Official_RFP_Amendment_0004_-_SPE60013R0404.pdf

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT

1. CONTRACT ID CODE

2. AMENDMENT/MODIFICATION NO.

See Block 14

4. REQUISITION/PURCHASE REQ. NO. 5. PROJECT NO. (If applicable)

6. ISSUED BY CODE SPE600 7. ADMINISTERED BY (If other than Item 6) CODE

8. NAME AND ADDRESS OF CONTRACTOR (No., street, county, State and ZIP Code)

CODE FACILITY CODE

SPE60013R0404

X

2013 MAR 05

10A. MODIFICATION OF CONTRACT/ORDER NO.

10B. DATED (SEE ITEM 13)

11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS

The above numbered solicitation is amended as set forth in Item 14. The hour and date specified for receipt of OffersX is extended, X is not extended.

or (c) By separate letter or telegram which includes a reference to the solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this amendment you desire to change an offer already submitted, such change may be made by telegram or letter, provided each telegram or letter makes reference to the solicitation and this amendment, and is received prior to the opening hour and date specified.

1 copies of the amendment; (b) By acknowledging receipt of this amendment on each copy of the offer submitted;

Offers must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as amended, by one of the following methods:

12. ACCOUNTING AND APPROPRIATION DATA (If required)

A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO.

IN ITEM 10A.

B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation date, etc. ) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR 43.103(b).

C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:

E. IMPORTANT: Contractor is not, is required to sign this document and return copies to issuing office.

14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings, including solicitation/contract subject matter where feasible.)

Except as provided herein, all terms and conditions of the document referenced in Item 9A or 10A, as heretofore changed, remains unchanged and in full force and effect.

15A NAME AND TITLE OF SIGNER (Type or print)

NSN 7540-01-152-8070

Previous edition unusable

STANDARD FORM 30 (REV. 10-83)

Prescribed by GSA FAR (48 CFR) 53.243

16B. UNITED STATES OF AMERICA15B. CONTRACTOR/OFFEROR

(Signature of Contracting Officer)(Signature of person authorized to sign)

16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)

(a) By completing Items 8 and 15, and returning

DLA ENERGY

8725 JOHN J KINGMAN RD STE 4950

FT BELVOIR VA 22060-6222

USA

15C. DATE SIGNED 16C. DATE SIGNED

D. OTHER (Specify type of modification and authority)

7/25/2013

3. EFFECTIVE DATE

See Attached Continuation Sheet(s).

(X)

CHECK ONE

PAGE OF PAGES

9A. AMENDMENT OF SOLICITATION NO.

9B. DATED (SEE ITEM 11)

13. THIS APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS.

IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.

fae9141 Typewritten Text Jezabel Aviles fae9141 Typewritten Text

The following questions have been received in response to the solicitation:

1. With respect to charges for Renewable Portfolio Standards (RPS), Section B19.46 (2)(b)(1) of Part I states that costs associated with RPS shall be passed through to the Government; however, Note 1 of Section B19.46 (2)(c) requires that the suppliers’ prices in their submission include current and future costs attributed to meeting RPS requirements. Please clarify whether RPS costs should be fixed in the Supplier Service Fee or passed through on the Government’s invoices as one of the components listed in Other Market Charges.

DLA Energy Response: Amendment 0003 removed the note in reference to your question. Please refer to provision B19.46 BLOCK PURCHASES, Subparagraph (2)(b)(1) Renewable Energy Credits which states that RPS charges shall be passed through to the Government.

2. Offeror wishes to clarify that the prices in its submission will not include any costs related to FERC Order

745. “FERC Order 745 costs” refers to any costs or charges imposed by the ISO on load served by Offeror in accordance with complying with the provisions of Federal Energy Regulatory Commission (“FERC”) in Order No. 745 18 CFR Part 35 (March 15, 2011). Any modifications or conditions to the treatment of FERC Order 745 Costs under the ISO tariff or otherwise shall be deemed a change in regulation pursuant to the applicable section of the Solicitation.

