Kurmit Rockwell:
Session 2: The Critical Path to Success. My name is Kurmit Rockwell and I'm the FEMP ESPC Outreach and Project Development Lead. The Just-In-Time training series is designed to give you timely information from program experts to help you award high quality, on-time ESPC task orders. 

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This is the second of three sessions in this series. In session 1 we developed the task order request for proposal, conducted the IGA kick-off meeting, and set up expectations for success through frequent communications including bi-weekly ESCO Agency meetings.

This session will focus on the technical review of the proposal your ESCO submitted based on the results of the IGA. Session 3 in the series will be focusing on the review of the price proposal, and finally crossing the finishing line to task order award. 

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Your instructors today are very experienced in ESPC. Scott Wolf has been involved in ESPC as a federal financial specialist for about 10 years and has been involved with more than 50 ESPC projects. 

He's also one of our instructors for our comprehensive ESPC course. Prior to FEMP he was an energy engineer at the Washington State University Energy Program. he developed the award winning resource efficiency manager program used so heavily by the Department of Defense and other federal agencies.  Sam Espinosa was involved in contracting for 38 years and was a contracting officer for ESPC projects when he worked at the Department of Energy. Sam is also one of our instructors for our comprehensive ESPC course.

Mike Holda has supported over 100 ESPC and UESC projects over the past 15 years. He has instructed at numerous ESPC and UESC workshops and also provides support to FEMP's ESPC ENABLE program. Prior to FEMP Mike was the energy management program leader at DOE's Lawrence Livermore National Laboratory. I encourage you to take advantage of your instructors and ask as many questions as you have, no matter how small. We may not be able to answer all of your questions today but we will be following up on all questions and evaluating if we can provide additional support with FEMP's resources.

Lastly FEMP's goal is to provide you with relevant high quality training to help you achieve your energy and sustainability goals.  So to help us serve you better I'm asking you to please complete an evaluation form at the end of today's session. I'm going to now turn over to Scott Wolf to get us started.

Scott Wolf:
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Thank you, Kurmit. I hope everybody can hear me. My name is Scott Wolf.  I'm the Federal Finance Specialist. I'm going to go over a few slides right now, the Critical Path to Success and talk about some discussion topics you'll hear today. We're going to talk about reviewing and evaluating the proposal, basically how to assess your current relationship with the ESCO. This is so important, to be able to assess relationships with anybody. This is of course a very important relationship that you began long ago.  We'll give you some tips on how to assess your current relationship and how to move forward.

When to start negotiating: we're going to bust a few myths on this one. Some think that negotiation is basically a one-day meeting and you negotiate. We'll talk about the nuances of negotiation and how you have to sprinkle a bit of negotiation throughout the entire process that you're going through. Thirdly, living with the ESCO's design and installation; very critical piece. It requires lots of give and take and sharing of information and we'll certainly talk about that today.

Then we have the crystal clear proposal. Really this is the proposal that we're talking about that happens after the Investment Grade Audit. Then we're going to sprinkle throughout this entire presentation best practices and lessons learned. 

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You saw the milestones in the ESPC process yesterday. Today this group of trainers will focus on the proposal or phase 3. 

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Again there's the right arrow of you are here today, the evaluation of the proposal. 

And we will talk about some important elements of that and how it pertains to getting your projects high quality and out the door just in time for the presidential memo. 

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Just to remind all of you - you saw this slide yesterday - but we're really running towards the goal line of getting a task order. The task order is a number of these pieces: the IDIQ Contract with the general scope, terms, and conditions, the task order RFP which will provide the site specific requirements to the ESCO so they can write a proposal that reflects your requirements and it's very flexible.

Investment Grad Audit, which is the technical piece which then morphs into the proposal. This will be the technical specs and the financial schedules and a number of other very important pieces.  All of this will combine and then you will basically have a task order that is ready to be signed. 

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I will turn this over to Sam Espinosa, retired contracting officer.  Sam, take it away.

Sam Espinosa:
Thank you Scott.  Can everybody hear me?


Kurmit Rockwell:
Loud and clear, Sam.

Sam Espinosa:
Okay good enough.  Reviewing and evaluating the proposal; I guess the key ingredient there is knowing where you stand and where you want to go with your negotiations with the ESCO.  The other great important piece that Scott was talking about is the relationship that you have with the ESCOs as you're going through the process of negotiations. Another critical element obviously is to know when to negotiate. Throughout the process that we have here for the ESPCs you will be negotiating with the contract tool probably weekly or bi-weekly given where you are within the IGA.  And we'll have follow-up discussions during those meetings.

At the same time having those discussions you will have to obviously live with the ESCO's design and construction. That's why it's very important for the agencies to ensure that they do a very comprehensive review.

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Next slide, number 10, All right moving on to the first I want to do a quick review of the proposal. You'll look at the contact requirement which is special provision H6 of the IDIQ Contract. There you will have your energy conservation measurements
descriptions. Their measurement and their verification plan.

You look at the Risk, Responsibility, and Performance Matrix which is a very important document and your task order schedules.  Those are your financial schedules and there are five of them.  Again you'll review the proof of completeness, obviously based on direction provided to the ESCO. Some of those areas that in the event you do not have it you can go back to the ESCO and request more information. Additional information that you will need obviously is pricing support. 

A lot of the agencies do have price analysts that help support the contracting officer or contract specialists and the technical folks as they're going through the evaluation of the proposals.In the event that there is a support that's needed within that particular area FEMP does have technical experts who can walk you through each one of the schedules. Again if you need more detailed information given them information that is provided to you, the contracting officer can request information that is necessary to ensure that you do a comprehensive review of your proposal.

And again the key now is that in the event you have the information the CO will instruct the ESCO to submit that missing information. 

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Moving on the Chart number 11, again your relationship with the ESCO; how do you assess that? A lot of the areas that you can find when you receive your proposal is much different than what you've expected as you went through the kick-off meeting through the IGA when you provided your expectations to the ESCO for that proposal.

Also a lot of times deadlines have not been met by the ESCO which may cause some fertibation within the agency themselves and ensuring that they meet the award on time and on schedule.  The other thing is engineering subcontract or ESCO team is marginal. Again in the event that you do find that, the key ingredient is when you're going through discussions ('cause this is a FAR Part 15) you can hold discussions with the contractor. Ask for clarity. Ask for information to ensure that you can close up that particular loop.

The good news that you will see when you receive the proposals is obviously they did meet your expectations. They have met the deadlines. Obviously the engineering team that they have appears to be competent. All these are just symptoms to look out for. Not one particular symptom makes a good or a bad proposal.  But these are just things to keep in mind to ensure that you receive a proposal that the agency feels comfortable with.

