Army Issues Multi-Billion-Dollar Solicitation for Large-Scale Renewable and Alternative Energy Production for Federal Installations

22 August 2012 Publication
Author(s): Frank S. Murray Jr Jeffery R. Atkin

Legal News Alert: Energy

The U.S. Army has released a solicitation to acquire locally generated renewable and alternative energy (RAE) at federal installations, with the energy to be acquired from contractors under Power Purchase Agreements or similar contractual agreements. The solicitation is designed to help the U.S. Department of Defense (DOD) meet its statutory mandate to acquire at least 25 percent of its total facility energy needs from renewable resources by 2025. The solicitation represents an opportunity for RAE producers to compete to provide up to $7 billion worth of energy to DOD installations over the next 30 years. Contractors receiving an award under the solicitation will then compete for task orders to provide energy to DOD installations, with the contractor responsible for constructing, operating, and maintaining a renewable/alternative energy facility to be built on (or near) the DOD installation.

Under the solicitation, the U.S. Army Engineering and Support Center, based in Huntsville, Alabama, will award multiple Indefinite Delivery/Indefinite Quantity (IDIQ) contracts to all qualified and responsible offerors, both large and small businesses, whose offers meet the minimum standards for acceptability at a reasonable and realistic price. The Army will evaluate proposals under the following technical factors: corporate technical/management experience; financial capability and management approach; past performance; and small business participation. The intent is to make the maximum number of contract awards and then provide for competition for task orders among the various awardees to supply the RAE power to specific DOD installations. The task orders awarded under the contract can be for a period of up to 30 years, but will be limited to the useful life of the energy production facility constructed by the contractor (plus construction/demolition time).

Contract awards and task order competitions will be made on a technology-specific basis, with contractors responsible for proposing a maximum “ceiling” price-per-kilowatt hour for each of the specific renewable energy technologies on which the contractor intends to bid. That is, a contractor would be awarded a contract (and become eligible to compete for task orders) for specific RAE technology: solar, wind, biomass, or geothermal. Other alternative energy sources also may be considered for award. The primary renewable energy technology for a particular installation will be identified based on a number of factors, including available real estate, installation mission requirements for energy security, energy demand, grid interconnection, and environmental restrictions. While a task order may specify a particular technology, the Army intends to make the specification as general as possible to allow maximum flexibility for contractors competing to meet that requirement. For instance, a task order may specify that only solar technology be provided, but be non-specific as to the use of photovoltaic or solar thermal technologies, and their respective derivative technologies.

Smaller awards — four MW of energy or less — will be set aside for small businesses, and small businesses also will be given priority for awards of between four MW and 12 MW. Awards for more than 12 MW will be fully competitive. Under the size standard applicable to this contract opportunity, an offeror is considered a small business if, including its affiliates, 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 four million megawatt hours.

Full information on this contract opportunity can be found at the Army Single Face to Industry (AFSI) Acquisition Business Web Site. The current deadline to submit proposals in response to the solicitation is October 5, 2012.

Legal News Alerts is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our clients and our colleagues. If you have any questions about this update or would like to discuss this topic further, please contact your Foley attorney or the following:

Andrea J. Chambers
Washington, D.C.

Frank S. Murray
Washington, D.C.

Jeffery R. Atkin
Los Angeles, California

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