DLA Energy Response: The Government does not concur. Charges not in effect at contract signing and imposed afterward shall be addressed as defined in provision I820 Electricity Regulatory Changes of the solicitation.

3. Offeror requests confirmation that RMR is to be a separate line item.

DLA Energy Response: The Government concurs. RMR charges are to be passed through per provision

B19.46, paragraph (b)(7) of the solicitation and, as stated in provision C804, paragraph (b)(13), all RMR charges are to be identified on the invoice.

4. With respect to Section B19.46(a)(1)(iv), offeror would like to clarify that each block purchase shall be for no less than 1 month in duration.

DLA Energy Response: The Government concurs.

5. With respect to Section B19.46(a)(1)(iv), the electric block will identify hourly locational marginal price index and applicable UDC where block will be delivered. Government shall only request price quotes between 9:00 AM EPT and 3:00 PM EPT, Monday through Friday (other than holidays).

DLA Energy Response: The Government agrees that price quotes will only be requested between 9:00

AM EST and 3:00 PM EST, Monday through Friday (other than holidays). Each electric block shall apply to the hourly LMP index and UDC associated with each of the accounts listed on the Installation Data Sheet of this solicitation.

6. With respect to Section B19.46(a)(1)(iv), offeror would like the Government to clarify the meaning of “any other aspect of the proposed block purchase is unsatisfactory” in the last sentence. Offeror counterparties may be reluctant to offer bids if purchases are declined for unknown or unreasonable justifications.

DLA Energy Response: Should the Government determine the price or any other aspect of the proposed block purchase to be unsatisfactory, the Government will provide the Contractor with an explanation at the time and will further address additional concerns at the contractor’s request.

5. Exception to FAR 52.212-1(c) – Period for Acceptance of Offers: The Company will only hold its offer for fixed price requirements firm until one (1) hour prior to market close from the date specified for receipt of offers. Fixed Adder will be held for 24 hours.

DLA Energy Response: Offerors are free to withdraw their proposal in writing any time prior to award.

Please see 52.212-1 Section (c) – PERIOD FOR ACCEPTANCE OF OFFERS, on page 28 of the solicitation which reads that the offeror agrees to hold prices firm for five business days from the date specified for receipt of offers, unless another time period is specified in an addendum to the solicitation. If an offeror withdraws their proposal, the Offeror will not be able to re-submit following the withdrawal.

Please note that 52.212-1(c) is only applicable prior to award. The submission of electricity block quotes after award is governed by Provision B19.46(a)(1)(iv) on page 5 of the solicitation.

6. The Government represents that none of the accounts in the solicitation has on-site generation, except for emergency or back-up generation.

DLA Energy Response: The presence of on-site generation related to National Institutes of Health account 27301490008 is addressed under Amendment 0003. The Government will contact all remaining customers regarding the presence of on-site generation and provide an update under a future solicitation.

7. Transmission Pass-Through – Offeror is not clear as to exactly which transmission related charges should be passed through via this line item. Offeror interprets “Transmission Costs” to include the items listed below: Please confirm.

1. Network Integrated Transmission

2. Transmission Enhancement Charges/Credits

3. Transmission Owner Schedule, Control, Dispatch

4. Black Start

DLA Energy Response: Please refer to Amendment 0003.

8. Ancillary Services Pass-Through – Offeror is not clear as to exactly which ancillary service charges should be passed through via this line item, particularly in regard to Operating Reserves. Offeror considers “Ancillary Service Costs” to include the items listed below. Please confirm.

1. Day Ahead Operating Reserves

2. Balancing Operating Reserves

3. Reactive Services

4. FERC Order 745 Uplift Charges

5. PJM Schedule Control Dispatch

6. Reactive Supply and Voltage Control

7. Regulation

8. Supplemental Reserves

9. Synchronized Reserves

DLA Energy Response: Please refer to Amendment 0003.

