On August 8, 2012, the U.S. Army Corps of Engineers issued a Multiple-Award Task Order Request for Proposal (RFP) for $7 billion in total contract capacity to procure renewable energy through power purchase agreements and similar contractual arrangements. The original RFP, a minor amendment, and a related FAQ document can be found at https://acquisition.army.mil/asfi/solicitation_view.cfm?psolicitationnbr=W912DY11R0036. The WSGR Alert describing the RFP can be found at http://www.wsgr.com/WSGR/Display.aspx?SectionName=publications/PDFSearch/wsgralert-US-military-renewable-energy.htm.
Responses to the RFP are due in paper form no later than 2 p.m. Central Time on Friday, October 5, 2012. Companies must respond to the RFP and be selected for inclusion in the pool on a technology-specific basis in order to bid on the Army's future project development opportunities. Future projects will be awarded over at least the next three years and perhaps up to ten years.
The Army held a pre-proposal conference in Huntsville, Alabama, on August 22, 2012. More than 400 people attended the conference. The presentations from the conference, the attendee list, and various minor amendments to the RFP, as well as the documents described below, can be found at the link in the first paragraph of this alert.
On September 14, 2012, the Army released roughly 100 answers to questions submitted by potential bidders. The Army also posted a fifth amendment to the RFP, which contains important changes relating to pricing, required experience levels, subcontracting plans, small business participation, and selection criteria. While some of the changes will make responding to the RFP somewhat easier, others are very substantive and are triggering a reevaluation of bidding and teaming strategies by potential bidders. Also, against the hopes of many potential bidders, the October 5 submission deadline was not extended, increasing the pressure placed on potential bidders over the next three weeks.
WSGR attended the Huntsville conference and has been assisting a number of clients with responses to the RFP. The following observations may be of interest to our clients and friends:
Price is less important than experience and financial viability at this point. The Army has made clear that it is seeking to create a large pool of qualified bidders for future projects, not to identify a few low-cost bidders. Since bidders will be held to the prices submitted in the MATOC process, companies should be careful to leave headroom in their pricing for future uncertainties.
The structure of the MATOC provides opportunities for smaller companies to partner with larger companies that are experienced in military contracting and have the resources to compile a strong submission. The attendee list from the Huntsville conference is a good starting point to identify potential partners. Smaller companies are able to be listed as sub-contractors for multiple teams.
Companies need not have commitments from third-party financiers at this point, but they must show in-house financial expertise and will need to demonstrate financing commitments for future projects.
For those companies that either are not selected in the first round or choose not to participate at this point, there will be "on-ramps" approximately every 18 months that will provide additional opportunities to join the pool. On the assumption that the first MATOC projects will be solar projects, companies active in other technologies might wish to delay their submissions to see how the first projects play out.
This is not an opportunity for companies with unproven technologies or no referenceable customers or projects. The Army has been clear that the standards in the RFP will not be varied. Companies in this situation should seek to partner, via joint venture or subcontracting arrangement, with other companies so as to meet the minimum standards.
While the MATOC process is the primary mechanism for the Army's procurement of renewable energy, it is not the only mechanism. Developers should keep apprised of other, separate opportunities to interact with military installations regarding their renewable energy needs. For example, the Army Energy Initiatives Task Force is hosting an open house at Tooele Army Depot in Utah to discuss renewable energy opportunities. Information about this open house is available at http://www.upcomingevents.ctc.com/armyeitf/index.html.
For more information or assistance in responding to the MATOC opportunity, please contact Taite McDonald (firstname.lastname@example.org), Chris Groobey (email@example.com), Todd Glass (firstname.lastname@example.org), or Peter Mostow (email@example.com).