United States: Recent US Department Of Defense Solicitation For Up To $7 Billion Of Renewable Or Alternative Energy Utilizing Power Purchase Agreements

Keywords: US Department of Defense, solicitation, renewable energy, power purchase agreements, RFP

Under mandates that require the US Department of Defense (DOD) to produce or procure from renewable resources at least 25 percent of its total facility energy needs by 2025, the DOD, through the US Army Engineering and Support Center, Huntsville, Alabama (CEHNC), has recently issued1 and posted2 a solicitation (RFP) for up to $7 billion of renewable or alternative energy (RAE) generation over 10 years. The RFP calls for a two-step process. 

As the first step, CEHNC intends to award multiple indefinite delivery/indefinite quantity (ID/IQ) contracts to qualified and responsible respondents whose offers receive minimum acceptable evaluation ratings and whose price is realistic and reasonable. As the second step, task orders will be awarded using fair opportunity procedures discussed in the Federal Acquisition Regulation (FAR) 16.505 in addition to the competitive source selection procedures identified in DFARS 216.505-70. Task orders will be firm fixed-price. Prospective respondents should note that an award of a contract does not assure the recipient of any particular work, Only the second step task order does so. Respondents should expect to expend significant time and efforts in the first step without assurance of resulting task orders.

The government intends only to purchase energy produced, and not to acquire assets—contractors are to develop, finance, design, build, operate, own and maintain the energy plant. The government will contract to purchase the energy for up to 30 years in accordance with site/project specific agreements resulting from task orders awarded. The RFP states that the RAE sources that will be considered include solar, wind, geothermal, biomass, and other alternative energy technologies, and provides the government with significant flexibility among these resource types.

The RFP includes small business set-asides for generation facilities less that 4 megawatts (MW) and for facilities between 4 and up to 12 MW (unless fewer than two letters of interest are received from small businesses, in which case the related task order will be open to unrestricted competition). For purposes of the RFP, a small business is a firm which, together with its affiliates, has less than 4 million megawatt hours (MWh)total electric generation in the prior fiscal year.

For generation facilities greater than 12MW, the RFP requires unrestricted competition.

Notably, the multiple ID/IQ contracts will be awarded for a base three-year term, with seven one-year optional term extensions (for a maximum term of 10 years if all extension options are exercised). In addition, the DOD will evaluate the related market at least every 18 months during the term of the ID/IQ contracts to determine if the DOD should open an "on-ramp" or an "off-ramp." During a contact on-ramp, the DOD will invite new proposals to "refresh" the technology and provide the DOD with better buying power. During an off-ramp, the DOD may elect to remove a poor performing firm from the ID/IQ contract pool. However, such removal will not affect previously awarded task orders.

The RFP states that the task orders will include a power purchase agreement or equivalent (PPA) that may include the following:

  • Asset ownership identification;
  • Fixed unit rate;
  • Fixed escalation rate
  • Period of performance;
  • Energy supply start date;
  • Minimum annual purchase amount;
  • Maximum demand limitation;
  • Metering;
  • Payment terms;
  • Maximum maintenance down time allowance;
  • Termination for convenience value schedule for each year of the contract (if necessary). Termination value schedules may include both termination settlement floors and ceiling amounts. The termination floor and ceiling will normally decrease in value each fiscal year. A termination for convenience value schedule should include the type of foreseeable damages anticipated by both parties. In the event of a termination, no anticipatory profits will be compensable;
  • Real estate access terms and conditions; and
  • Site security, protection and end of contract restoration responsibilities.

The task order and accompanying real estate access agreement will specify what is to become of the contractor-owned energy plant and associated equipment at the end of the contract term if there is no follow-on PPA or lease agreement extension. The government intends to retain the option to require the removal of the facility and the restoration of the property to its original condition or to purchase the facility at fair market value or to renew the real estate access agreement if a follow-on contract is awarded to the incumbent contactor.

The DOD may incorporate whatever terms, conditions, economic price adjustment provisions, etc., it finds appropriate in power purchase agreements for a particular RAE technology application to achieve a fair and reasonable agreement consistent with applicable laws, regulations and agency policies; however, these terms and conditions will not conflict with the terms and conditions of the basic contract. Such details may be decided or negotiated at the task order level. It is the DOD's intent to determine on a case-by-case basis for each task order whether to retain all or a portion of the Renewable Energy Credits (RECs) associated with or offered as a replacement to achieve federal mandates.

Questions regarding the RFP are due by August 24, 2012, and are required to be submitted through the ProjNet website. Firms must be registered or must self-register in order to submit questions or other comments. Instructions regarding self-registration are included in the RFP.

The RFP states that the DOD intends to hold a pre-proposal conference, tentatively to be held in Chicago, with further details to be made available on the FedBizOpps website when available.

Learn more about our Government Relations and Renewable Energy practices.

Footnotes

1. The DOD issued a pre-solicitation notice for W912DY-11-R-0036 on July 26, 2012.

2.The notice was updated with the final solicitation on August 7, 2012.

Originally published August 13, 2012

* * * * * *

Visit us at mayerbrown.com

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2012. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions