Questions_for_SPE600-15-R-0404.docx

Questions for SPE600-15-R-0404

#1. For Line Items 001 and 002 (WGL), is option #2 pricing requesting a 100% fixed price (i.e. NYMEX & Basis), or only a Henry Hub basis price, with monthly NYMEX settlement.

Option #2 relates to delivery/management options and covers the volumes to be invoiced at the end of each month, as well as how utility costs, pipeline costs, and pooling costs will be handled and how that should be included in the marketer’s bid (adjustment factor) for each line item. For further detail please review SECTION C – C700 STATEMENT OF WORK, (e) DELIVERY OPTIONS, (2) Full Requirements/Pool.

The pricing DLA is requesting is an Adjustment Factor as defined in the RFP on page 5, under B700 ECONOMIC PRICE ADJUSTMENT – MARKET PRICE AND TRANSPORTATION, (b) DEFINITIONS (2) Adjustment Factor (AF). DLA will award to the Lowest Price (AF) Technically Acceptable. The monthly invoiced price per dekatherm will be calculated using the SIP location’s price as published in Inside FERC for that month (in this case Henry Hub) plus said adjustment factor.

#2. If the answer to Question #1 is a basis only price, is the in intention of the DLA or installations, to execute a “fixed price” option at any point during the contracted period?

At any time during the contract performance the Government (DLA and/or the installation) and the Contractor can mutually agree to convert any fixed price with economic price adjustment contract line item quantity to a firm-fixed price, as is outlined on page 6 of the RFP under Part 1 – The Schedule, B-0003: B704 CONTRACT PRICE CONVERSION.

#3. For the Limited Interruptible accounts, can you advise the notification period that the DLA will give, prior to switching to Alternate fuel?

The installation will promptly notify the Contractor of any known or predicted changes in natural gas consumption not related to weather with as much advance notice as possible. Please read Part 1 – The Schedule, Section C – DESCRIPTIONS/SPECIFICATIONS, C- 0001 C700 STATEMENT OF WORK – (f) MATERIAL CHANGE for further detail (page 8).

#4. Has the DLA switched to Alternate fuel on the accounts included in line item #2 in the past 12 months, and if so, for what reason?

DLA has switched to alternate fuel on the accounts included in line item #2 in the past 12 months for the majority due to weather related issues and resulting curtailments and in a small percentage of cases mechanical issues at a specific installation.

#5. For Line Item 0004, all 4 customers are listed as interruptible, however there is no listing of curtailment days by month. Does this mean that there is no limit on the number of curtailment days for these accounts?

The Schedule Pages for Line Item 0004 have been updated to reflect the number of curtailment days allowed for each customer.

#6. In the Attachment Schedule IV pages certain locations have Noted Requirements when it comes to billing. Example Note # 2.

Due to LDC meter read variations throughout the month, this line item will be invoiced by the contractor using the first day of meter read for pricing reference. For example

Meter read dates:

Nov 5 - Dec 5; Use Nov index price for all volumes invoiced on Nov invoice.

Nov 2 - Dec 2: Use Nov index price for all volumes invoiced on Nov invoice.

Nov 28 - Dec 28: Use Nov index price for all volumes on Nov invoice.

Based on this would it be accepted a 2 line read information that is correctly displaying the price for example:

Meter Read 10/14/14 to 11/15/2014. The 2 line items will be displayed as such :

10/14/14 to 10/31/14 @ $.4323 / therm 18000 Therms 11/1/2014 to 11/15/2014 @.3933 / therm 22000 Therms

A suggested 2 line read information that is correctly displaying the price will NOT be acceptable.

-If this does occur, then it would take multiple invoices to complete one month worth of entries -Keeping it as prescribed will allow for a single invoice entry for each month.

#7. Example Note # 3

Each month a Consolidated Detailed NGAS Consumption Summary Sheet will need to be provided for this customer. This will need to be provided along with the corresponding monthly invoice. The summary will need to reflect each of the NGAS accounts activity which falls under the ownership of this customer, for the specific month delivery period.

Specific information that will need to be listed, for each NGAS Account: 1. NGAS Account Number; 2. DLA Associated Line Item Number; 3. Customer Name; 4. Customer Address (full address); 5. Delivery Month; 6. Rate Class; 7. Meter Readings (both prior & current dates); 8. Wet Therms; 9. Conversion; 10. Dry Therms; 11. DLA Commodity Bill Rate $/Therms; 12. Balancing Rate (if applicable); 13. Commodity Charge; 14. Balancing Charge; and 15. Total Charge

Based on the requirements expressed in Note 3, would it be possible to reduce the detail level for example Wet Therms and Dry Therms and applicable conversions out of the Summary Sheet?

No.

-The purpose behind the detail summary sheet is to reflect actual vs invoiced volumes as well as ensure NGAS accounts are correctly aligned with each customer

#8. Several Accounts( Installations) in the Schedule Pages of the Attachment IV reference certain Rate Class however based on information we have from the Utility those rate classes are different specifically Accounts referenced under WGL.

- Is it possible to obtain a LDC Account numbers therefore we could verify the Rate Classes with the Utility and not just based on Service Address. It will provide a more accurate way to price and know which pool these accounts should be in.

MD Customers- FIRM Rate Schedule - 2A Firm Commercial and Industrial Delivery Service.

DC Customers- FIRM Rate Schedule - 2A Firm Delivery Service Other than Residential VA Customers- FIRM Rate Schedule - 2A Firm Commercial and Industrial Delivery Service

MD Customers- INTERRUPTIBLE Rate Schedule - 4 Interruptible Delivery Service DC Customers- INTERRUPTIBLE Rate Schedule - 3A Interruptible Delivery Service VA Customers- INTERRUPTIBLE Rate Schedule - 4 Interruptible Delivery Service VA Customers- INTERRUPTIBLE Rate Schedule - 7 Interruptible Delivery Service (Fort Belvoir, Pentagon, Pentagon Incinerator & Mark Center)

Upon reviewing the Schedule Page Attachment, two Rate Schedule errors were identified and they will be listed below:

JFK CENTER- FIRM - Should reflect 2A Rate Schedule Mark Center- FIRM - Should reflect 2A Rate Schedule. These changes have been made as part of Amendment 1 to the solicitation.

#9. Would DLA Energy consider implementing a pricing phase that would have a due date later than that of the non pricing information that offerors are required to submit? This would take away the requirement that offerors must hold their price for 120 days, thereby reducing our risk exposure and price. DLA Energy implemented this in the past solicitation and this seemed to work very well. To hold a price for 120 days is substantially more then industry standard and puts a substantial amount of risk on ALL offerors. Forward price swings in the Natural Gas market can be very large over a 120 day period.

If DLA Energy would not consider implementing a pricing phase, would DLA Energy instead consider reducing the period in which an offeror agrees to hold their price from 120 days to a substantially less amount of time or does DLA Energy anticipate asking for at price “Refresh” ?

DLA Energy cannot waive the holding period at this time due to internal considerations. However we will be utilizing the Reverse Auction platform and will be asking for a price “Refresh” when Reverse Auctions are conducted prior to award.

#10. What day is the DLA accepting pricing and will it be through an online auction as stated in the RFP?

The offeror must submit pricing with the initial offeror package. We will be utilizing the Reverse Auction platform and will be asking for a price “Refresh” when Reverse Auctions are conducted after negotiations have concluded.