PROCUREMENT PROCESS

All Government Units are required to use SOEP's Request for Proposal (RFP) document model.. The Government Unit will have to modify the RFP document model to conform it to its own procurement process rules and particular needs. 1. Define Scope of Project Government Units shall provide a general description of the facilities, including technical details and any other relevant information necessary (a technical facility profile) to enable the ESCO to assess and propose opportunities for a succesfull project. Rather than providing a pre-determining scope of work specifying the Conservation Measures that the ESCO must undertake, the Government Unit shall rely on the ESCO's technical expertise and creativity to help identify and assess energy and water saving opportunities that are most cost-effective and suitable for the ESPC Project. The Project may incorporate all of the Govermnent Unit's buildings and facilities into a single project, or may divide the project in "phases" SO as to minimize project development time and move to reducing energy costs more quickly. In all cases, the preferred financing stream (total bond issuance, agency capital dollars, etc.) must be identified early in the process to avoid developing a project scope in excess of available financing. At a minimum, a brief description of the premises and all major energy-using equipment should be provided. The Government Unit shall also describe the facility's energy use, equipment, operating schedules, maintenance problems and planned equipment replacements or renovation plans. Also, the Government Unit must include the utility cunsumption and bill history for the past three (3) years, if available. 2. Request for Proposal (RFP) After the Government Unit enters into the Technical Assistance Agreement (TAA) with SOEP, it will be ready to initiate a Request for Proposals (RFP). The purpose of an RFP is to determine an 11 I Page Energy Savings Performance Contract Program Amended Regulation ESCO's suitability according to the proposed project characteristics. Respondents will be encouraged to focus on their expertise for meeting the business objectives of the project. All Qualified ESCOS shall be eligible to participate in the RFP. Alternatively, the Government Unit may decide to send out a Notice of Interest (NOI) to all Qualified ESCOs requesting them to cofirm their interest in a particular project. In this case, the RFP documents would be provided only to those ESCOs which responded to the NOI. The RFP shall, at minimum, contain the following information: General project scope; The business objectives for the Government Unit; Complete Facility Profile, that identifies the facilities to be considered, their current energy use, size, and unique conditions; Contractual terms and conditions that will apply to the project; A description of the required RFP Response format and content; Instructions for submission and a project schedule to identify specific dates for preproposal meetings, site visits, evaluation, and selection; The evaluation criteria that will be used as the basis for selection; Government Unit's approval process; Planned method for financing and paying for the project; Required corporate and technical project specific qualifications to be submitted by ESCOs in their response; Requirement that an appropriately qualified Puerto Rico registered Professional Engineer be in charge of the project for the ESCO. 3. RFP Responses Evaluation The Government Unit shall specify the evaluation criteria to be used for selecting an ESCO. In general terms, the evaluation criteria are grouped into six major categories: a) Prior Experience. b) Approach to Project Management. c) Ability to meet the business objectives and timing. d) Technical Capabilities & Expertise. e) Financial Strength or ability to secure financing. f) Proposed mark-ups and costs. Based on the evaluation criteria, RFP responses will be evaluated by the ESPC Evaluation Committee established by the Government Unit, as set forth in Section 4.02, along with the assistance of SOEP. The Evaluation Committee shall issue a report and recommendation to the Government Unit's Bid Board (or similar administrative body). The Bid Board or similar administrative body shall be the entity responsible for making the final determination and selection. All notices regarding a final determination shall be made pursuant to the Bid Rules adopted by the Government Units and applicable laws. 12 I Page Energy Savings Performance Contract Program Amended Regulation A procurement specialist may oversee the process but not participate in the evaluation. 4. Preliminary Assessment (PA) The Government Unit will select the three (3) highest rated ESCOs to perform a Preliminary Assessment of the Project. A PA evaluates the Project Site with the purpose of determining the likelihood that an effective ESPC Project may be implemented which will result in meaningful Conservation Measures. The PA and subsequent proposal will be used by both the ESCO and the Government Unit to ensure that the project meets the objectives and cost effectiveness criteria and addresses the facility's needs. A proposal for an Investment Grade Audit (IGA) will be developed based upon the PA, which identifies potential cost-effective energy and water conservation measures. The PA shall provide sufficient information, including the following key elements: a) A narrative summary of proposed project, including the business objectives. b) Description of ECMs. c) ESCO and Government resources and schedule requirements to complete an IGA. d) Estimates of proposed energy and cost savings. e) A general M&V approach f) Risk, Responsibility and Performance Matrix. Project Site inspections may be undertaken in order to allow the ESCOs to gather all necessary information to conduct their PAs. Scope of PA: 1. Preliminary Assessment of Needs and Opportunities a. Meet to discuss interests, plans, problems related to facilities and their operation. b. Collect data and background information on buildings, equipment and facilities operation. c. Perform a preliminary walk-through of facilities and interview staff and occupants to identify potential measures. d. Meet to explain preliminary findings and establish agreement on measures to analyze. 2. Preliminary Analysis of Measures a. Establish base year consumption and reconcile with end-use consumption estimates. b. Conduct a preliminary analysis of potential measures. C. Meet to present preliminary findings and establish agreement on measures to further analyze. 13 I Page Energy Savings Performance Contract Program Amended Regulation d. Establish costs, schedule and government resources required to complete an IGA Report. 5. PA Evaluation Upon submission of the written PA by the ESCOs, the Government Unit shall proceed to review the PAs and conduct interviews with each ESCO. The PA Evaluation shall be made by the ESPC Evaluation Committee, with the assistance from SOEP. The PA shall be evaluated based on the criteria set forth by the Government Unit. The evaluation criteria to be used by the Government Unit shall be provided to the ESCOs along with any other relevant information required for conducting the PA. The Evaluation Committee shall issue a report and recommendation to the Government Unit's Bid Board (or similar administrative body). The Bid Board or similar administrative body shall be the entity responsible for making the final determination and selection. All notices issued by the Bid Board regarding a final determination shall be made pursuant to the Bid Rules adopted by the Government Units and applicable laws. The Government Unit will select the highest rated ESCO as determined by the score received during the initial RFP evaluation and the score received as a result of the PA Evaluation. The Government Unit may, based on the information made available during the PA Evaluation, make revisions to the score awarded to an ESPC for the RFP evaluation. Any deficiencies and/or desired changes found in the PA must be addressed by the selected ESCO in the Investment Grade Audit (IGA) and in the final proposal. The Government Unit may, for any reason, elect not to continue the ESPC process without being liable for reimbursing any costs and expenses incurred by the ESCOs in relation to the process. All documents and information provided by the ESCOs shall become property of the Government Unit.