Q A_Set_10.pdf

Joint Base San Antonio (JBSA) Questions and Answers Set #10

August 28, 2013

Questions & Answers:

Q1: Will the government entertain a tri-party task order whereby the Prime Contractor would be responsible for complete operations and maintenance but an owner of convenience (i.e. bank / lender) would own the assets in order to minimize the capital cost of ownership?

A1: No.

Q2: Does the JBSA have an Emergency Management Plan?

A2: Yes, JBSA has an approved Emergency Management Plan: the Civil Engineer Contingency Management Plan. The plan provides the policies and procedures for contingency operations, courses of action for various possible emergency situations, and a priority list for restoration of service. The plan is classified as “For Official Use Only” (FOUO) and therefore not available for public dissemination. Upon contract award, and at the Successful Offeror’s (SO) request, the Government will ensure that a copy is available to the SO.

Q3: Does the JBSA have a Service Restoration/Facility Priority List?

A3: See Question Set #10 Question 2.

Q4: Section L – Page Limitations. Question: Would the Government please consider either; increasing the page limit of Volume I, to 225 pages per utility, or alternatively, exclude Subfactor 3 R+R schedule submission from the page count? Rationale: Depending upon utility, and specifically with respect to electric systems, the inventory is extensive (total line items) and as such, replication of the R+R schedule in the technical volume (without costs), even when using the most efficient format possible to arrange the information, and with the minimum font allowed, requires approximately 25 pages alone.

This limits the ability of offerors to address all of the other factors of the response, which are considerable and deserve equal attention to detail to the information you require for evaluation.

A4: This is due to systems limitations and thus can’t be changed.

Q5: Questions and Answers Release to Offerors. Question: Upon review of questions and answers received, we note that 6 questions for which we received answers directly from the Government were not shared with other offerors or posted as responses on FBO, as required by the long-standing fundamental principle that all offerors must be provided with the same statements of the agency's requirements so as to provide a common basis for the submission of proposals. Union Carbide Corp. , B–184495, Feb. 26, 1976, 76–1 CPD 134; SYMVIONICS, Inc., B–293824.2, Oct. 8, 2004, 2004 CPD ¶204. Our question is whether this also applies to questions asked by other offerors who received individual answers that were also not made available to all offerors?

A5: Though DLA Energy will not comment on the applicability or inapplicability of the legal authorities cited, it does review all interactions with industry before receipt of proposals under the guidance of FAR 15.201 and relevant authorities. Any exchange that is “necessary for the preparation of proposals” is shared with the public.

Q6: Regarding the repurchase option:

Q6a: If the Government makes use of the repurchase option at a time when the “Unrecovered Investment” is $0, does the Contractor owe the government anything?

[Explanation: There are times when “pre-payments” will create a cash surplus for Operator, for a period of time. What happens to such a balance in the case where the Gov. repurchases the asset?

If Operator has to repay these “pre-payments” this will create a liability for accounting purposes.

If Operator can keep them, it makes for a reasonable accounting treatment, because the “pre-payments” are then real “advance payments” which are forfeit if the customer cancels the “order” for our services.]

A6a: Payment for Initial System: if the System Owner has proposed matching payments for the Purchase Price Recovery and Purchase Price Credit any remaining amounts would be expected to set to $0. However, the if the System Owner proposed unbalanced Purchase Price Recovery and Purchase Price Credit, any amounts collected by the System Owner above the Purchase Price Credits would be expected to be returned to the government.

Q6b: Can “Unrecovered Investment” include RR Investment-related, but yet unrecovered costs such as un-recovered financing fees, if they were not reimbursed separately under H.10?

[Explanation: It is common to pay an up-front fee for financing. So, if we pay $100k in up-front fees in year 1 and priced-them into the RR charge, but the Gov. terminates the contract (for default) in Year 2, will the contractor be able to recover the up-front finance fee through the “unrecovered investment” or do we have to hope for leniency from the CO to pay us that separately?]

A6b: No. “Unrecovered Investments” are limited to the purchase price for the utility system(s) and “[i]mprovements or additions” to the system. While a financing fee does not meet either of the stated criteria, a request for recovery of such may be considered under FAR 52.249-2, Termination for the Convenience of the Government or DFARS 252.243- 7002, Request for Equitable Adjustment, depending on the circumstances.

Q7: Regarding the FMV test per 10 USC 2688

Q7a: What valuation model does the Government expect to use to determine the Fair Market Value (FMV) of the conveyed asset per 10 USC 2688?

A7a: The Offeror is expected to propose a Fair Market Value (FMV) as it determines prudent, and the Government will evaluate each proposal. Please note that in no case will the government accept paying Contribution In Aid of Construction (CIAC) tax if the FMV is determined to be inadequate by a taxing authority.

Q7b: In determining whether a bidder has offered a purchase price at or above the FMV, will the Government only look at the offered purchase price and resulting monthly credit or will it also look at the “recoverable portion”? In other words, for the purposes of determining compliance with 10 USC 2688, will the Government look for the real economic consideration that the bidder offers or are they only looking at the line item “Purchase Price”, even though that price would immediately be clawed back by the recoverable portion?

[Example: What is better in the eyes of the Government for 10 USC 2688? A bid with a purchase price of $100 million that is 100% recoverable or a bit with a purchase price of $1,000 of which 0% is recoverable]

A7b: The government will look at all aspects of an offer to determine the receipt of FMV.

