Acquisition Tools (e.g., Other Transaction Authorities)

■ Long-Term Planning Horizons with Concrete

Near- and Medium-Term Milestones

■ Teaming for Success - Air Force, DoD, Federal

Government, States, Utilities, Vendors

PRIORITY Technologies Beyond Solar & Wind

■ Geothermal

■ Small Modular Reactors

■ Long-Duration Energy Storage

■ Green Hydrogen

■ Electric Vehicle Support Equipment

■ ~ 4,000 energy resilience gaps identified by the Department of the Air Force (DAF)

■ Limited congressional appropriations to mitigate those gaps

■ Determined adversaries want to impact our critical energy infrastructure

■ “DOD is…unable to access…or deploy technologies and new business models at the scale, speed, and cost-effectiveness required to meet these [energy resilience] challenges.”

- Senate Armed Services Committee, FY2022 NDAA, S. Rep. No. 117-39

Problem: Energy Resilience

Opportunity: Defense Energy Consortium (DECo)

“The committee encourages the Department to create and/or partner with a consortium of industry, academic, and national laboratory partners dedicated to military installation resilience and energy innovation…”

Congress:

Create Energy Resilience Consortium

Senate Armed Services Committee, FY2022 NDAA, S. Rep. No. 117-39

“Each Secretary of a military department may enter into a partnership with, or seek to establish, a consortium of industry, academia, and other entities…to conduct covered prototype and demonstration projects

…[for] technologies and business models relating to energy resilience and all hazards resilience.”

FY 2023 NDAA, Sec. 322(g)

Congress:

Create Energy Resilience Consortium

Consortium Overview

■ *Consortium: DoD can award prototypes through a consortium (two or more individuals, companies, or organizations), to allow the DoD and industry to operate in one forum. (10 USC 4022 (f))

■ Consortium Management Organization (CMO) : The CMO acts as the consortium’s single point of contact and manages its membership.

■ CMO Management Agreement: DoD selects a CMO (usually competitive) and executes a base agreement. Akin to a Master

Services Agreement. (MSA)

■ Prototype Agreement: DoD selects CMO member/s to perform a prototype project and executes the prototype agreement with the

CMO. Akin to a Task Order under the MSA.

■ CMO Member Agreement: The CMO enters into a separate agreement with the CMO member/s selected to perform the prototype

(usually mirrors the CMO Master Services Agreement).

DoD Office

CMO Management

Agreement /

MSA

CMO

Prototype

Agreement /

Task Order

See “Audit of Other Transactions Awarded Through

Consortiums,” Department of Defense Inspector General, (Report No. DODIG-2021-077)

CMO

Member/s

CMO

Member

Agreement

Contract pathway

UNCLASSIFIED 11

Consortium

Management Agreement

DECo (Private)DoD Sponsor (Public)

Acquisition & Legal Team

Leadership Champion

Program Office

Prototype

Project Team 1

Prototype

Project Team 2

Prototype

Project Team 3

Consortium

Management

Organization

Governance:

Representative

Executive

Committee

DECo

UNCLASSIFIED 12

FY22 NDAA Section 824 report to Congress, Jan. 31, 2023

“[T]here could be a section 4022 prototype project where the performer provides the entire cost share, and the Department’s contribution for the agreement could be providing Government property, or facilities, or some other form of consideration.”

DECo Funding Strategy

UNCLASSIFIED 13

FY22 NDAA Section 824 report to Congress, Jan. 31, 2023

“[T]here could be a section 4022 prototype project where the performer provides the entire cost share, and the Department’s contribution for the agreement could be providing Government property, or facilities, or some other form of consideration.”

DECo Funding Strategy

• Consideration – access to installation, staff time, resilience gap analysis.

• Portfolio – Consortium would finance a portfolio of projects for scale.

UNCLASSIFIED 14

DECo Process Overview

Utility-scale Geothermal

AFTER Consortium Management Agreement Executed between DAF & DECo:

• Portfolio: DAF and DECo members collaborate to Identify a portfolio of risk balanced diversified projects (e.g., 5-10 bases) to address resilience gaps and demonstrate innovative technologies.

• Solicitation: DAF issues competitive solicitation to DECo. DECo sends solicitation to members.

• Selection: DAF selects best proposal. DAF executes prototype with DECo, not the vendors/team that submitted the winning proposal.

• Prototype Execution Vendors/teams secure 100% of prototype financing from one or more of DECo’s financiers, who in turn should fund entire portfolio, one or more prototypes in portfolio, or none.

• Award Follow-ons: Prototype team successfully completes prototype (e.g., technically feasible & financially viable follow-on projects where DAF is long-term offtaker). DAF may choose to award sole-source follow-on.

Long-term contract executed under the sole-source follow-on.

Next Steps

■ Issue Request for Information (RFI) for DECo

■ AF OEA Website:

https://www.afcec.af.mil/Energy/

■ Defense Energy Consortium (DECo) RFI:

https://sam.gov/opp/f240227da7c346b39ad5e09918a27b43/view

■ RFI Responses Due September 5, 2024, at 3:00 PM (EDT)

DECo RFI https://www.afcec.af.mil/Energy/ https://sam.gov/opp/f240227da7c346b39ad5e09918a27b43/view