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Moving on to Chart number 12; again, assess your current relationship. Has the project progressed as expected? Obviously we have expectations. Agencies have expectations. Clearly in the event that there is a fertibation it's always good to go back to the ESCO and clarify those expectations. Again if they have been surpassed that's great. If they've been met that's okay too. Also when you receive those discussions or have those discussions with the ESCO there is obviously some trust and confidence type of relationship that happens.

You can assess that based on the information begin provided, the response that you receive. Also since this is going to be a long-term relationship it's best to get that out in the open to ensure that you do have the confidence and the trust within your ESCO. The other thing is a lot of times the information being provided, either the ESCO has not understood what you've said or maybe it's not clear to them. So the key ingredient is to ensure that the ESCO is listening to the discussions and listens to the needs of the agencies.

And again, given all that, they have to be responsive to your requests. There are focal points if you have established with your ESCO in your communications plan that establishes who has that responsibility to provide you the responses that are necessary to ensure that you do have a comprehensive proposal. Again if you've answered no to any of these discuss your concerns in detail with your project facilitator and your federal finance specialist like Scott Wolf or Mike Holda. They'll be more than happy to help you with that on a one on one basis.

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Moving on the Chart 13; when to start negotiating. Again as everyone knows negotiating or exchanges and discussions between the contractor and the government obviously include bargaining for that information that you provided to them as assumptions and the agencies' positions. And given those things it's going to be a give and take back situation. Again the primary objective is to maximize the government's ability to maintain and invest in value for the requirement.

And again it has materially, the proposal, the potential for - what that means is you need to ensure that the proposal is sustainable given the information provided to you by the ESCO. Again the answer obviously is after contract selection and throughout the project development process then is when you are negotiating with the contractor. It's a continuous process until you actually sign or the contracting officer signs that proposal and awards the fee up.

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Moving on to 14; the agency negotiating team. Again the agency generally works together within the areas of responsibility. And having said that as many folks know in an agency the contracting officer obviously is the lead negotiator, with the assistance of the contracting officer tech rep and also the technical team of provides information based on questions and/or concerns that the team has going through the discussions with the ESCO.

Again the agency's technical team knows the governance requirements and should be involved in discussions that refine the project including design, installation, operations, maintenance, and repair of EMS. Again all these particular elements and all these particular team members within that actual proposal that you receive must evaluate that to ensure that the agency is reading their goals through this particular proposal. Again the agency contractor team knows the internal laws and regulations, and, again, has the ability to enter into agreement and bind the governance. And that is a contracting officer.

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Moving on to Slide 15; negotiating with technical pulse. Discussion topics obviously include the scope of the ECMs. Once you've concluded the IGA that is part of that proposal, Section C, it deals with your performance work statement or statement of work. You'll review that very carefully, engineer energy savings. You'll look at the assumptions and the base lines and the savings calculations that are part of the IGA and are passed on to the final proposal in your guaranteed savings.

M&V client methodologies; obviously Risk, Responsibility, and Performance Matrix in an important document because that's where everyone lays out who's responsible for care, who's responsible for maintenance for those particular services? Again the next bullet kind of supports that.  Who performs operational maintenance and Repair & Replacement services as part of your Risk, Responsibility, and Performance Matrix? That's a very good document to have, especially because if you're going to have a 15-20 year contract it's always best to ensure that everyone has the details within that Risk, Responsibility, and Performance Matrix.

Design and construction requirements; agencies have their own experts to look at that for every agency. They have specific requirements for a particular site. So in the event that you do have them look at the proposals that you have and ensure that the contractor is compliant. Then again in the event that for any one of these particular areas that you need assistance FEMP does have technical experts to provide you that to ensure that you do not - the schedule is not stymied because of that.

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Moving on the Chart 16; what is your agency's process to propose evaluation? Again the methodology for review of a proposal, whether that be in your engineering, maintenance reviews, budget reviews, labor reviews, a headquarter review is very, very important. Hold on a minute. Did I skip a chart? Go back. I'm on Chart 16. The reviews and evaluated by home and for how long those things are considered as you put your schedule together and as you're going through that review you've got different offices that this particular review will happen.

And again the key consideration now within the CO is to ensure that you do due diligence with each one of those particular specialists and you do know how long it's going to take them so that you can ensure that you award the contract on time. Another thing is obviously communication is very important as you go through this particular reviewing process. 

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Seventeen - this is a little saying by Henry Petroski. I'm not an engineer but I'm going to read it: "Engineers are not super human. They make mistakes in their assumptions, in their calculations, and their conclusions. That they make mistakes is forgivable. That they catch them is imperative. Thus it is the essence of modern engineering not only to be able to check one's own work but also to have one's work checked and to be able to check the work of others." Some words of wisdom.

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Moving on to number 18; evaluating a proposal and IGA findings. Again don't be confused about the ESPCs. Again the agency must review every word. As in any contract that's being awarded, prior to award when you go to these evaluations you must evaluate that information.  And every particular support staff needs to be assigned their role and responsibility to review those particular elements. And again the task order includes obviously the contractor's proposal, a TO RFP that you have put together along with the IDIQ Contract which is the basis for the proposal.

And again what you will find is revision will likely be necessary before award. And how that works out is obviously through agency comments as you're going through the evaluation. The ESCO's responses to comments; you come together with a resolution. And as you're documenting these things make sure that they're in writing and you include them as a part of your proposal. The measurement for awarding proposal may not necessarily always be at the forefront of the contract of the award. 

The intent of the award sometimes could be embedded in your appendix and the discussions that you have held with the contractor in the event that a particular discussion item comes up after contract award. Also require ESCO to show required changes and revisions of proposal. Now having said that that's a good way of doing it. I know agencies that have their own methodologies of how to track those changes in the proposals. I would say whatever works best for the agencies is great. 

However, make sure that at the end of the day when you have it completed you do have a proposal that has all the changes and you have maintained a list of that information to ensure that when you do the final review that those things are identified in the final proposal.

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Again going through the evaluation process and best practices; the key ingredient. Convene an evaluation team as early as possible. You've assigned the parts of the proposal to the appropriate personnel. You also establish due dates so that all that information comes together at a particular meeting and passed on to the CO which goes back on to the ESCO for discussions and clarifications and the final particular document in the contract.

Again you establish a process and schedule with a team like I said and the ESCO because you're both in it together. You assign appropriate priorities and resources again to the evaluation. Again deliver on schedule. That's very important. In the event you came to have some particular problem with a particular area, because I know as a CO I'm not the technical expert.  I rely on the agency techno staff.  And if they happen to get stuck we do have a FEMP expert that will be more than happy to assist you in that.

And again you do have your PF and your FEMP - again ESPC resources. Again contract officers know this; think ahead to the approval process so that the particular contractor who's going to read it does not get bogged down with this. And also a good practice is when you do those things and you do look at who is that reviewer of chain that you keep them notified of where you are.  And in the event that you get some new folks in there - because they tend to change personnel because these particular processes don't happen within one or two months. Some of these things go out to 12, sometimes 16 months.

Keep them informed. Communicate with them. And educate them about the ESPC process, which is very important. Moving on to why you won the technical proposal. That's one of our specialists, our technical specialists, Mike Holda. Mike?

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Okay thank you, Sam. Excellent job! Can everybody hear me?

Kurmit Rockwell:
Yep we can hear you Mike.

Mike Holda:
Okay great. I'm going to go over some of the technical aspects of reviewing proposals.  We should be on Slide 20. I'm going to emphasize some of the areas that Sam already touched on because they're important. We call this section the crystal clear proposals but a lot of times the proposal is not necessarily crystal clear. So you're going to have to read every word in the proposal and make sure that what was discussed during the Investment Grade Audit is reflected in that proposal. Make sure that there are no conflicts between various sections of that final proposal.

You're going to need to do your due diligence. As far as volume one is concerned the content and format requirements as Sam identified are included in H6 of the IDIQ Contract. Volume two is pricing. That will be covered tomorrow in detail during the session there. Volume one is the technical proposal. It's essentially a very robust preliminary assessment. The assumptions that were made in the preliminary assessment are going to be validated during the Investment Grade Audit phase. And it should be reflected in this final proposal.

You'll have the energy conservation measure descriptions. You'll have the measurement and verification plan including the associated baselines included in the final proposal as well as the commissioning approach. There's not a requirement for a commissioning plan in the final proposal. The commissioning plan comes in during the design phase of the project after the project is awarded. And then there is also a requirement for a commission report at the end of the construction period.

Also within that technical volume you're going to see the management approach. The management approach includes the contractor's organization and how he plans to staff the project during the implementation period as well as during the performance period. The Risk, Responsibility, and Performance Matrix will be included in there and Scott will cover some details on that a little bit later this morning. There'll be Operations & Maintenance responsibilities identified as well as repair and replacement responsibilities identified, whether or not it's the government's responsibility or the contractor's responsibility for performing those services.

Also there'll be a section on training. I also mention in that management approach I recommend you have the contractor include information on warranties associated with major pieces of equipment for each of the ECMs both the duration of the warranty and type of warranty and how the warranties will be administered during the performance period. I'd just like to review again the process of reviewing the final proposal. First you're going to establish a review team. Then you will outline a process that you'll go through for the review as well as a schedule associated with that process.

You'll draft comments, reviewed comments associated with the proposal. You'll consolidate those comments, eliminate redundancies, and eliminate those that may be more apt for price negotiations. Give those comments and clarification questions to the ESCO. The ESCO will respond to those comments. You'll review those responses. If they're acceptable, fine. Some are not going to be acceptable or some are going to require further discussion or negotiations. You'll probably have a sit down meeting with the ESCO in order to resolve outstanding issues associated with those comments.

 

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Let's go on to the next slide, Slide 21 I believe? Yes. All right as far as evaluating the energy conservation measure descriptions you want to make sure that the proposal includes both all the required ECMs and those that are desired to be included in the proposal. And again this final proposal should have no surprises in it.  It should reflect the summary of the discussions that you had during the entire Investment Grade Audit process where you have your bi-weekly meetings and you have your communications that are going on pretty much continuously throughout the process.

The ECM descriptions should be complete. They should be understandable. You should know what the contractor is proposing. It will identify interfaces with existing equipment. You should see in the appendix typically cut sheets and descriptions of the various make and model and size of the equipment that they're proposing whether or not there's going to be any utility interruptions associated with the installation of the equipment. 

And if there are utility interruptions you want to make sure the contractor addresses if there is a need for temporary utilities as a result of the installation of those energy conservation measures, and also how long you can go for an outage - either an outage of power, an outage of heating or cooling, for the various energy conservation measures in the areas that are affected. 

You want to make sure that the design is technically sound and that the energy conservation measures meet your needs. So you need to ask yourself if this is a project that is reasonable and you want to move forward with. At this point in time with the final proposal it should be reflective, like I said, of what you guys have discussed throughout the project development process. 

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Next slide, Slide 22; you want to review both the energy and energy cost savings very carefully. And when I say energy I mean energy water and energy and water cost savings, the basis of the performance guarantee and the savings guarantee for the project. The savings guarantee is typically a percentage of the estimated savings that the contractor has calculated. There are two types of savings that go into the calculations usually. One is the energy and energy cost savings.  You should see that information in its appropriate units by fuel type. And you want to make sure the rates that they're using in their calculations and savings calculations are the rates that were agreed to.

And then there is energy related cost savings. I'll get to the description of this a little later. But those are also allowable underneath a daily IDIQ Contract as a part of the economic analysis. As I mentioned the ESCOs typically guarantee a percentage of the estimated savings. That averages around 90 to 95 percent depending on the technology, the complexity of the ECM, the measurement and verification, who's doing the Operations & Maintenance and repair and placement and other risks that are either shared or shifted one way or the other depending on the percentage of the savings guarantee.

And keep in mind this is a financial guarantee for the overall project. The individual ECMs do not have a financial guarantee.  The financial guarantee is associated with a combination of all of the ECMs that you can have: underperforming ECMs and over-performing ECMs and still meet the overall savings guarantee.

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Let's go on to the next slide, Slide 23. Reviewing the engineering calculations and assumptions; as I mentioned these assumptions are validated during the IGA process from what was proposed in the preliminary assessment. The savings need to be reasonable and realistic. If the contractor is proposing to save 75 percent of your energy in your facilities that might raise a red flag for you because that may be an unrealistic expectation and an unrealistic calculation. Typically that's not going to be the case to have such a high percentage.

The calculations should be based on sound engineering principles and industry standards and practices. You want to check the math and spot check those elements through large spreadsheets to make sure that they have the math correct because sometimes folks make mistakes. I've seen that happen. You want to review the assumptions. In particular there are assumptions in these proposals that the site folks can only review and validate. Your project facilitator will be helping you review these proposals. 

But there are some elements of the scope of work that you need intimate knowledge of the site and the characteristics in order to determine whether the assumptions are reasonable or realistic.  And as I said the site needs to engage in this review process. One of the things you want to keep in mind also is whether or not the contractor has included any performance degradation in the energy conservation measures that they propose because equipment wears out over time and the savings will degrade depending on the types of  technology that are used.

For example performable tags; typically you have a performance degradation of anywhere between a quarter of a percent to a percent a year depending on what type of panels are specified and who manufactured those panels.

