Energy Savings Performance Contract Lease Agreement

The Commonwealth of Kentucky Finance and Administration Cabinet seeks a lessor to provide lease-purchase financing services for the Energy Savings Performance Contracting (ESPC) Program, with the solicitation addressing Elliott County and managed by the Office of Facility Development and Efficiency. This Request for Proposals (RFP No. RFP-785-2300000325) was issued on March 30, 2023, with written questions due by April 14, 2023, and proposals due by April 27, 2023, at 2:00 PM Eastern Time. The Commonwealth anticipates annual credit demand of up to $40 million and requires the selected lessor to provide direct marketing to user agencies, develop standard lease-purchase documentation, serve as primary contact with user agencies and budget offices, execute lease purchase documentation, and prepare periodic summary reports. The lessor must commit to funding ESPC projects for a minimum of two years and must submit financing proposals for three hypothetical scenarios: a $7 million project over 13 years, a $1.5 million project over 14 years, and a $14 million project over 14 years, with all payments on a 30/360 basis. Proposals must include technical and cost components, with scoring based on technical proposal (maximum 1,100 points), cost proposal (maximum 600 points), and optional oral presentations if required (maximum 200 points), for a total possible score of 1,900 points. The initial contract term runs from July 1, 2023, through June 30, 2024, with four optional two-year renewal periods available at mutual agreement, and all ESPC projects are expected to involve real property with equipment ownership transferring to the Commonwealth at lease end or upon full payment.

The solicitation does not identify specific set-asides or incumbent preferences, though bidders claiming resident bidder status must provide attestation under penalty of perjury that they maintain current Kentucky income tax filings, payments to the Kentucky unemployment insurance fund, and an active Kentucky workers' compensation policy. All bidders and offerors must submit required affidavits confirming compliance with Kentucky campaign finance laws and authorizing contract representatives to execute lease agreements. The existing master lease infrastructure references Banc of America Public Capital Corp as a previous ESPC administrator under a contract effective through June 30, 2017, and proposals should align with the Commonwealth's established equipment financing frameworks. Proposers must identify their selected funding index (LIBOR, Treasuries, SIFMA, 10-year Bloomberg Swap Rate, or other indices) and provide two years of monthly historical data; while prepayment penalties beyond year five are restricted in the RFP scenarios, vendors may propose alternative prepayment penalty structures. The combined project value across the three cost scenarios totals $22,500,000, with the Commonwealth's tax-exempt status indicating that federal excise tax and state sales or use tax should not be included in proposed financing costs. All proposals must be submitted electronically through the Commonwealth's Kentucky Vendor Self Service platform with instructions provided by the deadline, and interested parties should contact Amanda Greer at 502-782-8545 or Amanda.Greer@ky.gov for additional information.