Sometimes there are appropriate ways to compensate the Government for the system other than equal Purchase Price Credits and Purchase Recovery. Offerors should ensure that a CIAC tax is not likely to be imposed. In its proposal, the Offeror is expected to state that any CIAC tax will be paid by the System Owner.

Q7c. If a bidder determines that the conveyed asset, due to all the limitations it comes with, has an economic value of $0 and subsequently offers a purchase price of $0, can the Secretary still come to the conclusion that the FMV test under 10 USC 2688 has been met?

A7c: It is possible, but the rationale would need to be FULLY explained and documented using both text and active spreadsheet analysis.

Q7d: Please provide an overview of the cash flow that was generated from 3rd party users of the utility system (e.g. cell phone providers) on an annual basis since the year 2002?

A7d: This information is not available. For the purpose of proposing on this solicitation, the Offeror can “assume” that 3rd party payments are $0.

Q7e. Please provide an overview of the agreements that are currently in place with 3rd party users, particularly regard they payments they have to make and tenor?

A7e: This information is not available. Offeror should assume that “standard” 3rd party agreements would be in place. Assumptions regarding these agreements should be stated in accordance with Section L.

Q7f: Which of these leases, if any, does the Government expect to terminate or transfer to the Operator after signing the utility services agreement?

A7f: None, 3rd party agreements will transfer to the System Owner as they expire.

Q8: Regarding the evaluation criteria “price”, although the RFP does not require the Government to repurchase the system at the end of the term, it is (unless the base is closed) likely that it will do so (or renew the contract). Thus, the Government should not just look at the Net Present Value of the monthly payments over the 50 year period, but also at the price it would have to pay to take back the system at the end of the term or to renew the contract. Will the government factor in expected residual value or “end of term costs” in its evaluation of the bids?

[Explanation: The RFP seems to say that the Government will only look at the NPV of the payments it has to make during the contract period. This would put us at a disadvantage compared to someone who is willing to take residual value risk. However, if the government would include the not contractually committed, but likely “bullet payment” at the end of the contract, the NPV of both offers would be similar again. As a matter of fact, the offer without Residual Value has a lower NPV than the offer with the Residual Value, because interest costs are lower.

A8: The Government will evaluate Factor 5: Price in accordance with Section M.

Q9: Regarding I-002 INT-BT19.40 Economic Price Adjustment

Q9a: Is our understanding correct that that for the purposes of determining if “an index consistently and substantially fails to reflect market conditions”, a Contracting Officer will look at the cost development on both the O&M and RR Investment side?

A9a: In a situation where an economic price index is believed to consistently and substantially fail to reflect market conditions, the Contracting Officer will take into consideration all facts relevant to the applicable indices and base prices.

Q9b: What deviation of actual cost development to the current index would meet the definition of “substantially fails to reflect market conditions”?

A9b: Determinations are made on a case-by-case basis.

Q9c: What time period would meet the definition of “consistently”?

A9c: See response to A9b, above.

Q10: Regarding G.4 Accounting Procedures

Q10a: Does section G.4 and G.4.1 also apply to unregulated, non-utility bidders?

A10a: Yes.

Q10b: Is CAS a Uniform System of Accounts acceptable procedure to the Government per Section G.4 and G.4.1?

A10b: Yes.

Q11. In reference to RFP - H.2.4 Self-Insurance. When does the request to self-insure have to be submitted?

A11: Offerors should submit requests to self-insure with initial proposals.. Failure to receive approval for self-insurance requests submitted after award will require the Contractor to provide the appropriate certificates of insurance which may not be subject to equitable adjustment.

Q12. No installation-specific emergency management plans or policies were provided in RFP Attachments JA3 or JA4, or in the Technical Library. It is assumed that Joint Base San Antonio maintains a Comprehensive Emergency Management Plan (CEMP) in accordance with AFI 10-2501, Air Force Emergency Management Planning and Operations and that emergency management planning and operations for the water utilities fall under the 802nd Civil Engineer Squadron (CES) for JBSA- LAK and JBSA-LAKTA, the 902nd CES for JBSA-RND, and the 502nd CES for JBSA-FSH and

JBSA-CB.

A12. See Question 2 above.

Q13. What is the expiration date for JBSA's contract with the San Antonio Water System (SAWS) for its purchase of reclaimed water (purple pipe)? Is the cost of the reclaimed water tied to the wastewater treatment cost in a single contract and is that contract available?

A13. The referenced contract does not affect this solicitation. Offerors are to bid on what is in the Request for Proposal.

Q14. For "grouped" submittals, please verify that a separate Vol. I Technical Proposal for each utility (say water and wastewater) must be provided in the submittal package, but only one Vol. II Past Performance, Vol. III Contract Documentation and Vol. IV Price Proposal must be provided. It is also understood that the Price Proposal must include separate Price Sheets for each utility in a "grouped" offer.

A14. Each proposal is independent and must include its own Volumes I through IV. See Question Set #9 Question 101.

Q15. If a Respondent wishes to submit a two-utility "grouped" offer, but also wishes to submit a separate "stand alone" proposal for a utility, would this require a full proposal package including all four Volumes?

A15. Yes.