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Let's go on to the next slide, Slide 24. As far as energy simulations and spreadsheets; those are both allowable to use as calculations. The key thing is you don't want them just in a PDF file. You'd like to have the input and output files for the energy simulation so you can evaluate those and see if those are reasonable. And for the spreadsheet calculations you want the live Excel file so you can look at what formulas were used and evaluate those appropriately. You want to make sure that your simulations comply with ASHRAE 90.1, Appendix G, and that they're calibrated using meter data in accordance with the FEMP M&V Guidelines.


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Let's go on to the next slide, Slide 25. Let's talk a little bit about energy related Operations & Maintenance savings. And that includes water related Operations & Maintenance savings. This is a reduction in cost associated with an ECM in its Operations & Maintenance. It can be either materials or labor. Typically sites will include material cost savings associated with an energy conservation measure. 

For example a lighting energy conservation measure; if you go from conventional fluorescent fixtures to a LED technology the LEDs typically will have a longer service life than the conventional fluorescent fixtures. So they'll be a reduction in the frequency that you're replacing the lamps. There would be a reduction in the material costs associated with that on an annual basis. That is a savings that is realizable that can be applied to the project. 

Let's so, for example, you replaced a boiler that was a maintenance headache with a newer technology boiler that didn't need all the maintenance that was required for that older boiler but you did not lay off the boiler operator or the boiler repair man and just reassigned him, granted you will have some savings associated with that person doing something different but you're not going to be able to realize those savings financially because you haven't laid that person off. Or the dollars aren't financially tangible.

Typically material and cost savings are included. Or if you have a contract that you can terminate for service then you can include that as far as the economic element of the project is concerned.  There are some guidance documents for accounting for savings and for federal agencies, for ESPC projects. It's the Practical Guide to Savings and Payments that's available on the FEMP web site. If you have any questions ask your project facilitator, federal finance specialist, or this reference document.

And these savings can be either one-time or recurring cost savings.  So let's say for example if you were planning on replacing the chiller, instead of just replacing the chiller like for like you decided to incorporate that chiller replacement and the scope of work of an ESPC project and also did a bunch of other energy conservation measures, then you can potentially reduce the size or capacity of that chiller and its associated cost, put in a more efficient unit versus just a like for like, and that would be an avoided cost of that originally planned chiller replacement. 

That would be a one-time savings versus a recurring savings.  Again these savings must be realizable because if you're going to include it in the economic analysis of the project then they're just going to be payments that are going to need to be made based on these savings. 

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Okay let's go on to the next slide, Slide 26. Your decisions have consequences. These are all elements of the ESPC contract and process that are interrelated.  Sometimes you think you can make a decision in absence of its context. But affects other elements of the overall project economics and proposal. The first bullet: silence means agreement.  If you don't like something you'd better speak up and make sure what you want to have happen is reflected in the language in the final proposal. If' it's not in the final proposal or the award documents, the TO RFP it doesn't exist after award.

Understandings and agreements; if they're not documented they no longer exist after award.  So you want to make sure that you document it in the award documentation - either the final proposal or the TO RFP. Savings calculations; you want to make sure those are reasonable and realistic. Again they apply to both energy and energy related savings. For percent savings guarantee the greater the percent savings guarantee the greater your payments, the sooner you can retire the debt. That's something to keep in mind.  The lower the savings percentage, the lower the risk theoretically to the contractor, the longer it takes you to retire your debt.

Escalation rates; we recommend you use an Energy Escalation Rate Calculator. It's based on NIST.  And the thing about escalation rates; you want to get it right in the middle. You don't want to be "overly conservative." You don't want to be too high.  You don't want to be too low. On either side of the middle range if you will you're assuming some risk. On being too high you may have a decoupling between what the actual escalation rates are and on what you've estimated. 

If it's too low you're limiting yourself and your purchasing power of what you can install initially, and/or extending the term of the contract. You want to be right on as best you can, based on the best available information for your escalation rates. M&V protocols; depending on the level of rigor the M&V protocol can potentially impact interest rates. If it's too rigorous for a particular ECM that may be some perceived risk that can be reflected in the interest rates.

Risk, Responsibility, and Performance Matrix: Scott's going to talk more about this and how it potentially affects the bottom line. The whole point here is this is a risk management type of a contract and you need to know the potential impacts of your decisions.

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Just a summary review of the energy and cost savings; again you want to validate the math. You want to make sure the assumptions are reasonable and realistic. You want to make sure that you agree to the energy rates and labor rates in the proposal. 

And then you want to validate that the energy and cost savings are identified in Task Order Schedule 4 which is the engineer's task order schedule breaking down the savings per fuel type and quantity. There are folks at FEMP that can help you with advanced technologies like the folks at the National Laboratory. If you have any questions ask your project facilitator or federal finance specialist and they should be able to get you some help.

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Let's go on to the next slide number. I missed advancing that one. Let's go on to Slide 28.

And this has to do with the management approach. Again it's going to have the ESCO's organization structure. They'll have that Risk, Responsibility, and Performance Matrix that Scott will talk about in a minute. They'll have the Operations & Maintenance services.  You want to make sure that whatever is proposed complements your resources and expertise. You don't want to take on maintaining a new co-gen plant when you don't have the expertise to do so. Training; is it adequate for your staff both now and in the future?

You may want to consider periodic re-training or digitally recording the training. The timeline appropriate for an ESPC; keep in mind that you cannot exceed a 25 year contract term for both the implementation period and the performance period. That's the total maximum. We recommend that you do not exceed 24 years 'cause guess what?  Things change. There may be some delays in the construction schedule. There may be some modifications that occur after the project is awarded. 

And if you have no more time left on your contract then the only way to fix the problem is to apply funds to it. Sometimes that can be painful and sometimes you don't have the funds to do that. You don't want to exceed the legislative limit. Do you have confidence in the fact that the job [inaudible comment]? I mentioned the warranty type.  I don't mention that again. And I'm going to turn it over to Scott for the Risk, Responsibility, and Performance Matrix.

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Thank you Mike, excellent job. Appreciate that. Right now we're going to talk about a major piece of the whole deal you're putting tougher right now with the ESCO and that is the Risk, Responsibility, and Performance Matrix. We're going to talk about the assignments of risk and so forth. Mike was mentioning this several times. There are risks and how do we all like to treat risk?  Well in my personal life I like to minimize my risk. Guess what?  In the ESCO's business life they also like to minimize risk.

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How do we look at risk? How does the ESCO look at risk? How does the agency look at risk? Well there is absolutely a chance that a guarantee will not be met and a shortfall will be identified. And the ESCO is fearful that they would perhaps have to pay the agency back some sum of money. This is because there is a guarantee that they're putting in the contract and in writing. And if the Annual Measurement and Verification Performance report shows that there's a shortage there's going to be money going one way or the other.

Now to the agency the risk is the chance that the savings you are paying for are not fully realized. Remember that the golden rule of ESPC is you can't make payments that exceed your savings. This was a final rule. Congress won't let you do this. We have a lot of steps and tools involved in putting together the whole ESPC deals to guarantee that, to prevent that.