9. Capacity Pass-Through – Offeror interprets the Solicitation that capacity will be passed through based on the PJM calculation where: Monthly Capacity Cost = RPM Net Load Clearing Price ($/MW-Day) x Capacity PLC x Forecast Pool Requirement x Zonal Scaling Factor x No. Days in Billing Cycle. Capacity Transfer Rights Credit is reflected in the RPM Net Load Clearing Price.

DLA Energy Response: The Government does not concur. The Government’s language in Provision

B19.46(b)(2) Capacity Costs is unambiguous and consistent with PJM Manual 18: PJM Capacity Market, Sections 6 (Capacity Transfer Rights), Section 7 (Load Obligations), and Section 9 (Settlements).

10. Marginal Loss Over-collection Credits (aka Transmission Loss Credits) – The Solicitation is silent on the treatment of Marginal Loss Over-collection Credits. Please confirm that this component is also to be passed through.

DLA Energy Response: Please refer to Amendment 0003.

11. RPS – There seems to be conflicting language. Page 6 of the Solicitation indicates that RPS shall be passed through, however on page 7, Note 1 indicates that the Supplier Service Fee is to include current and future RPS costs. Please clarify. To be consistent with the above items, Offeror believes that RPS should also be passed through.

12. Firm Fixed Price Block Purchases – Please confirm that block prices may include a commercially reasonable premium to cover contractor’s collateral costs.

DLA Energy Response: The Government does not concur. Please refer to B19.46 (c) Supply Service Fee.

13. Availability of Funds: If funds are not made available beyond September 2013, will the DLA commit to terminating for convenience to allow a supplier to fairly settle forward market hedges through 2019?

DLA Energy Response: The Government will not commit to a specific action in advance of the noted scenario actually occurring.

14. Under B19.46 (a)(2), Please define how utility defined loss factors and PJM deration will be applied to the respective formulas for both Electricity Deficiency Adjustment and Excess Electricity Adjustment.

DLA Energy Response: Please refer to Amendment 0003.

15. Under B19.46 (b)(1), the RFP states that the cost of RPS shall be passed through to the government. But then in B19.46 (c) Note 1, the RFP states that the supplier service fee shall include the cost attributed to meeting state RPS. Please clarify if RPS is included or a pass through.

16. Under B19.46 (b)(4), please define what PJM losses are.

DLA Energy Response: “PJM Losses” refers to the cost of power that is lost as heat when power flows in transmission lines and transformers. Just as with congestion charges, this cost is incorporated into LMPs.

17. B19.46(b)(4) - Exception/clarification: Contractor may agree to fix this component, but cannot be

‘directed to secure financial instruments’, as the same could violate CFTC broker rules.

DLA Energy Response: The Government has relied on basis contracts to fix congestion costs and is not aware of any CFTC broker rules that would be violated by purchasing such contracts. The Government would agree not to direct the Contractor to secure any particular financial instrument that would violate CFTC rules, but would like you to specify the CFTC broker rules that you believe would be violated were the Contractor to be directed to purchase a basis contract to allow the Government to fix congestion costs.

18. Additionally, please clarify how transmission losses (TL) are to be passed through. The data which demonstrates the TL factor distinct from the LMP is not published until 60 days following. Does the Government intend for a 60 day trueup?

DLA Energy Response: For the purposes of this solicitation, there is no need to distinguish between costs related to congestion and costs related to transmission losses. Losses are passed through to the Government through the congestion charge, i.e., the differential in the LMP at PJM West and the LMP at the load zone.

19. B19.46(b)(8) - Exception/clarification: Please clarify that the Government would like transmission and distribution losses to be applied to the metered volume and billed at the Real Time LMP.

DLA Energy Response: As stated in B19.46(b)(8), UDC losses shall be billed as a pass-through.

