U.S. Army issues an RFP to secure locally generated renewable and alternative energy.
On August 7, the U.S. Army Corps of Engineers issued its long-awaited request for proposal (RFP) to procure up to $7 billion worth of locally generated renewable and alternative energy through power purchase agreements and other contractual equivalents. The RFP solicits contractors that can develop, finance, design, build, operate, own, and maintain solar, wind, biomass, or geothermal power generation facilities under energy purchase contracts of up to 30 years.
The RFP calls for the award of multiple indefinite delivery, indefinite quantity (IDIQ) contracts with a base period of three years and seven one-year options (total 10 years). These contracts do not guarantee work and are not project specific. Rather, each contract serves as a "license to hunt," and the Army intends to award such contracts to all qualified offerors. Individual task orders for specific projects will be issued after qualified contract holders are given a fair opportunity to be considered. To satisfy this requirement, the Army must issue a notice of the task order containing a clear statement of its requirements and allow for a reasonable response period. The winner of each task order will be awarded the work described in the task order's statement of work.
Project locations are not identified in the RFP but will be specified in subsequent individual task orders. The locations may include private land or installations under the jurisdiction of the Department of Defense located within the continental United States. Renewable energy facilities also may be located on any properties available for use by the contractor that are in the proximity of the location of the federal property for which the services will be provided.
The RFP divides projects into three categories: (1) For projects greater than 12 MW, task order competition will be unrestricted by contractor size; (2) for projects 4 MW up to 12 MW, the contracting officer will consider reserving the task order for small businesses; and (3) for projects less than 4 MW, the task order will be reserved for small businesses. Under the terms of the RFP, a firm is considered small if it is primarily engaged in the generation, transmission, and/or distribution of electric energy for sale and its total electric output for the preceding fiscal year did not exceed 4 million MWh.
The RFP and an accompanying "frequently asked questions" (FAQ) document raise several important issues for contractor qualifications and for projects to be constructed under future task orders:
Comments on the final RFP may be submitted by August 24, 2012; the Army intends to hold a pre-proposal conference at a date to be announced (tentatively in Chicago). The deadline for submission of proposals in response to the RFP is October 5, 2012.
Morgan Lewis attorneys advise project developers, utilities, investors, and lenders in the renewable energy industries and have served as counsel in developing and financing thousands of megawatts of renewable energy projects. Our Government Contracts Practice provides knowledge of the legal, regulatory, and political workings of the $320 billion public procurement sector to help clients cut costs and risk—and gain the best possible advantage—in transactions and strategic business planning related to government contracts.
For additional information—including guidance on the RFP requirements and related government contracting issues, risks, and benefits—please contact any of the following Morgan Lewis attorneys:
Kenneth M. Kulak