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The purpose of the risk responsibility performance matrix is really to - It's a section that basically is J7 of the IDIQ Contract. J6 is the task order schedules. J7 you can see the three-page contract in the IDIQ. There's a URL up in the chat board where you can find the IDIQ.

Basically it's how the contract elements affect the cost and savings.  It talks about how to tailor the task orders to match the agency needs. It's absolutely a structure in a very synthesized format for decision making. For example the first entry on there is interest rates. Neither the contractor nor the agency has control over the prevailing interest rates. Higher interest rates of course will increase the project costs and the term right?

We both have little control over the interest rates, however if you look at another in the Risk, Responsibility, and Performance Matrix there is an item there called delays. Both the contractor and the agency can cause delays. I've seen this personally happen.  Basically delays cost somebody money. It depends whether it's on the agency side or the ESCO side. An example of a delay happening on the agency side is perhaps it's a secure facility.  Perhaps the agency committed to the ESCO during formation of this deal that they'll provide five security escorts.

Low and behold the agency could only come up with two for an extended period of time because some other construction project is happening. In that case a delay is happening, clearly based on the agency.  But it could go the other way as well. These are just some areas to discuss and talk about. It's an ideal place for the documentation for these areas, these key elements related to risk and responsibility. And again some of these responsibilities and risks are clearly in the ESCO's camp, some in the agency camp.

But some there's a natural mixing, a sharing if you will, of these, which we'll talk about.

[Next slide]
Now with the financial there are three categories of risks overall: the financial, the operational, and the performance. The financial is one where it's usually a mixed risk between the agency and the ESCO. Again I did mention interest rates as an example. Construction costs, measure and verification confidence, energy related cost savings, delays, and facility changes. Usually a shared risk but you could go to the matrix and basically use that and discuss.

You'll basically get a contractor proposed approach. And as we were mentioning from the beginning of this presentation it's a continuous negotiation and going back and forth on what makes sense and who has what risks. With operational risks that's typically on the agency. And that's typically in the area of operating hours, loads of equipment, weather, and user participation. For example if the ECM is developed and the savings are calculated based on the agency using an office space 10 or 12 hours a day and it turns out that the space is actually going to be reduced to seven hours a day you're not going to anticipate it. 

In that case squarely it's the agency that changed the idea of how many hours the equipment gets used. And there will certainly be avenues in the contract to address what happens when that happens. Performance risk is very squarely in the ESCO's court.  They are responsible for the performance of the equipment, the operation of the equipment, ultimately the preventive maintenance, the return, and the replacement. We'll talk a little bit about that shortly.

[Next slide]
We're on Slide 33 right now. The Risk, Responsibility, and Performance Matrix ensures that these risks are addressed, that there's dialog that fosters a mutual understanding of what the deal really is. And like I said it's a guide for everybody. Operation and maintenance; Repair & Replacement of installed equipment are the ESCO's responsibility.  That's pretty much written into the contract. However the performance of the operation and maintenance and the risk and responsibility could be assigned to the ESCO or agency.

It depends. There's flexibility in this contract and you could get as much or as little as you want. But there's a give and take and of course there's a price to be paid for all of that as well.

[Next slide]
Basically for each energy conservation measure the task order will specify who carries out the O&M and R&R caps. How the performance will be verified; this is very important. It will be verified both on the ESCO end and the agency end. And what to do if the tasks are not performed?

For example if the Operation & Maintenance is something that the agency really wishes to do - Say it's a boiler maintenance. Well what happens five years down the line if Joe the boiler guy's job - There's a budget cut. The agency says, "Hey we can't do this. We have to get a lower level service. We have to contract out something that isn't as robust." What happens? Well this really should be addressed in the contract. And that's what would happen if the agency cannot perform? There have to be some steps in place.

The ESCO will absolutely want that to happen because they're ultimately responsible for the operation of that boiler and the performance of it. However agencies get very uneasy if there is some default language where for example after 35 or 60 days if there is no ongoing maintenance or if the records are insufficient there is hesitancy on a federal agency side to just have a default where the ESCO could step in and do the maintenance and bill them. So you really have to think about these things ahead of time, answer these hard questions. It's really better to do this during the formation of this contract rather than four or five years down the line where you see ambiguity in what the off-ramps (if you will) are on this topic.

[Next slide]
Slide 35; if the government performs the Operation & Maintenance the task order will contain the performance requirements. This is very important. What will get done and when will it get done? There will be requirements for agency record keeping. And this could be something as simple as giving the ESCO access to the boiler logs, various electronic files, maybe access to a maintenance management system, and things like this. These are just examples.  And these are again provisions for the ESCO to monitor the agency performance.

Why? Because the ESCO is ultimately responsible for the performance of this. So it's critical that the maintenance gets performed. If there's any trepidation on the agency side that you the agency cannot perform the maintenance just go over to the ESCO and have the ESCO do it. In fact by default if you read the Army Corps ESPC manual they call it straight out that they will not be responsible for maintenance on ESCO installed equipment. 

That's an example where an agency just came out and said, "You know what? We're not going to take responsibility for our equipment. We're going to make sure if the ESCO installs it they're responsible for it. Figure it in the deal and we're going to live with it." Not all agencies have that clarity in their understanding of how they want to treat maintenance. In this case the Army does.  As we mentioned the ESCO is still ultimately responsible for the maintenance and Repair & Replacement.

In every case we do see operation manuals defining the O&M procedures being provided by the ESCO.  We almost always see training to an agency on Operation & Maintenance. Now this training is critical.  It just does not happen one time or two times.  If you have say a 15-20 year contract with an ESCO there should be periodic training throughout the whole contract. And like Mike Holda mentioned, our technical PF, it's good to get it digitally recorded because you're going to have changeover. You're going to have turnover in your agency. And it does make sense to have it digitally recorded.

Another thing is when you do have your agency people come in and sit down and get training please, please document it. Get a sign-in sheet. Have a sign-in sheet be submitted to the contracting officer who is maintaining the records for the ESPC. And I say this because it is a lesson learned. I was involved with a situation where there was a finger pointing and the ESCO said they provided the training. The agency said, "No you didn't provide the training. You just kind of talked to us when you came on site telling us some information about how to mix up a solution for a solar hot water panel."

And it was a he-said, she-said thing. It didn't go very well. So lesson learned? Document, document, document. Document all these things with maintenance. Bottom line, if the agency doesn't meet its own M&R in our obligations the guarantee is going to be compromised. So keep that in mind please.