Pursuant to Section B19.46(b)(4), transmission losses along with transmission congestion for the block energy scheduled day-ahead shall be billed at the day-ahead LMP for PJM West hub minus the day-ahead LMP for the applicable Point of Delivery. For energy outside the blocks, the real-time LMP differential is used to calculate congestion plus losses.

20. RFP §B19.46 Block Purchases (a) Electricity (1) Electricity – Purchase by Firm-Fixed Price Blocks (i.).

Could the Government please clarify the following statement: “Any modification to the Block Purchase Schedule shall not exceed 36 months beginning one month subsequent to the date when the Government directs the Contractor to make a block purchase, unless different terms are mutually agreed upon.”

DLA Energy Response: Any modification to the Block Purchase Schedule will not affect any block scheduled to be purchased within one month of the date on which the Block Purchase Schedule is modified. This could, at the earliest, include blocks scheduled to be purchased one month after the date on which the Block Purchase Schedule is modified; and at the latest, include any block purchases scheduled over the next 36 months following the earliest possible date. Any modification affecting scheduled block purchases outside of this range will be mutually agreed upon.

21. RFP §B19.46 Block Purchases (b) Other Market Charges (4) Transmission Congestion & PJM Losses.

Can you please confirm what the Government’s expectations are regarding “the right to direct Contractor to secure financial instruments to fix congestion costs or basis..” Would this involve such things as participation in FTR auctions?

DLA Energy Response: The financial instruments that have been employed by the Government for this purpose have been basis point difference contracts. The Government does not envision use of participation in FTR auctions for this purpose.

22. RFP §B19.46 Block Purchases (b) Other Market Charges (4) Transmission Congestion & PJM Losses.

Regarding the ability “to fix congestion costs or basis between the PJM West Hub and the applicable delivery zone over a specified time period for a specified level of load through RFPs or other methods as mutually agreed to…” How often does the Government anticipate locking vs. floating the basis? We propose that the ability to lock the basis can only occur once per year.

DLA Energy Response: The Government does agree with limiting its ability to lock the basis only once per year. The Government does not currently have an estimate of how often congestion would be fixed.

23. RFP §B19.46 Block Purchases (c) Supply Service Fee. Under Note 1 (page 7), it states that “Offered unit prices (Supply Service Fee) shall include current and future costs attributed to meeting state Renewable Portfolio Standards (RPS)”. However, Renewable Energy Credits are listed under (b)(1) (page 6)Other

Market Charges as pass-through charges. Please clarify if RPS should be included in the Supply Service Fee or billed to the Government as a separate line item?

24. RFP §C804(a) Statement of Work/Specifications. Please clarify that the Contractor will be responsible for penalties for non-delivery if that is due to the acts or omissions of Contractor, but not if due to the acts or omissions of the Government or the LDU, or due to force majeure.

DLA Energy Response: The examples listed may be considered excusable delays under clause 52.212-

4(f) Contract Terms and Conditions – Commercial Items in Section I of the solicitation in the event that the specific cause of the delay was beyond the reasonable control of the Contractor and without its fault or negligence.

25. RFP §C804(b) Invoice and Payment. Please confirm that the Government agrees to pay the undisputed amount of any invoice on its due date?

DLA Energy Response: The Government intends to make payment in accordance with provision

52.212-4, paragraph (i) in conjunction with the Prompt Payment Act (31 U.S.C 3903) and its corresponding regulations (5 CFR Part 1315).

26. Additions and Deletions. How does the Government anticipate handling the addition of future accounts to the awarded contract?

DLA Energy Response: Please refer to Amendment 0003.

27. Award. Is it the Government’s intent to award on an installation basis or to award all accounts to one

Contractor?

DLA Energy Response: The Government intends to award all accounts to one Contractor.

28. Congestion. For congestion, capacity, RECs, etc., when the Government requests that Contractor procures

“through an RFP”, is the expectation that the Government will issue the RFP/obtain quotes or will the Contractor be responsible for administering one?

