RFI_Attachment_21_03222013.pdf

Attachment 21 Questions and Responses

Fort Drum– 22 March 2013

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1. The Evaluation criteria for Volume II “The criteria is met when the offeror provides a well-articulated narrative, no more than five pages, that describes five previous projects performed in varied locations such as the project scope herein. At a minimum, the areas of past performance to be discussed shall include management, quality and quality control, knowledge and professionalism, problem resolution, adherence to schedules, working relationships, design capabilities, environmental awareness, and contract performance.”

Yet there is a 10 page limit for Volume II and each past performance form (Attachment

9) takes two pages. Do the completed project past performance information forms (Attachment 9) for each of the five projects count toward the 10 page limitation in Volume II?

Answer: Five previous projects, Attachment 9 takes two pages each, there is a 10 page limit for Volume II. Much of the information concerning past projects is in Volume I (see L.5.1.2)

2. Our biomass plant requires a building that is 110-115 ft. (10 stories). Is there a height restriction on the base?

Answer: No.

3. Ref: Paragraph B.1, definition of “Biomass” -Discussion: The definition of “Biomass” could be interpreted to preclude a facility that combusts biomass along with other non-biomass fuels. The combustion of multiple fuels can improve the combustion efficiency of a solid-fuel boiler, and in some cases may be necessary to achieve the maximum net electrical output from the facility, either of which could result in lower pricing to the Government. In addition, in order to encourage the combustion of various materials that otherwise are difficult to manage and have limited, if any, reuse potential, the New York State Department of Environmental Conservation’s Policy DAR-3: Alternative Fuels allows a facility to combust up to 30% of alternative fuels without undertake extensive new permitting activities.

Question: Will a facility that combusts biomass and other non-biomass fuels qualify as a BGF for purposes of CLIN 0001 so long as the percentage of electricity produced annually by the combustion of biomass exceeds the percentage of the facility’s annual output that is sold to the government?

Answer: Fort Drum’s requirements specify a biomass facility. The Federal definition of biomass is contained in the solicitation and does not include other non-biomass fuels.

We understand the potential benefits to the plant and the installation when burning non-biomass fuels in the biomass facility; however that is not part of the Fort Drum requirements. If you choose to offer something other than government definition biomass, it would be an exception/alternate proposal. As such, it is not part of the requirement and the Technical Evaluation Team would treat it as an exception/alternative to the requirements of the solicitation.

4. Ref: Paragraph B.1.3 (CLIN 0001) On-Site Biomass Facility - Discussion: This paragraph establishes an upper limit for the on-site BGF of 28MW. During the pre-proposal

SP0600-12-R-0401 Fort Drum BGF Page 2 conference there was no upper limit placed upon the capacity of the on-site BGF. The government’s PPA requirement is that the on-site BGF have the capacity to deliver at least 100,000 MWh annually, with the potential of meeting Fort Drum’s current annual requirements of 147,000 MWh. Furthermore, Section C.1, On-Site Biomass requirement, states in part that the electricity demand at Fort Drum is expected to continue to grow. If the on-site BGF is capable of producing power in excess of 28MW that could be an advantage for the government in the case of additional power requirements beyond the 28MW upper limit size. This additional capacity of the on-site BGF would be at no cost to the government. In fact, a facility with a generating capacity in excess of 28 MW could result in lower prices to the government due to the economies of scale that can be achieved at a larger facility.

Question: Will the government remove the 28 MW upper limit restriction from CLIN 0001 requirements?

Answer: Please review Amendment 0004 to the solicitation for changes made to Sections B and C.

5. Ref: Section C, paragraph C.1 On-site biomass Requirement and C.3.1.2 Description of Equipment and Controls - Discussion: These paragraphs require the offeror for CLIN 0001 to design, construct, operate and maintain the transmission interconnection between the Fort Drum North and South substations. There are several benefits that this interconnection would provide to Fort Drum, and these benefits are not part of the ancillary services that are currently being obtained by Fort Drum for the spot market price the Army is paying for electricity. The net effect of this requirement is to obligate CLIN 0001 offerors to provide additional services for the same price Fort Drum is paying for electricity without these services. In addition, this does not appear to be a requirement for the CLIN 0002 offerors. This requirement represents a significant additional expense for CLIN 0001 offerors, which in turn puts them at a competitive disadvantage. Offerors on CLIN 0002 do not have a similar requirement resulting in a situation where all offerors are not treated equally. This difference between CLIN 0001 and CLIN 0002 requirements gives rise to disparate, unequal treatment between CLIN 0001 and CLIN 0002 offerors.