[Next slide]
Switching to Slide 36; ensure the responsibility is allocated and clearly understood. If a site performs the O&M and the R&R make sure it complies with the ESCO's manuals and task order instructions. Maintain the O&M and R&M records per the task order requirements. This is going to require certain people in the organization to be privy to the terms and conditions in the ESPC contract. And they do that.  So make sure when you have new people coming that they have more or less a transition plan so they understand who needs to do what in the organization to make sure you're in compliance with the ESPC contract.

And again make sure that the personnel receive the training and have access to these things. With that I'm going to turn this back over to Mike Holda and he will talk about Measurement & Verification.

Mike Holda:
Thank you, Scott.  Can everybody hear me?

Scott Wolf:
Yes.

Mike Holda:
[Next slide]
Excellent, thank you. I'm going to give a brief overview of some of the basics associated with Measurement & Verification. I'm sure there are all types of experts out there in the audience on Measurement & Verification. But I'm just going to keep this relatively light for today. If you'd like additional information I know AEE offers I think it's a certification as a Measurement & Verification professional as well as other M&V courses. And I believe that ASHRAE may also offer similar courses. And then if you're really bored at night you could read the FEMP M&V Guidelines as a stimulating read.

[Next slide]
Let's go on to the next slide, Slide 38 I believe. What is M&V and why do we need it?  M&V are the activities aimed at determining whether or not your savings guarantee that is proposed by the ESCO is being met. The M&V is required both under the contract as well as required by statute. There needs to be at a minimum and annual Measurement & Verification audit and report that is conducted in order to be responsive to the statutory requirements. 

And then when Measurement & Verification is done well it will reduce the uncertainty associated with savings and then help to allocate risks appropriately. And it could potentially identify some O&M issues, particularly in the performance phase of the project.  Let's go on to Slide 39.

[Next slide]
Some basic concepts of M&V. I consider Measurement
& Verification an art as well as a science because it's a balance
between savings assurance and cost. You don't want to spend more money validating or getting some assurance that you're getting the savings then the savings are worth.

It needs to be proportional. The rigor that you use for Measurement & Verification needs to be proportional to the magnitude of the cost savings associated with the energy conservation measure as well as the risk that the performance will not occur associated with that energy conservation measure and that the savings will not manifest themselves. It should be proportional to those two elements. A good M&V plan requires that one or more key performance parameters be measured both prior to and after the retrofit.

If a M&V plan is weak it's just a bunch of words on paper. I've reviewed multiple M&V plans over the years. A lot of them have a lot of words but not a whole lot of substance. You need to review the plan. Your project facilitator can help you with review of that plan. And you need to understand what is being guaranteed.  Sometimes you'll get a plan that has a lot of the words in it but there is really no risk to the contractor.

[Next slide]
Let's go on to Slide 40. The M&V that's proposed in the contract should be in accordance with the FEMP M&V Guidelines Version 3.0. That came out back in April of 2008. I still see proposals referencing Version 2.2 and some of the guidelines from Version 2.2. So you want to make sure they're referring to the current version of the guidelines. It's specifically designed for federal energy projects. And it's an application of the IPMVP or the International Performance Measurement and Verification Protocol.

Some of the resources that are available to help on this topic; there's an introduction to M&V for FEMP ESPC projects. And these are all available on the FEMP web site. There is Guidance for Government Witnessing of Measurement and Verification.  And there's Guidance on Reviewing Measurement and Verification Plans and Reports on the FEMP web site.

[Next slide]
Let's go on to Slide 41.Here are some of the key elements associated with the Measurement & Verification process. The first one is the baseline which his typically defined in the Investment Grade Audit phase and reflected in the final proposal. This is an important element of the overall M&V process because depending on the energy conservation measure and the methodology that's used to validate the savings you may not be able to re-establish or look at that baseline again after the retrofit. 

The Measurement & Verification Plan - I think that's the most important element in the process because it defines the activities that are associated with the M&V process for the entire term of the contract. The post-installation report - this is submitted by the contractor after the installation is complete. And it should verify and demonstrate the energy conservation measure's ability to perform and generate savings per the measurement and verification plan. 

And then the annual Measurement & Verification Reports; the activities are defined in the Measurement & Verification Plan.  And then the findings or the results of those activities are documented in the annual M&V reports. Those are required at a minimum on an annual basis. There may be some reasons that you may want to have them more frequently depending on your energy conservation measures or at least some sub-element of a completed report.

Also included in those M&V activities is reporting on Maintenance & Operation and Repair & Replacement activities associated with the ECMs and whether that's performed either by the contractor or by the government. So that should be documented in those annual M&V reports. One of the things I would recommend is having a meeting with the ESCO when he submits his annual report in order to go over those findings and have an understanding of what's included in that document.

[Next slide]
Let's talk a little bit about baselines.You'll get a baseline for each ECM as part of the Investment Grade Audit. You're going to be reviewing that baseline and the savings is determined by comparing the baseline energy consumption and cost versus the post-installation energy consumption and cost. You can't measure savings directly. You can measure the difference between these two elements and then determine what the savings are, based on the differential between these two.

As I mentioned once the ECM is installed it may be difficult or impossible to revisit the baseline. So you want to make sure they're right to begin with. And sometimes baselines are affected by weather. But this is typically normalized by using CMY data which is 30-year average data that is typically local to a facility.

[Next slide]
Let's go on to the next slide, Slide 43. This gives you the FEMP M&V options: Options A, B, C, and D.  The first two options are retrofit isolation where you're looking at analyzing and measuring and verifying the performance of the ECM and isolating it to that particular ECM.

For Option A you're measuring the key performance parameter associated with that energy conservation measure. For lights and water Option A is relatively common. You would measure that parameter before. You would measure it after. And then stipulate the savings for the remainder of the term of the contract. Option is retrofit isolation but you're measuring multiple performance parameters associated with those energy conservation measures.  And you may take those measurements periodically or on an annual basis or even continuously.

And that's typically associated with ECMs that have variable loads.  Option C is a whole building type of a M&V option where you're looking at the energy consumption on a whole building basis.  Typically you would not use it on energy conservation measures that impact the building less than 15 to 20 percent. You want to use it on energy conservation measures that will have a significant impact on the whole building energy consumption because if it's a relatively small level you won't see it in the noise of the normal variation of energy use in a facility. Option D is using computer simulations. This sometimes is used to determine building envelop energy saving ECMs. 

[Next slide]
Let's go on to Slide 44. We talked about the savings guarantee. And as Scott mentioned the savings must exceed the payments in every year of the contract.  At least that's how DOE has interpreted the federal guidance.  There are two types of savings that we can use to pay the ESCO.  We talked about these earlier. One is the energy and water cost savings. The other is the energy and water related cost savings.  And again if you're going to include it in the economic analysis of the project the savings must be realizable because you're going to make payments based on that.