DLA Energy Response: As stated in Provision B19.46, Subparagraph (b)(1), Contractor would be directed to purchase RECs through either an RFP or other method mutually agreed to. Thus Contractor would be responsible for administering the purchase process. It is the Government’s intention that RECs obtained under this subparagraph be subject to a competitive procurement.

29. Inapplicable FARs. Offeror requests that the Government agree that FAR.212-4 subsections (a) and (o) will not be applicable to the contract awarded as a result of this Solicitation. Those clauses are not appropriate for a contract for the supply of electricity.

DLA Energy Response: The Government does not concur. FAR 52.212-4 Contract Terms and

Conditions is required by statute to be included in this solicitation under FAR 12.301(b). Please note that those paragraphs of FAR 52.212-4 that have not been included in full text are incorporated by reference as stated in Block 27 of Standard Form 1449.

30. Modification of Block Purchase Schedule. B19.46 (a)(1)(i) Block Purchase Schedule (page 5). Please confirm that modifications to the Block Purchase Schedule will not be used by the Government to unwind existing block purchases before expiration of the time period for which the Government purchased the block.

DLA Energy Response: The Government confirms.

31. Taxes. Tailored FAR clause 52.212-4(k) (page 12) states that the contract price includes all applicable

Federal, State and local taxes and duties. Does that include gross receipts tax, or will gross receipts tax be a pass-through charge?

DLA Energy Response: As defined in provisions B19.46 BLOCK PURCHASES, paragraph (b)(9) and

C804 STATEMENT OF WORK/SPECIFICATIONS, paragraph (b)(15), Pennsylvania Gross Receipts Tax shall not be included in the offered unit prices and shall be billed as a separate line item.

32. Section B19.46 BLOCK PURCHASES (ELECTRICITY) (b) OTHER MARKET CHARGES Offeror requests DLA to clarify how renewable energy credits are to be treated under this RFP. In this section, the RFP states renewable energy credits are to be passed through to DLA. However, in "Supply Service Fee" Note 1 Offered Unit Prices (subsection (c)), the RFP states that the Supply Service Fee shall include "Renewable Portfolio Standards (RPS)."

33. Offeror requests DLA to clarify what must be included in the Supplier Service Fee. The RFP as written contains contradictory language regarding the pass-throughs. Based on the ancillary services that are not included in Section, what ancillary charges are expected to be in the Supplier Service Fee?

34. Offeror requests DLA to confirm whether the Block Purchases are by entity/account or on the aggregate load.

DLA Energy Response: Blocks will be purchased for the aggregate load.

35. Offeror requests DLA to clarify whether Transmission Enhancement Charges are to be passed through.

Offeror identifies the following as pass-throughs (RECs and RFP addressed above) Capacity, Transmission Costs, Transmission Congestion and PJM Losses, Ancillary Service Costs, Reconciliation charge, RMR, UDC Losses, and PA GRT.

36. Section B19.46(a)(2) (i, ii, iii) Pricing Offeror requests further explanation of the proposed pricing. It is Offeror’s understanding that DLA is purchasing fixed blocks, and any volume greater than the purchased block size will be charged at the zonal hourly real-time LMP and any volume lower than the purchased block size will be credited back at the zonal hourly real-time LMP.

DLA Energy Response: The above methodology is consistent with the language in this solicitation.

37. 52.212-2 Offeror requests DLA to advise approximately when DLA will request pricing and whether prices are to be submitted through Procurex or standard pricing sheet.

DLA Energy Response: The Government will announce the date for the submission of pricing as part of a future amendment. A date has not yet been set and is dependent on the conclusion of negotiations and evaluations. Should the decision be made to utilize the Procurex reverse auction system, this too will be announced as part of a future amendment in accordance with provisions 52.215-9023 REVERSE AUCTION in Section L of the solicitation.