Questions:

a. Will this requirement also be placed on the CLIN 0002 offerors?

Answer: Interconnecting between the Fort Drum North and South substations is not a requirement under CLIN 0002. However, the Government recognizes that there are different advantages to the two CLINs and in accordance with M.6 will perform a comparative assessment of the highest rated proposals for CLIN 0001 and 0002 to determine which alternative provides the best value to the Government.

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b. If not, how will the government recognize the value added of this requirement when CLIN 0001 offeror’s proposals are evaluated against CLIN 0002 offeror’s proposal?

Answer: The Government will evaluate offers in accordance with Section M of the Solicitation.

c. Will the government consider paying a fee for use of the interconnect thereby allowing a fair comparison of the costs in CLIN 0001 and CLIN 0002?

Answer: All costs associated with the Offeror’s proposal shall be included in the proposed rates.

6. Ref: Section C Paragraph C.1.3.1 - Discussion: The contractor is required to maintain a 30 day biomass feedstock on site at all times. There is no explanation of the need for this requirement, and the only time when this requirement would affect the government is when the National Grid transmission system is down for an extended period of time, which would mean there is no alternative electricity supply for Fort Drum in the event the BGF was unable to supply Fort Drum’s needs.

Questions:

d. Does the government mean a 30 day feedstock necessary to generate the maximum power requirements for Fort Drum (28MW) in the event of an extended outage of the National Grid transmission system?

Answer: Relating to the feedstock requirement, an offeror may submit an exception to the terms of the solicitation with its initial proposal in accordance with Section L.4.2.10 Exceptions to Terms and Conditions.

e. If not, what power output requirement is related to the 30 day feedstock requirement?

Answer: See answer above.

f. Could this requirement be met by combining the on-site storage with material stored in an off-site concentration yard that is located within 15 miles of Fort Drum?

Answer: See answer above.

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7. Ref: Paragraph C.6.1 and Paragraph H.4.2. - Discussion: These paragraphs stipulate that scheduled outages at the BGF shall not exceed 36 hours and shall not exceed one event per month. Customary good operating practice in the biomass industry is that facilities undergo at least one scheduled maintenance outage per year that typically lasts for 4 – 7 days, and an outage every 5 – 7 years that includes preventative maintenance to the turbine generator that typically lasts approximately two weeks.

Question: Will the government allow for scheduled outages to exceed 36 hours provided that Fort Drum has access to electricity supply through the National Grid transmission system during the outage?

Answer: Please see Amendment 0004 for changes to Section C.6.1 and H.4.2

8. Ref: Paragraph H.4.2 - Discussion: The provider is required to maintain a system uptime performance that is in the top 25% of the industry in the United States for the technology being implemented.

Question: What is the government using for the industry standard?

Answer: The Government shall consider Offeror’s proposed uptimes and justifications for offerings. An industry standard has not been established.

9. Ref: Paragraph L.4.2.9 (d) - Discussion: The SF 1449 does not give the number of days for which the offeror’s proposal is valid.

Question: Where in the solicitation (Amendment 2) is the number of days that that the proposal is valid?

Answer: Section L.4.2.9 has been modified to reflect, “Proposals in response to this solicitation will be valid for 120 days (unless a different period is proposed by the Provider).

10. Ref: Paragraph L.5.1.2. 3) b. Performance Plan - Discussion: The offeror is proposing to sell the government electrical power generated by a BGF at a fixed price plus annual escalation. Fluctuations in the cost of the feedstock do not affect the price for electricity to be paid by the government under the PPA. The purchase and maintenance of the required feedstock is an operating responsibility of the offeror. In addition, offerors in CLIN 0002 do not have a similar requirement.

Question: Will the government delete the requirement for the contractor to maintain the feedstock at a firm fixed price for the life of the contract, or, if not, require offerors in CLIN 0002 to meet a similar requirement?