Bottom line is does the agency have confidence that the savings will be achieved? I always ask the question: under what circumstances with the ESCO not achieve the estimated savings or the guaranteed savings? Again you can read some of these M&V plans and approaches. They'll be a lot of words in it. And then after you're done - They mention Option A or B or whatever it is and after you're done you're thinking, "How is the ESCO not going to achieve the estimated savings?

You want to ask that question and you want to ask that question to the ESCO also. That is it on Measurement & Verification for today. 

[Next slide]
Let's move on to the next slide, Slide 45. We get into a little bit of best practices and Scott will have a number of other best practices at the end of the session. This one has to do with planning for transition between the phases of the project and getting the construction team involved while you're still in the Investment Grade Audit phase. This is applicable to both the teams from the ESCO as well as the team from the federal agency.

You want to make sure your construction manager is cognizant of the scope of work, buys into the project, and reviews the final proposal for constructability. That way when the project is awarded and it's handed over to them he's not surprised and he has a little bit of skin in the game. This transition overlap is recommended at all the stages of the project whether it's going from the preliminary assessment to the Investment Grade Audit.  The Investment Grade Audit's construction, construction to performance period; you want to make sure you bring in those folks that are going to be involved in the next phase so you have continuity and the project package doesn't just fall on the ground.

That helps ensure you have consistency and continuity throughout the development and implementation and performance period. It gives you a little bit of ownership in the game.

[Next slide]
The next slide, Slide 46; a couple things not to forget. We recommend including a critical path schedule for the implementation of the project. A lot of times the contractor will submit a Gantt chart or a bar chart for the schedule but it doesn't reflect the critical path. You want to know what the actual critical path is because if there are delays some of those delays may not affect the overall acceptance.

And if there is a delay that does affect the acceptance date then there may be interest expense that accrues that, depending on who caused the delay, would have to be either paid by the government or by the contractor. So you want to make sure you get a critical path schedule. Some other items that sometimes are overlooked if you have a large project where you have a large PV array or a co-gen unit - co-generation plant - being installed. You want to make sure the NEPA is performed as well as the environmental assessment is performed prior to award.

And sometimes that takes time. So you want to get started on that early. Interconnection Agreements would also be applicable for both PV and co-generation - any onsite generation. You want to work those with the utility, again, prior to the award. Also there are Net Metering Agreements that are associated with that.  Interconnection Agreements usually have problems with indemnification language. Lawyers don't like that. Air quality management district permits; if you're going to put in a co-gen unit or change a bunch of boilers, depending on where you're at -

You may be in a non-attainment area and you have to get permits to construct and permits to operate that new equipment. You need to get that done. Also HIPOs and SHIPOs, historical preservation may be applicable. Incentives or rebate applications you want to get in as early as possible because those have a tendency to get over-subscribed. I've mentioned the warranty table to include in the management approach and also a 30 day acceptance test period where all ECMs operate as proposed for a minimum of 30 days.

We used to have that in the old IDIQ. I recommend including that in your TO RFP as a requirement and for your task order. Don't forget spare parts if you want any. A lot of times the contractor will provide attic stock, like two percent, for lamps and ballasts for lighting retrofits. Now I'll turn it over to Scott for some best practices and lessons learned.

[Next slide]
Thanks very much Mike. That's an excellent description for some of these "do not forget" items - very pertinent. Switching to best practices and lessons learned.

[Next slide]
I am on Slide 48. We will be having a Q&A shortly, in about 15 minutes. Many of those questions that you have been writing; we'll certainly address those. A collection of best practices/lessons learned. One, engage high level management support, critical support, early and often. Let me emphasize the word often.

Sometimes upper management gives the blessing to various staff to pursue something and then they back off and they may not hear anything for a long, long period of time. And then by that time perhaps higher level management may have changed out or other priorities happen. It's very important (that we've noticed) to keep upper management appraised of the situation. Let them understand what's happening, where you are on the steps, how things are going so you basically foster continuous support with your higher level management.

It's important in the beginning of the project to designate an energy efficient champion for the project. Keep in mind the third bullet here, an agency project manager is very important as well. The project manager and the champion may not necessarily be the same person, or they may be. But this is a long-term endeavor you're going through to basically get to the goal line of a deliver - an award. And it's important that you have people who have project management skills in your organization to march down the field and do the things you have to do in a timely manner with proficiency.

A project manager we feel at FEMP is a very important thing that every agency should include. Recognize the fact that energy and finance projects can have a long development cycle. We have a point here that says go as fast as you can. But to give you an analogy think of this as a baton relay race on a track field. And no one person on your team is going to run around the track and win it for you. You all are working together and you're going to hand off the baton to one another. And so as a team - as a team - you're going to go as fast as you can.

We all know what happens when an individual in our organization goes as fast as they can without other people. People change - another point here. You have to plan for a change. People switch jobs, not just on the agency side but the ESCO side. And so you have to be aware of these things and just bring people up to speed when they come into your project kind of cold or in the middle of it. It's very important. 

As FEMP we're very happy to talk with people on the phone to bring them up to speed. We're very happy to do two-hour quick webinars and do short bursts of training. We find that very useful.  And I think just agencies don't always realize they have access to this through FEMP. So please be aware that people change and we at FEMP will help you with those changes and train those people. 

Risk tolerance of agencies change we have noticed. Again it's a fact of life. It's nice to have continuous risk of tolerances throughout this but we do understand sometimes when people change their measure of risk tolerance changes and that could throw off a project. Develop and manage to a schedule - very important. Everyone works best with deadlines and due dates correct? It's no different than when we were all in school and we had to get various assignments done by certain dates.

We definitely notice managing to a schedule is very important.  And again schedules can slip. It can delay realization of various savings. And the worst case is you would incur interest rate expenses. Or somebody incurs it depending on if it's the fault of the ESCO or the fault of the federal agency. But when you have schedule slips say in construction, the finance company wants money at a certain date and if the project is not done interest rate accrues. So keep that in mind.


[Next slide]
Moving to Slide 49; continuation of best practices. And I did mention the importance of communication. Also the longer it takes to develop the project the lower the probability of success. Doing this for nearly a decade I have seen some agencies drag their feet. People have changed.  And when they were fairly far along interest was lost in the project. Keep to the schedule. Realize probability gets lower the longer this is stretched out during a project

Avoid scoped creep. And what that means is when many of you are in the middle of a project like you are now and maybe you're reviewing an IGA or a proposal. If all of a sudden out of left field someone on your team says, "ESCO we want to add something here," and it wasn't necessarily in the original scope of work and formation of your thinking this could really throw a number of delays into the situation. Try to avoid that. Remember your decisions have consequences.

Very important throughout this - you see a file cabinet there. It looks like some contracting officer's file documentation. Maintain documentation through all stages of the project development: the implementation and the performance. This is very important. And again when people leave make sure that they get a whole set of this. Also sometimes in organizations you might have a centralized contracting officer in another part of the country, and the project is happening in another part of the country. 

There has to be a point where you have some file documentations going over for the administration if you will, which will be typically at the site. It would help very much to document it, have files get transferred and so forth so the correct people at the time could then manage and administer the contract. 

Take a graded approach. This is really talking about time management and prioritizing activities based on the importance or the value of what you're doing. How many times have we been in organizations and we see people more or less spending a lot of their time on things that deviate from the central mission?  Keep in mind you know what's going to be important in putting this contract together and administering it or getting it built. Stick to those important, valuable things.

[Next slide]
Moving to Slide 50; continuation. I like this slide. This is a very pragmatic slide. Ask yourself the question in your organization who? Who could make or break this project? Where are the weak links? How could this project get derailed? It's a very prudent exercise to ask these questions within your own organization for you, the person responsible for marching this project down and getting an award could take some steps to mitigate these various risks. Some things that come to mind here are is there an approval board?

You know the Department of Energy has a review board. So does the USDA. I don't know if it's a super popular thing in the federal government. To my knowledge those are the two agencies that I can think of who have a review board. Keep that in mind.  Sometimes the review board may never have worked on a project before. Sometimes the review board folks need to get educated.  Again as I said previously keep in mind FEMP will educate anybody in the organization. And hopefully it should make things go smoother.

Another question we have seen, another situation we have seen - Sometimes we have seen where the agency has the impression that legal approved this and everything is good prior to the project starting. And then when there is a proposal the legal guys come out and say, "We've got to review this. We've got to make sure it's right."  And it might be a different person than they were working with in the first place. So understand your process. Will it require a review? When will it require a review? Keep that in mind please.

Thirdly, does your management still support the process or the program or the project? Has there been a change in mindset for example? Just a quick example about management still supporting a process - some years back the Navy noticed that they were putting out a lot of money for their utility contracts. So they informally put in a moratorium. They wanted to check out their books, make sure they were getting their savings they were thinking they were getting. You just have to take the pulse of your management. Are they still supporting what we're doing here? Do we have the full faith that they will approve it and allow us to move forward? 

Lastly is your federal team in agreement with awarding this? Does everybody have a unanimous agreement on your acquisition team that yes we should move forward, this is a great thing, it's a great idea, and we'll move forward for an award? If there is dissention in the ranks this absolutely needs to be talked about. Please include in that conversation your project facilitator, your federal finance specialist if needed. We'd like to sort these things out with you.

[Next slide]
Best practices continued; absolutely use subject matter experts to
educate stakeholders and review documents: technical, finance, process. I believe somebody on the chat - or maybe it was elsewhere - was asking about financial schedules. How do we know they're right? Well FEMP has a tool where we could basically stimulate the spreadsheets that the ESCO has. The ESCO may not necessarily give you the negative spreadsheet where you could see the cells and everything but we have tools where we could basically take the inputs for that spreadsheet and show you the calculated values.

In many cases there are some round off errors and it works out pretty well. All of these ESCOs are responsible for putting together their spreadsheets in the format indicated in the IDIQ Contract.  Identify potential risks, manage, and mitigate them early. These do come up. What's interesting and what I've noticed is sometimes the building use for example is a risk. Sometimes three-quarters of the way through a project an agency may say, "Hey we're going to demolish those buildings." 

Or say a Department of Defense site might say, "Hey we're on a BRAC list. Being on this list doesn't make it feasible for us to continue on with what we're doing." Other times there have been changes in energy costs that have been fairly dramatic one way or another. That could also be another area that you may want to address and take some action on. Now we talked about this throughout this presentation: due diligence, reading every word.  We did have Mike or Sam previously talk about how to track changes in the proposal using the Microsoft Word feature "track changes."

We've seen that works really, really well. But other agencies have other methods. But when the proposal gets revised by the ESCO, let's say perhaps after the agency comments you really, really need to read every word to make sure that the changes as agreed upon maybe in your meeting minutes, maybe in the documentation that you guys made another column on your Risk, Responsibility, and Performance Matrix. You really have to take a look at that and make sure that those changes were indeed incorporated perhaps in the body of the proposal.

Again FEMP provides assistance for all phases, all elements of the ESPC project. Doing this for ten years I appreciate the fact that each project is quite different. No two projects are ever the same.  And in conclusions these ESPCs can be a lot of fun.  I notice then when I see various agencies do a big project. They start to really, really make gains on their sustainability goals. They really make gains on their Executive Order energy reduction goals and renewable energy goals.

And when I see these folks then go off and apply for say a FEMP award or other internal awards to their agency boy oh boy there's a lot of satisfaction there. And this is what I mean by ESPC projects can be fun. I personally have gotten a kick out of a particular federal agency. They were getting 1 MW photovoltaic project installed on their site. These people on the site were giggling over the construction and were just so thrilled with how well things went with the construction of their 1 MW site which they really wanted for a half dozen years it was in the making in their minds.  It was very satisfying to see that. 

[Next slide]
Slide 52. Please use your resources (FEMP has a lot of them) to make the most of your ESPC project. We do have a FEMP resources tab which is filled with a lot of material and you can find copies of the IDIQ Contract, the M&V Guidelines. You can find all kinds of form letters, templates, sample meeting agendas. We absolutely have that.  If you can't find it on our web site please talk to your FEMP project facilitator or your federal finance specialist. You've heard many times your federal finance specialist is oftentimes your best point of contact. 

We're there very early for you to initiate, to get going on a project, to kind of decide which financial mechanism you should go over to give your site a dose of training either with a WebEx similar to this or we'll come out and we'll train a half dozen of your people. We'll have meetings. Whatever it takes we're there for you.  We have expert National Laboratory folks. We have a CHP initiative that's happening right now.  We've got various laboratories that specialize in various emerging technologies.

Another thing we have is screening for renewable energy that we help set up. Make sure you get that. Oftentimes these are good things to initiate your ESPC project. Get some screening.  Understand what looks good, what would work. Below here are some FEMP resources on the web site. You can see the homepage resources. And again I mentioned the ESPC resources, guidance and contract documents. This last URL you're looking at on Slide 52 is a very content-rich web site.

Sometimes it's a little bit difficult to navigate on the FEMP web site. If you have any questions please call your federal finance specialist. There's a map of us on the web site, our contact, what territories we cover. But I think Tom Hattery yesterday mentioned you can talk to any of us any time. It doesn't matter if you're in our region or not. If you can't get ahold of one guy right away you need to talk to another. Please do. We're in very close contact with one another and we'll certainly relay the information of what you were looking forward to the other FFS that is in your region.

[Next slide]
Next Slide 53. Again, just a reminder - Thanks for your participation in this. We're going to have Evan talk about the evaluation in a little bit and Evan is going to go through a little Q&A session with us. Thank you!

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