Answer: The requirement for CLIN 0002 requires delivery of electricity with the same pricing requirements as CLIN 0001. Neither CLIN makes guarantees regarding the cost

SP0600-12-R-0401 Fort Drum BGF Page 5 of feedstock used for generation.

11. Ref: Paragraph L.5.1.2 (1) Renewable Project Experience and L.5.2.1 - Discussion: Both paragraphs require a completed Attachment 9 (Past Performance) for the same five projects that the offeror cites for experience (Attachment 8). However, the evaluation criteria for Volume I addresses Experience (Attachment 8) and the evaluation criteria for Volume II addresses Past Performance (Attachment 9).

Question: Will the government remove the requirement to include the completed past performance information forms (Attachment 9) for the five projects presented in Volume I?

Answer: No

12. Ref: Paragraph L.5.3.1 and L.5.6 (c) - Discussion: Both paragraphs appear to require the inclusion of a Subcontracting Plan (Applicable to large businesses). The page limitation for Volume III is two pages, which is not long enough to include both the subcontracting plan and provide the information requested in paragraphs L.5.3.1(a)-(d).

Question: Is our assumption correct that the government’s intention is that the offeror include its Subcontracting Plan only in Volume VI?

Answer: Subcontracting plan will not be included in the page count for Volume III.

13. Energy Security - Discussion: We note that energy security has become increasingly important for Army installations, and there are a growing number of initiatives under way to promote energy security. The Army’s Official Energy Security Implementation Strategy (AESIS), approved on January 13, 2009, states that “Army leadership will expect each organization, Soldier, and Civilian to incorporate energy security into the fabric of all Army activities.” According to the AESIS, energy security for the Army means preventing loss of access to power and fuel sources (surety), ensuring resilience in energy systems (survivability), accessing alternative and renewable energy sources available on installations (supply), providing adequate power for critical missions (sufficiency), and promoting support for the Army’s mission, its community, and the environment (sustainability). This goal is consistently reinforced by Army leadership, including by the Assistant Secretary of the Army, Installations, Energy and the Environment, the Honorable Katherine Hammack, during Congressional Testimony entitled “The Value of Energy Security from Battlefield to the Base” (March 29, 2012). Despite this official policy, the RFP fails to promote energy security, and in fact provides a disincentive for CLIN 001 offerors to provide energy security at Fort Drum due to the high cost of the interconnection between the two substations that is not required under CLIN 002 (see Question 3 above).

Questions:

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a. Is this RFP intended to enhance energy security at Fort Drum?

Answer: See section C.28 for requirements related to energy security.

b. Will the government consider incentivizing offerors to provide secure energy for Fort Drum? If so, how?

14. Pricing - Discussion: The RFP indicates that pricing in Year 1 shall meet or beat the current day-ahead average spot market price of $0.056/kWh, compounded annually at no more than 4.88% after Year 1. To cap proposed prices under a long-term agreement using current spot market pricing appears unreasonable and arbitrary. Day-ahead spot pricing is volatile and seasonal, as the day-ahead price in January and February is typically materially higher than in the Fall or Spring. In addition, using spot market pricing as the benchmark does not allow for a fair accounting of the value of enhancements such as energy security and satisfying federal renewable energy law and policy. The $0.056/kWh price simply does not account for enhanced energy security or the benefits of locally-produced renewable energy from CLIN 0001 offerors. Full and open competition to obtain best value, without an arbitrary price cap, is more consistent with federal policy and can achieve the Army’s budgetary, energy, and security goals.

Questions:

a. Will the Government remove this $0.056/kWh price ceiling and escalation mechanism?

b. If not, would the Government consider other pricing mechanisms that would provide price certainty, but account for the added value (and associated costs) of energy security and locally-produced renewable energy?

c. Will an offer be deemed non-responsive if it proposed alternative pricing mechanisms?

Answer: To be responsive, an offer must meet the requirements of the solicitation. If an offeror chooses to offer an alternative pricing mechanism, it would be considered an exception/alternate proposal. As such, it is not part of

SP0600-12-R-0401 Fort Drum BGF Page 7 the requirement and the Cost/Price Evaluation Team would treat it as an exception/alternative to the requirements of the solicitation.